A-9965, JULY 12, 1926, 6 COMP. GEN. 23

A-9965: Jul 12, 1926

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SET OFF - INTEREST WHERE MONEYS HAVE BEEN RETAINED FROM AN AMOUNT ALLOWED AS A REFUND OF TAXES ERRONEOUSLY COLLECTED. TO WHICH IS APPLICABLE THE GENERAL RULE THAT THE LIABILITY OF THE GOVERNMENT TO PAY INTEREST EXISTS ONLY WHERE IT IS AUTHORIZED BY EXPRESS LEGISLATION OR WHERE IT IS PROVIDED BY LAW. 1926: THERE IS FOR CONSIDERATION THE CLAIM OF THE H. THE ADJUSTMENTS WERE MADE AS FOLLOWS: $2. 189.28 AS TAX REFUND WAS ALLOWED TO THE H. IT IS WELL ESTABLISHED THAT INTEREST IS NOT PAYABLE ON A CLAIM AGAINST THE UNITED STATES UNLESS SPECIFICALLY PROVIDED FOR IN A STATUTE OR IN A CONTRACT AUTHORIZED BY LAW. IN ACCORDANCE WITH THE PROVISIONS OF SAID ACT INTEREST APPEARS TO HAVE BEEN ALLOWED BY THE COMMISSIONER OF INTERNAL REVENUE TO THE DATE OF THE ALLOWANCE OF THE REFUND TAX FOUND DUE TO THE H.

A-9965, JULY 12, 1926, 6 COMP. GEN. 23

CLAIMS, SET OFF - INTEREST WHERE MONEYS HAVE BEEN RETAINED FROM AN AMOUNT ALLOWED AS A REFUND OF TAXES ERRONEOUSLY COLLECTED, AND APPLIED IN LIQUIDATION OF THE INDEBTEDNESS OF THE PAYEE ON ACCOUNT OF REPORTED OVERPAYMENTS MADE TO HIM UNDER CERTAIN GOVERNMENT CONTRACTS, THE CLAIM FOR REFUND OF SAID AMOUNT BECOMES A CLAIM UNDER SUCH CONTRACTS, TO WHICH IS APPLICABLE THE GENERAL RULE THAT THE LIABILITY OF THE GOVERNMENT TO PAY INTEREST EXISTS ONLY WHERE IT IS AUTHORIZED BY EXPRESS LEGISLATION OR WHERE IT IS PROVIDED BY LAW.

DECISION BY COMPTROLLER GENERAL MCCARL, JULY 12, 1926:

THERE IS FOR CONSIDERATION THE CLAIM OF THE H. E. BRADFORD CO. (INC.), FOR INTEREST APPROXIMATING $200 ALLEGED TO BE OWING TO IT FROM THE UNITED STATES UPON THE $3,264.22 REFUND FOUND DUE SAID CORPORATION BY SETTLEMENT NO. 0120632-T, DATED JUNE 9, 1926.

THE REFUND IN QUESTION RESULTED FROM THE DISCONTINUANCE OF AN INDEBTEDNESS OF $3,264.22 THERETOFORE CHARGED AGAINST THE H. E. BRADFORD CO. (INC.), ON ACCOUNT OF CERTAIN REPORTED OVERPAYMENTS UNDER ITS TWO CONTRACTS DATED SEPTEMBER 29 AND NOVEMBER 10, 1917, FOR THE MANUFACTURE AND DELIVERY OF QUANTITIES OF UNDERWEAR, ADJUSTMENT OF WHICH HAD BEEN EFFECTED BY WITHHOLDING AND APPLYING IN LIQUIDATION THEREOF CERTAIN AMOUNTS OTHERWISE FOUND DUE SAID CONTRACTOR AS REFUND OF TAXES ERRONEOUSLY COLLECTED. THE ADJUSTMENTS WERE MADE AS FOLLOWS: $2,403.42 MAY 13, 1925, AND $860.80 SEPTEMBER 11, 1925.

