true, or his payment will be deemed voluntary. City of Philadelphia v. The Collector, 5 Wall. 720; The Collector v. Hubbard, 12 ibid. 1. But while a written protest would in all cases be most convenient, there is no statutory requirement that the protest shall be in writing." The court might have gone further, and stated that there is no statutory requirement that in the payment of internal revenue taxes there shall be a protest either written or verbal, in order to entitle the taxpayers to make application for a refund, or thereafter to sue the collector to recover such taxes in such cases as are illegally collected; and, as a matter of fact, in practice no protest has been required. In this case it is also decided that the cause of action against the collector accrues when the decision of the commissioner adverse to the claim is made, and that the taxpayer has two years from that time within which to bring his suit against the collector. Wright v. Blakeslee, 11 Otto, 174.

Suits against collector of internal revenue for recovery of taxes, where the parties are citizens of the same State, must be begun in the State courts and may be transferred to the United States court. See, also, Hornthall v. Collector, 9 Wall. 560; The Assessor v. Osbornes, 9 Wall. 567; Insurance Company v. Ritchie, 5 Wall. 541.

A suit against the collector for recovering internal revenue taxes may be maintained in the United States Circuit Court notwithstanding the plaintiffs and defendants are both citizens of the same State, because it is a case of which the circuit court is given jurisdiction by the fourth subdivision of Sec. 629 R. S. It is also a case arising under the laws of the United States, and is within the first clause of the act of March 3, 1887, which gives the circuit court jurisdiction of causes arising under the laws of the United States. Commissioners of the Sinking Fund of Louisville et al. v. Buckner et al., Circuit Court D. Ky., December 1, 1891, Barr, J., 48 Fed. Rep. 533.

The rule as laid down by the Supreme Court is that the action should be brought in the State court where the parties are citizens of the same State, and defendant can have the

case removed to the circuit court. See 131 U. S. 111, Appendix.

In an action against collector for the recovery of internal revenue taxes on gross receipts of an express company illegally paid, it was held that, in the absence of a contrary rule established by statute, a defendant, who desires to avail himself of the statute of limitations as a defense, must raise the question either in pleading or on the trial, or before judgment. Retzer v. Wood, collector, 109 U. S. 185.

After an appeal for abatement of tax has been made to the commissioner and rejected, it is not necessary after payment to make a second appeal for refunding to entitle the taxpayer to sue the collector. San Francisco Savings and Loan Society v. Carey, 2 Sawyer, 393.

to suits for re

wrongfully col

SEC. 3227. No suit or proceeding for the recovery of any internal tax alleged to have been errone- Limitation as ously or illegally assessed or collected, or of covery of taxes any penalty alleged to have been collected lected. without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, shall be maintained in any court, unless the same is brought within two years next after the cause of action accrued: Provided, That actions for such claims which accrued prior to June six, eighteen hundred and seventy-two, may be brought within one year from said date; and that where any such claim was pending before the commissioner, as provided in the preceding section, an action thereon may be brought within one year after such decision and not after. But no right of action which was already barred by any statute on the said date shall be revived by this section.

Jurisdiction of circuit court in suits against collector of internal revenue for recovery of taxes, discussed. City of Philadelphia v. Collector, 5 Wall. 720.

Suits against collector of internal revenue for recovery of

taxes. Question of State statute of limitations as affected by the federal statute of limitations, discussed. Sec. 3227. Braun v. Sauerwein, 10 Wall. 218.

The " cause of action" first accrues to the taxpayer when the Commissioner of Internal Revenue makes an adverse decision against him on his appeal, and he has two years from that time to bring his action. Wright v. Blakeslee, 11 Otto, 174.

"The ground for the refusal to allow interest is the presumption that the government is always ready and willing to pay its ordinary debts. Where an illegal tax has been collected, the citizen who has paid it, and has been obliged to bring suit against the collector, is, we think, entitled to interest from the time of the illegal exaction. Cohens v. Abel, 1 Woolworth, 293; Nelson v. Carman, 5 Blatch. 511." Erskine v. Van Arsdale, 15 Wall. 75.

funding, limi

tation.

or of

SEC. 3228. All claims for the refunding of any inClaims for re-ternal tax alleged to have been erroneously or illegally assessed or collected, or of any penalty alleged to have been collected without authority, any sum alleged to have been excessive or in any manner wrongfully collected, must be presented to the Commissioner of Internal Revenue within two years next after the cause of action accrued: Provided, That claims which accrued prior to June six, eighteen hundred and seventy-two, may be presented to the commissioner at any time within one year from said date. But nothing in this section shall be construed to revive any right of action which was already barred by any statute on that date.

