1. Under the twentieth section of the Internal Revenue Act of
June 30, 1864, as amended by the ninth section of the Act of July
13, 1866, it is not necessary that an assessor, in making a
reassessment for deficiencies, should make his reassessment
coincide, month by month, in the terms which it covers, with the
monthly returns of the manufacturer; that is to say, it is not
requisite that he should make a separate specification of
deficiency for each defective return.
2. Nor, under the terms of the act of 1866, when the
reassessment was made within fifteen months from the passage of the
act, was it necessary that the reassessment should have reference
only to returns made within fifteen months prior to the
reassessment.
3. Nor, under the Act of March 2, 1867, conceding that since the
act of 1866 brewers are taxable, in the first instance, by stamps
per barrel, and not on monthly returns, would a reassessment for
deficiency be void, even though it had been made out on the
principle of an assessment for false returns, under the previous
act of July 13, 1866.
Page 85 U. S. 643
By different Internal Revenue Acts a tax was laid on brewers, by
which they were made liable thus:
From September, 1862, to March 1, 1863 . . $1.00 per bbl.
[
Footnote 1]
From March 1, 1863, to March 31, 1864. . . .60 per bbl.
[
Footnote 2]
From April 1, 1864 . . . . . . . . . . . . 1.00 per bbl.
[
Footnote 3]
And after the 30th of June, 1864, a penalty of 50 cents was
added where the return was erroneous because of refusal or
neglect.
By the Internal Revenue Act of June 30, 1864 [
Footnote 4] (section 20), the assessors were
to make out lists containing the names of persons residing in their
respective districts, and having property liable to tax, together
with the sums payable by each, which lists the assessors were to
send to the collectors.
The Internal Revenue Act of July 13, 1866, [
Footnote 5] enacted further (by its ninth
section):
"The assessor may, from time to time, or at any time
within
fifteen months from the time of the passage of this act, or
from the time of the
delivery of the to the collector as
aforesaid, enter on any monthly or special list, . . . the names of
the persons or parties, in respect to whose returns as aforesaid
there has been or shall be any omission, undervaluation,
understatement, or false or fraudulent statement, together with the
amounts for which such persons or parties may be liable, over and
above the amount for which they may have been, or shall be,
assessed upon
any return, or returns made as aforesaid,
and shall certify or return said list to the collector as required
by law."
This same act [
Footnote 6]
of 1866 changed the mode of assessing and collecting the tax on
malt liquors, and made the tax on them after the 1st of September,
1866, payable by stamps. And an Act of March, 1867, by its fifth
section, [
Footnote 7]
enacted:
"That if the manufacturer of any article upon which a tax is
required to be paid by means of a stamp, shall have sold or removed
for sale any such articles, without the use of the proper
Page 85 U. S. 644
stamp, in addition to the penalties now imposed . . . it shall
be the duty of the assessor . . . upon such information as he can
obtain, to estimate the amount of the tax which has been omitted to
be paid, and to make an assessment therefor, and certify the same
to the collector, and the subsequent proceedings for collection
shall be in all respects like those for the collection of taxes
upon manufactures and productions."
In this state of the law, Dandelet, a brewer, in Baltimore, from
the year 1862 had made monthly statements or returns to the
assessor of what beer he admitted that he made, and these were
delivered to the collector. In August, 1867, the assessor made an
assessment for alleged deficiencies, the same being in the
following form:
F. Dandelet's Assessment
Deficiency from Sept. 1, '62, to Feb. 28, '63, 522 bbls. at $1 $
522.00
Deficiency from March 1, '63, to March 31, '64, 922 bbls. at 60
c. 555.00
Deficiency from April 1, '64, to June 30, '64, 216 bbls. at $1
216.00
Deficiency from July 1, '64, to April 20, '67, 1425 bbls. at $1
1,425.00
Fifty cents penalty on $1,425 . . . . . . . . . . . . . . . . .
712.50
---------
$3,430.50
This assessment was entered on the monthly list for August,
1867, delivered to one Smith as collector, and after the remission
of the penalty of $712.50, the balance was paid under protest. An
appeal was duly made by Dandelet to the Commissioner of Internal
Revenue, and was dismissed, after which this suit was brought to
recover back the tax paid, and being tried by the court, judgment
was given for the defendant. That judgment it was which was now
brought here for review.
Page 85 U. S. 645
MR. JUSTICE BRADLEY delivered the opinion of the Court.
