payment of such tax, penalty, or sum. * * * '
Although there is no precedent on this question with respect to estate taxes, the decisions are uniform in actions for refunds of income, excess-profits and gift taxes that the specific limitation as to refund are applicable to claims for overpayment of such taxes, whereas the general statute, Section 3228(a) of the Revised Statutes, as amended, applies where the taxpayer was exempt from the tax assessed and paid. Huntley v. Southern Oregon Sales, Inc., 9 Cir., 102 F.2d 538; United States v. Lederer Terminal Warehouse Co., 6 Cir., 139 F.2d 679; Olsen v. United States, D.C., 32 F.Supp. 276; Godfrey v. United States,
C.C.H. Inheritance, Estate and Gift Tax Service, paragraph 417210.
The basis for the distinction was set forth by the court in the Lederer case, supra, as follows, at page 681 of 139 F.2d: 'Congress evidently considered that less time would be required for the discovery of errors in tax returns resultant from miscalculations or mere overpayment than would be required to ascertain the erroneous or illegal nature of an assessment. Hence, the inference is logical that Congress intended to allow the taxpayer a longer time to determine whether he had been erroneously or illegally assessed than would be permitted him for the discovery of a mere overpayment of taxes, assessed and collected upon a correct or legal basis.'
The Commissioner contends that these decisions are all unsound and should not be followed, but that in any event the plaintiff's claim in the present case is for an overpayment of the estate tax rather than for an amount assessed against him illegally and without authority, and hence they are inapplicable. It seems clear, however, that the refund sought is not for an 'overpayment' in the sense used as the basis for the distinction drawn, merely because plaintiff admittedly owed and paid some estate tax. The refund was rather for a refund sought to be imposed as an estate tax, but held by the Supreme Court not to have been levied at all under the statute in question, and hence erroneously and illegally assessed. The reasoning of the Circuit Court of Appeals for the Sixth Circuit in the excerpt from its opinion quoted above clearly brings the present claim under the general statute, Section 3228(a) of the Revised Statutes as amended.
I am inclined to follow the unanimous authorities bearing on this question and to hold that plaintiff's claim for refund, filed within four years from the time of the payment of the tax, was timely and permits the present action. This conclusion makes unnecessary a consideration of whether the rider to the original return constitutes an informal claim for refund.
I make the following
Conclusions of Law:
1. No basis estate tax under Title III of the Revenue Act of 1926, as amended, 26 U.S.C.A.Int.Rev.Acts,page 224 et seq., nor additional estate tax under Title II of the Revenue Act of 1932, as amended, 26 U.S.C.A.Int.Rev.Code, § 935 et seq., was imposed upon the $ 31,219.56 of interest and dividends collected and accrued upon bonds and stocks between the date of decedent's death and the optional valuation date, included in the estate tax return in this case.
2. There was an illegal assessment in this case of which $ 5770.59 had not been refunded and arises solely out of the erroneous inclusion of interest and dividends in the estate tax return.
3. The unrefunded sum of $ 5770.59 represents alleged taxes which were erroneously and illegally assessed and collected and were never imposed as basis estate tax under Title III of the Revenue Act of 1936, as amended, as additional estate tax under Title II of the Revenue Act of 1932, as amended, or under any other Act of Congress.
4. Section 3228(a) of the Revised Statutes, as amended, governs the time within which plaintiff was permitted to file a claim for refund of the sum of $ 5770.59, and the claim for refund filed May 24, 1941, was a valid, sufficient and timely claim.
5. Judgment is hereby entered in favor of the plaintiff and against the defendant in the sum of $ 5770.59 with interest thereon from May 12, 1938.