THE RECORD DISCLOSES THAT THE AMOUNT OF $8,189.28 AS TAX REFUND WAS ALLOWED TO THE H. E. BRADFORD CO. (INC.), MARCH 27, 1925, BY THE COMMISSIONER OF INTERNAL REVENUE, ON DIRECT SETTLEMENT SUPPLEMENTAL SCHEDULE NO. IT-R-12765, AND CONSISTED OF OVERASSESSMENTS DURING THE PERIOD OF JUNE 1 TO NOVEMBER 30, 1918, AMOUNTING TO $6,799.01, AND INTEREST THEREON AMOUNTING TO $1,390.27.

IT IS WELL ESTABLISHED THAT INTEREST IS NOT PAYABLE ON A CLAIM AGAINST THE UNITED STATES UNLESS SPECIFICALLY PROVIDED FOR IN A STATUTE OR IN A CONTRACT AUTHORIZED BY LAW. SEE UNITED STATES EX REL ANGARICA V. BAYARD, 127 U.S. 251.

THE REVENUE ACT OF 1924, 43 STAT. 346 (SEC. 1019), SPECIFICALLY ALLOWED INTEREST AT THE RATE OF 6 PERCENT PER ANNUM ON REFUNDS OF ANY INTERNAL- REVENUE TAX ERRONEOUSLY OR ILLEGALLY ASSESSED OR COLLECTED FROM DATE OF PAYMENT THEREOF TO THE DATE OF THE ACTION OF THE COMMISSIONER OF INTERNAL REVENUE IN ALLOWING THE REFUND. IN ACCORDANCE WITH THE PROVISIONS OF SAID ACT INTEREST APPEARS TO HAVE BEEN ALLOWED BY THE COMMISSIONER OF INTERNAL REVENUE TO THE DATE OF THE ALLOWANCE OF THE REFUND TAX FOUND DUE TO THE H. E. BRADFORD CO. (INC.), AND SUCH INTEREST WAS INCLUDED IN THE $8,189.28 TAX REFUND ALLOWED SAID CORPORATION. INTEREST IN SUCH CASES DOES NOT ACCRUE TO DATE OF ACTUAL PAYMENT. GIRARD TRUST CO. V. UNITED STATES, DECIDED BY THE UNITED STATES SUPREME COURT MARCH 1, 1926. IT WAS FROM THIS TAX REFUND ALLOWANCE THAT THE $3,264.22 WAS RETAINED IN LIQUIDATION OF THE INDEBTEDNESS CHARGED AGAINST SAID CORPORATION UNDER ITS GARMENT CONTRACTS HEREINABOVE REFERRED TO. SUBSEQUENTLY, ON RECONSIDERATION OF THE FACTS INVOLVED UNDER SAID CONTRACTS, UPON CONTRACTOR'S REQUEST THEREFOR THE $3,264.22 CHARGED AGAINST THE CONTRACTOR WAS DISCONTINUED BY SETTLEMENT NO. 0120632-T, DATED JUNE 9, 1926, AND SAID SUM WAS THEREAFTER REFUNDED TO THE CONTRACTOR.

IT IS APPARENT THAT AFTER THE $3,264.22 WAS RETAINED FROM THE REFUND TAX ALLOWANCE AND APPLIED IN LIQUIDATION OF THE REPORTED OVERPAYMENTS ON THE GARMENT CONTRACTS, THE CLAIM FOR REFUND OF SAID AMOUNT BECAME A CLAIM UNDER SAID GARMENT CONTRACTS, TO WHICH IS APPLICABLE THE GENERAL RULE THAT THE LIABILITY OF THE GOVERNMENT TO PAY INTEREST EXISTS ONLY WHERE IT IS AUTHORIZED BY EXPRESS LEGISLATION OR WHERE IT IS PROVIDED FOR BY CONTRACT AUTHORIZED BY LAW. THERE IS NO STATUTE OR VALID CONTRACT AUTHORIZING PAYMENT OF INTEREST ON SAID REFUND CLAIM.

ACCORDINGLY, THE INTEREST CLAIMED BY THE H. E. BRADFORD CO. (INC.) ON $3,264.22, FOR THE PERIOD OF TIME SAME WAS WITHHELD AND APPLIED IN LIQUIDATION OF THE REPORTED OVERPAYMENTS UNDER ITS GARMENT CONTRACTS, MUST BE AND THE SAME IS DISALLOWED.