1. Under § 322(b)(1) of the Internal Revenue Code, a claim for
refund of federal income tax, whether arising out of an income tax
"erroneously or illegally assessed or collected" or not, must be
filed within three years from the time the return was filed or
within two years from the time the tax was paid. The four-year
period prescribed by § 3313 is inapplicable to such a claim. Pp.
332 U. S.
525-526,
332 U. S.
534-535.
2. The word "overpayment" in § 322 of the Internal Revenue Code
is to be read in its usual sense, as meaning any payment in excess
of that which is properly due, whether traceable to an error in
Page 332 U. S. 525
mathematics or in judgment or in interpretation of facts or law,
and whether the error be committed by the taxpayer or the revenue
agents. P.
332 U. S.
531.
3. Where the language and purpose of an Act of Congress are
clear, legislative acquiescence in a rather recent contrary
interpretation by lower federal courts is not to be assumed. Pp.
332 U. S.
533-534.
159 F.2d 316 reversed.
The District Court gave judgment for respondent in a suit for a
refund of federal income taxes. 66 F. Supp. 254. The Circuit Court
of Appeals affirmed. 159 F.2d 316. This Court granted certiorari.
331 U.S. 800.
Reversed, p.
332 U. S. 535.
MR. JUSTICE MURPHY delivered the opinion of the Court.
Our concern here is with the period of limitations applicable to
the filing of claims for refund of federal income taxes. Must such
claims be filed within two years after payment of the tax, as
provided by § 322(b)(1) of the Internal Revenue Code, or within
four years after payment of the tax, as provided by § 3313 of the
Code?
The corporate taxpayer, respondent herein, filed its income and
excess profits tax return for 1938, a return which indicated a tax
liability of $1,193.25. This sum, plus a small additional
assessment, was paid in 1939. A revenue agent later investigated
the taxpayer's liability again, resulting in an additional
assessment of $6,640.81.
Page 332 U. S. 526
Payment of this amount was made on March 8, 1941. Over three
years later, on March 30, 1944, the taxpayer filed a claim for
refund of $1,053.49. It was stated that the revenue agent
erroneously had failed to allow certain credits for sums used by
the taxpayer in 1938 to reduce its indebtedness. Reliance was
placed by the taxpayer on the four-year limitation period specified
in § 3313. The Commissioner of Internal Revenue rejected this
claim, pointing out that § 3313 specifically exempts from its
application income, war profits, excess profits, estate, and gift
taxes.
This suit was then brought by the taxpayer in the District Court
to recover the amount alleged by t e refund claim to be due. That
court held that § 3313 was applicable, and gave judgment for the
taxpayer. 66 F. Supp. 254. The Tenth Circuit Court of Appeals, one
judge dissenting, affirmed the judgment. 159 F.2d 316. The problem
being one of importance in the administration of the revenue laws,
we granted certiorari. 331 U.S. 800.
Section 322(b)(1) is to be found in Subtitle A of the Internal
Revenue Code, a subtitle dealing with those taxes over which the
Tax Court has jurisdiction. Such jurisdiction includes income,
excess profits, estate, and gift taxes. More specifically, §
322(b)(1) appears under Chapter 1 of the Code, pertaining to income
taxes. It is concerned with overpayments of income taxes, and
provides quite simply that no refund shall be allowed unless a
claim for refund "is filed 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." [
Footnote 1]
Page 332 U. S. 527
Section 3313, on the other hand, is located under Subtitle B of
the Code, a subtitle devoted to miscellaneous taxes. It is in
Chapter 28, which contains various provisions common to such taxes.
And it is among those provisions dealing with the assessment,
collection, and refund of the taxes. It reads as follows:
"All claims for the refunding or crediting of any internal
revenue tax alleged to have been erroneously or illegally assessed
or collected, or of any penalty alleged to have been collected
without authority, or of any sum alleged to have been excessive or
in any manner wrongfully collected must, except as otherwise
provided by law in the case of income, war profits, excess profits,
estate, and gift taxes, be presented to the Commissioner within
four years next after the payment of such tax, penalty, or sum. The
amount of the refund (in the case of taxes other than income, war
profits, excess profits, estate, and gift taxes) shall not exceed
the portion of the tax, penalty, or sum paid during the four years
immediately preceding the filing of the claim, or if no claim was
filed, then during the four years immediately preceding the
allowance of the refund."
