Veto of Bill Concerning the Claim of J. Don Alexander.
To the United States Senate:
I return herewith, without my approval, the enrolled bill (S. 484) "Conferring jurisdiction upon the United States District Court for the District of Colorado to hear, determine, and render judgment upon the claim of J. Don Alexander against the United States."
The bill confers jurisdiction on the United States District Court for the District of Colorado to hear, determine, and render judgment on the claim of J. Don Alexander, of Colorado Springs, Colorado, against the United States for recovery of income tax paid by him for the year 1929, which covered the capital net gain for the sale of 9,000 shares of stock in the Alexander Industries, Incorporated, which stock was later held by the United States Circuit Court of Appeals to be the property of Alexander Industries, Incorporated, and not of J. Don Alexander (69 F. 2d. 610 (1934)). Section 2 of the bill provides that such suit may be instituted within one year after date of enactment of the Act; that proceedings for the determination of the claim and review thereof and payment of any judgment thereon, shall be as in other cases under 28 U.S.C. 1346(a) (I); that nothing contained in the Act shall be construed as an inference of liability on the part of the United States.
The Congress, in changing this bill from its original form to that of a jurisdictional bill, apparently believed that its action would provide a greater degree of protection to the interests of the United States. A review of the facts and of the decision of the Circuit Court of Appeals convinces me that this action of the Congress has had quite the opposite effect from what was intended.
The opinion of the Court in the case of Alexander v. Theleman referred to in the bill discusses in some detail ( i ) the relationship of Mr. Alexander to the Corporation, in which he owned a considerable portion of stock, and (2) the question of the ownership of the 9,000 shares, the sale of which Mr. Alexander had assumed, in paying his income tax in 1930, gave rise to a capital net gain to him. Although the opinion raises some doubt whether equitable considerations are presented so as to justify a refund of the principal amount of the tax payment of $16,720.41, the bill, in conferring jurisdiction upon the United States District Court for the District of Colorado, provides for the payment of any judgment recovered in accordance with the provisions of law applicable to tax cases of which the court has jurisdiction. Accordingly, the 420 bill might permit Mr. Alexander to recover, not only the amount paid by him, but also interest at the rate of 6% per annum for the period from 1930 to date of payment. Thus, in effect, Mr. Alexander might recover over $23,000 in interest alone.
The requirement that the United States pay interest on a refund is entirely proper where the Government has retained a taxpayer's money, notwithstanding the fact that by means of a timely refund claim the officials of the Treasury were put on notice and had an opportunity to examine the merits of the claim. Such circumstances do not exist in this case. No reason appears why the Government should pay in interest a sum far in excess of the original amount claimed by Mr. Alexander.
If the Congress should decide again to review Mr. Alexander's original claim and should resolve the equities in this case in favor of the claimant, I would be willing to give the case further consideration.
DWIGHT D. EISENHOWER
Dwight D. Eisenhower, Veto of Bill Concerning the Claim of J. Don Alexander. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/231622