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Upon an application by the United States for an order upon a receiver to pay an assessment, the receiver may show that the assessment was erroneous or illegal, without regard to the lapse of time or to whether there has been an appeal to the Commissioner of Internal Revenue. (United States v. Nebraska Distil

ling Co. (1897), circuit court of appeals, 80 Fed. Rep., 285.) Limitation SEC. 3227. No suit or proceeding for the recovery of any covery of taxes internal tax alleged to have been erroneously or

illegally wrongfully lected.

col-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, shall be maintained in any court unless the same is brought within two years next after the cause of action accrued: Provided, That actions for such claims which accrued prior to June six, eighteen hundred and seventy-two, may be brought within one year from said date; and that where any such claim was pending before the Commissioner, as provided in the preceding section, an action thereon may be brought within one year after such decision and not after. But no right of action which was already barred by any statute on the said date shall be revived by this section.

The words “cause of action mean the right of action. (Wright v. Blakeslee, 101 U. S., 174; 26 Int. Rev. Rec., 179.)

As to claim pending before commissioner June 6, 1872. (James v. Hicks, 110 U.S., 272.).

Jurisdiction. (City of Philadelphia v. Collector, 5 Wall., 720.)

State statute of limitations as affected by the Federal statute of limitations. (Braun v. Sauerwein, 10 Wall., 218.)

A person can not recover from an internal-revenue collector taxes paid which were in fact due, even though the manner of their assessment and collection was unauthorized. (Schafer v. Craft, 144 Fed. Rep., 907.)

Suits must be brought within two years after the cause of action accrued. (Cheatham v. United States, 92 U. S., 85; 22 Int. Rev. Rec., 30; Kings County Savings Institution v. Blair, 116 U. S., 200; 32 Int. Rev. Rec., 30; Commissioners of the Sinking Fund of Louisville v. Buckner, 48 Fed. Rep., 533; Coblens v. Abel, Woolw. 293, Fed. Cas. No. 2926;

Christie-Street Commission Co. v. United States, C. C. A. 136 Fed. Rep. 326, affirming 129 Fed. Rep., 506; Farrell v. United States, 167 Fed. Rep., 639.)

The right of action accrues at the expiration of six months after an appeal without action thereon and becomes barred in two years thereafter. (Schwartzchild & Sulzerberger v. Rucker, collector (1906), U. S. Circuit Court, northern district of Ga., 143 Fed. Rep., 656; T. D., 974.)

No officer of the Government is authorized to waive the statute of limitations imposed in favor of the Government. (Christie

Street Commission Co. v. United States, 129 Fed. Rep., 506.)

SEC. 3228. All claims for the refunding of any internal funding, limita

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 be presented to the Commissioner of Internal Revenue within two years next after the cause of action accrued: Provided, That claims which accrued prior to June six, eighteen hundred and seventy-two, may be presented to the Commissioner at any time within one

Claims for re


page 117.


year from said date. But nothing in this section shall be construed to revive any right of action which was already barred by any statute on that date.

Informal application regarded as a claim within the meaning of this section. (14 Op. Atty. Gen., 615.)

When this section does not apply. This limitation does not apply to claims for the redemption of stamps. (15 Op. Atty. Gen., 426.)

This limitation does not apply to claims under section 3221, Section 3228 does not apply to claims for refund of legacy taxes under section 3, act of June 27, 1902. (13 Comp. Dec., 707.)

Claims for taxes recovered by judgments should be presented within two years after date of judgment. SEC. 3229. The Commissioner of Internal Revenue, with the advice and consent of the Secretary of the Treasury, may compromise any civil or criminal case arising under the internal-revenue laws instead of commencing suit thereon; and, with the advice and consent of the said Secretary and the recommendation of the AttorneyGeneral, he may compromise any such case after a suit thereon has been commenced. Whenever a compromise is made in any case there shall be placed on file in the office of the Commissioner the opinion of the Solicitor of Internal Revenue, or of the officer acting as such, with his reasons therefor, with a statement of the amount of tax assessed, the amount of additional tax or penalty imposed by law in consequence of the neglect or delinquency of the person against whom the tax is assessed, and the amount actually paid in accordance with the terms of the compromise.

Compromises after judgment, remissions, and pardons. (See sec. 3469, p. 399.)

Officers compromising offenses except as authorized by law; penalty: (Sec. 3169, p. 81, and sec. 3170, p. 83.)

District attorney or marshal compromising cases illegally; penalty. (Sec. 3170, p. 83.)

Opinion of the Attorney General as to the limitation of the power to compromise vested in the Secretary of the Treasury under sections 3229 and 3469, page 399. (17 Op. Atty. Gen., 213; 27 Int. Rev. Rec., 334.)

Compromises, course of proceedings indicated. The functions of the Secretary of the Treasury and the Attorney General are advisory. (12 Op. Atty. Gen., 472; 8 Int. Rev. Rec., 86.)

Power to compromise ceases as soon as judgment is rendered.
(13 Op. Atty. Gen., 479.)