The substance of § 3313 of the Code has long been a part of
federal statutory law. Its ancestry can be traced back to 1872,
when § 3228 of the Revised Statutes was enacted. [
Footnote 2] Section 3228 established a
procedure for filing claims for refund of any internal revenue tax
alleged to have been "erroneously or illegally assessed or
collected," and created a limitation period of two years from the
time the cause of action accrued, later extended in 1921 to four
years from the date of payment of the tax. [
Footnote 3] But soon after the entry of the income tax
into the federal scene in 1913, separate provision was made for the
filing of claims
Page 332 U. S. 528
for refund of income taxes "paid in excess of those properly
due." Section 14(a) of the Revenue Act of 1916 [
Footnote 4] was the first such provision, and it
made clear that § 3228 was inapplicable to claims of this nature.
Section 252 of the Revenue Act of 1918, [
Footnote 5] followed by § 252 of the 1921 Act,
[
Footnote 6] continued this
scheme of separate treatment. These later provisions were written
so as to include refund claims relating to war profits and excess
profits taxes as well as those involving income taxes, and a
limitation of five years from the date the return was due was
placed on the filing of such claims. It was further specified that
the procedure therein detailed was to be followed "notwithstanding
the provisions" of § 3228.
Section 252, as it appeared in the 1921 Act, was then changed in
1923 [
Footnote 7] so as to
permit claims for refund of income and profits taxes "paid in
excess of that properly
Page 332 U. S. 529
due" to be filed within two years after the tax was paid, in
addition to the five-year period after the due date of the return.
This change was made
"so that the taxpayer who has, by agreement with the Treasury,
permitted the time for the final assessment of the taxes due from
him to be made after the expiration of the five-year period, will
not be barred from making a claim for a refund when such assessment
is made and the taxpayer
alleges that the assessment is
illegal. [
Footnote 8]"
Amending § 252, rather than § 3228 of the Revised Statutes to
accomplish this purpose was significant. It was an unequivocal
indication that § 252, in speaking of claims for refund of "excess"
payments of income and profits taxes, was designed by its framers
to include not only those payments growing out of errors in the
preparation of returns, but also those payments resulting from
illegal or erroneous assessments.
See Graham v. Dupont,
262 U. S. 234,
262 U. S. 258.
The Revenue Act of 1924 [
Footnote 9] transferred the substance of the former § 252
to a new § 281. A four-year period of limitations from the date of
the payment of the tax was established, a period coinciding in
length with that prescribed by § 3228. The reference to the type of
payments involved was recast; in place of speaking of payments "in
excess of that properly due," § 281 used the simple term
"overpayments." [
Footnote
10] And instead of stating in § 281 that its provisions should
apply "notwithstanding
Page 332 U. S. 530
the provisions" of § 3228 of the Revised Statutes, § 3228 itself
was amended [
Footnote 11] to
make it applicable to all claims for the refunding or crediting of
any internal revenue tax "except as provided in section 281 of the
Revenue Act of 1924." This placing of an exceptive clause in § 3228
was done "to remove the doubt which now exists as to whether or not
the provisions of section 3228, Revised Statutes, apply, in any
event, to income taxes." [
Footnote 12] In other words, the statutory drafters
intended to make certain that § 3228 was in no event to apply to
income tax refund claims. Such claims were to be governed
exclusively by § 281.
The essence of § 281 of the 1924 Act has been carried through to
the present § 322 of the Internal Revenue Code. [
Footnote 13] The only significant change in
the interval, for our purposes, was a reduction in the period of
limitations, as measured from the payment of the tax, from four
years to three years, and finally to two years. And § 3228 of the
Revised Statutes, as amended to state that it applies "except as
otherwise provided by law in the case of income, war profits,
excess profits, estate, and gift taxes," has become the current §
3313 of the Code.
