Wilkes-barre Carriage Co., Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent, 332 F.2d 421 (2d Cir. 1964)

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U.S. Court of Appeals for the Second Circuit - 332 F.2d 421 (2d Cir. 1964) Argued May 13, 1964
Decided May 26, 1964

Fred R. Tansill of Goodwin, Rosenbaum, Meacham & White, Washington, D. C., for petitioner.

Robert H. Bernstein, Atty. Dept. of Justice, Washington, D. C. (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson and I. Henry Kutz, Attys. on the brief), for respondent.

Before KAUFMAN, HAYS and MARSHALL, Circuit Judges.


We affirm a decision of the Tax Court determining a deficiency in taxpayer's excess profits tax for the year 1943.

The taxpayer was engaged in the manufacture of ordnance for the armed services. After it had filed its return for 1943 but before it had paid in full its excess profits tax for that year, the War Contract Price Adjustment Board held its 1943 profits from war contracts to be excessive by $3,789,321 and ordered repayment of this amount. Under Section 3806(b) of the Internal Revenue Code of 1939, repayment was to be effected by means of a credit of $3,064,526.96 on its excess profits tax plus a cash payment of the balance of $724,794.04. The latter balance has been satisfied but the payment which consists of a credit against taxes has not been made since the excess profits tax for 1943 has never been paid.

The contentions of the taxpayer seek to create confusion about what is essentially a simple situation. We find no merit in them and uphold the result reached by the Tax Court. The taxpayer owed the government $3,064,526.96. Under § 3806 this is to be paid by crediting against it the excess profits tax. In order to discharge the obligation the taxpayer must pay the excess profits tax. This it has not done. A deficiency therefore exists.