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Auditor for the Treasury Department, the latter raised the question of the bar of section 3228 upon one claim and referred the matter to the Comptroller of the Treasury, who rendered a decision under date of June 30, 1905, overruling my view and holding that taxes refundable under section 3 of the act of June 27, 1902, if filed more than two years after the payment of the tax, were barred by section 3228.

No contention has ever been made that section 3228 applied to claims filed under section 1 of the act of June 27, 1902.

However, the question of the bar contained in the act of May 12, 1900, as amended by the act of June 30, 1902, was raised in connection with a claim filed under section 2 of the act of June 27, 1902. This question was referred to the Comptroller, who decided in an opinion rendered February 18, 1905, that the bar of the statute did not apply to claims filed under that section.

It will be seen, therefore, that there was no difference between the Comptroller of the Treasury and myself regarding the payment of claims under the act of June 27, 1902, except as to those filed under the third section of that act, my position being that the power to refund having been placed in the hands of another administrative officer, the bar upon claims upon which the Commissioner of Internal Revenue had the exclusive power to act could not apply, and for the reason that the taxes mentioned in section 3 were not illegally collected, but were made refundable as a free gift by the act of Congress.

In the absence of any time limitation in the act of June 27, 1902, I could not conceive that the free bounty of the Government, given to a whole class alike, should depend upon the time of filing the refunding claim, inasmuch, also, as at the time the act of June 27, 1902, was passed, some of the claimants thereunder were already barred if section 3228 were held to apply.

Why the apparently contradictory rulings were made on sections 2 and 3 of the act of June 27, 1902, I am unable to say. These rulings were made by the Comptroller of the Treasury and are found in Volume XI of the Decisions of the Comptroller of the Treasury, pages 472 and 772.

So far as this question is concerned, there appears to be no difference in the wording of the three sections of the act to which reference is herein made.

The question as to whether the bar of limitation contained in section 3228 applies to section 3 of the act of June 27, 1902, was raised in the circuit court of the United States for the district of Massachusetts in the case of Thomas C. Thacher et al. v. United States. On December 28, 1906, Judge Lowell gave an opinion holding against the contention that section 3228 prevented the allowance of claims for the refunding of taxes paid upon contingent beneficial interests filed more than two years after the date of the payment of the tax. I inclose herewith copy of the opinion of the court, which I will ask you to kindly return to me as it is one of the files of this office.

I am, very truly, yours,

Hon. JOHN DALZELL,

JOHN W. YERKES, Commissioner.

House of Representatives.

[Circuit court of the United States, district of Massachusetts. No. 158, law docket. Thomas C. Thacher et al., executors, petitioners, v. United States.]

Opinion of the court, December 29, 1906.

LOWELL, J. On June 7, 1901, the petitioners in this case, being the executors of Henry C. Thacher, paid to the collector of internal revenue, without protest, an inheritance tax on account of contingent beneficial interests. This tax they seek to recover under the provisions of the act of June 27, 1902 (32 Stat. L., 406). On March 15, 1904, their claim was filed with the collector in due form. The contingent estates were not vested in possession or enjoyment before July 1, 1902.

The United States has demurred to the petition. It contends that the tax thus paid was illegally collected (Vanderbilt v. Eidman, 196 U. S., 480); that, in order to recover back the tax thus collected, the claim must be filed with the collector within two years after payment of the tax (sec. 3228, Rev. Stat.), and that, inasmuch as the claim in this case was filed more than two years after payment of the tax, the petitioners can not recover.

The answer to the contention of the United States is simple. The petition before the court is not based upon the illegality of the tax, which it nowhere asserts. It seeks only the free bounty of the Government, given by the act of 1902, which reads as follows:

"That in all cases where an executor, administrator, or trustee shall have paid, or shall hereafter pay, any tax upon any legacy or distributive share of personal property under the provisions of the act approved June thirteenth, eighteen hundred and ninety-eight, entitled 'An act to provide ways and means to meet war expenditures, and for other purposes.' and amendments thereof, the Secretary of the Treasury be, and he is hereby, authorized and directed to refund, out of any money in the Treasury not otherwise appropriated, upon proper application being made to the Commissioner of Internal Revenue, under such rules and regulations as may be prescribed, so much of said tax as may have been collected on contingent beneficial interests which shall not have become vested prior to July first, nineteen hundred and two. And no tax shall hereafter be assessed or imposed under said act approved June thirteenth, eighteen hundred and ninety-eight, upon or in respect of any contingent beneficial interests which shall not become absolutely vested in possession or enjoyment prior to said July first, nineteen hundred and two."

The petitioners could not at any time have maintained suit to recover the tax as having been illegally collected. They had paid it voluntarily, not under protest. Their claim to a refund, if they had any, was moral only and not legal. It appealed only to the Government's sense of fairness, and could be satisfied only by the bounty of the United States given upon such terms as Congress saw fit to impose. That a free gift of Congress, like that here in question, may be sued upon after it has been voted by Congress was decided in U. S. v. Jordan (96 U. S. 418), U. S. v. Louisville (169 U. S., 249). The act of 1902 fixes no time within which the claim for a refund must be filed with the collector, and no departmental regulation has been called to the attention of the court. Even if the limit fixed by section 3228, Revised Statutes, be applicable here by analogy, yet the two years therein mentioned must run, if they run at all, not from the payment of the tax, which was effective to create the claim here in suit, but from the passage of the act providing the bounty which the petitioners seek to obtain. That the tax paid by the petitioners in 1901 was illegally collected is irrelevant to the issues raised by this petition. Demurrer overruled.

2d Session.

No. 7093.

REPAIR OF TREASURY BUILDING.

JANUARY 30, 1907.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed.

Mr. CONNER, from the Committee on Public Buildings and Grounds, submitted the following

REPORT.

[To accompany H. R. 25048.]

The Committee on Public Buildings and Grounds, to whom was referred the bill (H. R. 25048) for the restoration, reconstruction, and repair of the east front of the Treasury building, Washington, D. C., having had the same under consideration, submit the following explanation thereof:

The east front of the United States Treasury building was originally constructed of soft stone more than eighty-five years ago, and is now rapidly deteriorating, with the result that it is becoming not only unsightly, but because of liability of stones falling, is a menace to pedestrians. Not long ago a portion of the cornice fell and struck the pavement in close proximity to a person who happened to be standing at that point.

Attempts have been made to repair by piecemeal the parts of the building giving way, but it is found that this does not relieve the situation. Extensive repairs are necessary to remedy apparent defects, but it is impossible to detect all places where stones are liable to become detached and fall, and the necessary repairs increase the unsightliness of this portion of the building.

The only permanent remedy appears to be to substitute for the defective soft stone, granite to match the remainder of the building, and to satisfactorily do this will require approximately $360,000.

There is now on the books of the Treasury Department an unexpended balance remaining from appropriation for "Treasury building, Washington, D. C., ventilation," and it is recommended that Congress act favorably in the matter of making the substitution of stone above referred to of the unexpended balance.

It is the purpose to have this unexpended balance, $155,147.42, be made available for the work, and the further sum of $204,852.58 should be appropriated, making a total of $360,000 for the work in question.

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