With this background in mind, we find the pattern of limitation
periods for tax refund claims to be clear. Section 3313 of the Code
establishes a four-year period for all internal revenue taxes,
except as otherwise provided
Page 332 U. S. 531
by law in the case of specified taxes. Among the latter is the
income tax, as to which § 322(b)(1) makes provision "otherwise" by
requiring that refund claims be presented within two years of
payment or within three years from the filing of the return.
Provisions are also made "otherwise" in the case of the estate tax
( § 910 of the Code) and the gift tax ( § 1027 of the Code).
The argument is made, however, that § 322(b)(1) deals only with
income tax "overpayments," and not with income taxes "erroneously
or illegally assessed or collected." Overpayments are said to refer
solely to excess payments resulting from errors by taxpayers in the
preparation of their returns or in related activities, while
erroneous or illegal assessments and collections are claimed to
relate to various kinds of errors on the part of revenue agents.
Since there is no provision "otherwise" for income tax refund
claims involving the latter type of errors, the conclusion is
reached that the four-year limitation period of § 3313 remains
applicable. We cannot agree.
In the absence of some contrary indication, we must assume that
the framers of these statutory provisions intended to convey the
ordinary meaning which is attached to the language they used.
See Rosenman v. United States, 323 U.
S. 658,
323 U. S. 661.
Hence, we read the word "overpayment" in its usual sense, as
meaning any payment in excess of that which is properly due. Such
an excess payment may be traced to an error in mathematics or in
judgment or in interpretation of facts or law. And the error may be
committed by the taxpayer or by the revenue agents. Whatever the
reason, the payment of more than is rightfully due is what
characterizes an overpayment.
That this ordinary meaning is the one intended by the authors of
§ 322(b)(1) is quite evident from the legislative history which we
have detailed. The word "overpayment"
Page 332 U. S. 532
first appeared in § 281 of the 1924 Revenue Act, one of the
direct ancestors of § 322(b)(1). The word was there used as a
substitute for the previous reference to payments "in excess of
that properly due," a phrase that is a perfect definition of an
overpayment, and that is not necessarily confined to overpayments
occasioned by errors made by taxpayers. The immediate predecessor
of § 281 had employed that phrase, and had been enacted in 1923
with the expressed intention of including claims growing out of
illegal assessments. There was not the slightest indication that
the substitution of the word "overpayment" was designed to narrow
the scope of § 281. It apparently was a mere simplification in
phraseology. But it does make clear the sense in which the word was
first used in this context. The generic character of the word was
emphasized from the start. [
Footnote 14] And we see no basis for making it over into
a word of art at this late date.
The legislative history further reveals a consistent intention
to make a separate and complete limitation provision for income tax
refund claims, whatever might be the underlying basis of the
claims. Section 322 and its predecessors were devised in order to
provide such an exclusive scheme. Claims relating to the income tax
have at all times been explicitly excluded from § 3313. [
Footnote 15]
Page 332 U. S. 533
This arrangement is but part of the general plan evident in the
Internal Revenue Code of providing separate treatment for the
income, profits, estate, and gift taxes, as distinct from the
miscellaneous taxes and the excise, import, and temporary taxes. We
would be doing unwarranted violence to this clear demarcation were
we to read the word "overpayment" so as to place certain types of
income tax refund claims within the scope of § 3313, a section that
has always been divorced from the income tax portion of the revenue
laws.
It is pointed out, however, that various lower federal courts,
beginning in 1939, have reached a contrary result. [
Footnote 16] They have held that § 3313,
rather than § 322(b)(1), governs refund claims for income taxes
alleged to have been "erroneously or illegally assessed or
collected." Since Congress has subsequently convened from time to
time and has amended § 322 in other respects without expressly
disapproving this interpretation, the contention is advanced that
legislative acquiescence in the interpretation must be assumed. But
the doctrine of legislative
Page 332 U. S. 534
acquiescence is as best only an auxiliary tool for use in
interpreting ambiguous statutory provisions.
See Helvering v.
