unfavorable decision by the Board, or if he expects the Commissioner to seek a review in the event of a decision favorable to the taxpayer, he should try the case before the Board with the same attention to the record that an expert trial lawyer would use in an important civil

case.

Are the Board's findings of fact reviewable?-A very important point upon which the act is silent is whether the appellate courts shall review anew the findings of fact of the Board of Tax Appeals or shall confine their jurisdiction to reviewing questions of law and the ascertainment of whether there were any facts to support the decision of the Board. This question will doubtless be one of the first which the courts will be called upon to decide, unless Congress does so by legislative enactment.

The form of the Board's findings will probably determine the question. If the findings contain a full statement of the facts, rather than brief formal conclusions, it is doubtless unlikely that a reviewing court will overturn or disregard them. Again, it is perhaps unlikely that the court will disturb the findings of the Board on technical questions, if the record shows clearly that the Board's conclusions are based upon a careful weighing of stated facts. On the other hand, if the findings of fact become brief stereotyped statements of conclusions, the courts, while not purporting to review them, may in effect disregard them.

Effect of judgment by reviewing court.-The decision of the Circuit Court of Appeals or the Court of Appeals of the District of Columbia is final and may be reviewed only by the United States Supreme Court on a writ of certiorari. (See page 379.)

LAW. Section 1003. (a) The Circuit Courts of Appeals and the Court of Appeals of the District of Columbia shall have exclusive jurisdiction to review the decisions of the Board (except as provided in section 239 of the Judicial Code, as amended); and the judgment of any such court shall be final, except that it shall be subject to review by the Supreme Court of the United States upon certiorari, in the manner provided in section 240 of the Judicial Code, as amended.

The decision of the Board becomes final in accordance with the terms of section 1005, as follows:

LAW. Section 1005. (a) .... (1) Upon the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within such time; or

(2) Upon the expiration of the time allowed for filing a petition for certiorari, if the decision of the Board has been affirmed or the petition for review dismissed by the Circuit Court of Appeals and no petition for certiorari has been duly filed; or

(3) Upon the denial of a petition for certiorari, if the decision of the Board has been affirmed or the petition for review dismissed by the Circuit Court of Appeals; or

(4) Upon the expiration of 30 days from the date of issuance of the mandate of the Supreme Court, if such Court directs that the decision of the Board be affirmed or the petition for review dismissed.

(b) If the Supreme Court directs that the decision of the Board be modified or reversed, the decision of the Board rendered in accordance with the mandate of the Supreme Court shall become final upon the expiration of 30 days from the time it was rendered, unless within such 30 days either the Commissioner or the taxpayer has instituted proceedings to have such decision corrected to accord with the mandate, in which event the decision of the Board shall become final when so corrected.

(c) If the decision of the Board is modified or reversed by the Circuit Court of Appeals, and if (1) the time allowed for filing a petition for certiorari has expired and no such petition has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the Court has been affirmed by the Supreme Court, then the decision of the Board rendered in accordance with the mandate of the Circuit Court of Appeals shall become final on the expiration of 30 days from the time such decision of the Board was rendered, unless within such 30 days either the Commissioner or the taxpayer has instituted proceedings to have such decision corrected so that it will accord with the mandate, in which event the decision of the Board shall become final when so corrected.

(d) If the Supreme Court orders a rehearing; or if the case is remanded by the Circuit Court of Appeals to the Board for a rehearing, and if (1) the time allowed for filing a petition for certiorari has expired, and no such petition has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the decision of the Board rendered upon such rehearing shall become final in the same manner as though no prior decision of the Board had been rendered.

(e) As used in this section

(1) The term "Circuit Court of Appeals" includes the Court of Appeals of the District of Columbia;

(2) The term "mandate," in case a mandate has been recalled prior to the expiration of 30 days from the date of issuance thereof, means the final mandate.

When the decision of the Board becomes final, the Commissioner may proceed to assess and collect any deficiency in tax found to be due. (See pages 54 and 94.) Any overpayment found by the Board for the year in which the Commissioner determined the deficiency will be refunded when the Board's decision has become final. (See pages 136 and 247.)

Should the taxpayer elect to pay the additional tax and institute suit for its recovery, rather than to appeal to the Board, he may institute it, as heretofore, either in the United States Court of Claims, in which event the United States will be the defendant, or he may start his action in the United States District Court against the collector to whom he paid the tax, or, if he be dead, or out of office, against the United States. On the other hand, as has already been stated, if the taxpayer elects to appeal to the Board, he may not thereafter pay the tax, and institute suit for its recovery.

