Blair v. United States Birkenstock, 713

• Decision Date: 24 May 1926
• Docket Number: No. 713,713
• Citation: 46 S.Ct. 506,70 L.Ed. 983,271 U.S. 348
• Parties: BLAIR, Commissioner of Internal Revenue, v. UNITED STATES ex rel. BIRKENSTOCK et al
• Court: U.S. Supreme Court

271 U.S. 348

46 S.Ct. 506

70 L.Ed. 983

BLAIR, Commissioner of Internal Revenue,

v UNITED STATES ex rel. BIRKENSTOCK et al.

No. 713.

Argued May 4, 1926.

Decided May 24, 1926.

Mr. William D. Mitchell, Sol. Gen., Mrs. Mabel Walker Willebrandt, Asst. Atty. Gen., and Messrs. T. H. Lewis, Jr., and Sewall Key, both of Washington, D. C., for petitioner.

Messrs. James Craig Peacock and John W. Townsend, both of Washington, D. C., for respondents.

Mr. Justice STONE delivered the opinion of the Court.

In 1920, Margaret Murphy, testatrix of respondents, paid without protest, to the collector of internal revenue at Philadelphia, the sum of $88,956.92 as income tax for the year 1919. On May 18, 1923, a claim was filed with the Commissioner of Internal Revenue for a refund of $35,054.85 as an overpayment of her taxes for 1919. On May 19, 1924, the Commissioner signed a 'schedule of overassessment and allowance of abatement, credit and refund,' in the amount claimed, and gave certain instructions to the collector with respect to it. On a statement from the collector that the amount claimed was subject to refund, the Commissioner, on August 12, 1924, signed an authorization to the disbursing clerk of the Treasury to pay to respondents the refund demanded, with interest computed from November 18, 1923 (six months after the filing of the claim for refund, as provided by section 1324 of the Revenue Act of 1921 (Comp. St. Ann. Supp. 1923, § 6371 4/5 j), which he deemed applicable) to May 19, 1924, the date on which the Commissioner signed the schedule of overassessment.

Respondents protested the amount of interest allowed, and demanded that it be computed on the excess of each quarterly payment from the date when it was made, in 1920, to August 12, 1924, the date upon which the Commissioner signed the authorization to the disbursing clerk. Upon the refusal of the Commissioner to allow this claim, respondents petitioned the Supreme Court of the District of Columbia for a writ of mandamus to compel him to compute and allow the interest demanded. The Commissioner, the petitioner here, filed an answer, to which the respondents demurred. The Supreme Court of the District sustained the demurrer and granted the writ; and, upon appeal, the Court of Appeals sustained the judgment, modifying it in only one particular, not important to the decision in this case. This court granted certiorari. 269 U. S. 545, 46 S. Ct. 102, 70 L. Ed. —.

The government having expressly waived the point made below that mandamus will not lie, only two questions are presented for consideration here. One is the date from which, the other is the date to which, interest allowed on the refund should be computed. Since the certiorari was allowed, the second question has been decided by this court in Girard Trust Co. v. United States, 270 U. S. 163, 46 S. Ct. 229, 70 L. Ed. 524, March 1, 1926. In that case we held that the date of allowance of the refund, and therefore the date to which interest should be computed under section 1019 of the Revenue Act of 1924, c. 234, 43 Stat. 253, 346 (Comp. St. Supp. 1925, § 6371 5/6 m), is the date on which the Commissioner signed the authorization to the disbursing clerk of the Treasury, directing him to pay the refund. The court below therefore correctly held that interest should be computed to that date, which was August 12, 1924, and that, as this date was subsequent to the enactment of section 1019 of the Revenue Act of 1924, the allowance of interest must be in accordance with that section, and not section 1324 of the Act of 1921, which had been repealed. Hence we are not concerned with the ruling of the Commissioner, applying the 1921 act, that interest ran only from six months after filing of the claim for refund, because it was based on his erroneous conclusion as to the date when the refund was 'allowed.'

The question remaining for decision is from what date interest on the refund is to be computed, under section 1019 of the Act of 1924, which provides:

'Upon the allowance of a credit or refund of any internal revenue tax erroneously or illegally assessed or collected, * * * interest shall be allowed and paid on the amount of such credit or refund at the rate of 6 per centum per annum from the date such tax * * * was paid to the date of the allowance of the refund, or in case of a credit, to the due date of the amount against which the credit is taken. * * *'

The respondents contend that, as each of the quarterly installments paid by the taxpayer was in excess of one-fourth of the proper amount of the tax for the year, interest allowed on the refund should have been computed, as the court below held, on the excess of each quarterly payment, from the date on which it was paid. But the government argues that such an excess quarterly payment is not a 'tax erroneously or illegally assessed or collected,' within the meaning of section 1019, if, when it is...