Petition for Writ of Certiorari — Herwig v. Crenshaw

INDEX

Page

Opinion below 1

Jurisdiction 2

Question presented 2

Statute involved 2

Statement nee 2

Argument 4

Conelusion 6

Appendix 7

CITATIONS

Cases:

Creary Vv. Weeks, 259 U. S. 336 5

Erskine v. Hohnbach, 14 Wall. 613 5

French v. Weeks, 259 U. S. 326 Tht 5

Harvey v. Early, 160 F. 2d 836 4

Herwig v. Schoeneman, et al., 340 U. 5. 935, rehearing

denied, 341 U. S. 906 ae, 6

Reaves v. Ainsworth, 219 U.S. 296 ; 5

Statutes:

Internal Revenue Code:

See. 322 (26 U. S. C. 1946 ed., See. 322 4,7

See. 3653 (26 S. C. 1946 ed., See. 3653) 4,8

Sec. 3655 (26 U. S. C. 1946 ed., See. 3655)......... 5,8

See. 3690 (26 . C. 1946 ed., See. 3690) 5,8

See. 3772 (26 U. S. C. 1946 ed., See. 3772) 4,9

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Guthe Supreme Court of the United States

OcrToBER TERM, 1951

No. 423

L. J. H. HERWIG, PETITIONER

v.

Stuart L. CRENSHAW, COLLECTOR OF INTERNAL

REVENUE, AND AS AN INDIVIDUAL,

and

Ortis E. SNowa, Deputy COLLECTOR OF INTERNAL

REVENUE, AND AS AN INDIVIDUAL

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FOURTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINION BELOW

The memorandum opinion of the District Court

(R. I, 198) is not reported. The per curiam opin-

ion of the Court of Appeals for the Fourth Circuit

affirming the District Court is reported in 188 F.

2d 572.

(1)

Si MS LN 0 6S PRINT SEMA ADE REELED DCP ITS RIO LA EO REE GIES SAE BIEL ALLE ABER XL IPERS DAS

2

JURISDICTION

The judgment of the Court of Appeals was filed

April 26, 1951 (R. ILI, 4). Petitioner’s motion for

rehearing was denied on July 11, 1951 (R. ITT, 26).

By order of Chief Justice Vinson, dated October

8, 1951, the time within which to file a petition for a

writ of certiorari was extended to and including

November 10, 1951. The petition for a writ of

certiorari was filed on November 10, 1951. The

jurisdiction of this Court is invoked under 28

U.S. C., Section 1254.

QUESTION PRESENTED

Whether a taxpayer who has included certain

income in his return, and who now claims that

such income is exempt from taxation but has failed

to correct his return or file a claim for a refund,

may (1) enjoin collection of the tax after its col-

lection, (2) recover the tax collected, or (3) obtain

damages from the officials making the collection.

STATUTE INVOLVED

The applicable provisions of the statute involved

are set forth in the Appendix, infra, pp. 7-9.

STATEMENT

The taxpayer was retired from the army for dis-

ability in 1919 and thereupon became entitled to

disability pay. In his income tax return for 1946,

the taxpayer included this disability pay as in-

come but made no payment of the tax. The tax

was duly assessed by the Commissioner of Internal

- Aca RON RTE IETS

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2 OA OEP HN RH AT we 2 hag RY AY eR A Es A Pee tae vg A PS

3

Revenue, and, after appropriate notice, was col-

lected by the deputy collector of Internal Revenue

by a levy upon the taxpayer’s bank account. (R. I,

37, 40.)

The taxpayer instituted proceedings against the

collector and the deputy collector, in which he

originally sought to enjoin the collection (R. 1,1).

In a supplemental complaint, the taxpayer sought

recovery for trespass, malicious abuse of process,

libel and fraud (R. I, 14).

The district court held that it was prohibited

hy statute from issuing the injunction, and also

that the cause was moot because the taxes had

been collected prior to the commencement of the

suit. The district court also held that the collectors

could not be held liable for damages, since they

had acted within their authority and on express

authorization of law (R. I, 176).

Thereafter, the taxpayer filed a motion for leave

to amend his complaint to include a count for

recovery and refund of the tax which had been

collected (R. 1, 192). This motion was denied on

the ground that the taxpayer had not taken the

necessary steps preliminary to suit for a refund

and because it appeared that the collectors were

ready and willing to make the refund whenever

1 By further amendment to his complaint, the taxpayer also

sought to enjoin collection of a tax on his 1948 income, but

this issue was disposed of by the district court on the ground

that the cause, if it existed, had abated. The taxpayer

apparently does not raise this issue here.

4

demand was made therefor (R. I, 201). The

district court also filed a memorandum in which

it stated that the real purpose of the litigation

was to obtain an adjudication on the validity of

the 1919 army retirement proceedings. The court

found that it could not pass upon the case on

that basis (R. I, 201).

On appeal, the Court of Appeals for the Fourth

Circuit affirmed the holdings below (R. III, 4).

ARGUMENT

1. The district court had no alternative but to

dismiss the action for an injunction, since Section

3653 of the Internal Revenue Code (Appendix,

infra, p. 8) specifically denies the taxpayer that

remedy. Harvey v. Early, 160 F. 2d 836 (C. A. 4).

Moreover, as the district court pointed out, the

tax had already been collected, and it was there-

fore too late to test the question through a pro-

ceeding for an injunction.

2. A taxpayer is permitted to bring suit for a

refund only if he has first filed a claim for a refund

with the Commissioner. Sections 322 and 3772

of the Internal Revenue Code, Appendix, infra,

pp. 7, 9. In fact, the court below indicated that it

was clear that if a claim for refund had been

made, it would in all probability have been allowed

(R. I, 201).

