21, 1927. Plaintiff agreed to the assessment and collection of this additional tax.On March 14, 1928, plaintiff filed a claim for refund for $ 20,952.50 which contained the same general grounds set forth in its claim for the year 1922. Plaintiff was notified the claim would be rejected as unsubstantiated, and the claim was rejected on Schedule No. 11918 dated April 24, 1928. This suit was filed July 3, 1930.
For the year 1926, plaintiff filed a return on March 15, 1927, reporting a tax due of $ 16,887.27. On March 17, 1927, plaintiff paid $ 4,221.82, and the balance was paid in instalments on June 15, September 15, and December 15, 1927. Additional tax of $ 12.55 was assessed in April 1928, and paid April 23, 1928. Plaintiff agreed to the assessment and collection of this additional tax.On March 14, 1928, plaintiff filed a claim for the refund of $ 16,887.27, containing the same general grounds set forth in its other claim for 1922. Plaintiff was notified its claim would be rejected in a letter dated August 13, 1928, because plaintiff signed an agreement consenting to the assessment and collection of additional tax subsequent to the date the claim was filed. The claim was rejected on Schedule No. 12881 dated September 7, 1928.
In addition, we find that so far as concerns the refund claims for the year 1917 to the year 1923 inclusive, involved in these two suits, the plaintiff, on January 30, 1929, filed with the Commissioner of Internal Revenue a petition for the re-opening of these refund claims, which petition was denied by the Commissioner on January 8, 1930.
On these facts we are of the opinion that suit No. 6321 should be dismissed, because no timely sufficient claim for refund was filed for any year or amount involved in this suit; and that suit No. 6322 should likewise be dismissed, because the refund claims filed were insufficient to constitute valid claims within the meaning of Section 1113(a) of the Revenue Act of 1926, and Article 1304 of the Treasury Regulations 69; and further, as to the years 1925 and 1926, no cause of action is stated on which relief can be granted.
We first consider plaintiff's petition to re-open its tax-refund claims for the years 1917 to 1923 inclusive, which was filed January 30, 1929, and denied January 30, 1930. It is the contention of plaintiff that this later date is the date of denial of its refund claims for these years. With this contention we cannot agree. It is our opinion that the mere filing of a petition to re-open a tax-refund claim will not toll the running of the statute. Had the Commissioner granted the petition to re-open, and after further hearing and considering the refund claims on their merits, rejected them, the date of that rejection would have been the date from which to compute the time in which plaintiff could sue. The cases of American Safety Razor Co. v. United States, Ct.Cl., 6 F.Supp. 293; Watts v. United States, 2 Cir., 82 F.2d 266 (cited by the plaintiff), are not in point, because the Commissioner granted the petition to re-open, and heard those cases on their merits. That is not the situation here, where the Commissioner merely denied the petition to re-open.
The plaintiff contends it was entitled to have granted its petition to re-open its refund claims for the years 1917 to 1924, by reason of the provisions of Treasury Decision 4235 with reference to the re-opening of refund claims. We cannot see the decision applies to the facts of this case at all. The Treasury decision applies only to "claims disallowed prior to May 29, 1928, in which the period of limitations for bringing suit has expired." None of the claims here in controversy is within that category.
We next consider the necessity and sufficiency of the claims for refund which were filed in the instant case. Under Section 1113(a) of the Revenue Act of 1926, it is provided: "No suit or proceeding shall be maintained in any court for the recovery of any internal-revenue tax * * * until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof. * * *"
Article 1304 of Regulations 69 adopted by the Secretary of the Treasury pursuant to Section 3226 of the Revenue Act, provides: "Article 1304. Claims for Refund by Taxpayers. Claims by the taxpayer for the refunding of taxes, interest, penalties, and additions to tax erroneously or illegally collected shall be made on Form 843.All facts relied upon in support of the claim should be clearly set forth in detail under oath."
The plaintiff in the instant case did file the refund claims under oath, using Form 843, but they were general in their statements. No facts were submitted in support of the claims, and it would be impossible to tell from the grounds stated, what adjustments the taxpayer wanted. In our opinion, none of the claims filed met the requirements of this statute and regulations. The only basis on which the United States can be sued for the recovery of taxes, is the basis asserted by the taxpayer in his claim for refund. See Rock Island, Arkansas & Louisiana R. Co. v. United States, 254 U.S. 141, 41 S. Ct. 55, 65 L. Ed. 188; United States v. Real Estate-Land Title Trust Co., 3 Cir., 102 F.2d 582, affirmed 309 U.S. 13, 60 S. Ct. 371, 84 L. Ed. 542; United States v. Felt & Tarrant Mfg. Co., 283 U.S. 269, 51 S. Ct. 376, 75 L. Ed. 1025.
