For the benefits, though not complete, are not illusory or trivial. The Commissioner's assessment is supported by a presumption of correctness. If a taxpayer would overthrow it, he has the burden of proving it erroneous, and of fixing in dollars and cents the amount of the error. By the decision just announced, the taxpayer is relieved of that burden. He has received upon account of his taxable income an allowance of the face amount of an indebtedness payable in the future without deduction for the benefits resulting from the time and manner of the payment. How substantial those benefits are will be obvious if we let them pass before us in review.

The beneficiaries, instead of restoring the overpaid income to the corpus of the estate, are permitted to retain it until the termination of the trust and to dispose of it as their own. They gain thereby the benefit of investing or consuming, with the opportunity for profit or enjoyment that goes along with such a privilege. If gain is derived, it is theirs without accountability to any one. If a loss ensues and the money is used up, a court of bankruptcy is open to them, in the event of their insolvency, to discharge the liability. At the making of the notes, their resources may have been adequate to enable them to restore what had been unlawfully obtained. At the time when the notes become due, they may find themselves without a dollar except their interest in the trust estate.

But this does not exhaust the catalogue of benefits. In any reckoning of these, account must be taken of the relation of kinship between makers and payees. Except in remote contingencies the notes will be payable either to the children or descendants of the makers, or to the makers themselves. If the makers are dead at the termination of the trust, they will have had it in their power to write a clause into their wills requiring their descendants who elect to take under the wills to cancel any claim

CARDOZO, J., dissenting.

291 U.S.

that has accrued upon the notes. If the makers are then alive, they will have put their names to notes that will be payable to themselves. There is grave doubt, to say the least, whether any one of them will ever have to pay a dollar.

Up to this, attention has been confined to terms of the notes that have to do with the restitution of the principal. The postponement of payment of the principal was, however, accompanied by a provision that there should be no liability for interest. On its face this was a gain. The argument is made, however, that the gain is unreal for the reason that the overpayments, if restored, would be accretions to the corpus of the trust, and that the income on the accretions would be due to the same persons absolved from liability for interest. But this is only a part truth. The makers gained the difference between interest at the legal rate upon the principal of the notes and the lower rate of income likely to be earned by a trustee who invests the funds of a trust in conformity with law. What is even more important, they gained the privilege in the meantime of retaining for themselves what would otherwise be principal in the hands of the trustee and of using it as they pleased.

These are important benefits. They would be unhesitatingly recognized as such by any investor or by any man of business. Some account should be taken of them before we say that the income of the trust was not income in the hands of the beneficiaries, who received it as their own and who for all that appears may never come under a duty to pay it back to any one.

I think the Court of Appeals did not err in upholding the assessment and that its decree should be affirmed.

MR. JUSTICE BRANDEIS and MR. JUSTICE STONE join in this dissent.

Opinion of the Court.

LOUISE A. WHITCOMB v. HELVERING, COMMISSIONER OF INTERNAL REVENUE.*

CERTIORARI TO THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA.

No. 145. Submitted December 8, 1933.-Decided January 8, 1934.

Decided upon the authority of Freuler v. Helvering, ante, p. 35. 65 F. (2d) 803, 809, reversed.

CERTIORARI, 290 U.S. 610, to review a judgment reversing, on appeal, a decision of the Board of Tax Appeals, which had set aside a deficiency assessment of income tax. 22 B.T.A. 118.

Messrs. Claude R. Branch, Felix T. Smith, W. W. Spalding, and Robert A. Littleton were on the brief for petitioner.

Solicitor General Biggs and Messrs. Erwin N. Griswold, Sewall Key, and John MacC. Hudson were on the brief for respondent.

MR. JUSTICE ROBERTS delivered the opinion of the Court.

This case was brought here by writ of certiorari.1 The petitioner is a beneficiary of the trust created by the will of A. C. Whitcomb, and her status differs from that of

2

* Pursuant to stipulation, the decisions in the following cases are reversed on the authority of this case: No. 146, Lydia L. Whitcomb v. Helvering; No. 147, Louise A. F. E. Whitcomb v. Helvering; Nos. 148 and 149, Lydia L. I. Whitcomb v. Helvering; and No. 150, Louise A. F. E. Whitcomb v. Helvering, all on writs of certiorari to the Court of Appeals of the District of Columbia.