3. The collector and deputy collector were not

answerable in damages for making the collection.

The assessment was duly certified by the Commis-

sioner of Internal Revenue before the levy was

made (R. 1,40). It is not the duty of the collectors

to go behind the assessment once a tax is certified

to them for collection. The statute requires them

to give notice of the taxes due and to demand pay-

ment within ten days after receiving the assess-

ment list (See. 3655 of the Internal Revenue Code,

Appendix, infra, p. 8); it requires them further

to proceed to collect the tax within ten days after

notice and demand. Section 3690 of the Internal

Revenue Code, Appendix, infra, p. 8; Erskine vy.

Holnbach, 14 Wall. 618. There is nothing in the

record to indicate that the collectors acted in any

way beyond the scope of their statutory duties.

4. The district court was quite correct in finding

that it had no power or occasion to pass upon the

validity of the taxpayer’s retirement. As pointed

out above, the issues raised in the proceeding

were determined by the applicable sections of the

Internal Revenue Code, regardless of the validity

of the taxpayer’s retirement. That retirement

was itself not subject to direct review. Reaves v.

Ainsworth, 219 U.S. 296, 306; French v. Weeks,

259 U.S. 326, 335; and Creary v. Weeks, 259 U.S.

336, 344.7

7A prior attempt by this same taxpayer to review the

retirement proceeding through an injunctive proceeding

against the Commissioner of Internal Revenue, the Secretary of

the Army, and others was dismissed by the United States

PET ee eT ee Ta 4

,

6

5. The taxpayer raises many other points in his

petition, but it is believed that all of them are

without merit and do not require specific answer.

CONCLUSION

The decision below is correct, and no reason

appears which would warrant further review in

this Court. We respectfully submit that the peti-

tion for a writ of certiorari should therefore be

denied.

Puitie B. PERLMAN,

Solicitor General.

EuLuis N. SLACK,

Acting Assistant Attorney General.

JOHN F. Davis,

CAROLYN R. Just,

Special Assistants to the

Attorney General.

DECEMBER 1951.

District Court for the District of Columbia in 1949, and the

dismissal was upheld by the Court of Appeals for the District

of Columbia, and certiorari denied by this Court. Herwig v.

Schoeneman, et al., 340 U. 8. 935, rehearing denied, 341 U. S.

906.

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7

APPENDIX

Internal Revenue Code:

Sec. 322. Rerunps aANp CRepits.

(a) [as amended by See. 172(e) of the Rev-

enue Act of 1942, ¢. 619, 56 Stat. T9838] Author-

ization.—

(1) Overpayment.—W here there has been

an overpayment of any tax imposed by this

chapter, the amount of such overpayment

shall be credited against any income, war-

profits, or excess-profits tax or installment

thereof then due from the taxpayer, and any

balance shall be refunded immediately to

the taxpayer.

*% * % * *

(b) Limitation on Allowance.—

(1) Period of limitation.—Uniless a claim

for credit or refund is tiled by the taxpayer .

within three years from the time the return

was filed by the taxpayer or within two

years from the time the tax was paid, no

credit or refund shall be allowed or made

after the expiration of whichever of such ;

periods expires the later. If no return is

filed by the taxpayer, then no credit or re-

fund shall be allowed or made after two

years from the time the tax was paid, un-

less before the expiration of sueh period

a claim therefor is filed by the taxpayer.

=

~ * * x *

(26 U.S.C. 1946 ed., See. 322.)

5

Src. 3653. PROHIBITION OF Suits TO RESTRAIN

ASSESSMENT OR COLLECTION.

(a) Tar—lixcept as provided in sections

272(a), 8S71(a) and 1012(a), no suit for the

purpose of restraining the assessment or col-

lection of any tax shall be maintained in any

court.

* * * * *

(26 U.S.C. 1946 ed., See. 3653. )

Src. 3655. Novick AND DEMAND For TAX.

(a) Delivery—Where it is not otherwise

provided, the collector shall in person or by

deputy: within ten days after receiving any

list of taxes from the Commissioner, give no-

tice to each person liable to pay any taxes

stated therein, to be left at his dwelling or

usual place of business, or to be sent by mail,

stating the amount of such taxes and demand-

ing payment thereof.

* % * * *

(26 U.S.C. 1946 ed., See. 3655.)

Src. 3690. AUTHORITY TO DISTRAIN.

If any person liable to pay any taxes neglects

or refuses to pay the same within ten days

after notice and demand, it shall be lawful

for the collector or his deputy to collect the

said taxes, with such interest and other addi-

tional amounts as are required by law, by

distraint and sale, in the manner provided

in this subchapter, of the goods, chattels, or

effects. ineluding stocks, securities, bank ae-

rt amen, a De bo ee eae ee Nina.

9

counts, and evidences of debt, of the person

delinquent as aforesaid.

(26 U.S.C. 1946 ed., Sec. 3690.)

Sec. 3772. Suits ror REFUND.

(a) Limitations.—

(1) Claim.—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 of any penalty claimed to have

been collected without authority, or of any

sum alleged to have been excessive or in

any manner wrongfully collected until a

claim for refund or credit has been duly

filed with the Commissioner, according to

the provisions of law in that regard, and

the regulations of the Secretary established

in pursuance thereof.

(2) Time.—No such suit or proceeding

shall be begun before the expiration of six

months from the date of filing such claim

unless the Commissioner renders a decision

thereon within that time, nor after the ex-

piration of two years from the date of mail-

ing by registered mail by the Commissioner

to the taxpayer of a notice of the disallow-

ance of the part of the claim to which such

suit or proceeding relates.

* * * * *

(26 U.S.C. 1946 ed., See. 3772.)

Wo. s. GOVERNMENT PRINTING OFFICE: 1951 976746 Bie