Ritter v. United States

• Decision Date: 20 September 1928
• Docket Number: No. 3798.,3798.
• Citation: 28 F.2d 265
• Parties: RITTER v. UNITED STATES.
• Court: U.S. Court of Appeals — Third Circuit

28 F.2d 265 (1928)

RITTER v. UNITED STATES.

No. 3798.

Circuit Court of Appeals, Third Circuit.

September 20, 1928.

James Walton, of Pittsburgh, Pa., for plaintiff in error.

John D. Meyer, U. S. Atty., and William J. Aiken, Asst. U. S. Atty., both of Pittsburgh, Pa. (C. M. Charest, General Counsel, Bureau of Internal Revenue, and Floyd F. Toomey, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for the United States.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

DAVIS, Circuit Judge.

This was an action brought by Daniel Ritter to recover from the United States an overpayment in taxes for the year 1917 of $1,091.81, with interest. The case was argued on plaintiff's complaint and defendant's affidavit of defense, raising questions of law in the nature of a demurrer under the Pennsylvania practice.

On April 1, 1918, plaintiff filed his tax return for 1917, showing a tax liability of $6,964.95, which was paid on June 7, 1918. On December 30, 1922, an examination of plaintiff's books by Revenue Field Agent Timberlake disclosed the overpayment. The agent gave the plaintiff a copy of his report and told him of the overpayment. Plaintiff says that he then and there made an oral claim for refund, and that the agent told him that no further action on his part would be necessary, and that the overpayment would be refunded as a matter of course.

The report was sent by mail to the Bureau of Internal Revenue at Washington, but it appears to have been lost, for it never reached Washington. Information of the overpayment was not brought to the attention of the Bureau or Commissioner of Internal Revenue until September 11, 1924, when the plaintiff wrote a letter to the Commissioner about the overpayment, though plaintiff alleges that he began to make inquiries as to what was holding up its return as early as November 26, 1923. The department replied to the letter of September 11, 1924, on November 25, 1925, advising plaintiff that the return of the overpayment appeared to be barred by the statute of limitations, that the facts which he had submitted were "insufficient to constitute an informal claim," and that unless a statement was submitted, evidencing his intention to claim refund prior to the operation of the statute, no overassessment might be allowed.

However, on December 6, 1924, plaintiff filed with the collector of internal revenue at Pittsburgh a formal written claim for refund. On February 4, 1925, the Commissioner of Internal Revenue again advised plaintiff that his claim for refund was barred by the statute of limitations. Thereafter, on May 26, 1926, suit was brought for its recovery. The court held that on the admitted facts, as a matter of law, the claim for refund was barred by the statute of limitations; that the oral claim alleged to have been made to Agent Timberlake was ineffective, because the statute requires that it be made to the Commissioner of Internal Revenue; and the government was not estopped by any statement made to plaintiff by the field agent. The case is here on plaintiff's writ of error.

Section 1112 of the Revenue Act of 1926 (26 USCA § 157) provides that all claims for the refund of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or any sum alleged to have been excessive or in any manner wrongfully collected, must, with exceptions not here pertinent, "be presented to the Commissioner of Internal Revenue within four years next after the payment of such tax."

Section 1113 (26 USCA § 156) provides that no suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or any sum alleged to have been excessive, until a claim for refund "has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof."

As above stated, attention of the Bureau of Internal Revenue was not called to this overpayment until the letter of September 11, 1924. Section 281 of the Revenue Act of 1924 (26 USCA § 1065) was then in force. It provides that a refund of an overpayment of any income tax imposed by the Revenue Acts of 1909, 1913, 1916, 1917, 1918, and 1921 shall not be allowed or made after four years from the time the tax was paid unless before the expiration of such four years a claim therefor is filed by the taxpayer.

The tax in this case was paid by Ritter on June 7, 1918. There is no question but that the tax involved in this suit was an overpayment innocently made. In order to have it refunded, however, it was necessary that a claim be filed with the Commissioner of Internal Revenue within four years from the date of payment. It is unfortunate and to be regretted that the plaintiff finds himself in the position in which his negligence, misunderstanding,...