United States Attorney General Opinion, October 24, 1933
38 U.S. Op. Atty. Gen. 94
COMPROMISE OF CLAIMS UNDER SECTIONS 3469 AND 3229 OF THE REVISED
 The Secretary of the Treasury (upon the recommendation of
Solicitor of the Treasury and any District Attorney or special
attorney or agent
in charge of the claim) is without authority under section 3469 of
Statutes to compromise a final judgment if there is no doubt that
can be collected in full.
The Commissioner of Internal Revenue (with the advice and
consent of the
Secretary of the Treasury and the Attorney General, the latter in
cases in which
suit has been commenced), is without authority under section 3229
of the Revised
Statutes to compromise a case if there is no doubt either as to the
the claim or as to the collectibility thereof
The rule is the same as to the compromise of interest and
To the SECRETARY OF THE TREASURY.
I have the honor to acknowledge the receipt of your letter of
1933, requesting my opinion with respect to the authority to
by Sections 3469 and 3229 of the Revised Statutes. The specific
presented are as follows:
'1. Has the Secretary of the Treasury (upon the
of the Solicitor of the Treasury and any district attorney or
or agent having charge of the claim) authority under Section 3469
of the Revised
Statutes to compromise a final judgment if there be no doubt as to
collectibility of the judgment?
'2. Has the Commissioner of Interal Revenue (with the advice
of the Secretary of the Treasury and the Attorney General, the
latter in cases
in which suit has been commenced) [FN2] authority under Section
3229 of the
Revised Statutes to compromise a case if there be no doubt as to
legality of the claim of the Government or the collectibility
You further request that the authority to compromise interest
be separately considered.
 The statutes to which you refer provide:
'SEC. 3469. Upon a report by a district attorney,
special attorney or agent having charge of any claim in favor of
States, showing in detail the condition of such claim, and terms
upon which the
same may be compromised, and recommending that it be compromised
upon the terms
so offered, and upon the recommendation of the Solicitor of the
Secretary of the Treasury is authorized to compromise such claim
But the provisions of this section shall not apply to any claim
arising under the
postal laws. [Italics supplied.]
'SEC. 3229. The Commissioner of Internal Revenue, with the
consent of the Secretary of the Treasury, may compromise any civil
case arising under the internal-revenue laws instead of commencing
and, with the advice and consent of the said Secretary and the
the Attorney-General, he may compromise any such case after a suit
been commenced. Whenever a compromise is made in any case there
shall be placed
on file in the office of the Commissioner the opinion of the
Internal Revenue, or of the officer acting as such, with his
with a statement of the amount of tax assessed, the amount of
additional tax or
penalty imposed by law in consequence of the neglect or delinquency
of the person
against whom the tax is assessed, and the amount actually paid in
the terms of the compromise.' [Italics supplied.]
It will be observed that Section 3469 is a general statute,
3229 is special. Being special, Section 3229 is exclusive to the
extent that it
applies. Both sections confer upon the specified administrative
jointly, unlimited power to 'compromise' the specified cases and
claims. Thus the
precise question presented with respect to each statute is what is
meant by the
Webster's New International Dictionary defines the word
'A settlement by arbitration or by consent reached
concessions; a reciprocal abatement of extreme demands or rights,
an agreement; * * *' [Italics supplied.]
 It is well settled that 'mutual concessions' are
essential to a valid
compromise agreement. Fire Insurance Association v. Wickham, 141
U. S. 564, 577;
Owensboro Ditcher & Grader Co. v. Markham, 32 F. (2d) 564, 565 (C.
C. A. 6th);
Roark v. Fordson Coal Co., 10 F. (2d) 70, 71 (C. C. A. 6th); Big
Co. v. United States, 51 F. (2d) 721, 724 (C. C. A. 8th); Skinner
40 F. (2d) 241, 245 (C. C. A. 10th); United States v. Golden, 34 F.
(2d) 367, 374
(C. C. A. 10th).
This was recognized by Solicitor General Richards (approved by
General Griggs), in 23 Op. 18, where he said (p. 20):
'A compromise is an adjustment or settlement by
concessions. The claim must in some way be doubtful. There must be
room for the
'play of give and take'.' [Italics supplied.]
