United States v. Updike - 281 U.S. 489 (1930)
U.S. Supreme Court
United States v. Updike, 281 U.S. 489 (1930)
United States v. Updike
Argued April 15, 1930
Decided May 19, 1930
281 U.S. 489
1. Under §§ 278(d) and 280 of the Revenue Act of 1926, a suit in equity against stockholders of a dissolved corporation to charge them, as distributees of its assets, with the amount of a tax assessed against the corporation, is a proceeding to collect the tax and is barred if not brought within six years after the assessment. P. 281 U. S. 492.
2. Where, under the Revenue Act of 1926 in a "no return" case, an assessment which, under § 278(a), may be made at any time, has in fact been made, a proceeding to collect must be begun within six years thereafter; but where there has been no assessment, the proceeding may be begun at any time. P 281 U. S. 494.
3. The provision of § 278(d) of the Revenue Act of 1926, that,
"Where the assessment . . . has been made . . . within the statutory period of limitation properly applicable thereto, such tax may be collected . . . by a proceeding in court . . . but only if begun (1) within six years after the assessment of the tax,"
applies to an assessment in 1920 of 1917 taxes, notwithstanding that, in 1920, when the assessment was made, there was, and had been, no provision of law which in any form limited the time for assessing or collecting taxes. P. 281 U. S. 495.
4. The saving clause, "within the statutory period of limitation properly applicable thereto," in § 278(d) of the Revenue Act of 1926 was inserted solely for the protection of the taxpayer -- that is to say, in order to preclude collection of the tax even within six years after the assessment, if that assessment, when made, was barred by the applicable statutory limitation. P. 281 U. S. 496.
5. Taxing acts, including provisions of limitation embodied therein, are to be construed liberally in favor of the taxpayer. Id.
32 F.2d 1 affirmed.
Certiorari, 280 U. S. 543, to review a decree of the circuit court of appeals which affirmed a decree of the district court, 25 F.2d 746, against the United States in a suit brought against stockholders of a dissolved corporation to recover a tax.