National Bank of Commerce of Seattle v. United States

This is an action to recover war and excess profits taxes claimed to have been erroneously collected for the years 1918-1919. The Commissioner of Internal Revenue computed the taxes to be paid by the appellant under the provisions of section 301 of the Revenue Act of 1918 ( 40 Stat. 1057 , 1088). The appellant claims that it is entitled to the benefit of an assessment under the provisions of section 327, subd. (d) and section 328 of the Revenue Act of 1918 ( 40 Stat. 1057 , 1093), on the theory that it comes within the proviso of section 327, subd. (d), calling for such an assessment where “owing to abnormal conditions affecting the capital or income of the corporation” the ordinary rules of assessment would “work upon the corporation an exceptional hardship evidenced by gross disproportion between the tax computed without benefit of this section and the tax computed by reference to the representative corporations specified in section 328.” Section 327, subd. (d), also provides that “this subdivision shall not apply to any case (1) in which the tax (computed without benefit of this section) is high merely because the corporation earned within the taxable year a high rate of profit…