Marsh & McLennan Companies, Inc. v. United States

The Marsh & McLennan Companies, Inc. (Marsh) (plaintiff) overpaid its 1985 and 1986 taxes. The Internal Revenue Service (IRS) credited these interest-earning ordinary overpayments to Marsh’s future taxes. Additionally, Marsh purportedly overpaid its 1987 and 1988 taxes. Marsh made credit elects regarding the purported 1987 and 1988 overpayments, meaning that Marsh chose to apply the money to future taxes. Under the Internal Revenue Code (code) and the Treasury Regulations, credit elects did not earn interest. On March 15, 1989, the 1988 return’s due date, the IRS transferred Marsh’s 1987 credit-elect overpayment to Marsh’s 1988 account. On September 15, 1989, and March 15, 1990 (the 1989 return’s due date), the IRS transferred Marsh’s 1988 credit-elect overpayment to Marsh’s 1989 account to satisfy Marsh’s estimated and final 1989 tax liabilities, respectively. The IRS applied Marsh’s 1985 overpayment and some of Marsh’s 1986 overpayment to Marsh’s 1987 account on March 15, 1989, and the remainder of Marsh’s 1986 overpayment to Marsh’s 1988 account on September 15, 1989. The IRS stopped awarding interest on the 1985 and 1986 overpayments as of the 1988 and 1989 return deadlines (except that the IRS inadvertently used April 15, rather than March 15, as the deadlines), citing (1) code § 6611, which provided for interest until the “due date of the amount against which the credit is taken,” and (2) Treasury Regulations § 301.6611-1(b), which defined “due date” as the “last date fixed” for a tax payment. Marsh sued the United States (defendant) in the United States Court of Federal Claims, seeking interest on the 1985 and 1986 overpayments for the periods between April 15, 1988, and April 15, 1989, respectively, and the dates on which the IRS applied the credit-elect overpayments to Marsh’s 1987 and 1988 accounts. The Court of Federal Claims ruled that § 6611’s plain language supported stopping interest on the return due dates notwithstanding Marsh’s credit-elect overpayments. Marsh appealed, citing (1) § 6611’s assertedly plain language; (2) § 6611’s legislative history, which allegedly required the IRS to consider credit-elect overpayments in calculating interest; (3) cases involving tax underpayments; and (4) the use-of-money doctrine.