Bennett v. United States, 11599.

• Decision Date: 04 April 1956
• Docket Number: No. 11599.,11599.
• Citation: 231 F.2d 465
• Parties: Josephine F. BENNETT, etc., and Harris Trust and Savings Bank, etc., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

231 F.2d 465 (1956)

Josephine F. BENNETT, etc., and Harris Trust and Savings Bank, etc., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

No. 11599.

United States Court of Appeals Seventh Circuit.

April 4, 1956.

Harry D. Orr, Jr., Chicago, Ill., James J. McClure, Jr., Chicago, Ill., Hopkins, Sutter, Owen, Mulroy & Wentz, Chicago, Ill., of counsel, for appellants.

H. Brian Holland, Asst. Atty. Gen., S. Dee Hanson, Atty., U. S. Dept. of Justice, Washington, D. C., Robert Tieken, U. S. Atty., Chicago, Ill., Charles K. Rice, Acting Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott, Morton K. Rothschild, Attorneys, Department of Justice, Washington, D. C., John P. Lulinski, Donald S. Lowitz, Asst. U. S. Attys., Chicago, Ill., for appellee.

Before MAJOR, FINNEGAN and SCHNACKENBERG, Circuit Judges.

FINNEGAN, Circuit Judge.

Plaintiff executors'¹ claim for refund, based upon alleged overpayment of federal estate taxes, was held barred by reason of a settlement agreement with the government. Relying upon the defendant's first affirmative defense coupled with an array of stipulated facts and documentary exhibits, the court below dismissed plaintiffs' complaint. The ruling was erroneous.

By their appeal the plaintiffs present the same basic question passed upon, and stipulated, below, viz.: "For the purpose of saving the time of the Court, the parties hereto are submitting to the Court the single legal question of whether or not the terms and conditions of the waiver set forth as Exhibit D hereto and circumstances surrounding its execution constitute a good defense to this action * * * and thus a bar to further proceedings herein." The district judge considered the "entire matter" in the nature of a motion for judgment on the pleadings pursuant to Rule 12(c), Federal Rules of Civil Procedure, 28 U.S.C.A.

Exhibit D is reprinted here because much of this appeal centers about its content:

C-TS:CD AP:EFV Accepted Oct. 21-1948 Albin Pearson Head, Chicago Division Technical Staff Waiver of Restrictions Against Assessment and Collection of Deficiency in Estate Tax District of — 1st Illinois

Pursuant to the provisions of section 871(d) of the Internal Revenue Code or corresponding provisions of prior internal revenue laws, the undersigned executor or administrator of the estate of Ben Alexander waives the restrictions provided in section 871(a) of the Internal Revenue Code, as amended, or corresponding provisions of prior internal revenue laws, and consents to the assessment and collection of a deficiency in estate tax in the sum of $135,602.74, together with interest as provided by law.

It is understood and agreed that evidence of payment of estate, inheritance, legacy or succession taxes to the State of Texas, as required by section 81.9 of Estate Tax Regulations 105, will be filed with the Bureau of Internal Revenue at Washington, D. C. as promptly as practicable. In the event that such evidence is filed on or before June 30, 1949, the taxpayer in this case shall have the right to file a claim for refund for the amount of estate, inheritance, legacy or succession taxes so paid to the State of Texas in respect to this estate, or in the amount of $2,351.44, whichever amount is the lesser. It is further understood and agreed that the amount refundable to the taxpayer under such claim for refund shall not exceed the sum of $2,351.44, with interest as provided by law.

This Waiver of Restrictions is subject to acceptance by on or behalf of the Commissioner of Internal Revenue, on the basis of the adjusted liability as hereinabove proposed, and is to take effect as such only from the date said adjusted liability is accepted by or on behalf of the Commissioner as a basis for closing the case, and if not thus accepted will have no force or effect.

If this proposal is accepted by or on behalf of the Commissioner, the case shall not be reopened nor shall any claim for refund be filed or prosecuted respecting the estate tax in the absence of fraud, malfeasance, concealment or misrepresentation of material fact, or of an important mistake in mathematical calculations, except that a claim for refund may be hereafter filed or presented on the one condition and not to exceed the amount specified in the second paragraph of this waiver. The taxpayer also agrees: (1) to make payment of the above deficiency, together with interest, as provided by law, promptly upon receipt of notice and demand from the Collector of Internal Revenue, and not to file an offer in compromise respecting such liability; and (2) upon request of the Commissioner to execute at any time a final closing agreement as to the tax liability, on the foregoing basis, under the provisions of section 3760 of the Internal Revenue...