No power to compromise proceedings against officers. (14 Op.
Atty. Gen., 8, 43.)

The right to compromise is understood to embrace the crim-
inal as well as the civil liability of the defendant. (13 Op.
Atty. Gen., 480.)

Can not compromise taxes legally due from a solvent taxpayer.
T. D. 18854; 16 Op. Atty. Gen., 249; 25 Int. Rev. Rec., 14.
United States v. Roelle et al., 24 Int. Rev. Rec., 332; Fed. Cas.
No. 16186.)

See also Dorsheimer v. U.S., (7 Wall., 166; 10 Int. Rev. Rec.,
131), as to power to remit a tax.

Relative to compromise of liability of obligors on an export bond. (13 Op. Atty. Gen., 115.)

Canadian bank notes paid out by banks in the United States, tax on, compromise. (21 Op. Atty. Gen., 557.)

No power to compromise a suit brought against a collector of internal revenue for the recovery of tax claimed to have been illegally collected. (Coca Cola Co. v. Rucker; 23 Op. Atty. Gen., 507.)

Money deposited for compromise can not be held or set off against tax due. (Boughton v. United States, 12 Ct. Cls., 330; 13 ibid., 284.)

When party complies with terms of compromise it is conclusive. (Sweeny v. United States, 17 Wall., 75; United States v. Child & Co., 12 ibid., 232; Mason v. United States, 17 ibid., 67.)

Discontinuance on payment of costs a compromise. (Op. Atty. Gen. (Hoar), 11 Int. Rev. Rec., 98; 12 Op. Atty. Gen. (Êvarts), 536.)

Commissioner may direct an unconditional dismissal of a suit without recommendation of Attorney General. (12 Op. Atty. Gen., 553.)

The Attorney General exercises superintendence and direction over United States attorneys and general supervision over proceedings instituted for the benefit of the United States. He may absolutely dismiss or discontinue suits in which the Government is interested; a fortiori, he may terminate the same upon terms, at any stage, by way of compromise or settlement. (220p. Atty. Gen., 499; Treas. Dec. (1899), No. 21270.)

An agreement made with the United States District Attorney in the nature of a compromise is not valid unless with the concurrence of the officers above named. (U. S. v. Quantity of Distilled Spirits, 4 Ben., 349; Fed. Cas. 16099.)

There is no authority for a district attorney or collector to compromise, adjust, or settle any charge or complaint for any violation, or alleged violation, of the internal-revenue law. (T. D. 845, Dec. 9, 1904.)

United States Commissioners have no authority to settle cases. (T. D. 1216.)

A compromise operates for the protection of the offender against subsequent proceedings as fully as a former conviction or acquittal, and is a bar to a suit on a bond to recover penalties based upon the same offense. (U. S. 1. Chouteau (1880), 102 U. S. 603; 27 Int. Rev. Rec., 51.)

The officers of the Treasury Department are authorized to compromise a case involving a violation of the oleomargarine statutes upon terms, which, in their judgment, are just and reasonable. The initiative of action is with the Commissioner. (26 Op. Atty. Gen., 282.)

Suits against illicit distillers may not be nolled without permission of Attorney General. (Sec. 3230, R. S.)

Commissioner may instruct United States attorney to prosecute or abstain. (Secs. 838, p. 401; 3214, p. 111.)

Instructions relative to offers in compromise. (T. D. 18854, Jan. 22, 1898; T. D. 20265, Oct. 28, 1898.)

As to compromises induced by threats and duress. (T. D. 206, Aug. 30, 1900; Int. Rev. Cir. 579.)

As to five-dollar offers. (T. D. 496, Apr. 2, 1902.)

Offers in compromise should include payment of costs. (T. D. 642, Mar. 20, 1903.)

Relative to deposit of amount offered. (T. D. 1253.) Discontinu- SEC. 3230. No discontinuance or nolle prosequi of any nces of prosecu.

prosecution under section three thousand two hundred and fifty-seven shall be allowed without the permission in writing of the Secretary of the Treasury and the

Attorney-General. Continuance of Sec. 3231. It shall be lawful for any court in which any internal - revenue

suit or criminal proceeding arising under the internalrevenue laws may be pending, to continue the same at any stage thereof, for good cause shown on motion by the district attorney.






3232. Occupation not to be carried on

until tax is paid. 3233. Business to be registered. (3233a.) Selling on passenger railroad

trains or vessels. 3234. Persons in partnership at same

place liable for only one tax. 3235. Payment of one special tax not to

cover several places of business. 3236. When more than one pursuit is car

ried on in same place by same

person at same time. 3237 (amended). When special tax to be

due, how reckoned. 3238. Stamps for special taxes. 3239. Special-tax stamp to be exhibited

in place of business. 3240. List of special-tax payers to be ex

hibited in collector's office. 3241. Death or removal after paying tax;

business carried on without addi

tional tax. 3242. Carrying on business without pay

ment of special tax; penalties. [3242a.) Same. (32426.) Section 4, act of August 2, 1886.

