R. H. Stearns Co. v. United States, 291 U.S. 54 (1934)

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R. H. Stearns Co. v. United States

No. 133

Argued December 5, 6, 1933
Decided January 8, 1934
291 U.S. 54

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

1. When a taxpayer, in filing a claim for overpayment of income taxes for several years, asks that the amount overpaid be credited against an unpaid tax, the collection of which has not yet been barred by time, he, in effect, requests the taxing authorities to postpone the collection of that tax until the claim has been acted on, during (at least) the statutory period for assessment of the latest tax involved in the claim, and where, within that period, the Commissioner has found an overpayment and has applied it to the unpaid tax as requested, the taxpayer is estopped from claiming the amount as still due him upon the ground that collection of the unpaid tax had in the meantime been barred by limitation. P. 59.

So held where the practice of the collector’s office was to treat such a claim as a stay of collection of unpaid taxes against which credit was asked, until the Commissioner had adjudged the claim, and where the taxpayer had at first accepted without protest the application of the credit and paid the resulting balance.

2. The provision of the Revenue Act of 1928 (§ 609) declaring that a credit against any liability for any taxable year shall be void if made against a liability barred by limitation, applies where the credit is made by the Commissioner in invitum, not where it is done, as in this case, at the taxpayer’s request. P. 60.

3. Under the provision of the Revenue Act of 1921, § 250(d), that no suit shall be begun after the expiration of five years succeeding the filing of the return "unless both the Commissioner and the taxpayer consent in writing to a later determination, assessment and collection," any writing, formal or informal, is sufficient to show the Commissioner’s consent if his approval may be gathered from it as a reasonable inference. P. 62.

4. A taxpayer suing for a refund upon the ground that the crediting of the amount against an earlier tax took place after the collection of that tax had become barred by limitation, has the burden of producing evidence to show that a consent to extension of the collection period, filed by him, was not assented to in writing by the Commissioner. P. 62.

5. The word "waiver" written on an assessment list attached to a certificate of assessment signed by the Commissioner, together with a date indicative of the tax referred to, held evidence in this case of the Commissioner’s consent to a waiver filed by the taxpayer. P. 63.

6. Choice between two doubts as to which of two waivers was intended by such entries should be so made as to favor the presumption of official regularity. P. 64.

7. Action to recover an overpayment of taxes, on the ground of illegal assessment or collection, is barred by R.S., § 3226; 26 U.S.C. § 156, on the expiration of five years from the time of payment. P. 64.

8. To constitute an account stated, a balance must have been struck in such circumstances as to import a promise of payment, on the one side, and acceptance, on the other. P. 65.

9. Mere rendition to the taxpayer of a certificate of overassessment did not evince a promise to refund when, by his request, the overpayment was to be applied against another tax, and this was subsequently and in due course accomplished, and the results accepted by him. Bonwit Teller & Co. v. United States, 283 U.S. 258, distinguished. P. 66.

77 Ct.Cls. 264, 2 F.Supp. 773, affirmed.

Certiorari, 290 U.S. 611, to review a judgment rejecting a claim for an overpayment of income and profits taxes.