Veto of Bill for the Relief of D. S. and Elizabeth Laney.

To the House of Representatives:

I return herewith, without my approval, H. R. 2647, entitled "An Act for the relief of D. S. and Elizabeth Laney."

The bill would direct the Secretary of the Treasury to pay to D. S. and Elizabeth Laney, Osceola, Arkansas, the sum of $2,572.80. The bill states that this sum shall be in full settlement of all claims of D. S. and Elizabeth Laney against the United States for refund of an overpayment with respect to their federal income tax liability for the calendar year 1951.

The records of the Treasury Department disclose that the amount here involved represents a portion of the tax which the taxpayers paid on March 18, 1952, at the time they filed their joint income tax return for 1951. A field examination of the taxpayers' books and records for 1951 resulted in the assessment of a deficiency of $2,019.48 based primarily on the inclusion in income of $4,000 of unexplained credits to the taxpayers' personal accounts on their books. This deficiency was paid by the taxpayers on July 14, 1953.

On July 11, 1955, which date was more than three years after the taxpayers filed their return for 1951 and was almost two years after the payment of the additional deficiency, the taxpayers filed a claim for refund in the amount of $4,592.28. At the time this claim was filed, refund of any amount paid with the original return was barred by the three-year period of limitations prescribed by section 322 of the Internal Revenue Code of 1939. However, the two-year period of limitations prescribed by section 322 for filing a claim for refund after the date of actual payment of an amount of tax still had three days to run with respect to the deficiency in tax of $2,019.48 which had been paid on July 14, 1953.

A revenue agent's re-examination of the taxpayers' records resulted in a refund of the deficiency of $2,019.48, plus interest, for which a timely claim had been filed.

This bill would refund to the taxpayers an amount of tax for which no timely claim for refund was filed and which constitutes an amount the correctness of which has not been verified by the Internal Revenue Service.

The record of this case does not warrant special legislative relief from the statute of limitations. The taxpayers had three years in which to file a claim for refund after the amount here involved had been paid. Even when, on July 14, 1953, the assessment of a deficiency in tax made obvious to the taxpayers the inadequacy of their books and records, the taxpayers still had more than a year and one-half in which to file a timely claim for refund; and the record discloses no extenuating circumstances justifying the taxpayers' failure to file a claim for refund within that period.

The granting of special relief in this case, where a refund was not claimed in the time and manner required by law, would constitute a discrimination against other taxpayers similarly situated and would create an undesirable precedent.

Under the circumstances, therefore, I am constrained to withhold my approval of the bill.

DWIGHT D. EISENHOWER