1. Section 1019 of the Revenue Act of 1924, which provides that
interest on a refund of any internal revenue tax erroneously or
illegally assessed or collected shall be allowed from the date when
the tax was paid, cannot be construed retroactively as substituting
that basis of interest recovery for the basis in the Act of 1921,
as to refunds which had been allowed under the earlier Act but not
computed or paid when the later Act was passed. P.
276 U. S.
162.
2. This conclusion is not affected even if it be assumed that
the interest allowed by the earlier Act was not within the saving
clause accompanying the repeal of that Act by that later one, a
question not here raised, and therefore not considered. P.
276 U. S.
163.
3. Save as given by Congress, there was no right to the
interest.
Id.
4. Under § 1324(a), subdivision (1), Act of 1921, a claimant is
not entitled to interest from the time when the tax was paid if the
protest accompanying the payment gave no information and stated
nothing that would aid in determining whether an overassessment had
been made. P.
276 U. S.
164.
63 Ct.Cls. 173 reversed.
Certiorari, 275 U.S. 512, to a judgment of the Court of Claims,
allowing a claim for interest on refunds of income and excess
profits taxes.
MR. JUSTICE BUTLER delivered the opinion of the Court.
Respondent was assessed and paid for 1916 an income tax of
$105,571.95, and for 1917 income and excess profits
Page 276 U. S. 161
taxes of $1,131,075.86 in excess of the amounts for which it was
liable. October 11, 1923, the Commissioner of Internal Revenue so
determined, and, November 22, 1923, the respondent received
certificates showing such over-assessments and treasury warrants
for the return of these amounts. Each certificate included a
statement that "interest status will be determined as soon as
necessary data can be assembled."
Section 1324(a) of the Revenue Act of 1921, which was then in
force, authorized interest from the date of the payment of the
taxes if paid under protest, but, if not paid under protest or
pursuant to an additional assessment, it allowed interest to
commence six months after the filing of claim for refund. Section
1019 of the Revenue Act of 1924 provided that interest on refunds
should be computed from the date the taxes were paid.
*
January 18, 1924, the Commissioner notified respondent that the
interest payable on the refunds had been determined. July 2, 1924,
after the passage of the Revenue Act of that year, the Commissioner
wrote respondent that
Page 276 U. S. 162
the amounts stated in his letter of January 18, 1924 --
corrected by reason of an error as to the date of filing the claim
for refund of 1917 taxes -- would be paid, and, on July 18, 1924,
issued a treasury warrant to respondent for $35,369.05, being
$19,171.21 on the refund of 1916 taxes and $16,197.84 on the refund
of 1917 taxes. Respondent, saving its right to sue for additional
interest, accepted payment of the amount specified, and later
brought this suit. The Court of Claims held that the Act of 1924
applied, calculated interest from dates of payment of the taxes,
and gave judgment for $365,799.42. This Court granted a writ of
certiorari. 275 U.S. 512.
The petitioner maintains that the interest should be computed
according to § 1324(a) of the Act of 1921. Respondent contends
that, by § 1019 of the Act of 1924 and contemporaneous repeal of §
1324(a), the basis of interest allowances was changed, and that, as
the interest had not yet been paid, respondent became entitled to
an amount calculated according to the later enactment. Undoubtedly
it was within the power of Congress to apply that basis to claims
like those of respondent. But the question is whether the statute
should be so construed. The date of "allowance" was October 11,
1923, when the Commissioner approved the refunds.
Girard Trust
Co. v. United States, 270 U. S. 163,
270 U. S. 169.
Under § 1324(a), "upon the allowance" of the refunds, respondent
became entitled to interest according to the rule then in force.
Cf. Blair v. Birkenstock, 271 U.
S. 348,
271 U. S. 350.
Computation and payment were all that remained to be done. There is
nothing to suggest that § 1019 was intended to change the rule as
to refunds theretofore allowed. The language employed shows the
contrary. The words are "upon the allowance of . . . refund . . .
interest shall be allowed . . . from the date such tax was paid."
Statutes are not to be given retroactive effect or construed to
change the status of claims fixed in accordance with earlier
provisions
Page 276 U. S. 163
unless the legislative purpose so to do plainly appears.
United States v.
