Commissioner of Internal Revenue v. Gooch Milling Elevator Co, No. 53

• Court: United States Supreme Court
• Writing for the Court: MURPHY
• Citation: 320 U.S. 418,88 L.Ed. 139,64 S.Ct. 184
• Decision Date: 06 December 1943
• Docket Number: No. 53
• Parties: COMMISSIONER OF INTERNAL REVENUE v. GOOCH MILLING & ELEVATOR CO

320 U.S. 418 64 S.Ct. 184 88 L.Ed. 139 COMMISSIONER OF INTERNAL REVENUE

v.

GOOCH MILLING & ELEVATOR CO.

No. 53. Argued Nov. 12, 1943. Decided Dec. 6, 1943.

Miss Helen R. Carloss, of Washington, D.C., for petitioner.

Mr. D. M. Kelleher, of Ft. Dodge, Iowa, for respondent.

Mr. Justice MURPHY delivered the opinion of the Court.

The jurisdiction of the Board of Tax Appeals¹ to determine and to apply a prior tax overpayment against a tax

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deficiency for a particular year is the sole question presented by this case. The Board held that it did not possess such jurisdiction, but the court below reversed, 8 Cir., 133 F.2d 131. We granted certiorari, 319 U.S. 737, 63 S.Ct. 1318, 87 L.Ed. 1696, the problem being one of importance in the administration of the revenue laws.

An audit made in 1938 of the books of the respondent corporation disclosed an erroneous valuation of its inventory of June 30, 1935.² Because of this error, respondent had been overassessed and had overpaid its income and excess profits taxes for the 1935 fiscal year. This excess payment was not subject to refund because barred by the statute of limitations. On the basis of the adjusted inventory, however, the Commissioner determined that there was a tax deficiency for the 1936 fiscal year. The overpayment of the prior fiscal year exceeded the amount of this deficiency. On appeal to the Board for a redetermination of the deficiency, the respondent sought in its amended petition to have the 1935 overpayment applied as an offset or recoupment against the 1936 deficiency. The Board, consistent with its past decisions, ³ refused to grant this relief 'for jurisdictional reasons.'

We hold that the Board's position was correct and that it had no jurisdiction to determine or to apply any overpayment of the taxes for the 1935 fiscal year against the 1936 deficiency.

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The Board is but 'an independent agency in the Executive Branch of the Government,'⁴ and the legislative pattern of its jurisdiction is clear and unambiguous. The Board is confined to a determination of the amount of deficiency or overpayment for the particular tax year as to which the Commissioner determines a deficiency and as to which the taxpayer seeks a review of the deficiency assessment. Internal Revenue Code, §§ 272, 322(d), 26 U.S.C.A. Int.Rev.Code, §§ 272, 322(d). It has no power to order a refund or credit should it find that there has been an overpayment in the year in question. United States ex rel. Girard Trust Co. v. Helvering, 301 U.S. 540, 542, 57 S.Ct. 855, 856, 81 L.Ed. 1272. Section 272(g) of the Internal Revenue Code specifically provides that 'the Board in determining a deficiency in respect of any taxable year shall consider such facts with relation to the taxes for other taxable years as may be necessary correctly to redetermine the amount of such deficiency, but in so doing shall have no jurisdiction to determine whether or not the tax for any other taxable year has been overpaid or underpaid.'

The Board's want of jurisdiction to apply the doctrine of equitable recoupment in this case is manifest from these statutory provisions. The Commissioner assessed a deficiency only for the 1936 fiscal...