United States v. Hauser
UNITED STATES v. HAUSER
- Proceeding
- district
- Area
- civil
- Panel
- Neterer (author)
Analysis
The United States sued the estate of Julius Hauser to collect a federal estate tax assessment of $75,833.16 that had become final because no administrative appeal was taken. The court directed judgment for the plaintiff, holding it lacked jurisdiction to review the merits of the assessment and that the presumption of validity attached to the final assessment.
| What the court decided | The model |
|---|---|
Judgment directed for the plaintiff (United States) for the full amount of the assessed estate tax.“Judgment for the plaintiff is therefore directed.” | agree with court The court correctly applied the principle that a tax assessment becomes final and conclusive if the taxpayer fails to exhaust administrative remedies and appeal. By failing to appeal to the Board of Tax Appeals, the defendant waived the right to challenge the validity of the assessment in a subsequent suit for collection. The court correctly identified its limited jurisdiction in a collection suit as being to adjudicate the existence of the debt for execution purposes, not to review the merits of the Commissioner's determination. |
The order itself: sound — The order is procedurally sound. It correctly identifies that the assessment became final due to the lack of an administrative appeal. It correctly distinguishes between a suit to review the assessment (which the court lacks jurisdiction to hear after finality) and a suit to enforce the assessment (which is the purpose of this action). The reliance on the exhaustion of remedies doctrine is appropriate for 1938 federal tax law.
Opinion — Neterer
NETERER, District Judge.
The plaintiff seeks judgment for estate tax against the estate of Julius Hauser, deceased, alleging the United States Commissioner of Internal Revenue on the 22nd day of September, 1931, assessed federal estate tax against said estate in the sum of $75,833.16, no part of which has been paid.
The defendant answering denies that that total sum is now due. “Said defendants are informed and believe and upon such information and belief, allege there is now due no sum in excess of $2175.46.”
The assessment and levy became final when made, unless reversed on appeal. No appeal was taken and the levy has the force and effect of a judgment except it is not subject to execution. A suit is necessary to adjudicate the fact, however, as a basis for execution. The Revenue Act provides a complete remedy for the correction of errors, and for review, etc., including appeal from the Commissioner of Internal Revenue to the Board of Tax Appeals. All defenses to the improper, Irregular and unjust assessment must be presented to the agency provided by the act and all of the remedies provided by the act must be exhausted and then appeal may be taken to-the Circuit Court of Appeals; thence by certiorari to the Supreme Court. No appeal having been taken the claim became final. The same rule is applicable as obtains in State legislation. See Puget Sound Electric Ry. v. Lee et al., D.C., 207 F. 860.
There is nothing presented in this case, however, which overcomes the presumption of the assessment, and while this *690court has jurisdiction to adjudicate the demand in the complaint to the end that execution may issue, it has not jurisdiction to examine into or review the action of the Commissioner, supra, in making the levy declared on.
Judgment for the plaintiff is therefore directed.