Brown's "Shamrock" Linens, Ltd. v. Bowers

41 F.2d 862, 8 A.F.T.R. (P-H) 10975, 1930 U.S. Dist. LEXIS 2206, 1930 U.S. Tax Cas. (CCH) 9416

• Court: District Court, S.D. New York
• Decided: June 11, 1930
• Status: Published

Opinion

MACK, Circuit Judge.

. e question presented on defendant’s motion to dismiss a complaint seeking recovfW sieged. overpayment of excess prof- or Profits tax under the Revenue Act of 1918 (40 Stat. 1057) is whether or not tHg ^ ^ jurisdicti(m review tbe de_ termination of the Commissioner of Internal EevenU0 M to tbe amoxmt o£ ^ taes to be id by forei oorporaiioiL

TT _ . ,, . nder section 327 (b) of the act, m the cas® a forel|n corporation, the use of the method.prescribed m section 328 is absolute and not, as m the ease of a domestic corporatl0n’ discretionary with the Commissioner.

That the discretion so to be exercised in the case of a domestic corporation is not subject to judicial control on the mere a-llegat-ion of error or illegality is settled by Williamsport Wire Rope Co. v. United States, 277 U. S. 551, 48 S. Ct. 587, 72 L. Ed. 985.

That ease, however, went further; plaintiff contended in the Supreme Court that a court had power to determine not only whether or not a special assessment under section 328 should be made, but also if its decision was affirmative, then “to determine the true amount of the tax.”

The opinion rendered covered both points. The court in clear terms held that discretionary power was conferred on the Commissioner to determine, firstly, whether or not the method of section 328 should be applied, and secondly, if he determines to apply it, then to decide the various “questions of administrative discretion” suggested in that section.

In respect to 'this second determination, there is no difference whatsoever between a domestic and á foreign corporation,

Motion to dismiss for want of jurisdiction granted.