Suits in the District Courts and the Court of Claims have certain common requirements which will be considered first. Thereafter, the special procedure in the respective courts will be discussed. Finally, the methods for securing an appellate review of court decisions will be set forth.

General Requirements

Claim for refund or credit required.—An appeal to the Commissioner in the form of a claim for refund or credit must precede a suit to recover a tax. If the Commissioner delays action on the claim for refund, suit may be brought against the collector or the United States after six months, without awaiting the Commissioner's decision.

LAW. Section 1113. [Amending section 3226, Revised Statutes.] No suit or proceeding shall be maintained in any court for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof. . . . .

REGULATION. Under the provisions of section 3226 of the Revised Statutes, as amended by the Revenue Act of 1924 and reenacted without change by section 1113 of the Revenue Act of 1926, no suit or proceeding by any person for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrong fully collected, can be maintained in any court until a claim for refund or credit has been duly filed with the Commissioner (see section 284 and articles 1301-1306) and six months have elapsed from the date of filing such claim, unless the Commissioner renders a decision within six months, in which case suit may be brought upon the rendition of the decision. No suit or proceeding in court can be brought after the expiration of five years from the date of the payment of such tax, penalty, or sum, unless such suit or proceeding is begun within two years after the disallowance of the part of such claim to which such suit or proceeding relates. The statute requires that the Commissioner shall notify the claimant by mail of the disallowance of the claim for refund or credit within 90 days after such disallowance.

Section 1113 does not affect any proceeding in court instituted prior to the enactment of the Revenue Act of 1924. (Ast. 1351.)

The Court of Claims of the United States has decided that when suit is brought by a taxpayer against the collector for recovery of the tax, the burden of proof is upon him to show that his appeal to the Commissioner has been taken and decided, or else that decision was delayed more than six months from the date of appeal. (Lauer v. U. S., 5 Ct. Cl. 447.)

REGULATION. The lodging of an appeal (claim for refund) made out

in due form with the proper collector of internal revenue, for the purpose of transmission to the Commissioner of Internal Revenue in the usual course of business under the requirements of the regulations of the Secretary of the Treasury, is in legal effect a presentation of the appeal to the Commissioner. (Reg. 33, 1918, Art. 270.)1

DECISION.

The written appeal was the best evidence of which the case was susceptible, and if it was not in his power to have produced the original, it was nevertheless his duty to have produced an authentic copy thereof, or accounted for its absence. (Hubbard v. Kelley, 8 W. Va. 46.)

Who should file claim.-The claim must have been filed, of course, on behalf of the taxpayer suing to recover the tax. In Rosen v. U. S. (U. S. Dist. Ct. Minn., Mar. 2, 1926) it was held that a claim for refund filed on behalf of a corporation later dissolved was unavailing in a suit by individual shareholders for a refund.

This decision, although technically correct, seems narrow, in a case where the shareholders had been forced to pay the corporation's tax, and it was that tax which was being sued for.

Amended return or claim for abatement does not constitute a claim for refund.—

RULING. Amended returns do not take the place of a claim for refund or credit, and if filed, unsupported by such claim or claims, do not in themselves constitute a sufficient claim within the meaning of the statute to warrant the crediting or refunding of any taxes thereunder after the expiration of the five-year period. (C. B. 4, 332; Mim. 2764.)

The Supreme Court of the United States has held (Rock Island, A. & L. R. R. Co. v. U. S., 254 U. S. 141) under an earlier law that a claim in abatement does not constitute an appeal to the Commissioner for a refund. For this decision as well as a decision 2 of a Circuit Court of Appeals taking the opposite position see Income Tax Procedure, 1922, pages 265-267. In view of this situation, taxpayers should be careful to preserve their legal rights by filing a claim for refund when a claim for abatement is rejected.

In a lower court, however, it has been held that if the Commissioner advised the taxpayer that no claim for refund was necessary, under such circumstances, the collector can not defend on the ground that claim for refund was not filed. (Black v. Bolen, 268 Fed. 427; dismissed on appeal, 277 Fed. 1013.)

1 This regulation is based upon U. S. v. Savings Bank, 104 U. S. 728. 2 Loomis v. Wattles, 266 Fed. 876. In the Rock Island case, supra, the Supreme Court criticized Loomis v. Wattles.