La Follette v. United States

In this suit for refund the government relies upon the doctrine of equitable recoupment, and the facts which are detailed and complicated are not in dispute and will be adverted to only as needed.

There is no contention of fraud or evasion or concealment on the part of the plaintiffs.

The crucial question is whether or not the government was bound to proceed by suit to collect an erroneous refund made by its check on October 21, 1953, and cashed by the plaintiffs on December 19, 1953, within the two-year period of limitation (1939 Internal Revenue Code, Section 3746(a), 26 U.S.C. § 3746 (a), *389 now 26 U.S.C. § 6532 (b)), or may, after the expiration of that period, viz., on September 25, 1957, without suit, levy for the refund on an assessment made on August 1, 1952.

This in turn depends upon whether or not the assessment of August 1, 1952, was valid or whether or not it had been “satisfied” 1 prior to the date of the levy.

This makes it necessary to advert to some of the facts in this “comedy of errors” by the Internal Revenue Bureau. On January 28,1952, plaintiffs filed their income tax return for the year 1951 showing an overpayment of tax in the sum of $582.50 and…