Tait v. Western Maryland Railway Co., 289 U.S. 620 (1933)

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Tait v. Western Maryland Railway Co.

No. 842

Argued May 12, 1933
Decided May 29, 1933
289 U.S. 620

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Syllabus

1. In computing income tax, the Commissioner of Internal Revenue and Board of Tax Appeals denied the right of a corporation to deduct from gross income an amortized proportion of the discount on sales of bonds by its predecessors. On appeal to the Circuit Court of Appeals, the right was sustained. Held that the judgment worked an estoppel against the United States and the Collector in later litigation with the corporation as to its right to make like deductions for subsequent years under the same statutory provisions and Treasury regulations. Pp. 623, 625.

2. It will not be inferred that Congress, merely by adopting the scheme of annual tax periods, and without express declaration of purpose, intended to abolish the doctrine of res judicata in tax cases, and thus to deprive government and taxpayer of relief from redundant litigation of identical questions as to the liability of the same taxpayer under the same taxing provisions. United States v. Stone & Downer, 274 U.S. 225, respecting res judicata in tariff cases, distinguished. P. 624.

3. The effect of res judicata cannot be avoided by showing that an inadvertent or erroneous concession was made at the former trial as to the materiality, bearing, or significance of the facts or questions then before the court. P. 626.

4. Where a question has been adjudged as between a taxpayer and the government or its official agent, the Commissioner of Internal Revenue, the Collector being an official inferior in authority and acting under them, is in such privity with them that he is estopped by the Judgment. P. 627.

62 F.2d 933 affirmed.

Certiorari to review the affirmance of a judgment for the plaintiff, the respondent here, in a consolidation of actions for the recovery of excess tax payments. See also 53 F.2d 211 (District Court in this case), and 33 F.2d 695 (Circuit Court of Appeals in an earlier case).