Such has been the position taken by all of the Attorneys
upon the question (12 Op. 543; 16 Op. 259; 617; 21 Op. 50; 264; 23
Op. 18; 631;
36 Op. 40) except two (17 Op. 213; 29 Op. 217). With those two I
am unable to
There is much to be said for the proposition that a liberal
exist, but my opinion is that if such a course is to be taken it
should be at the
instance of Congress. I conclude that where liability has been
a valid judgment or is certain, and there is no doubt as to the
ability of the
Government to collect, there is no room for 'mutual concessions',
no basis for a 'compromise'.
A similar answer must be made to your inquiry with respect to
the power to
compromise interest and penalties.
The several statutes provide that the interest shall be
collected as a part
of the tax. [FN3] Big Diamond Mills Co. v.  United States, 51
F. (2d) 721,
725 (C. C. A. 8th). See United States v. Childs, 266 U. S. 304.
The two may not
be divorced and the interest compromised separately. Big Diamond
Mills Co. v.
United States, supra, p. 725; Colorado Milling & Elevator Co. v.
Howbert, 57 F.
(2d) 769, 772 (C. C. A. 10th). It follows that the tax and the
constitute one liability which goes to make up a 'case' arising
internal revenue laws within the meaning of Section 3229, Revised
supra, which, when reduced to judgment, constitutes one 'claim'
meaning of Section 3469, Revised Statutes, supra. There is nothing
in the statute
to justify a division of such a 'case' or of such a 'claim', and
same situation prevails as to the penalties. [FN4] Ely & Walker
Dry Goods Co.
v. United States, 34 F. (2d) 429 (C. C. A. 8th).
With respect to the latter it is worthy of note that by
Revised Statutes, Congress conferred upon the Secretary of the
Treasury a limited
power to remit fines, penalties or forfeitures imposed under
authority of any
internal reverue law where the amount did not exceed one thousand
provided 'it was incurred without willful negligence or fraud'.
statute was repealed in 1922 (c. 356, Sec. 642, 42 Stat. 858, 989),
has not seen fit to restore such power. Thus it will be seen that
never extended unlimited power to remit or cancel penalties, and
the power it did
extend it recalled. In the face of this action I cannot conclude
3229 confers unlimited power to remit or forgive a penalty where
clear and there is no doubt as to the ability of the Government to
 These conclusions make it unnecessary for me to consider
situations to which you specifically refer.
FN1 The publication of this opinion was temporarily withheld.
FN2 Attention is invited to Section 5 of Executive Order No.
6166 (June 10,
1933), which transfers to the Attorney General exclusive power to
cases where suit has been commenced.
FN3 Sec. 274(j), Revenue Act of 1926 (c. 27, 44 Stat. 9) and
Revenue acts of 1928 (c. 852, 45 Stat. 791) and 1932 (c. 209, 47
provide for 6 per cent. interest upon deficiencies to be 'collected
as a part of
the tax'. Secs. 274(k) and 276(a) and (b), Revenue Act of 1926, and
Secs. 296 and
294(a) and (b), Revenue Acts of 1928 and 1932, provide that if a
not paid in accordance with the terms of an extension of time, or
if the tax is
not paid when due, or if a deficiency is not paid in full within 10
days from the
date of demand from the Collector, there shall be collected 'as a
part of the
tax' interest at the rate of 1 per centum a month.
FN4 Sec. 275(a), Revenue Act of 1926, and Sec. 203, Revenue
Acts of 1928 and
1932 impose a 5 per cent. penalty upon deficiencies due to
intentional disregard of rules and regulations where no fraud is
provide that such penalty 'shall be assessed, collected, and paid
in the same
manner as if it were a deficiency'. Sec. 3176, Revised Statutes, as
Sec. 1103, Revenue Act of 1926, and Sec. 291, Revenue Acts of 1928
impose a 25 per cent. penalty for willful failure to make and file
a return as
required by law, and provide that such penalty shall be added 'to
the tax'. Sec.
3176, Revised Statutes, as amended by Sec. 1103, Revenue Act of
1926, Sec. 275
of the 1926 Act, and Sec. 293(b), Revenue Acts of 1928 and 1932
provide that in
case a false or fraudulent return or list is willfully made, or if
is due to fraud with intent to evade tax, the Commissioner shall
add to the tax
50 per cent. of its amount.