The opinion of the court was delivered by: KIRKPATRICK
This is a suit to recover an alleged overpayment, amounting to $60,016.86, of income and excess profits taxes for the taxable year 1918. The tax was assessed and paid after the expiration of the statutory period of limitation, and the plaintiff bases its claim upon section 607 of the Revenue Act of 1928 (26 USCA § 2607), which provides that any tax assessed after such time shall be considered an overpayment.
The first defense is that the plaintiff by written agreement waived the limitation period, and the first question is as to the validity of the waivers. The second defense is that the plaintiff, subsequent to the assessment, gave bond to stay immediate collection of the tax by distraint, and the second question is whether the giving of the bond extinguished any right the plaintiff may have had at that time.
The facts are substantially as follows:
The limitation period so extended expired without any new waiver having been filed and without any assessment having been made. Two months after its expiration on August 18, 1925, in response to a letter from the Commissioner of Internal Revenue, the plaintiff filed a second waiver extending the period to December 31, 1926. On January 13, 1926, in response to another letter from the Commissioner, the plaintiff filed a third waiver which by its terms also extended the period of limitation to December 31, 1926, the same date as fixed by the second waiver, already filed.
De December 18, 1926, and within the limitation period covered by the second and third waivers, the Commissioner assessed additional income and profits taxes and interest against the plaintiff for the year 1918 in the total amount of $84,467.27. $24,450.41 has been either abated or collected by means of credits and is not involved in this suit.
On April 20, 1927, the plaintiff, under threat of immediate proceedings to collect the balance or $60,016.86, gave bond to the collector and obtained an extension of the time for payment, agreeing to make payment in monthly installments of $5,000 each, which payments were duly made and the total amount paid on or before September 20, 1928.
In January, 1929, the plaintiff filed claims for refund, which claims were rejected in March, 1929. Thereupon this suit was brought.
The fact that the second waiver was given after the expiration of the statutory period (as extended by the first waiver) does not impair its validity. Stange v. United States, 282 U.S. 270, 51 S. Ct. 145, 75 L. Ed. 335. If obtained by duress or fraud, it would be void.The plaintiff does not suggest that there was any duress, but does contend that it was obtained by suggestions amounting to fraudulent misrepresentations contained in the Commissioner's letter of August 14, 1925, in reply to which it was sent. This contention calls for further findings of fact which I make as follows:
The letter of the Commissioner in response to which the second waiver was sent was as follows:
"Reference is made to your income and profits tax returns for the calendar years 1917 to 1919, inclusive."
"The appraisal submitted by you to establish the March 1, 1913, value of your plant for depreciation purposes is under consideration and it is not believed that the examination of the appraisal nor the audit of your returns will be completed prior to the statutory period of limitation. In the event the final audit of your returns discloses overassessments, in order to protect your interests it will be necessary that you immediately file claims for refund with the Collector of Internal Revenue for your district."
"In the event deficiencies in tax are disclosed in order that the interests of the Government may not be jeopardized you are requested to execute and return to this office within ten days from the ...