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Time of Payment of Tax. The primary due date is June 15th, or in the case of corporations reporting for their fiscal years the 165th day after the close of their fiscal years. In the case of corporations care should be taken to reckon the days correctly, as 165 days is not equivalent to five and one-half months. The second due date is the date given on the notice and demand for tax, which date should be not less than ten days after the first due date. The second due date is the last day on which the tax may be paid without penalty or interest. The payment of the tax may be made at any time during the last day. To accommodate those who make payments after closing time a mail box is provided at the cashier's window in the office of the local collector for the deposit of such collections.24

ADVANCE PAYMENT OF Tax. The Secretary of the Treasury, under rules and regulations prescribed by him, is required to permit taxpayers liable to income taxes to make payments in advance in instalments, or in whole, of an amount not in excess of the estimated taxes which will be due from them, and upon determination of the taxes actually due any amount paid in excess shall be refunded as taxes erroneously collected. When payment is made in instalments, the law requires at least one-fourth of such estimated tax to be paid before the expiration of thirty days after the close of the taxable year, at least an additional one-fourth within two months after the close of the taxable year, at least an additional one-fourth within four months after the close of the taxable year, and the remainder of the tax due, on or before the regular due dates fixed by law. The Secretary of the Treasury may allow a credit against taxes so paid in advance of an amount not exceeding the rate of 3% per annum, calculated upon the amounts so paid from the date of such payment to the regular due date fixed by law; but no such credit is allowed on payments in excess of taxes determined to be due, nor on payments made after the expiration of four and one-half months after the close of the taxable year.25 All the penalties provided by law for failure to pay the tax when due, are applicable to any failure to pay the tax at the time or times above stated, in case the taxpayer chooses to pay in advance. The purpose of applying the penalties to such advance payments seems to be to protect the taxpayer, who chooses to make payments in advance, from the legal disability of recovering voluntary payments of taxes. By applying the penalties the taxpayer may, if he observes the rules as to protest and duress, pay the tax in advance and thereafter sue to recover if he has overpaid or paid under an erroneous assessment.

dividuals. The forms are essentially the same, each is divided into three parts in the manner and for the purpose described in the note regarding the notice of assessment.

24 T. D. 1728.

Manner of Payment of Taxes. As a general rule, payment of the tax is authorized by law to be made in certified checks drawn in favor of the collector on national and state banks and trust companies located in the city where the collector has his office, and also such “out-of-towncertified checks as can be cashed without cost to the government, providing the depositary will accept for deposit "out-of-town” certified checks “without recourse." Prior to this year the Treasury Department did not specifically authorize the acceptance of any form of exchange in payment of internal revenue taxes,

25 Act of October 3, 1917 (Public No. 50), $ 1009.

other than currency and such certified checks as are above described.26 There was no objection to a collector accepting at his own risk, or at the risk of the government depositary, uncertified checks, or any other form of exchange, for collection only.27 Where a form of remittance not authorized by law was accepted for collection, the 5% penalty was incurred by the taxpayer, if there was delay in collection and the funds were not actually received by the collector within the time provided by law. Receipt by the Government depositary, in the course of collection, was held not to be receipt by the collector, as the depositary is not an agent of the collector or of the government.28 At present the law provides that, under rules and regulations prescribed by the Secretary of the Treasury, collectors may receive, at par and accrued interest, certificates of indebtedness issued under Section 6 of the Act entitled “An Act to authorize an issue of bonds to meet expenditures for the National security and defense, and, for the purpose of assisting in the prosecution of the war, to extend credit to foreign governments, and for other purposes, approved April 24, 1917, and any subsequent act or acts. Under the same provision of law, and under rules and regulations prescribed by the Secretary of the Treasury, collectors may also receive uncertified checks in payment of income taxes, during such time, and under such regulations, as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; but if a check so received is not paid by the bank on which it is drawn, the person by whom such check has been tendered shall remain liable for the pay

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26 T. D. 1990. 27 T. D. 2158. 28 T. D. 1651.

ment of the tax and for all legal penalties and additions the same as if such check had not been tendered.29 If payment is made by check the taxpayer as a precaution should draw the check for such amount as to cover any collection charges by the bank, in order that the net amount received by the Government may be the full amount of tax due.

Payment Under Protest. The purpose of paying a tax under protest is to preserve the taxpayer's rights to recover the tax should the assessment prove to be wrongful or excessive. As a general rule of law, a voluntary payment of money cannot be recovered and this rule applies to payments of taxes. It does not seem essential, although it may be a wise precaution, also to protest at the time of filing the return on which the assessment is based.

RECOVERY OF TAXES FROM COMMISSIONER OF INTERNAL REVENUE. It would seem that a protest is not necessary to recover taxes from the Commissioner of Internal Revenue, but essential if suit is to be maintained against an adverse decision of the Commissioner:30 It is a principle universally recognized that an action cannot be maintained for the recovery of money paid in discharge of a tax illegally assessed, unless the payment was made under protest. But this principle has been held by the Commissioner of Internal Revenue and other officers of the Department as too technical and too exacting for application to the refund of taxes under Section 3220 of the Revised Statutes. 31

29 Act of October 3, 1917 (Public No. 50), $ 1010. 30 Chesebrough v. U. 8., 192 U. S. 253.

31 Real Estate Savings Bank v. U. S., 16 Court of Claims 335; 27 Int. Rev. Rec. 154.

RECOVERY BY ACTION AT LAW. Though there is some conflict in the dicta of the Supreme Court, the true doctrine seems to be that when taxes are paid under protest or with notice that the payer contends that they are illegal and intends to institute a suit to compel their repayment, a sufficient foundation for suit to recover has been established.3 It appears that a collector is not personally liable for taxes if no protest or objection is made to their collection by him.33

FORM OF PROTEST. There seems to be no legal requirement that a protest be in writing. An oral protest may be effective, 34 but a written protest is, of course, better evidence. A protest against paying the tax includes the

alties without specific mention of the latter. Where a corporation had been assessed for taxes and the same were not paid, a writ of distraint was issued by the collector, and, the corporation having been notified that the tax would be collected by levy, the deputy collector counted out and took from a representative of the company a sufficient amount to pay the tax against verbal protest at the time. A written notice of protest was then served in which the corporation denied that it was liable to the tax. The court held that the protest was sufficient.35 Under the 1909 Law the Treasury Department ruled that no form of protest was prescribed, any form of protest would be sufficient if filed before payment of the tax, and the right of protest was not to be denied.36

32 Herold v. Kahn, 159 Fed. 608. 33 Commissioners, etc. v. Buckner, 48 Fed. 533. 34 Wright v. Blackeslee, 101 U. S. 174. 35 Abrast Realty Co. v. Maxwell, 206 Fed. 333. 36 T. D. 1675.

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