The question in this case is whether the assessment for alleged
deficiencies was or was not illegal.
1. It is contended by the plaintiff in error that the assessment
is void upon its face, because not made month by month so as to
indicate the deficiency for each month, and to make the
reassessment coincide in time with the monthly returns of the
plaintiff. It is sufficient to say that the law [
Footnote 8]
Page 85 U. S. 646
does not require this to be done. All that the statute requires
is a list of the names of parties whose returns have been
deficient, with the amounts for which they are liable over and
above the amount for which they may have been assessed upon any
return or returns. This language does not, by its terms,
require a separate specification of deficiency for each defective
return. "The amount for which a person has been assessed upon any
return or returns" may be an aggregate of many sums, and it is the
deficiency of this amount which is to be reassessed. It may
frequently happen that the assessor could not possibly tell in what
particular month the deficiencies occurred, and yet he may have
demonstrative evidence of the deficiency of the aggregate amount
returned.
2. It is contended that by the act, the assessor could only go
back fifteen months. We do not so understand it. The language
is:
"The said assessor may, from time to time, or at any time within
fifteen months from the time of the passage of this act, or from
the time of the delivery of the list to the collector as aforesaid,
enter in any monthly or special list the names"
&c. The first limitation, "within fifteen months from the
time of the passage of this act," evidently relates to past
deficiencies; the others to future. The reassessment in this case
was made within fifteen months after the passage of the act, and
the assessor was justified in reviewing the past returns as he
did.
3. It is lastly objected that the law in question -- namely the
twentieth section of the Internal Revenue Act of June 30, 1864, as
amended by the ninth section of the Act of July 13, 1866 -- does
not refer at all to the tax assessed upon brewers, inasmuch as they
were required by the same act of 1866 to use stamps, instead of
making monthly returns, from and after the 1st of September, 1866,
whereas the amended twentieth section authorizing a reassessment,
only applied, by its terms, to defective "returns." The language
refers to past as well as future returns, and therefore expressly
covers all returns made prior to September 1, 1866. The
reassessment in this case is for deficiency
Page 85 U. S. 647
from September 1, 1862, to April 20, 1867, namely, prior to
March 1, 1863, 522 barrels; thence to April 1, 1864, 922 barrels;
thence to July 1, 1864, 216 barrels; thence to April 20, 1867, 1425
barrels. It is only the last period which embraces a portion of
time in which stamps were used. But it embraced twenty-six months
during which assessments were made upon monthly returns, and
non constat, but that the deficiency of 1,425 barrels
arose in that time. The reassessment does not show that any portion
of that deficiency arose after September 1, 1866.
But suppose that a portion of it did arise after that time, when
stamps were required to be used. The brewer may have made more beer
than he stamped, and by the fifth section of the Act of March 2,
1867, [
Footnote 9] it is
enacted that
"If the manufacturer of any article upon which a tax is required
to be paid by means of a stamp shall have sold or removed for sale
any such articles, without the use of the proper stamp, in addition
to the penalties . . . imposed, . . . it shall be the duty of the
assessor, . . . upon such information as he can obtain, to estimate
the amount of the tax which has been omitted to be paid and to make
an assessment therefor and certify the same to the collector, and
the subsequent proceedings for collection shall be in all respects
like those for the collection of taxes upon manufactures and
productions."
Now in what more proper form could the assessor make a
certificate of "the amount of the tax which has been omitted to be
paid" than he did in this case? If a more proper form could be
devised, still is not the form used by the assessor in this case
admissible?
The exact truth always lies in the knowledge of the
manufacturer. His books show, or ought to show, everything that he
has produced, and in an investigation of this kind, if he shows
that his returns or stamps fully equal the amount of his production
and sale, the burden will then be on the government to show a
deficiency. The form of the assessment
Page 85 U. S. 648
adopted in this case can neither mislead nor embarrass an honest
manufacturer who has kept true and exact books of account.
Judgment affirmed.
[
Footnote 1]
12 Stat. at Large 450.
[
Footnote 2]
Ib., 723.
[
Footnote 3]
14
id. 164.
[
Footnote 4]
13 Stat. at Large 229.
[
Footnote 5]
14
id. 104.
[
Footnote 6]
Sections 52-58.
[
Footnote 7]
14 Stat. at Large 472.
[
Footnote 8]
Section 20, as amended by act of July 13, 1866, 14 Stat. at
Large 104.
[
Footnote 9]
14 Stat. at Large 742.
