U.S. Supreme Court MCEACHERN v. ROSE, 302 U.S. 56 (1937)

[Page 302 U.S. 56, 63]

they were not equitably entitled to recover the tax after the statute had barred collection from the beneficiary. The assessment of a deficiency against the trustees and the payment of it by them were not barred by limitation. Hence section 607 did not compel a recovery. Section 609 did not require it. The Commissioner neither sought, nor did section 322, regardless of any period of limitation, permit him to credit the amount which the one taxpayer had paid against the tax which another should have paid. Equitable considerations not within the reach of the statutes denied a recovery. It was enough, in the peculiar facts of the case, that the trustees had suffered no burden and that the government was not unjustly enriched.

Reversed. Footnotes

Footnote 1 Sec. 44 (45 Stat. 806, 26 U.S.C.A. 44 and note). '(d) Gain or loss upon disposition of installment obligations.-If an installment obligation is ... distributed, transmitted, sold, or otherwise disposed of, gain or loss shall result to the extent of the difference between the basis of the obligation and ... the fair market value of the obligation at the time of such distribution, transmission, or disposition. The basis of the obligation shall be the excess of the face value of the obligation over an amount equal to the income which would be returnable were the obligation satisfied in full.'

Footnote 2 Sec. 322 (26 U.S.C.A. 322 and note). '(a) Authorization. Where there has been an overpayment of any tax imposed by this title, the amount of such overpayment shall be credited against any income, war-profits, or excess-profits tax or installment thereof then due from the taxpayer, and any balance shall be refunded immediately to the taxpayer.'