There was no motion to amend any of the claims on which these suits were predicated; and even if we were to hold the plaintiff's petition to re-open some of the refund claims involved in these suits to be in the nature of a motion to amend the claims, it would not avail the plaintiff, for the reason that a claim for refund cannot be amended after it has been rejected. See United States v. Memphis Oil Co., 288 U.S. 62, 53 S. Ct. 278 77 L. Ed. 619; Sugar Land Railway Co. v. United States, Ct.Cl., 48 F.2d 973; Cuban-American Sugar Co. v. United States, D.C., 27 F.Supp. 307, certioriari denied April 1, 1940, 309 U.S. 681, 60 S. Ct. 721, 84 L. Ed. 1025; United States v. Andrews, 302 U.S. 517, 58 S. Ct. 315, 82 L. Ed. 398; United States v. Garbutt Oil Co., 302 U.S. 528, 58 S. Ct. 320, 82 L. Ed. 405.
In January, 1929, when plaintiff filed its petition to re-open the refund claims, it still had time in which to file claims for refund of all taxes paid for the years 1924 to 1926 inclusive, but did not do so.
In addition to that, it might be noted that plaintiff's tax returns for the years 1920 to 1926 inclusive, were reviewed, and that the plaintiff consented to the assessment of additional taxes.
Our conclusion is that the refund claims were wholly insufficient to apprise the Commissioner of the basis on which a refund was claimed, and that the Commissioner's action in rejecting them for each year was fully justified under the facts and circumstances of these cases.
We also conclude that the complaint fails to state a cause of action for the years 1925 and 1926. As to these years it sets forth only the dates on which the returns were filed, the dates and amount of taxes paid; the general allegations that the amounts paid in those two years were overpayments; that waivers were filed for 1925 and 1926; that claims for refund were filed; and that these overpayments were erroneous, illegal and void. This we do not regard as sufficient, in view of the fact that the plaintiff alleges no facts which show that taxes paid for these two years were not due and owing. The complaint on page 4 does show plaintiff's sales for the years 1917 to 1924 inclusive, but nothing is said about 1925 and 1926. Page 5 of the complaint shows depreciation of patents for the years 1917 to 1924 inclusive, but nothing is said about such depreciation, if any, for the years 1925 and 1926. On page 6 of the complaint, the statement of depreciation allowed does not refer to the years 1925 and 1926; and the complaint sets forth no value on which depreciation could be allowed for these years. We therefore consider the complaint fails to state any cause of action for the years 1925 and 1926.
The plaintiff further contends that the statute of limitations does not apply to its claims for the years 1917 to 1920 inclusive, by reason of the provisions of Sections 281(c) of the Revenue Act of 1924, 26 U.S.C.A. Int.Rev.Acts, page 62, and 284(c) of the Revenue Act of 1926, 26 U.S.C.A. Int.Rev.Acts, page 220 which reads as follows: "(c) If the invested capital of a taxpayer is decreased by the Commissioner, and such decrease is due to the fact that the taxpayer failed to take adequate deductions in previous years, with the result that there has been an overpayment of income, war-profits, or excess-profits taxes in any previous year or years, then the amount of such overpayment shall be credited or refunded, without the filing of a claim therefor, notwithstanding the period of limitation provided for in subdivision (b) or (g) has expired."
The plaintiff, however, does not plead any facts that make the provisions of this statute applicable, in that there is no allegation the Commissioner has decreased the invested capital of plaintiff for any of those years. Therefore, this statute is not applicable to the facts of this case. This view is supported by Denver Rock Drill Mfg. Co. v. United States, Ct.Cl., 59 F.2d 834, certiorari denied 287 U.S. 651, 53 S. Ct. 115, 77 L. Ed. 563; Southwestern Oil & Gas Co. v. United States, D.C., 29 F.2d 404, affirmed, 3 Cir., 34 F.2d 446, certiorari denied 280 U.S. 601, 50 S. Ct. 82, 74 L. Ed. 646.
Our conclusion is that the defendant is entitled to summary judgment in its favor for the dismissal of the complaint in each of the two cases here involved. An order may be submitted accordingly on notice to opposing counsel.
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