The opinion of the court was delivered by: FOLLMER
This suit involved a claim for a refund of taxes allegedly unlawfully assessed and collected in the sum of $ 5,835.60 with interest at the rate of six per cent. per annum from May 1951. After trial before the Court and without a jury, the Court awarded judgment in favor of plaintiff and against the defendant in the sum of $ 5,835.60 with interest thereon at the rate of six per cent. per annum from July 31, 1951.
Defendant has moved to amend the judgment so as aforesaid awarded by the sum of $ 868.14 so that the judgment call for recovery in the sum of $ 4,967.46 plus interest at the rate of six per cent. per annum from July 31, 1951. Defendant gives as its reasons in support of its motion that the District Director erroneously refunded interest of $ 148.28 on September 23, 1953, and erroneously made a second refund of $ 719.86 on March 10, 1955, totalling $ 868.14.
Section 6532(b) of the Internal Revenue Code of 1954, 26 U.S.C. § 6532(b), (c. 736, 68A Stat. 816) provides as follows:
'(b) Suits by United States for recovery of erroneous refunds. -- Recovery of an erroneous refund by suit under section 7405 shall be allowed only if such suit is begun within 2 years after the making of such refund, except that such suit may be brought at any time within 5 years from the making of the refund if it appears that any part of the refund was induced by fraud or misrepresentation of a material fact.'
The complaint avers that plaintiff paid additional tax of $ 5,835.60 in May 1951. The answer admits the payment but avers it was made on July 31, 1951. The Order of the Court awarded judgment to plaintiff in the sum of $ 5,835.60 with interest from July 31, 1951.
Basically, this is an action by a taxpayer for repayment of taxes allegedly erroneously or illegally assessed and collected under the provisions of 28 U.S.C. § 1346(a)(1)(i).
Plaintiff contends that because the motion to amend the judgment order was not made within two years of the alleged refund it is barred by Section 6532(b) of the Internal Revenue Code of 1954 (26 U.S.C. § 6532(b)) and Section 3746 of the Internal Revenue Code of 1939, respectively.
Defendant contends that the motion does not constitute a suit for recovery of an erroneous refund which would be barred by the Statute of Limitations but rather that it merely reflects the amount of recovery to which plaintiff is entitled by virtue of the Court's judgment; that there was no need for the Government to plead the diminution of recovery called for in the Government's motion since this was not an 'offset' as contemplated by plaintiff. Defendant further contends that the motion poses a challenge to the jurisdiction of the Court and that where jurisdictional requirements are found lacking the Court must sue sponte dismiss.
I am not impressed by the Government's argument. It smacks too much of Monday morning quarterbacking. Surely the Government must have been aware of the refunds in question when it answered the complaint. It then was content to stake its case on the broad underlying theory that the transactions involved were speculative in nature and not legitimate hedges. With the judgment against them, they now belatedly assert a jurisdictional lapse that it seems to me comes squarely within the provisions of 26 U.S.C. § 6532(b). There is nothing in this record to impel the Court to exercise its discretion under the provisions of Rule 60(b) of the Federal Rules of Civil Procedure, 28 U.S.C.
Motion of defendant to amend the judgment ...