United States v. Memphis Cotton Oil Co., 288 U.S. 62 (1933)

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United States v. Memphis Cotton Oil Co.

No. 308

Argued December 9, 1932
Decided January 9, 1933.
288 U.S. 62

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

1. A claim for a tax refund which has been seasonably filed, but which fails to conform to Treasury Regulations in that it omits to state the grounds upon which the refund is demanded, may be amended by specifying the grounds at any time before the claim in its original form has been finally rejected, though it be after the time when a wholly new claim would be barred by limitation. Pp. 69, 71, et seq.

So held under § 1318, Rev. Act of 1921, as amended March 4, 1923, which provides that no suit for recovery shall be maintained in any court until a claim for refund has been duly filed with the Commissioner "according to the provisions of law in that regard and the regulations of the Secretary of the Treasury established in pursuance thereof," where the regulation required that "all the facts relied upon in support of the claim should be clearly set forth under oath" and where the claim, originally exhibiting only the taxpayer’s statement of amounts of net income, tax, previous payments, and overpayment was amended, before its final rejection on that ground, so that it set forth in detail the facts showing overassessment as they had been revealed by the Bureau’s own investigation.

2. Rulings as to what amendments of pleadings may (or may not) by relation avoid the bar of an intervening limitation, and as to what, in that connection, is but a revised statement of the same cause of action and what the substitution of a new one, furnish helpful analogies, though subordinate to administrative considerations, in determining the effect of an amendment of a claim for refund before the Commissioner. P. 67.

3. To give effect by relation to the amendment here in question harmonizes with the Commissioner’s practice of reauditing returns when refunds are claimed (Lewis v. Reynolds, 284 U.S. 281), and particularly with his action in entertaining the original claim (instead of rejecting it promptly for defect of form), examining completely the taxpayer’s business, and announcing that the overassessments so found would be rectified. P. 69.

4. The function of a statute limiting the time within which claims may be presented is to give protection against stale demands; the function of a regulation making provision as to the form of claims is to facilitate research; the line dividing the two functions should be kept a sharp one. P. 71.

5. Notice by the Deputy Commissioner to a taxpayer that his claim for refund would be rejected and that the rejection would be officially announced in a schedule to be approved thereafter, held not a final rejection. P. 72.

75 Ct.Cls.195, 59 F.2d 276, affirmed.

Certiorari to review a recovery of overpayments of income taxes.