The opinion of the court was delivered by: GIBSON
The plaintiff seeks to recover $141,957.55, with interest from August 26, 1925, which it claims was collected from it after the statute of limitations had barred the Government's claim.
The only matter in material dispute is the effect of an agreement made between representatives of the Commissioner and the taxpayer prior to the expiration of the statutory period for collection. If that agreement served as a claim in abatement or as a waiver of the statute, as contended by the defendant, judgment must be for the defendant, and if it did not so serve, judgment must be for the plaintiff.
The controversy arises from the collection of income and excess profits taxes for the year 1918. The plaintiff filed its completed return for that year on June 13, 1919. On January 29, 1924, the taxpayer filed a waiver extending the limitation period of collection for a period of one year, that is, from June 13, 1924, to June 13, 1925.
On April 10, 1924, the taxpayer was informed that additional taxes, in amount of $320,120.73, would be assessed against it. Of this amount, $150,000 was paid pursuant to the agreement mentioned supra, and on August 26, 1925, the sum of $141,957.55 was collected. The claim for the refund of this amount, based upon the expiration of the statutory period for collection, was made on August 23, 1929, and rejected October 17, 1930.
On April 22, 1924, the Commissioner of Internal Revenue extended the time for filing a protest to the proposed additional assessment to May 14, 1924. On May 13, 1924, the taxpayer filed its protest and appeal, and on June 4, 1924, filed a supplemental brief in connection therewith. The protest and appeal were inadvertently overlooked by the Commissioner, who, on May 27, 1924, assessed against the taxpayer the aforesaid tax of $320,120.73, without having given it a hearing on its protest, as required by section 250(d) of the Revenue Act of 1921.
On June 16, 1924, representatives of the taxpayer and Commissioner met and agreed that the assessment had been inadvertently made and was premature. It was further agreed that $150,000 of the total amount proposed to be assessed against the taxpayer was not in dispute and would be paid at once, and that thereupon the Commissioner would withdraw the assessment of $320,120.73, and make a new assessment of $150,000, and then the Commissioner would proceed as though the assessment of $320,120.73 had not been made. This agreement was confirmed by the taxpayer, which paid the $150,000 as additional taxes on June 19, 1924. It was part of the agreement last mentioned that no interest was to be paid by the taxpayer upon any tax found due in addition to the $150,000 paid.
The Commissioner failed to withdraw the assessment of $320,120.73, upon the payment of $150,000. He did, however, on July 2, 1924, direct the Collector, the defendant, to hold in abeyance the collection of the balance of the assessment, and informed him that a certificate of overassessment would be forwarded at an early date, and on April 30, 1925, informed the taxpayer of an overassessment of $28,163.18.
It is plain that no formal claim in abatement was filed by the taxpayer. The Regulations adopted by the Commissioner of Internal Revenue pursuant to authority from the Congress and having the force of law, required a claim in abatement to be made upon a prescribed form, filed with the Collector of Internal Revenue and supported by affidavits giving full and explicit statements of all the material facts sustaining the claim. The regulations also provided that a claim in abatement could not be filed by a taxpayer who had received the benefit of Section 250(d), which excepts from the statutory period of five years for the collection of the tax the case wherein both the Commissioner and the taxpayer have consented in writing to a later determination, assessment and collection of the tax.
It is not claimed on behalf of the defendant that any formal claim for abatement was filed. The record herein discloses that the representative of the Commissioner who had charge of this tax claim in the Bureau of Internal Revenue had denied representatives of the taxpayer an extension of time within which to file a brief because, as he stated, no claim in abatement had been filed.
The record discloses no agreement in writing, signed by the Commissioner and the taxpayer, for an extension of the statutory period for collection.
It is claimed on behalf of the defendant, however, that the plaintiff, by its statements and actions, waived the limitation period for collection, and is estopped from claiming it.
As to the waiver, no evidence was introduced which establishes it. A waiver, to be effective, must be a consent in writing signed by the Commissioner. Helvering v. United States Refractories Corporation, 290 U.S. 591, 54 ...