From Casetext: Smarter Legal Research

Lewis v. Reynolds

U.S.
Jan 4, 1932
284 U.S. 281 (1932)

Summary

holding that the government may "retain payments already received when they do not exceed the amount which might have been properly assessed and demanded"

Summary of this case from Rische v. United States

Opinion

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE TENTH CIRCUIT.

No. 115.

Argued December 8, 9, 1931. Decided January 4, 1932.

In acting upon a claim for refund based upon the disallowance of a particular deduction, the Commissioner of Internal Revenue has authority to reaudit the return and to reject the claim on the basis of the disallowance of another deduction even though the statute of limitations prevents him from making an additional assessment for the year involved. P. 283. 48 F.2d 515, affirmed.

CERTIORARI, post p. 600, to review a decision affirming a judgment in favor of the Collector in an action for a refund of income taxes.

Mr. N.E. Corthell for petitioners.

Assistant Attorney General Youngquist, with whom Solicitor General Thacher, Messrs. Whitney North Seymour and Sewall Key, and Miss Helen. R. Carloss were on the brief, for respondent.


Petitioners sued the respondent Collector in the United States District Court for Wyoming, September 20, 1929, to recover $7,297.16 alleged to have been wrongfully exacted as income tax upon the estate of Cooper.

February 18, 1921, the administrator filed a return for the period January 1 to December 12, 1920, the day of final settlement. Among others, he reported deductions for attorney's fees, $20,750, and inheritance taxes paid to the State, $16,870. The amount of tax as indicated by the return was paid.

November 24, 1925, the Commissioner, having audited the return, disallowed all deductions except the one for attorney's fees and assessed a deficiency of $7,297.16. This sum was paid March 21, 1926; and on July 27, 1926, petitioners asked that it be refunded.

A letter from the Commissioner to petitioners, dated May 18, 1929, and introduced in evidence by them, stated that the deduction of $20,750 for attorney's fees had been improperly allowed. He also set out a revised computation wherein he deducted the state inheritance taxes. This showed liability greater than the total sums theretofore exacted. The Commissioner further said: "Since the correct computation results in an additional tax as indicated above which is barred from assessment by the statute of limitations your claim will be rejected on the next schedule to be approved by the commissioner."

The trial court upheld the Commissioner's action and its judgment was affirmed by the Circuit Court of Appeals.

Counsel for petitioners relies upon the five year statute of limitations (Rev. Act. 1926, § 277). He maintains that the Commissioner lacked authority to redetermine and reassess the tax after the statute had run.

"Sec. 277. (a) Except as provided in § 278 [not here important] — . . . (3) The amount of income, excess-profits, and war-profits Page 283 taxes imposed by . . . the Revenue Act of 1918, and by any such Act as amended, shall be assessed within five years after the return was filed, and no proceeding in court without assessment for the collection of such taxes shall be begin after the expiration of such period."

The opinion is printed here as amended by an order of February 15, 1932, to be published in the last part of this volume.

After referring to § 284, Revenue Act of 1926, 44 Stat. 66, and § 322, Revenue Act of 1928, 45 Stat. 861, the Circuit Court of Appeals said [ 48 F.2d 515, 516] —

"The above quoted provisions clearly limit refunds to overpayments. It follows that the ultimate question presented for decision, upon a claim for refund, is whether the taxpayer has overpaid his tax. This involves a redetermination of the entire tax liability. While no new assessment can be made, after the bar of the statute has fallen, the taxpayer, nevertheless, is not entitled to a refund unless he has overpaid his tax. The action to recover on a claim for refund is in the nature of an action for money had and received, and it is incumbent upon the claimant to show that the United States has money which belongs to him."

We agree with the conclusion reached by the courts below.

While the statutes authorizing refunds do not specifically empower the Commissioner to reaudit a return whenever repayment is claimed, authority therefor is necessarily implied. An overpayment must appear before refund is authorized. Although the statute of limitations may have barred the assessment and collection of any additional sum, it does not obliterate the right of the United States to retain payments already received when they do not exceed the amount which might have been properly assessed and demanded. Bonwit Teller Co. v. United States, 283 U.S. 258, says nothing in conflict with the view which we now approve.

Affirmed.


Summaries of

Lewis v. Reynolds

U.S.
Jan 4, 1932
284 U.S. 281 (1932)

holding that the government may "retain payments already received when they do not exceed the amount which might have been properly assessed and demanded"

Summary of this case from Rische v. United States

ruling that the correct liability for a barred year may be determined in relation to a claimed refund

Summary of this case from Transupport, Inc. v. Comm'r

adopting the lower court's statement that a tax refund suit "involves a redetermination of the entire tax liability"

Summary of this case from Mann v. United States

recognizing that the government may "retain payments already received when they do not exceed the amount which might have been properly assessed and demanded"

Summary of this case from Rische v. United States

In Lewis, the IRS timely audited an income tax return and disallowed all deductions except one for attorney fees. Despite paying the resulting deficiency, the taxpayer continued to believe that a deduction for state taxes was proper and so sought a refund.

