with a detail of all items of costs which were paid by the judgment debtor or for which he is liable.63 Recovery of Interest. It is a well-settled principle that the United States is not liable to pay interest on claims against it, in the absence of express statutory provision to that effect. It has been established as a general rule in the practice of the Government that interest is not allowed on claims against it, whether such claims originate in contract or in tort; whether they arise in the ordinary business of administration, or the private acts of relief by Congress on special application. The only recognized exceptions are where the Government stipulates to pay interest, and where interest is given expressly by an Act of Congress, either by the name of interest, or damages. Not only is this the general principle and settled rule of the executive department of the Government, but it has been the rule of the legislative department, because Congress, though well knowing the rule observed at the Treasury, and frequently invited to change it, has refused to pass any general law for the allowance and payment of interest on claims against the Government.64 Where a person accepts from the Government without objection a refund of a sum illegally exacted he gives up his right to sue for interest.65 The ground for refusal to allow interest is the presumption that the Government is always ready and willing to pay its ordinary debts. When, however, an illegal tax has been collected, the citizen who has paid it, and has been obliged to bring suit against the collector, is entitled to interest in the event of recovery, from the date of the illegal exaction.66 In a case where there had been a delay of thirty years in prosecuting a claim to recover internal revenue taxes, interest was not allowed from the date of payment of the taxes, but was allowed from the time of commencing the suit.67 It has been held that where railroads, seeking to recover internal revenue taxes illegally assessed, delayed in pressing their claims on account of an understanding with the collectors that the claims should await the decision of other pending cases, but it 63 Reg. 45, Arts. 1031 and 1038. 66 Erskine v. Van Arsdale, 15 Wall. 75; Old Colony R. Co. v. Gill, 257 Fed. 220; Redfield v. Bartels, 139 U. S. 694. 67 Burrough v. Abel, 105 Fed. 366. became apparent that the question of interest could not be adjusted, the railroad's conduct did not disentitle them to interest for any lack of diligence in prosecution.68 It seems clear that in a suit against a collector interest may be recovered whether or not the same rule applies to suits against the United States.69 On recovery of a judgment against a collector for the amount of an internal revenue tax illegally collected, the plaintiff is entitled to have the judgment state that it is with interest.70 Where judgment is recovered in an action against a collector, interest may be recovered up to the time final judgment is entered and a certificate from the trial court that there was probable cause for the collection of the tax has been given. Upon giving such certificate the claim becomes one against the United States, stopping the right to further interest, unless a review of the judgment by an appellate court is obtained, in which event the judgment upon the mandate of the appellate court will be treated as a final judgment, to the rendition of which interest will be allowed, unless the plaintiff unduly delays the presentation of his claim.71 A suit against a collector is a private suit and there is no claim against the Government until a certificate of probable cause, under the Revised Statutes,72 has been obtained from the court, at which time the Government assumes a definite liability of the collector, which does not include the payment of interest thereafter; neither is there any further personal liability on the part of the collector. The interest which may be recovered is that put into the judgment before there is any certificate of probable cause, and if none has been put in, the Government assumes no part of the liability of the defendant. The liability assumed by the Government includes interest and costs forming part of the recovery, but does not include interest after judgment.73 Costs. The Revised Statutes 74 authorize the Commissioner to repay to any collector or deputy collector the full amount of such 68 Boston & P. R. Corp. v. Gill, 257 Fed. 221. 69 Conant v. Kinney, 162 Fed. 581. 70 New York Mail and Newspaper Transportation Co. v. Anderson, 234 Fed. 590. 71 Klock Produce Co. v. Hartson, 212 Fed. 758. 72 R. S., § 989. 73 White v. Arthur, 10 Fed. 80. 