Paulson v. United States
| Decision Date | 14 June 1935 |
| Docket Number | 1189.,No. 1188,1188 |
| Citation | 78 F.2d 97 |
| Parties | PAULSON v. UNITED STATES. HOLDEN v. SAME. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Glenn Porter, of Wichita, Kan. (H. W. Hart, Enos E. Hook, and Getto McDonald, all of Wichita, Kan., on the brief), for appellants.
Warren F. Wattles, of Washington, D. C. (Frank J. Wideman, Asst. Atty. Gen., Sewall Key, Frank J. Ready, Jr., and Lester L. Gibson, Sp. Assts. to the Atty. Gen., and Summerfield S. Alexander, U. S. Atty., and R. T. McCluggage, Asst. U. S. Atty., both of Topeka, Kan., on the brief), for the United States.
Before LEWIS, McDERMOTT, and BRATTON, Circuit Judges.
These separate actions were instituted to recover the respective amounts erroneously paid to appellants as refunds of income taxes. Section 610 of the Revenue Act of 1928 (26 USCA § 2610) provides that a suit of this kind must be brought within two years after the making of such a refund or before May 1, 1928, whichever is later. The amendment of May 10, 1934 (48 Stat. 756, § 502 (a), 26 USCA § 2610 (c), providing that the suit may be brought at any time within five years after the refund is made if it is induced by fraud or misrepresentation of a material fact has no application and may be dismissed without further consideration. The question presented — common to both cases — is whether the two-year period runs from the date on which the Commissioner of Internal Revenue finally approves the schedule of refunds and credits or from the delivery of the check in payment of the refund.
The facts in the first case are that Peder Paulson, father of appellant, owned a leasehold estate covering land situated in Kansas which entitled him to certain rental and royalty. In March, 1918, Peder Paulson and wife executed and delivered written assignments under which appellant and five other children were each to receive an undivided one-eighth interest in such rental and royalty with provision that Peder Paulson or any person designated by him should collect the income and make distribution of it among the several children. Appellant received $27,342.02 from his father as his distributive share of the fund during the year 1919 and included that sum in his income tax return for that year. The tax thereon in the sum of $3,080.23 was seasonably paid. He later signed a written waiver extending to December 31, 1925 the time within which an assessment for the year 1919 might be made. The Commissioner subsequently determined that the father was liable for the tax upon the money thus distributed, not the children. He signed a certificate of over-assessment on November 5, 1926, in which it was certified that appellant was entitled to a refund of the sum stated. The certificate was listed in the usual manner and forwarded to the Collector in Kansas to determine whether appellant owed taxes against which the amount should be credited. The Collector responded that he owed no taxes, and on or about November 30, 1926, the Commissioner signed the schedule of refunds and credits, the principal plus accrued interest then being $4,313.33. Check for that amount was issued March 15, 1927, and delivered to appellant on the 19th. The Board of Tax Appeals decided on February 14, 1928, that the father was not liable for the tax. Paulson v. Commissioner, 10 B. T. A. 732. In consequence of that decision, this suit was filed on March 18, 1929, to recover the amount refunded.
The facts in the other case are that George Holden, deceased husband of appellant, owned the record title to 240 acres of land in Kansas. Holden and appellant executed assignments of parts of the royalty receivable from an oil and gas lease covering a portion of the land, for which $95,000 was paid as bonuses in 1919. They filed separate returns for that year, each including therein one-half of the bonuses thus received. Their income taxes of $10,217.37 and $8,580, respectively, were paid. Holden died August 21, 1921, leaving an estate exceeding $25,000 in value at the time this suit was filed, all of which is owned by appellant.
On review of their separate returns, the Commissioner determined that Holden should have included the entire bonuses in his return, and that appellant should not have included any part of them in hers. He thereupon found an additional tax of $21,376.94 against the estate and on January 7, 1925, issued a certificate of overassessment of $8,580 against appellant, which was forwarded in like manner to the Collector in Kansas to determine whether she owed taxes...
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...question whether a refund is "made" under the current Sec. 6532(b) when the check is mailed or when it is received, in Paulson v. United States, 78 F.2d 97 (10th Cir.1935), we held that the date a refund was made for purposes of the predecessor of Sec. 6532(b) was the date of receipt rather......
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...States v. Woodmansee, 388 F.Supp. 36, 46 (N.D.Cal.1975), rev'd on other grounds, 578 F.2d 1302 (9th Cir.1978); cf. Paulson v. United States, 78 F.2d 97, 98-99 (10th Cir.1935) (reasoning that a suit to recover an erroneous refund cannot be maintained until the money is paid to the taxpayer, ......
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