United States v. Northwestern Mutual Insurance Co., a Washington Corporation

The United States appeals from a judgment of the district court granting taxpayer a refund of interest assessed on its income tax.

The interest had been assessed upon refunds of foreign tax which had been paid by the taxpayer and as to which it had previously taken federal income tax credit. The question presented by the appeal is as to the date from which interest on these deficiencies shall run. At issue is the sum of $2,468.11 assessed by the Washington District Director for the year 1955 and the sum of $300.48 assessed for 1957.

The assessments were made pursuant to the provisions of sections 905(c) and 6601(a) and (c) of the Internal Revenue Code of 1954 which are reproduced in the margin.

Taxpayer is a Washington corporation which paid income tax to Canada on income derived from its branch office in Canada in the years 1955 and 1957 and obtained foreign tax credit against its United States income tax for both taxable years in accordance with section 901 of the 1954 Code. On November 25, 1957, taxpayer received a refund of income tax from Canada for 1955. It notified the District Director of this on November 26. He redetermined taxpayer’s tax for 1955 and on May 1, 1959,…