262 U.S. 234 (1923), 846, Graham v. Du Pont

Docket Nº:No. 846
Citation:262 U.S. 234, 43 S.Ct. 567, 67 L.Ed. 965
Party Name:Graham v. Du Pont
Case Date:May 21, 1923
Court:United States Supreme Court
 
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Page 234

262 U.S. 234 (1923)

43 S.Ct. 567, 67 L.Ed. 965

Graham

v.

Du Pont

No. 846

United States Supreme Court

May 21, 1923

Argued April 30, 1923

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. Under § 3224, Rev.Stats., federal taxing officers who, in the course of general jurisdiction over the subject matter, have made an assessment and claim that it is valid cannot be enjoined from collecting the tax upon the ground that the assessment is illegal. P. 254.

2. One who would contest the validity of a federal tax upon the ground that the assessment and the right to distrain were barred by a statutory time limitation should pay the tax and sue to recover it, and not seek relief by a suit to enjoin the Collector from distraining for the tax. P. 255.

3. Under § 252 of the Revenue Act of 1918, reenacted in the Revenue Act of 1921, a taxpayer whose return of income was due March 15, 1916, and against whom an additional assessment was made December 31, 1919, could pay the amount of the assessment, make his claim therefor, and, if that were rejected, have at least until March 15, 1921, within which to sue to recover back the payment. P. 256.

4. A taxpayer cannot, by delaying payment of an assessment until his right to sue to recover it back is barred by limitations, make a case so extraordinary and entirely exceptional as to render Rev.Stats., § 3224, inapplicable to his suit to enjoin collection by distraint. P. 256. Lipke v. Lederer, 259 U.S. 557; Hill v. Wallace, id., 44, and other cases distinguished.

5. A taxpayer whose income return for the year 1915 was filed before March 15, 1916, and who was assessed additionally December 31, 1919, and, on March 8, 1920, filed a claim for abatement

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of such assessment as void, because not made within the statutory time limit therefor and because made on a dividend of corporate shares which were not income (involving a question afterward determined adversely in United States v. Phellis, 257 U.S. 156) held entitled under § 252 of Revenue Act 1921, and § 3226, Rev.Stats., as amended by Revenue Act of March 4, 1923, c. 276, 42 Stat. 1504, to pay the tax assessed, bring suit to recover it back, and, in such suit, to raise questions as to the value of the stock and the amount of resulting tax, and also as to whether the assessment was barred by statutory time limitation. P. 258.

284 F. 1017 reversed.

[43 S.Ct. 568] This is a proceeding by certiorari to review the action of the circuit court of appeals of the Third Circuit in affirming on appeal a temporary injunction granted by the district court of Delaware restraining the then Collector of Internal Revenue for the District of Delaware from levying a distraint against the property of the complainant, Alfred I. Dupont, to collect the sum of $1,576,015.06 assessed against him by the Commissioner of Internal Revenue.

In a reorganization of a Dupont Powder Company of New Jersey and the organization of a new Dupont Powder Company of Delaware to take over many of the assets of the old company, the complainant, in the year 1915, received 75,534 shares of the common stock of the Delaware company of the par value of $100 each. The transaction was the subject of consideration by this Court in United States v....

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