Heth, 3 Cranch 399,
7 U. S. 413;
White v. United States, 191 U. S. 545,
191 U. S. 552;
Shwab v. Doyle, 258 U. S. 529,
258 U. S. 534.
Respondent calls attention to § 1100 of the Act of 1924, repealing
the Act of 1921 and says that the saving clause therein does not
extend to interest on refunds allowed under § 1324(a). But, save as
given by Congress, respondent had no right to interest; as shown
above, the basis prescribed by the later act was not substituted
for that fixed by the earlier one; and, as respondent's right to
have the rule prescribed by the Act of 1921 applied is not
questioned, we need not consider the effect of the repealing and
saving clauses. It is clear that respondent is not entitled to
allowances on the basis of the Act of 1924, and that the judgment
must be reversed.
Respondent, assuming that the Act of 1921 applies, insists that
the facts found by the lower court show that the Commissioner's
allowances of interest were erroneous, and that it is entitled to
much more than it has received.
It appears from calculations made in its brief that, if the
basis contended for by the respondent be applied to the refund of
the 1916 tax, respondent has been allowed and paid.$864.99 in
excess of what it was entitled to have. As petitioner is not
complaining of that, we need not consider the matter.
As to the 1917 taxes, respondent filed returns May 18, 1918, but
paid no tax thereon. May 27 following, it filed amended returns
showing taxes of $1,966,600.87, and, on June 15, paid that amount
under protest. Petitioner contends that the protest was not
sufficient under § 1324(a) to support a claim for interest from the
date of payment. On June 12, 1920, respondent filed a claim for the
full amount paid, and, September 20, 1920, filed claim for
$1,005,519.42. October 8, 1923, the Commissioner wrote respondent
that its claim first filed would be allowed for $1,131,075.86, and
that the one last filed would be rejected
Page 276 U. S. 164
in full. January 18, 1924, the Commissioner wrote respondent
concerning the interest allowance, stating that no part of the
claim first filed had been allowed, that $105,556.84 had been
allowed on the basis of the claim last filed, and that
$1,025,519.52 of the refund was "attributable to points not raised
in the claim." The interest paid was calculated on the amount said
to have been allowed on the latest claim for the period commencing
March 20, 1921 -- six months after the filing of that claim -- and
ending October 11, 1923, the date of the allowance.
If the protest was sufficient under § 1324(a), interest should
have been calculated on the amount of the refund from the date of
the payment of the taxes. The lower court held it valid. In order
to meet the condition specified in § 1324(a), the payment must be
made "under a specific protest setting forth in detail the basis of
and reasons for such protest." The findings set forth its language.
The grounds asserted were that the taxing acts were ambiguous,
uncertain, and unconstitutional; that they did not apply to
respondent; that the regulations prescribed under them were not
authorized, and that the method prescribed for applying the rates
under the War Excess Profits Tax Act was arbitrary and unjust. It
was not found that any part of the refund was allowed on any ground
or for any reason specified in the protest. It requires no
discussion to show that these general statements were not
sufficient to constitute a basis for the allowance of interest from
the date of the payment of the taxes. The protest gave no
information, and stated nothing that would aid in determining
whether an overassessment had been made. It was not sufficient.
Girard Trust Co. v. United States, supra, 270 U. S.
172.
Assuming the protest inadequate, respondent insists that it is
entitled to interest on the full amount of the refund from six
months after the filing of its first claim. But, as the merits of
that contention depend upon ambiguous
Page 276 U. S. 165
findings above referred to, the lower court should again
consider the case and make definite determination of the
controlling facts and give judgment thereon.
The judgment is reversed and the case is remanded for
further proceedings in harmony with this opinion.
* Section 1324(a) of the Revenue Act of 1921, c. 136, 42 Stat.
227, 316:
"That, upon the allowance of a claim for the refund of . . .
internal revenue taxes paid, interest shall be allowed and paid
upon the total amount of such refund . . . as follows: (1) if such
amount was paid under a specific protest setting forth in detail
the basis of and reasons for such protest, from the time when such
tax was paid, or (2) if such amount was not paid under protest but
pursuant to an additional assessment, from the time such additional
assessment was paid, or (3) if no protest was made and the tax was
not paid pursuant to an additional assessment, from six months
after the date of filing of such claim for refund or credit. . .
."
Section 1019 of the Revenue Act of 1924, c. 234, 43 Stat. 253,
346 (U.S.C. Tit. 26, § 153):
"Upon the allowance of a credit or refund of any internal
revenue tax erroneously or illegally assessed or collected, . . .
interest shall be allowed and paid on the amount of such credit or
refund . . . from the date such tax . . . was paid to the date of
the allowance of the refund. . . ."