Reynolds, 313 U. S. 428,
313 U. S. 432.
Here, the language and the purpose of Congress seem clear to us.
The arrangement whereby all income tax refund claims are to be
governed by what is now § 322(b)(1) was established in an
unmistakable manner nearly a quarter of a century ago -- an
arrangement that has been continued through various reenactments
and changes in the revenue laws. And that arrangement has been
consistently recognized and followed by the Treasury Department.
[
Footnote 17] Under those
circumstances, it would take more than legislative silence in the
face of rather recent contrary decisions by lower federal courts to
overcome the factors upon which we have placed reliance.
Cf.
Electric Storage Battery Co. v. Shimadzu, 307 U. S.
5,
307 U. S. 14;
Missouri v. Ross, 299 U. S. 72,
299 U. S. 75;
United States v. Elgin, J. & E. R. Co., 298 U.
S. 492,
298 U. S. 500.
We do not expect Congress to make an affirmative move every time a
lower court indulges in an erroneous interpretation. In short, the
original legislative language speaks louder than such judicial
action.
We accordingly conclude that all income tax refund claims,
whatever the reasons giving rise to the claims, must be filed
within three years from the time the return was filed or within two
years from the time the tax was
Page 332 U. S. 535
paid, as provided in § 322(b)(1). The four-year period
prescribed by § 3313 is inapplicable to such claims. Since
respondent filed its income tax refund claim more than three years
after filing the return and more than two years after payment of
the tax, its claim was out of time. That is true even though the
claim arose out of an income tax alleged to have been "erroneously
or illegally assessed or collected."
Reversed.
MR. JUSTICE DOUGLAS dissents.
[
Footnote 1]
The return in this case was filed in June, 1939. Since the claim
was filed on March 30, 1944, no contention could be made that it
was within the three-year period from the date the return was
filed.
[
Footnote 2]
Section 3228 was in the nature of a revision of § 44 of the Act
of June 6, 1872, 17 Stat. 230, 257.
[
Footnote 3]
Revenue Act of 1921, § 1316, 42 Stat. 227, 314.
[
Footnote 4]
39 Stat. 756, 772. This provided that the claim for refund might
be presented "notwithstanding the provisions of section thirty-two
hundred and twenty-eight of the Revised Statutes."
[
Footnote 5]
40 Stat. 1057, 1085.
[
Footnote 6]
42 Stat. 227, 268.
[
Footnote 7]
Act of March 4, 1923, 42 Stat. 1504, 1505. In amending § 252,
the Act of March 4, 1923, made mention of refunds of income taxes
to withholding agents which might be made under the provisions of
"section 3228 of the Revised Statutes." This was an obvious
reference to the practice of the Treasury Department, admitted to
be of "very doubtful legality," H.Rep. No.1424, 67th Cong., 4th
Sess., p. 2, of allowing a taxpayer who had permitted an additional
assessment after the five-year period from the due date of the
return (specified by § 252 of the 1921 Act) to file a claim for
refund within four years after payment of the tax (pursuant to §
3228), even though the five-year period had elapsed. The Treasury
had instituted this practice to prevent inequities which might
otherwise ensue to such taxpayers, but it was without legislative
sanction. It was to take care of the taxpayers who had taken
advantage of the Treasury practice that the reference in question
in the Act of March 4, 1923, was made. As to claims pending on
March 4, 1923, which were timely filed under § 3228, but not timely
under § 252, refunds to withholding agents were necessarily to be
made under § 3228. This provision was not repeated in subsequent
legislation, and it was not indicative of a legislative intent to
permit income tax refund claims to be governed by § 3228 in the
future.
[
Footnote 8]
Emphasis added. H.Rep. No.1424, 67th Cong., 4th Sess., p. 2;
S.Rep. No.1137, 67th Cong., 4th Sess., p. 2.
[
Footnote 9]
43 Stat. 253, 301.
[
Footnote 10]
The Revenue Act of 1924, 43 Stat. 253, 296, also created a new §
272, dealing with "overpayments" of income tax installments. This
spoke of overpayments in the sense of payments of "more than the
amount determined to be the correct amount of such installment."
