
    MARYLAND CASUALTY COMPANY v. THE UNITED STATES.
    [52 C. Cls., 201, 288 ; 53 C. Cls., 81; 251 U. S. 342.]
    Judgment was rendered in favor of the defendants in the court below. On appeal, the judgment was modified and affirmed, and the Supreme Court decided:
    Under the income tax act of 1913, sec. G, (a), (b), as under the corporation excise tax act of 1909, the income taxable to a domestic corporation is limited to income “ received ” during the year.
    Under these statutes premiums collected in any year by the agents of an insurance company but not paid over to the treasurer of the company are part of its income “ received ” in that year. Where the Government imposed and collected the tax on all premiums written during the year, the company, claiming refund of part as erroneously assessed on premiums not received, must show what premiums were received during the year.
    Reserves which are required by State insurance departments in the exercise of statutory authority, are “ required by law ” within the meaning of the excise and income tax acts, supra, where they provide that net additions, required by law to be made within the year to reserve funds, may be deducted from gross, in determining net income.
    The term “ reserve funds,” as used in these acts, held to include an “ unearned premium reserve,” to meet future liabilities on policies; a “ liability reserve,” to satisfy claims indefinite in amount and as to time of payment, but accrued, on liability and workmen’s compensation policies; and a “ reserve for loss claims,” accrued on other policies; but not to include funds required by State authority to be maintained to meet ordinary running expenses, such as taxes, salaries, reinsurance, and unpaid brokerage.
    If an insurance company in one year makes an overestimate of reserve requirements and so an excessive deduction from gross income, semble, that such excess may be treated, under these tax ac s, as income of the year in which it is subsequently released to the general uses of the company.
    But amounts once deducted from gross income and added to reserves, under these acts, can be treated by the Government as income of a subsequent year for the purpose of computing the tax only where it can be clearly shown that subsequent business conditions have released them to the free beneficial use of the company in a real, and not in a mere bookkeeping sense.
    A claim for refund of money paid with original returns made under the above-mentioned tax acts is barred if not presented to the commissioner, as directed by Rev. Stats., sec. 3226, and sued on in the Court of Claims within the two-year limitation of see. 3227; and these requirements are not postponed or superseded as to such payments by the facts that the original returns were amended and the assessments increased and the original payments credited upon the increased assessments by the action of the commissioner. Cheatham v. United States, 92 U. S., 85, distinguished. Act of September 8, 1916, c. 463, sec. 14, 39 Stat., 772, held inapplicable.
   Mr. Justice Clarke

delivered the opinion of the Supreme Court January 12, 1920.  