Michel v. United States, 141

• Decision Date: 06 January 1930
• Docket Number: 142.,No. 141,141
• Parties: MICHEL v. UNITED STATES. KRIEGER v. SAME.
• Court: U.S. Court of Appeals — Second Circuit

37 F.2d 38 (1930)

MICHEL v. UNITED STATES.

KRIEGER v. SAME.

Nos. 141, 142.

Circuit Court of Appeals, Second Circuit.

January 6, 1930.

Donald Horne, of New York City, for plaintiffs-appellants.

Charles H. Tuttle, U. S. Atty., of New York City (Leon E. Spencer, Asst. U. S. Atty., of New York City, of counsel), for the United States.

Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge (after stating the facts as above).

The question before us is the effect to be given to the provision of the statute that the Commissioner of Internal Revenue shall within ninety days after the disallowance of a claim to refund taxes notify the taxpayer thereof by mail.

If the words directing notice amount to no more than a regulation for the promotion of efficient administration and are not a requirement for the protection of the taxpayer, then the claim of each plaintiff is barred because more than two years have elapsed since his claim was rejected. But it is hard to suppose that the provision for notice was not primarily intended to warn the taxpayer of the rejection of his claim and of the running of the statute. The schedule of assessments which the Commissioner approves is not a record open to the public, but is an interdepartmental document, and the taxpayer apparently has no authoritative information as to the decision of the Commissioner except the prescribed notice by mail. But notice of the Commissioner's action is required by all the necessities of the case. While there is a general provision in the amended section 3226, supra, giving the taxpayer five years after payment of his tax within which to sue for the recovery of an overpayment, few persons wish to go to the trouble and expense of a lawsuit where relief may come through departmental action, especially when they are obliged to file refunding applications in all cases as a preliminary requisite. It was doubtless with this human element in view that the clause was inserted in the section as finally amended, allowing a special period within which to sue after a disallowance of the taxpayer's claim, and requiring notice of such disallowance.

Under the rule laid down by the Supreme Court in French v. Edwards, 13 Wall. 506, 511, 20 L. Ed. 702, the provision in section 3226 for notice to the taxpayer would seem to be mandatory. Justice Field there explained the principle of statutory construction as follows:

"There are undoubtedly many statutory requisitions intended for the guide of officers in the conduct of business devolved upon them, which do not limit their power or render its exercise in disregard of the requisitions ineffectual. Such generally are regulations designed to secure order, system, and dispatch in proceedings, and by a disregard of which the rights of parties interested cannot be injuriously affected. Provisions of this character are not usually regarded as mandatory unless accompanied by negative words importing that the acts required shall not be done in any other manner or time than that designated. But when the requisitions prescribed are intended for the protection of the citizen, and to prevent a sacrifice of his...