Same as to oleomargarine. (3242c.] Section 4, act of May 9, 1902.

Same as to process, renovated, or

adulterated butter.
3243. Payment of special tax not to au-

thorize violation of State laws
nor prohibit State taxation.

3244 (amended). Special taxes imposed on

1st. Brewers.
2d. Manufacturers of stills.
3d. Rectifiers.
4th. Retail liquor dealers.

Wholesale liquor dealers.
5th. Retail dealers in malt liquors.

Wholesale dealers in malt

liquors. Act of August 2, 1886, Section 3; as

amended by section 2, act of May 9,

Manufacturers of oleomargarine.
Wholesale dealers in oleomargarine.

Retail dealers in oleomargarine.
Act of May 9, 1902, section 4:

Manufacturers of process or renovated

butter. Manufacturers of adulterated butter. Wholesale dealers in adulterated


Retail dealers in adulterated butter.
Act of June 6, 1896, section 3:

Manufacturers of filled cheese.
Wholesale dealers in filled cheese,

Retail dealers in filled cheese.
Act of June 13, 1898, section 36:

Manufacturers, packers, and repack

ers of mixed flour. 3246 (amended). Special tax not to apply

to vintners nor apothecaries in certain cases.

to be carried on

Sec. 3232. No person shall be engaged in or carry on

Occupation not any trade or business hereinafter mentioned until he has until tax is paid. paid a special tax therefor in the manner hereinafter provided.

See section 53, act of October 1, 1890, amending section 3237,
Revised Statutes, modifying the above.

It was held in License Tax Cases (5 Wall., 462, 6 Int. Rev. Rec.,
36) that the provisions of the act of Congress of June 30, 1864,
"to provide internal revenue to support the Government,” etc.
(13 Stat., 223), and the amendatory acts requiring licenses for
certain kinds of business and imposing penalties for not taking
out and paying for them, were not contrary to the Constitution
or to public policy, and that the provisions of the act of July 13,
1866, to reduce internal taxation,” etc. (14 Stat., 98), for the
imposing of special taxes, in lieu of requiring payment for
licenses, removed whatever ambiguity existed in the previous
laws, and were in harmony with the Constitution and public


Returns to be made (Form 11). (Sec. 3173, p. 86.) For failure to make sworn return within time prescribed, without excuse of “sickness or absence," the Commissioner of Internal Revenue is required to add 50 per centum to the special tax. (Sec. 3176, p. 89.)

Prosecutions not to be commenced (except in cases of ped. dlers of liquors) against special-tax payers who make return and pay the tax at any time before expiration of the calendar month in which liability began. (T. D. 18946, 1898.)

Except in the case of persons engaging in business as liquor dealers in localities where such business is prohibited by local law. In such cases prosecution to be instituted unless the special tax is paid and the stamp posted before business is begun. (T. D. 1605, Mar. 25, 1910.)

Where a person, after his arrest for failure to pay special tax as required by law, proffers to the collector the amount of the tax and 50 per cent penalty, upon his signing and swearing to return(Form 11), the collector should receive the money proffered. This does not relieve such person from his criminal liability. (T. D. 21850, 1899.)

A verdict in favor of defendant in a criminal action does not estop the United States from proving the special-tax liability in

a civil action. (U. S. v. Schneider, 35 Fed. Rep., 107.) Trade or business to be regis

Sec. 3233. Every person engaged in any trade or business on which a special tax is imposed by law shall register with the collector of the district his name or style, place of residence, trade or business, and the place where such trade or business is to be carried on. In case of a firm or company, the names of the several persons constituting the same, and their places of residence, shall be so regis

tered. Special-tax stamps may be [SEC. 3233a.] [Joint resolution May 8, 1876 (19 Stat., isinas domasitas 213).] That nothing contained in chapter three of title on passenger rail-thirty-five of the Revised Statutes shall prevent the issue,


under such regulations as the Commissioner of Internal Revenue may prescribe, of special-tax stamps to persons carrying on the business of retail dealers in liquors, retail dealers in malt liquors, or dealers in tobacco, upon passenger railroad trains or upon steamboats or other vessels engaged in the business of carrying passengers.

The special-tax stamps issued for the retailing of wine and liquor on buffet cars attached to passenger railway trains are to be made in general terms for such cars in the United States,” in view of the impracticability of repeated transfers of such stamps in the various districts and States through which the train passes. (T. D. 21318, 1899.)

Retailing liquors on small boats. (T. D. 1007.) Persons in partnership at same Sec. 3234. Any number of persons doing business in place liable for

copartnership at any one place shall be required to pay only one tax.

but one special tax.

United States v. Glab, 99 U. S., 225; 25 Int. Rev. Rec., 84.

(See section 3241.) Payment of one special tax not to Sec. 3235. The payment of the special tax imposed pinces sony busi: shall not exempt from an additional special tax the person

carrying on a trade or business in any other place than that stated in the collector's register; but nothing herein contained shall require a special tax for the storage of goods, wares, or merchandise in other places than the



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