RESPONDENT: United States
LOCATION: Mapp's Residence
DOCKET NO.: 241
DECIDED BY: Warren Court (1958-1962)
CITATION: 365 US 753 (1961)
ARGUED: Mar 27, 1961
DECIDED: Apr 17, 1961
Facts of the case
Media for Bulova Watch Company, Inc. v. United States
Audio Transcription for Oral Argument - March 27, 1961 in Bulova Watch Company, Inc. v. United States
Number 241, Bulova Watch Company, Incorporated, Petitioner, versus United States.
May it please --
May it please the Court.
This proceeding is consigned with the question in computing interest as provided by law that the judgment of the United States Court of Claims, Section 2411 (a) of Title 28 of the U.S. Code Section 3771 (e) of the Internal Revenue Code of 1939, which is Title 26 apply.
It is the -- the petitioner's contention that Section 2411 (a) govern since it is contained in the Judicial Code, now called Title 28, a judiciary into the -- under the title, Judiciary and Judicial Procedure and the question of determining.
The interest on a judgment is peculiarly within the province of the Court which is adjudicating a case.
Section 2411 (a) is a specific provision in the Judicial Code dealing with interest in an -- with interest on any overpayment and federal tax, as a result of obtaining a judgment to such overpayment in any court.
I'm going to read these two Sections which are alleged to be in conflict and then I'll try to distinguish them and show why.
3771 (e) never applies in any case where we run into a situation where the Commissioner of Internal Revenue refuses to allow the claim for refund.
That Section is only applicable when the Commissioner of Internal Revenue has allowed it.
And if he doesn't allow, the claim for refund within the -- those provisions, that Section cannot be used.
This is an administrative proceeding when you say, “If the Commissioner determines.”
He's not a judicial officer.
Therefore, when we use this particular expression, if the Commissioner determines an overpayment in tax which is attributable to an unused excess profits, credit carry-back or a net operating loss, credit carry-back from a subsequent year, what we're in effect saying is that the Commissioner has now made a determination.
There is no judgment of any kind involved because when he makes the determination, there isn't -- the -- the taxpayer is in no position to refer to the Judicial Code.
And therefore, when the taxpayer seeks to -- seeks a refund, he has to come within the meaning of the law.
Now, when the -- I'm going to read these two Sections and this is what it said, reading now 2411 (a).
It says, “In any judgment of any court rendered that (whether against the United States, a collector or deputy collector of internal revenue, or the personal representative in case of death) for an overpayment in respect of any internal-revenue tax, interest shall be allowed at the rate of 6 per centum per annum upon the amount of the overpayment, from the date of the payment or collection thereof to a date preceding the date of the refund check by not more than 30 days, such date to be determined by the Commissioner of Internal Revenue.”
Now, the language of this particular provision of the Judicial Code requires no further explanation than just the words themselves.
They speak for themselves, they're unambiguous.
And what does Section 3771 (e) say?
It says, “If the Commissioner determines that any part of any overpayment is attributable to the inclusion in computing the net operating loss deduction for the taxable year of any part of the net operating loss for succeeding taxable year or to the inclusion in computing the -- unused excess profits credit adjustment for the taxable year of any part of the unused excess profits credit for succeeding taxable year, no interest shall be allowed or paid with -- with respect to such part of the overpayment for any period before the filing of a claim for credit or refund of such part of the over -- of the overpayment or the filing a petition with the Tax Court, whichever is earlier."
Now, before I go into discussing these two provisions, I want to make a short statement of what the facts are.
It's only one paragraph and we can deal with that.
March 28th, 1959, the petitioner obtained a judgment in the United States Court of claims against the defendant for overpayments of income and excess profits taxes in the sum of $520,000, approximately, when adjustments for interest as provided by law for the fiscal year ended March 31, 1942 to March 31, 1946, inclusive.
This judgment included an overpayment of $211,900 of excess profits tax for the fiscal year ended March 31, 1942 of which amount $150,000 was attributable to an unused excess profits credit carry-back from the fiscal year ended March 31, 1943.
The defendant in computing the amount of interest on the overpayment of $150,000 commenced with the date of June 14th, 1945, which is the date the claim for refund was filed rather than March 31st, 1943, which is the close of the year, giving rise to the unused excess profits credit carry-back resulting in several payment.
It is alleged that Section 3771 (e) requires such computation.
Now, interest on the rest of the overpayment in the fiscal year ended March 31, 1942 was properly computed.