Harold Hitz Burton

“ Indeed, the full payment of that tax soon was made an express condition of the application for adjustment. I.R.C. § 722 (d) . In 1943, Congress stated that if overpayments for either of the taxable years 1940 or 1941 were found to be attributable to § 722, no interest on such overpayments was to be paid the taxpayer. [11] At least to that extent, Congress expressly recognized that the funds paid as excess profits taxes, when due and without the benefit of § 722, were funds owed to and usable by the Government. ”

“ Such an abatement automatically would leave a larger portion of a corporation's taxable income subject to the normal income tax and surtax. This increase, however, was not made retroactive any more than the decrease in the excess profits tax which caused it was made retroactive. Congress thus appropriately charged no interest on the resulting deficiency just as it had allowed none on the belated overpayment.↑ When Congress, in a later Act, authorized deferment of payments of comparable taxes pending determinations of applications for relief, it did so unequivocally. ”

“ Once the taxpayer has done that, 'the tax shall be determined by using such constructive average base period net income in lieu of the average base period net income otherwise determined under this subchapter.' Standing alone, this directive language is elastic. It can be read consistently either with the interpretation that the new computation replaces and abates the old one currently, when the new one is determined and assessed, or that it retroactively replaces the old tax from its original due date. ”

“ In computing these taxes, it used excess profits credits based upon invested capital. [4] In 1943 and 1945, it applied under § 722 for relief from all or part of these taxes, claiming that they were 'excessive and discriminatory'. [5] In accordance with the usual administrative practice, the Commissioner determined the amount of the excess profits taxes due without regard to the application for relief under § 722. In doing so, he found it necessary to proceed under I.R.C. § 713, using excess profits credits based upon the taxpayer's income, rather than upon its invested capital. ”

“ If the instant taxpayer had paid its required tax in 1941, the Government would have received an additional $460,408.91 at that time. Accordingly, it would have had the use of that money, without charge, during the crucial war years. ”

“ After extended investigations and negotiations conducted under authority of § 722, the Commissioner and the taxpayer agreed upon a 'constructive average base period net income' which fixed the excess profits credits for the years in question and, as a result, the relief available under § 722. ”

“ Commissioner of Internal Revenue, 3 Cir., 162 F.2d 146.↑ See also, Standard Roofing & Material Co. v. United States, 10 Cir., 199 F.2d 607; Rodgers v. United States, 123 Ct.Cl. 108 F.Supp. 727; Cumberland Portland Cement Co. v. ”