Elliott v. Railroad Company/Opinion of the Court
In Erskine v. Milwaukee & St. Paul Railroad Co. (94 U.S. 619), we decided that the only penalty to which a corporation was liable for default under sect. 122 of the internal-revenue act of June 30, 1864 (13 Stat. 284), as amended July 13, 1866 (14 id. 138), was that of $1,000, specially provided for in that section. We are now asked to review that ruling; but after a careful consideration of the elaborate arguments which have been submitted, we are satisfied that it was right. The language of the section to be construed is as follows: 'And for any default in making or rendering such list or return, with the declaration annexed, or of the payment of the tax as aforesaid, the company making such default shall forfeit as a penalty the sum of $1,000; and in case of any default in making or rendering said list or return, or of the payment of the tax or any part thereof as aforesaid, the assessment and collection of the tax and penalty shall be made according to the provisions of law in other cases of neglect and refusal.' In that case we were asked to hold that the company, in case of default, was liable for the penalty of five per cent and interest at the rate of one per cent a month, provided for in sect. 119, as amended (13 id. 283; 14 id. 480); but we decided that this provision applied only to cases of default in payment of the duties imposed by that section. The correctness of that ruling is now conceded; but it is claimed that the company is liable for a penalty of five per cent and interest at the rate of one per cent a month, under sect. 28 of the act of June 30, 1864, as amended July 13, 1866 (14 Stat. 106), sect. 11 of the act of July 13, 1866 (id. 150), and sect. 8 of the act of March 2, 1867 (id. 473). The last-named act simply provides that when for a failure to pay a tax at the time and in the manner provided by law a penalty of ten per cent additional upon the amount of the tax so due and unpaid had been exacted, the person or persons so failing or neglecting to pay the tax, instead of paying ten per cent, should pay five per cent and interest at the rate of one per cent a month. The sections of the other acts referred to were evidently intended to apply to taxes and duties included in the regular annual and monthly lists required by law to be made out and placed in the hands of collectors, and not to the taxes on interest and dividends collected through or from the corporations, under the provisions of sect. 122. Penalties are never extended by implication. They must be expressly imposed or they cannot be enforced. Full power is given in sect. 122, by reference to the other provisions of the internal-revenue law, for the collection of the tax and penalty there provided for; but it nowhere appears, by reference or otherwise, that it was the intention of Congress to add to the one penalty which is expressly given for the failure to do what that section requires. As has been said, it is conceded that the addition of five per cent and interest provided for in sect. 119 applies only to individual incomes. In this connection it is a noticable fact that although by sect. 8 of the act of March 2, 1867 (14 Stat. 473), a reduction was made from ten per cent to five per cent and interest at the rate of one per cent a month in all cases where a penalty of ten per cent had been imposed for any failure to pay any internal-revenue tax, it was deemed necessary in sect. 13 of the same act (id. 480) to amend sect. 119 specially, so as to reduce in the same way the additional percentage of ten per cent imposed by that section. If it had been supposed that the penalties prescribed in the other parts of the act for failure to pay taxes applied to taxes upon incomes, this special amendment would not have been necessary. But if they did not apply to sect. 119, it is difficult to see how they can to sect. 122. As it was supposed to be necessary to make express provision in sect. 119 for the payment of this additional percentage in order to charge the tax-payer, and it was omitted in sect. 122, the conclusion is irresistible, that it was the intention of Congress to impose no other penalty for a failure to comply with the requirements of this section than the one which is specifically given.
We see nothing in the act of July 14, 1870 (16 Stat. 260), under which a portion of the taxes paid by the defendant in error was assessed, to manifest any intention on the part of Congress to add to the penalties imposed by sect. 122 while that section was in force. The penalty of $1,000 is confined to a default in making the required return, instead of default in making the return or in making the payment, as it was in sect. 122. In other respects the provisions as to penalties in the two acts are substantially the same.