Summary of this case from R.H. Donnelley Corp. v. U.S.

stating that in a tax refund suit, the taxpayer has the burden of proving not only that it overpaid its taxes, but also the amount of its overpayment

Summary of this case from American Airlines, Inc. v. U.S.

In Lewis, there was the complication, never expressly mentioned, that the Commissioner's assertion of an alternative ground for his earlier assessment was made after the statute of limitations had run.

Summary of this case from Bachner v. C.I.R

In Lewis v. Reynolds, 284 U.S. 281, modified on other grounds, 284 U.S. 599 (1932), the Supreme Court held that in a tax refund suit, the Internal Revenue Service (IRS) may offset against the refund other taxes that had previously not been assessed, and the assessment of which the statute of limitations barred.

Summary of this case from Fisher v. U.S.

In Lewis v. Reynolds, 284 U.S. 281, modified, 284 U.S. 559 (1932), an estate administrator sought a refund after paying taxes following an audit.

Summary of this case from Moran v. U.S.

In Lewis, the government's setoff claim flowed from a reassessment of underlying tax liability — i.e. denial of previously-allowed deductions, and consequent recalculation of the taxpayer's adjusted gross income.

Summary of this case from Allen v. U.S.

In Lewis, the taxpayer, after the expiration of the statute of limitations on additional tax assessment, filed a claim for refund alleging that certain deductions had been improperly disallowed.

Summary of this case from Allen v. U.S.

In Lewis v. Reynolds, 1932, 284 U.S. 281, 52 S.Ct. 145, 76 L.Ed. 293, the Supreme Court determined that a taxpayer was not entitled to a refund for a particular year until the entire tax for that year had in fact been overpaid.

Summary of this case from Montana Power Company v. United States

In Lewis v. Reynolds, 284 U.S. 281, 52 S.Ct. 145, 76 L.Ed. 293, it was held that, although the taxpayer's claim was based on an erroneous disallowance by the commissioner of a claimed deduction and the statute of limitations barred a new assessment, the United States was entitled to retain payments when they did not exceed the amount which might have been properly assessed and demanded.

Summary of this case from United States Paper Exports Ass'n v. Bowers

In Lewis, the Supreme Court held that the IRS has the authority to "reaudit a return whenever repayment is claimed" by a taxpayer, even if the statute of limitations "may have barred the assessment and collection of any additional" tax.

Summary of this case from Logan v. United States

In Lewis, the Supreme Court stated, "[T]he ultimate question presented for decision, upon a claim for refund, is whether taxpayer has overpaid his tax.

Summary of this case from Silipigno v. United States

In Lewis, the Supreme Court of the United States held that when bringing a lawsuit for refund of taxes paid, the taxpayer has the burden of proving he overpaid his taxes for the applicable period.

Summary of this case from Greene v. United States

In Lewis v. Reynolds, 284 U.S. 281, 283 (1932), the Supreme Court of the United States stated that "[t]he action to recover on a claim for refund is in the nature of an action for money had and received" by the taxing entity from which a taxpayer claims a refund.

Summary of this case from Patterson v. U.S. Virgin Islands

In Lewis, the taxpayer sought a refund of income taxes from the IRS, which took the request for a refund as an opportunity to reevaluate the taxpayer's liability for that year and to determine that the taxpayer's liability was greater than originally assessed.

Summary of this case from UNITED STATES v. KOSS

In Lewis v. Reynolds, 284 U.S. 281, 52 S.Ct. 145, 76 L.Ed. 293, the Supreme Court holds that a taxpayer is not entitled to a refund unless he has overpaid his taxes, and then only to the extent his taxes have been overpaid.

Summary of this case from Miller v. United States

In Lewis v. Reynolds, 284 U.S. 281, it was held that the Commissioner may offset a barred deficiency against a refund claim, but only up to the amount of the refund.

Summary of this case from H. Fendrich, Inc. v. Comm'r of Internal Revenue

In Lewis, administrators of an estate claimed deductions for attorney's fees and other taxes paid. 284 U.S. at 282, 52 S.Ct. at 145, 76 L.Ed, at 293.

Summary of this case from Gen. Motors Acceptance v. Director
Case details for

Lewis v. Reynolds

Case Details

Full title:LEWIS ET AL., TRUSTEES, v . REYNOLDS, COLLECTOR OF INTERNAL REVENUE

Court:U.S.

Date published: Jan 4, 1932

Citations

284 U.S. 281 (1932)
52 S. Ct. 145

Citing Cases

Northrop Aircraft v. Cal. Emp. Etc. Com

Such provisions operate adversely to the commission's position and to support the conclusion of the trial…

Wells Fargo Company v. U.S.

Wells Fargo contends that the United States has not met its factual burden to allege its "Second Additional…