Before HASTINGS, Chief Judge, and KNOCH and SWYGERT, Circuit Judges.
This is an appeal by the United States of America from a judgment entered by the district court in favor of taxpayer Harry J. Tyrrell. The trial court dismissed a complaint filed by the Government to reduce to judgment assessments of income tax, penalty and interest for the years 1939, 1940, and 1942 through 1947, inclusive totalling $115,281.32.
The district court found that the complaint was barred by the six-year statute of limitations set out in Section 276(c) of the Internal Revenue Code of 1939.*fn1
The assessment in suit for the year 1939 was made on July 23, 1953, and those for subsequent years on July 24, 1953.
On February 27, 1956, taxpayer submitted an offer in compromise in which he agreed, inter alia, to the suspension of the statute of limitations while his offer was pending, and for one year thereafter. The Government rejected the offer of compromise on June 12, 1958.
The effect of this offer and subsequent rejection was to suspend the running of the statute of limitations from February 27, 1956 through June 12, 1959, both dates inclusive.
The Government filed its complaint on November 8, 1962.
The district court made findings of fact consistent with the foregoing statement and they are not disputed by the parties. We are concerned only with the legal significance of those facts.
The district court held, as contended by taxpayer, "that where a suspension of the statute intervenes, the expiration date of the limitations provision of Section 276(c) must be computed by cumulating the number of elapsed days, in excess of complete years, included within the computation period. In other words, where accumulation of days is a factor, a complaint for collection of taxes must be filed not later than five years and 365 days after the date of assessment, excluding from the computation all periods of time in which the statute was suspended. Applying that formula to this case, the defendant is entitled to judgment as hereinabove found and concluded."
Applying this formula, as it relates to the assessment for 1940 and 1942 through 1947, the district court stated the following conclusions of law.
"9. As it relates to the assessment for 1940 and 1942 to 1947, inclusive, the agreement contained in defendant's compromise offer suspended the running of the statute of limitations from February 27, 1956, to June 12, 1959, both dates inclusive.
"10. Excluding the date of the assessments, two years and 217 days of the limitation period for collection of the assessments for 1940 and 1942 to 1947, inclusive, had elapsed before the offer in compromise was made on February 27, 1956, leaving three years and 148 days of the statutory period unexpired.
"11. Excluding the final day of suspension of the statute, namely June 12, 1959, from the computation, the remaining three years and 148 days of the six-years ...