1See 22 B.T.A. 118; 65 F. (2d) 803, 809.

Companion cases in the Board of Tax Appeals and the Court of Appeals of the District of Columbia, which involve the tax liability

the petitioner in No. 129 (ante, p. 35) only in the respect that she has a vested remainder, subject, in certain events, to be divested in favor of Harvard College. The Court of Appeals did not make that circumstance the basis of any distinction between her case and that of Freuler (No. 129). The petitioner therefore makes the same contentions which are there considered; but claims also, if her interest in the trust corpus by way of remainder is given effect, it does not follow that an affirmance in No. 129 requires the like result in her case. As we reverse the judgment in No. 129 and the reasons given in our opinion apply in this case, we have no occasion to pass upon the added feature presented by the remainder interest of the petitioner.

For the reasons set forth in the opinion in No. 129 the judgment must be reversed.

Reversed.

MR. JUSTICE BRANDEIS, MR. JUSTICE STONE, and MR. JUSTICE CARDOZO, dissent.

R. H. STEARNS CO. v. UNITED STATES.

CERTIORARI TO THE COURT OF CLAIMS.

No. 133. Argued December 5, 6, 1933-Decided January 8, 1934. 1. When a taxpayer, in filing a claim for overpayment of income taxes for several years, asks that the amount overpaid be credited against an unpaid tax, the collection of which has not yet been barred by time, he, in effect, requests the taxing authorities to postpone the collection of that tax until the claim has been acted on, during (at least) the statutory period for assessment of the latest tax involved of other beneficiaries of the same trust, under like circumstances, were brought up by certiorari. They are Nos. 146 to 150, inclusive. By stipulation filed in this court, the parties agree that if the judgment in No. 145 is reversed a like judgment shall be entered in the other cases; and if that judgment is affirmed a like judgment shall be entered in the others.

in the claim; and where, within that period, the Commissioner has found an overpayment and has applied it to the unpaid tax as requested, the taxpayer is estopped from claiming the amount as still due him upon the ground that collection of the unpaid tax had in the meantime been barred by limitation. P. 59.

So held where the practice of the collector's office was to treat such a claim as a stay of collection of unpaid taxes against which credit was asked, until the Commissioner had adjudged the claim; and where the taxpayer had at first accepted without protest the application of the credit and paid the resulting balance.

2. The provision of the Revenue Act of 1928 (§ 609) declaring that a credit against any liability for any taxable year shall be void if made against a liability barred by limitation, applies where the credit is made by the Commissioner in invitum, not where it is done, as in this case, at the taxpayer's request. P. 60.

3. Under the provision of the Revenue Act of 1921, § 250 (d), that no suit shall be begun after the expiration of five years succeeding the filing of the return "unless both the Commissioner and the taxpayer consent in writing to a later determination, assessment and collection," any writing, formal or informal, is sufficient to show the Commissioner's consent if his approval may be gathered from it as a reasonable inference. P. 62.

4. A taxpayer suing for a refund upon the ground that the crediting of the amount against an earlier tax took place after the collection of that tax had become barred by limitation, has the burden of producing evidence to show that a consent to extension of the collection period, filed by him, was not assented to in writing by the Commissioner. P. 62.

5. The word "waiver " written on an assessment list attached to a certificate of assessment signed by the Commissioner, together with a date indicative of the tax referred to, held evidence in this case of the Commissioner's consent to a waiver filed by the taxpayer. P. 63.

6. Choice between two doubts as to which of two waivers was intended by such entries, should be so made as to favor the presumption of official regularity. P. 64.

7. Action to recover an overpayment of taxes, on the ground of illegal assessment or collection, is barred by R.S., § 3226; 26 U.S.C., § 156, on the expiration of five years from the time of payment. P. 64. 8. To constitute an account stated, a balance must have been struck in such circumstances as to import a promise of payment on the one side, and acceptance on the other. P. 65.