Clark v. United States

Three basic questions are presented for determination, and are treated under the following headnotes:

Sufficiency of the Claims for Refund.

The plaintiffs contend that the claims for refund filed on the net operating loss carry forward and carry back for the years 1943 and 1944 fully apprised the defendant of the claims for refund on the capital gains issue. The auditing of the returns, conferences and negotiations relating to the net operating loss question were sufficient to apprise the defendant of any grounds for refund within the meaning of Section 3772(a) (1) of the Internal Revenue Code of 1939, 26 U.S.C.A. The requirement that the Commissioner understand the grounds of the claims was complied with and he dealt with such claims on the basis of that understanding. Smale & Robinson, Inc., v. United States, D.C., 123 F.Supp. 457 .

The claims for refund being sufficient, it becomes unnecessary to consider the question of waiver by the defendant.

Profits Accruing to Plaintiffs From Sale of Seven Lots.

The taxpayers started the development of the property involved in 1927. The construction of the Lake Norconian Club, hereinafter called “hotel”, commenced at that time and was…