74 R. S., § 3220, as amended by the Revenue Act of 1918. The amendment extends the provision to assessors, assistant assessors and agents. sums of money as may be recovered against him in any court, for any internal revenue taxes collected by him, with the cost and expenses of suit; also all damages and costs recovered against any assessor, assistant assessor, collector, deputy collector, agent or inspector in any suit brought against him by reason of anything done in the due performance of his official duty. Under this section costs may be recovered against the collector.75 Judgment is usually given in the District Court for costs and interest. Claims for Abatement of Uncollectible Taxes. When a tax is found to be uncollectible, the collector or deputy collector who made the demand for payment and is conversant with the facts may prepare a claim for abatement on form 53. Although credits allowed on account of insolvency or absconding release the collector from the obligation created by his receipt for the amount credited, the obligation to pay still remains upon the person assessed. It is the duty of the collector to use the same diligence to collect a tax after it has been abated as uncollectible as before abatement. Collectors should therefore keep a record of all taxes thus credited and of the persons from whom they are due, and should enforce payment whenever it is in their power to do so.7 76 75 De Bary v. Carter, 102 Fed. 130. However, see Treat v. Farmers Loan and Trust Co., 185 Fed. 760, 763, as to costs in the Supreme Court and Circuit Court of Appeals. 76 Reg. 45, Art. 1033. F. T.-37 CHAPTER 38 EXAMINATION OF TAXPAYERS' BOOKS The Revenue Act of 1918 and the Revised Statutes contain certain provisions for the examination of taxpayers' books by revenue agents or inspectors, the attendance of witnesses before the Commissioner and the production of books in suits or proceedings arising under the revenue laws which are set forth in the following paragraphs. Examination of Books. For the purpose of ascertaining the correctness of any return or making a return where none has been made, the Commissioner may, by any revenue agent or inspector designated by him for that purpose, examine any books, papers, records or memoranda bearing upon the matters required to be included in the return.1 Requiring Attendance of Witnesses. For the purpose stated in the previous paragraph the Commissioner may require the attendance of the person rendering a return or of any officer or employee of such person or the attendance of any other person having knowledge in the premises 2 and may take his testimony with reference to the matters required to be included in such return. The Commissioner, every collector, deputy collector, internal revenue agent, and internal revenue officer assigned to 1 Revenue Act of 1918, § 1305. In relation to the income tax this provision` seems to supplant R. S., § 3173, which as amended, omits the second case "in case of income tax on or before the first day of March in each year, or on or before the last day of the sixty day period next following the closing date of the fiscal year for which it makes a return of its income" and also omits the phrase "amount of annual income charged with a duty or tax."' 2 The italicized words would seem to have been inserted to avoid the effect of such decisions as In re Chadwick, 5 Fed. Cas. No. 2,570, 11 Int. Rev. Rec. 126, 133, which held under a similar statute that the books which the assessor has the right to examine are those of the person whose assessment is in question and not those of third persons who have had dealings with him, and consequently that a corporation was not bound to produce its books upon an inquiry into the income of its shareholders. duty under an internal revenue agent is clothed with power to administer oaths to such person or persons as may be required to attend any hearing before him.3 Requiring Production of Books. In all suits and proceedings, other than criminal, arising under any of the revenue laws of the United States, the attorney representing the Government may, whenever in his belief any business-book, invoice or paper, belonging to or under the control of the defendant or claimant, will tend to prove any allegation made by the United States, make a written motion particularly describing such book, invoice or paper, and setting forth the allegation which he expects to prove; and thereupon the court may, at its discretion, issue a notice to the defendant or claimant to produce the same. Upon failure to do so the allegation stated in the motion is taken as confessed, unless the failure or refusal is explained to the satisfaction of the court.5 This provision applies to proceedings under the internal revenue laws as well as the customs revenue laws.6 Enforcement of Provisions Requiring Examination, Attendance and Production. If any person is summoned to appear, to testify, or to produce books, papers or other data, the United States District Court for the district in which such person resides is invested with jurisdiction of appropriate means to compel such attendance, testimony, or production of books, papers or other data, and to make and issue, both in actions at law and suits in equity, such writs, orders, judgments, decrees and process as may be necessary or appropriate for the enforcement of any provisions requiring such attendance, testimony or production, but only at the instance of the United States. Any remedy of application to the District Court is in addition to and not exclusive of any and all remedies of the United States in such courts and otherwise to enforce such provisions.7 3 Revenue Act of 1918, § 1305; R. S., § 3165, as amended. 4 In Boyd v. U. S., 116 U. S. 616, it was held that proceedings to forfeit a person's goods for an offense against the law, though civil in form, and whether in rem or in personam, was a "criminal" case, within the meaning of this provision of law. 5 Act of June 22, 1874, 18 Stat. 187. 6 U. S. v. Distillery No. 28, 25 Fed. Cas. No. 14,966. 7 Revenue Act of 1918, § 1318. |