Rev. Rul. 62-130

Advice has been requested whether, under the provisions of section 6501(a) of the Internal Revenue Code of 1954, documentary stamp taxes incurred as a result of transactions which took place before January 1, 1959, may be assessed more than three years after the taxes became due.

Prior to its amendment by the Excise Tax Technical Changes Act of 1958, section 6501(a) of the Code provided (subject to certain exceptions not applicable here) that the amount of any tax imposed by the Code should be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax was payable by stamp , within three years after such tax became due , and no proceeding in court without assessment for the collection of such tax should be begun after the expiration of such period.

As amended by the Excise Tax Technical Changes Act of 1958, section 6501(a) of the Code provides that the amount of any tax imposed by the Code shall be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax is payable by stamp , at any time after such tax became due and before the expiration of three years after the date on which any part of such tax was paid , and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period.

With respect to the documentary stamp taxes, the effect of this amendment is to keep the statutory period for assessment open indefinitely or until three years after the payment of some part of the tax. Thus, section 6501(a), as amended, lengthens the period in which documentary stamp taxes may be assessed.

It is well settled that, in the absence of a legislative intent to the contrary, a new statute of limitation which extends the period for assessment and collection becomes applicable to existing causes of action. The customary application of such statutes to existing causes of action is not a retroactive application, because there is no cutting down of pre-existing rights. A taxpayer does not have a legal right not to pay taxes which are justly due and unpaid on the effective date of the new statute.

The legislative background of section 6501(a), as amended, does not indicate an intent to have the amendment operate only on causes of action arising after the effective date of the amendment. Accordingly, it is held that the provisions of section 6501(a) of the Code, as amended by the Excise Tax Technical Changes Act of 1958, apply to any documentary stamp taxes for which liabilities existed on January 1, 1959, as well as those arising on or after that date.

It should be noted that, if the taxpayer had made a partial payment of the tax due, the three-year period for assessment and collection would have started to run from the date of partial payment. Furthermore, the amendment of section 6501(a) did not revive a liability for any documentary stamp tax with respect to which assessment and collection were barred prior to January 1, 1959, under the statute of limitation existing before that date.