United States v. A. S. Kreider Co.

Background

A taxpayer filed its 1920 income tax return in 1921 and paid $52,481.97. The taxpayer signed a waiver extending audit time to December 31, 1926, and paid a later deficiency of $1,362.50 on July 26, 1926. On March 23, 1929, the taxpayer sought a refund of $53,844.47. The Commissioner found an overpayment of $14,833.68 but said $13,471.18 was barred by the statute of limitations and sent a check for $1,362.50 in October 1929; the taxpayer accepted that check and later sued on March 7, 1932.

Reasoning

The core question was whether the taxpayer’s suit was filed within the time federal law allows for tax-recovery suits. The Court concluded the case was untimely under the specific federal rule that limits suits to five years after tax payment (or two years after denial of a refund claim). The Court rejected the argument that the general six-year limit under the Tucker Act controlled and held the special tax limitation governs. The Court also considered and rejected the taxpayer’s argument that the Commissioner’s certificate and partial check created an “account stated” that would extend the time, finding no mutual promise or full acceptance to support that theory.

Real world impact

The decision means this taxpayer cannot recover the withheld amount because the suit was not brought within the statutory limits. It clarifies that specific, shorter tax-time limits can override broader six-year rules, and that accepting a partial refund check does not automatically settle a larger refund claim. The judgment was reversed and the suit ordered dismissed.