Pan American World Airways v. United States
Decision Date | 15 December 1953 |
Parties | PAN AMERICAN WORLD AIRWAYS, Inc. v. UNITED STATES. |
Court | U.S. District Court — Southern District of New York |
Cleary, Gottlieb, Friendly & Hamilton, New York City (George E. Cleary, New York City, of counsel), for plaintiff.
J. Edward Lumbard, U. S. Atty., Washington, D. C. (Arthur S. Ecker, Asst. U. S. Atty., New York City, of counsel), for defendant.
Cross-motions for summary judgment. The facts were stipulated.
Plaintiff corporation overpaid its income and declared value excess profits taxes for 1943 and 1944 in the sum of $174,298.72. By a Revenue Agent's report, dated March 15, 1951, sent to the taxpayer under date of April 20, 1951, the Internal Revenue Agent-in-charge proposed an overassessment of $174,298.72 for the years 1943 and 1944, and a deficiency in tax of $68,685.44 for 1945 and of $2,608,482.24 for 1946.
On March 7, 1951, the plaintiff executed Form 874, A Waiver of Restrictions on Assessment and Collection of Deficiency in Taxes, consenting to the assessment and collection of the proposed deficiencies and accepting the proposed overassessments as correct.
On May 10, 1951, plaintiff filed a claim for refund plus interest. On June 25, 1951, the Commissioner of Internal Revenue assessed the additional income taxes for 1945 and 1946 and, in a Statement of Income Tax Due, credited against these deficiencies the overpayments of tax for 1943 and 1944, including interest on the overpayments to April 8, 1951.
Plaintiff objected to the amount of interest allowed on the overpayments, claiming that interest was payable to June 25, 1951, the date of the additional assessment. The Commissioner rejected this claim and this suit is for that interest, in the amount of $2,160.25.
Plaintiff argues that Title 26 U.S.C.A. § 3771(b)(1) expressly requires the allowance of interest up to the date of the additional assessment. The government argues that, since Title 26 U.S.C.A. § 292(a) precludes the government from collecting interest beyond April 8, 1951, a date 30 days after the filing by plaintiff of the waiver above mentioned, no interest should accrue to plaintiff on the overpayments after April 8, during this period when the government is prevented from collecting interest on the overall net deficiency.
Applicable statutory provisions of Title 26 U.S.C.A. are:
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