Under Sec. 3228, the lodging of the appeal, made out in due form, with the proper collector of internal revenue, for the purpose of transmission to the commissioner in the usual course of business, under the regulations of the Secretary, was in legal effect a presentation of the appeal to the commissioner. United States v. Savings Bank, 14 Otto, 731.

No suit can be maintained against a collector for the recov ery of taxes paid unless a claim for refunding is made to the commissioner within two years from the date of payment, as provided by Sec. 3228 R. S., and a protest made on the face of the tax return and on the check by which the tax was paid are not the claims required by law. Kings County Savings Institution v. Blair, 116 U. S. 200.

No claim or application hereafter filed for the refunding of taxes under Sec. 3220 or Sec. 3221 of the Revised Statutes, or Sec. 6, act of March 1, 1879, as amended, will be entitled to consideration unless the same shall be filed within two years from the date of the payment of the tax. This limitation does not apply to claims for the redemption of stamps. Sec. 3426 of the Revised Statutes, as amended by the act of March 1, 1879, provides specially for limitation of that class of claims. Claims for taxes recovered by judgments should be presented within two years after date of judgment.

If a claim for refunding is duly prepared and is received by the proper collector in time to reach the commissioner by due course of mail "within two years next after the cause of action accrued," it is regarded as "presented to the commissioner," within the meaning and intent of the statute. See decision of Court of Claims in case of Real Estate Savings Bank of Pittsburgh, 27 Internal Revenue Record, 153. Int. Rev. Reg., Series 7, No. 14, Revised, p. 20.

Compromises.

SEC. 3229. The Commissioner of Internal Revenue, with the advice and consent of the Secretary of the Treasury, may compromise any civil or criminal case arising under the internal revenue laws instead of commencing suit thereon; and, with the advice and consent of the said Secretary and the recommendation of the Attorney-General, he may compromise any such case after a suit thereon has been commenced. Whenever a compromise is made in any case, there shall be placed on file in the office of the commissioner the opinion of the Solicitor of Internal Revenue, or of the

officer acting as such, with his reasons therefor, with a statement of the amount of tax assessed, the amount of additional tax or penalty imposed by law in consequence of the neglect or delinquency of the person against whom the tax is assessed, and the amount actually paid in accordance with the terms of the compro

mise.

The power of the Secretary of the Treasury to remit penalties and compromise cases is not a judicial one, but one of mercy to mitigate the severity of the law. It admits of no appeal to any court. (In the report of this case the act of June 30, 1864, is incorrectly referred to as the act of June 3, 1864.) Dorsheimer v. United States, 7 Wall. 166.

For compromise after judgment, see Sec. 3469, as below: SEC. 3469. Upon a report by a district attorney, or any special attorney or agent having charge of any claim in favor of the United States, showing in detail the condition of such claim, and the terms upon which the same may be compromised, and recommending that it be compromised upon the terms so offered, and upon the recommendation of the Solicitor of the Treasury, the Secretary of the Treasury is authorized to compromise such claim accordingly. But the provisions of this section shall not apply to any claim arising under the postal laws.

For misconduct of officers relative to compromise cases, see Secs. 3169 and 3170.

Construction of Secs. 3229 and 3469. 12 Opinions Atty.Gen. 472; 13 ibid. 479.

Commissioner cannot compromise proceedings against revenue officers. 14 Opinions Atty.-Gen. 43.

The authority to compromise conferred by Sec. 3229 does not permit the voluntary relinquishment of a part of a tax lawfully assessed upon, and due from, a solvent person or corporation. 16 Opinions Atty.-Gen. 249.

Discontinuance on payment of costs a compromise. 12 Opinions Atty.-Gen. 536.