United States v. Hecla Mining Company, a Corporation

Appellee taxpayer seeks recovery of interest in the amount of $34,118.38 assessed and paid with respect to corporate income tax deficiencies for the years 1942 to 1945 inclusive. The question presented is whether interest on income tax deficiencies and interest on an excess profits tax overassessment should be computed separately, as appellant contends, or the amounts of the deficiencies and overassessment offset against each other and the interest computed on the resulting net amount, as appellee contends, and as the district court held.

The facts are undisputed. On February 19, 1946, taxpayer filed a claim for refund of 1942 excess profits taxes, and on July 28, 1949, filed an amended claim, based upon a carry-back to 1942 of unused excess profits credits for the taxable years 1943 and 1944. The revenue agent, who audited taxpayer’s income and excess profits tax returns for the years 1942 to 1945 inclusive, filed his report on July 18, 1949, finding deficiencies in income taxes for each of the four years and large unused excess profits credits for the years 1943 and 1944.

Following negotiations, the Internal Revenue Service and taxpayer on December 12, 1952, agreed upon the…