Greenwood Packing Plant v. Commissioner of Int. Rev.
| Decision Date | 20 November 1942 |
| Docket Number | No. 4977.,4977. |
| Citation | 131 F.2d 815 |
| Parties | GREENWOOD PACKING PLANT v. COMMISSIONER OF INTERNAL REVENUE. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Theodore B. Benson, of Washington, D. C., for Petitioner.
Arthur A. Armstrong, Sp. Asst. to the Atty. Gen. (Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key and Samuel H. Levy, Sp. Assts. to the Atty. Gen., on the brief), for respondent.
Before PARKER, SOPER and DOBIE, Circuit Judges.
This case relates to a deficiency of $1,598.02 in unjust enrichment tax for the year 1935, determined by the Commissioner of Internal Revenue and approved by the Board of Tax Appeals under the Revenue Act of 1936, Ch. 690, 49 Stat. 1648, 26 U.S.C.A. Int.Rev.Acts, page 819 et seq. During the year 1935, the Greenwood Packing Company, a South Carolina corporation, the taxpayer, handled three classes of merchandise. It was engaged in processing hogs and selling the products, in selling cattle and selling the products, and in buying salt meats, butter and other dairy products at wholesale and selling them at retail. The records of the business for the tax year 1935 comprised a ledger, a cash book and purchase and sale invoices, but the invoices, having been damaged by rats, were destroyed in 1936. From the remaining records purchases can be segregated into:
Merchandise bought for resale $29,470.85
Cattle purchased for slaughter 27,252.43
Hogs and material bought for
processing .................. 16,811.74
The total sales are shown to have been $105,821.95, but no segregation of sales among the three classes of merchandise can be made.
The taxpayer did not pay the processing tax of $1,997.52 on hogs for the year 1935, but accrued it as an obligation on its books, and showed a net loss on the business as a whole in its income tax return for the year. After the processing tax had been declared unconstitutional and the return had been adjusted by the revenue agent, it showed a net loss for the year of $47.63.
The taxpayer's return of tax on unjust enrichment for the year 1935 was filed on December 16, 1936. Therein a revised net gain of $53.82 from the business as a whole for the year 1935 was indicated, but no unjust enrichment income subject to tax was shown. In this return the taxpayer made no attempt to show that it had not shifted the tax to customers, and failed to furnish any of the information required by the schedules annexed to the return from which the computations of net income directed by the act must be made. In effect, the taxpayer confined itself to the statement that since the payment of certain salary obligations was made possible only by the invalidation of the tax, there had been no unjust enrichment by virtue of the tax. Under these circumstances, the Commissioner drew the reasonable inference that the burden of the tax had been shifted to others, and therefore determined a deficiency in the sum of $1,598.02, that is, 80% of the total tax of $1,997.52. Under the established rule, this determination must be accepted as prima facie correct. The burden rests upon the taxpayer to prove the contrary. Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 78 L.Ed. 212; Helvering v. Taylor, 293 U.S. 507, 514, 515, 55 S.Ct. 287, 79 L.Ed. 623; Wilson Coal Land Co. v. Commissioner of Internal Revenue, 4 Cir., 87 F.2d 186; Manchester Board & Paper Co. v. Commissioner of Internal Revenue, 4 Cir., 89 F.2d 315.
The following statutory provisions are relevant to the discussion:
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