United States v. Price

Background

The United States sued a taxpayer to collect a tax deficiency for 1946 and statutory interest. The taxpayer argued the IRS could not proceed because the Commissioner never mailed the required 90‑day deficiency notice. The taxpayer had signed Treasury Form 870, a written waiver of the statutory restrictions on assessment and collection, and lower courts held that waiver ineffective without a prior 90‑day letter.

Reasoning

The core question was whether a written waiver is valid if executed before a formal 90‑day notice is mailed. The Court focused on the waiver provision’s plain language saying the taxpayer may waive “at any time,” and reviewed the statutory history showing waivers were meant to let taxpayers pay and stop the running of interest. The Court rejected the Ninth Circuit decisions that required a prior deficiency letter, found no persuasive legislative history to bar pre‑notice waivers, and noted later recodification explicitly authorized pre‑notice waivers. The Court concluded the waiver was fully effective and reversed the judgment below, permitting immediate assessment and collection.

Real world impact

Taxpayers and the Government are affected: taxpayers can stop the accrual of interest by filing waivers, and the IRS can assess and collect sooner when a waiver is on file. The decision resolves conflicting court views and affirms the departmental practice of using waivers to speed collection and settle issues without formal notice.

Dissents or concurrances

Justice Douglas, joined by Justice Stewart, dissented, arguing the Ninth Circuit rule was correct and would have affirmed the lower court’s judgment.