United States v. Andrews, 302 U.S. 517 (1938)

United States v. Andrews

No. 48

Argued December 8, 9, 1937
Decided January 3, 1938
302 U.S. 517

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

1. The taxpayer made timely claim for overpayment of income tax due to failure in the return to deduct for loss on worthless shares of certain corporations. After expiration of the two-year limitation (Revenue Act of 1928), he sought to amend by including another overpayment for the same year which resulted from returning as dividends payments received from another corporation which were not dividends and, should have been reported as giving rise to a capital gain, of less amount.

Held:

(1) That the second claim was not properly an amendment of the first, but a separate claim on a new and unrelated ground, and was barred by the statute. P. 520.

(2) The fact that the first claim, though for a specific transaction, contained also a "general relief" demand for any other or greater sum which might be found due to the taxpayer could not justify the amendment. P. 524.

(3) Neither could it be upheld because the Commissioner, before the statute ran, had learned from the corporation which had made the payments that they were not dividends, but the proceeds of a sale of shares owned by the taxpayer, and had so informed the revenue agent, it not appearing that, prior to the attempted amendment, the Commissioner knew that the taxpayer was a shareholder in that company or knew that the reported receipt of dividends had reference to such payments. P. 526.

2. In deciding whether a tax refund claim is subject to an amendment, the analogies of pleading are helpful, but they will not be so followed as to ignore the necessities and realities of administrative procedure. P. 523.

A claim which demands relief upon one asserted fact situation, and asks an investigation of the elements appropriate to such relief, cannot be amended to discard that basis and invoke action requiring examination of matters previously not germane.

84 Ct.Cls. 460, 17 F.Supp. 980, reversed.

Certiorari, post, p. 664, to review a judgment sustaining a claim based upon an overpayment of income tax.