This provision now exists as § 321 of the Internal Revenue
Code.
[
Footnote 11]
43 Stat. 253, 342.
[
Footnote 12]
H.Rep. No.179, 68th Cong., 1st Sess., p. 71; S.Rep. No.398, 68th
Cong., 1st Sess., p. 44. This quotation was taken verbatim by the
Congressional committees from the statement of A. W. Gregg of the
Treasury Department, Statement of the Changes Made in the Revenue
Act of 1921 by H.R.6715 and the Reasons Therefor, Senate Committee
Print, 68th Cong., 1st Sess., March 6, 1924, p. 37.
[
Footnote 13]
See Revenue Act of 1926, § 284, 44 Stat. 9, 66; Revenue
Act of 1928, § 322, 45 Stat. 791, 861; Revenue Act of 1932, § 322,
47 Stat. 169, 242; Revenue Act of 1934, § 322, 48 Stat. 680,
750.
[
Footnote 14]
Section 272 of the 1924 Act (now § 321 of the Code) referred to
"overpayments" of income tax installments as payments of "more than
the amount determined to be the correct amount of such
installment."
See note
10 supra. Such a definition admits of no distinction
between errors by the taxpayer and errors by the revenue
agents.
[
Footnote 15]
Reference should also be made to the second sentence of § 3313,
providing that the amount of refund may not exceed the amount of
tax paid during the four-year period. There is a parenthetical
phrase in this sentence which specifically excludes income, war
profits, excess profits, estate, and gift taxes. If the first
sentence of § 3313, establishing the four-year limitation period,
applied to income tax refund claims arising out of illegal
assessments, there would be no limit on the amount of refund by
reason of this second sentence. Such a result is without support in
the purpose or history of the provisions dealing with these refund
claims.
[
Footnote 16]
Huntley v. Southern Oregon Sales, 102 F.2d 538, was the
first case so holding. Subsequent decisions of the same tenor have
relied in large part upon the
Huntley case.
Olsen v.
United States, 32 F. Supp.
276;
United States v. Lederer Terminal Warehouse Co.,
139 F.2d 679;
In re Tindle's Estate, 59 F. Supp.
667,
aff'd per curiam sub nom. Pennsylvania Co. for
Insurances on Lives v. United States, 152 F.2d 757;
Godfrey v. United States, 61 F.
Supp. 240;
Noble v. Kavanagh, 66 F. Supp.
258,
aff'd per curiam, 160 F.2d 104;
Sbarbaro v.
United States, 73 F. Supp. 213.
See also Fawcett v. United
States, 70 F. Supp.
742.
Compare Central Hanover Bank & Trust Co. v. United
States, 67 F. Supp. 920. In many cases, however, the
applicability of § 322(b)(1) to claims of the type here involved
was assumed without question and without an explicit holding on the
point.
See, for example, United States v. Garbutt Oil Co.,
302 U. S. 528.
[
Footnote 17]
See I.T. 1447, I-2 Cum.Bull. 220 (1922); T.D. 3457,
II-1 Cum.Bull. 177 (1923) and T.D. 3462, amending Regulations 62,
II-1 Cum.Bull. 180 (1923); S.M. 1712, III-1 Cum.Bull. 345 (1924);
S.M. 2293, III-2 Cum.Bull. 310 (1924); G.C.M. 3152, VII-1 Cum.Bull.
153 (1928); G.C.M. 13759, XIII-2 Cum.Bull. 102 (1934); Mim. 4814,
1938-2 Cum.Bull. 96; I.T. 3483, 1941-1 Cum.Bull. 397.
The present Treasury viewpoint is codified in Treasury
Regulations 111, promulgated under the Internal Revenue Code, §
29.322-3 and § 29.322-7.
See also Treasury Regulations
103, promulgated under the Code, § 19.322-3 and § 19.322-7, as
amended by T.D. 5256, 1943 Cum.Bull. 550, and Treasury Regulations
101, promulgated under the Revenue Act of 1938, Articles 322-3 and
322-7.