Repetti v. Jamison

• Decision Date: 18 April 1955
• Docket Number: No. 33161.,33161.
• Citation: 131 F. Supp. 626
• Parties: Maria REPETTI, Plaintiff, v. Glen T. JAMISON, Director of Internal Revenue, Defendant.
• Court: U.S. District Court — Northern District of California

131 F. Supp. 626

Maria REPETTI, Plaintiff, v. Glen T. JAMISON, Director of Internal Revenue, Defendant.

No. 33161.

United States District Court N. D. California, S. D.

February 2, 1955.

Motion for Reconsideration Denied April 18, 1955.

Wareham C. Seaman, Stockton, Cal., for plaintiff.

Lloyd H. Burke, U. S. Atty., Charles Elmer Collett, Asst. U. S. Atty., San Francisco, Cal., for defendant.

OLIVER J. CARTER, District Judge.

Plaintiff instituted this action under 26 U.S.C.A. § 272(a) (1) to restrain the assessment of income taxes claimed by defendant to be due to the Government. The section under which plaintiff proceeds provides as follows:

"If in the case of any taxpayer, the Commissioner determines that there is a deficiency in respect of the tax imposed by this chapter, the Commissioner is authorized to send notice of such deficiency to the taxpayer by registered mail. Within ninety days after such notice is mailed * * * the taxpayer may file a petition with the Board of Tax Appeals for a redetermination of the deficiency. No assessment of a deficiency in respect of the tax imposed by this chapter and no distraint or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such ninety day period, nor, if a petition has been filed with the Board, until the decision of the Board has become final. Notwithstanding the provisions of section 3653(a) the making of such assessment or the beginning of such proceeding or distraint during the time such prohibition is in force may be enjoined by a proceeding in the proper court."

Defendant resists plaintiff's demand for an injunction, claiming that the alleged deficiency in plaintiff's return was the result of mathematical error, and therefore falls within 26 U.S.C.A. § 272 (f) which contains an exception to Section 272(a) (1). It provides in part:

"If the taxpayer is notified that, on account of a mathematical error appearing upon the face of the return, an amount of tax in excess of that shown upon the return is due, and that an assessment of the tax has been or will be made on the basis of what would have been the correct amount of tax but for the mathematical error, such notice shall not be considered * * * as a notice of a deficiency, and the taxpayer shall have no right to file a petition with the Board based on such notice, nor shall such assessment or collection be prohibited by the provisions of subsection (a) of this section."

The facts which gave rise to this dispute are set forth in the pleadings, and both parties have moved for summary judgment. Plaintiff (and plaintiff's now deceased husband) filed a declaration of estimated tax for the year 1945, and paid $296 as the tax estimated for that year; but part of the $296 was in fact an overpayment. In 1952 plaintiff filed returns for the years from 1944 through 1949 inclusive. The returns for 1948 and 1949 indicated some tax liability for those years but plaintiff claimed as a credit against that liability the amount paid as an overpayment on the 1945 declaration of estimated tax. In December of 1952 the Director of Internal Revenue issued a Notice of Mathematical Error pursuant to 26 U.S.C.A. § 272(f). The notice stated that the error consisted of claiming a credit with respect to which the statutory period for allowance had expired.

A search of the authorities has not revealed a judicial construction of the term "mathematical error"; but it is the opinion of this Court that the term as used in the statute in question was meant to refer to errors in arithmetic. This opinion is based primarily on the common meaning given to the phrase "mathematical error," and also on the fact that Congress did not provide for a petition by the taxpayer to the Board of Tax Appeals in the case of such error. It would appear that the failure to provide for review of a determination of mathematical error was due to the fact that there can be no dispute as to a matter of arithmetical computation.

The alleged error of the plaintiff was not a mistake in arithmetic or an inadvertent entry, and therefore it was not a mathematical error within the meaning of 26 U.S.C.A. § 272(f). Thus the Notice of Mathematical Error issued to plaintiff was ineffective as such, and plaintiff is entitled to the relief prayed for. It is not necessary for this Court to decide whether or not the credit claimed by plaintiff was barred by statute, because the purpose of the injunction referred to in Section 272(a) is to provide for an administrative review of a determination of deficiency. This was emphatically stated in Ventura Consol. Oil Fields v. Rogan, 9 Cir., 86 F.2d 149, 154-155:

"The injunction of section 274(a) (now section 272(a) ) is provided for the specific purpose of assuring taxpayer that a claimed deficiency shall be determined by the administrative process and adjudication by the Board of Tax Appeals provided by the statute. It must be granted without condition. The Commissioner, by failing to perform his administrative duty, cannot deprive taxpayer of his statutory right and convert the special injunctive proceeding into a judicial determination of the tax."

Accordingly, it is ordered that the motion of plaintiff Maria Repetti for summary judgment be, and the same is hereby granted. The assessment of January 30, 1953 is hereby ordered to be removed from the assessment list, and defendant Glen T. Jamison, Director of Internal Revenue, his agents, servants and employees are hereby enjoined from taking any action to distrain plaintiff's property pursuant to the assessment of January 30, 1953.

On Motion for Reconsideration

Defendant moves for reconsideration of this Court's order of February 2, 1955. That order granted plaintiff an injunction restraining the assessment and collection of income taxes alleged to be due the United States.

The amount alleged to be...