Weisbart v. U.S. Dept. Of Treasury
| Citation | 222 F.3d 93 |
| Decision Date | 22 June 2000 |
| Docket Number | DEFENDANTS-APPELLEES,Docket No. 99-6134,PLAINTIFF-APPELLANT |
| Parties | (2nd Cir. 2000) EMANUEL WEISBART,, v. UNITED STATES DEPARTMENT OF TREASURY AND INTERNAL REVENUE SERVICE,August Term 1999 Argued: |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Emanuel Weisbart, East Hampton, New York, Plaintiff-Appellant, pro se.
Kenneth W. Rosenberg, Attorney, Tax Division, Department of Justice, (Loretta C. Argrett, Assistant Attorney General, Richard Farber, Attorney, Tax Division, Department of Justice, Washington, D.C., on the brief; Loretta E. Lynch, United States Attorney for the Eastern District of New York, of counsel), for Defendants-Appellees.
Before: Miner, McLAUGHLIN, Straub, Circuit Judges.
Judge Learned Hand once described the Tax Code as a "fantastic labyrinth[]" whose words "merely dance before my eyes in a meaningless procession: cross-reference to cross-reference, exception upon exception...." Learned Hand, Thomas Walter Swan, 57 Yale L.J. 167, 169 (1947). Like Theseus of old we are compelled to enter this labyrinth - but without his ball of thread.
Emanuel Weisbart's 1991 income tax return was due on April 15, 1992, but he obtained an automatic extension until August 17, 1992. Despite the extension, Weisbart did not file his return by the August 1992 deadline. Tarrying three years, he mailed his 1991 return to the IRS on August 17, 1995. The tax return was submitted on the customary Form 1040 and included a refund claim for $4,867 from the $12,477 in taxes that had been previously withheld from Weisbart's 1991 wages. The IRS received the return on August 21, 1995.
The IRS denied Weisbart's refund claim, taking the position that it had been filed too late. On August 16, 1997, Weisbart sent the IRS a letter reasserting his original refund claim for $4,867, and, indeed, claiming for the first time an additional $700 refund. (According to Weisbart, the additional $700 represented a refund due for real estate tax deductions that he omitted from his 1991 return). The IRS denied both of Weisbart's claims.
Weisbart brought an administrative appeal, which was also denied. Then, in October 1997, Weisbart filed a pro se refund action in the United States District Court for the Eastern District of New York (Sifton, J.). He sought both the original $4,867 refund, plus the $700. The IRS moved for summary judgment, arguing that Weisbart's refund claims were barred by 26 U.S.C. § 6511(b)(2)(A). The district court agreed and granted the Service's motion. Weisbart now appeals.
As a threshold matter, we must consider whether the district court properly exercised jurisdiction over Weisbart's refund claim.
Although ordinarily immune from suit as sovereign, the United States has broadly consented to being sued by taxpayers in the district courts for the refund of "any sum [of federal tax] alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws." 28 U.S.C. § 1346; see United States v. Forma, 42 F.3d 759, 763 (2d Cir. 1994). There are, however, strict conditions attached to that consent. See Forma, 42 F.3d at 763; United States v. Dalm, 494 U.S. 596, 601-01 (1990); Rosenbluth Trading, Inc. v. United States, 736 F.2d 43, 47 (2d Cir. 1984).
The specific jurisdictional limitation at issue here is 26 U.S.C. § 6511(a). That subsection establishes three alternative filing deadlines for refund claims; one such deadline gives the taxpayer 3 years to file a refund claim, while the others give 2 years. Section 6511(a) provides that a refund claim is timely if filed:
[1] within 3 years from the time the return was filed or [2] 2 years from the time the tax was paid, whichever of such periods expires the later, or [3] if no return was filed by the taxpayer, within 2 years from the time the tax was paid.
Here, it is undisputed that Weisbart did not file his refund claim within "2 years from the time [his] tax was paid," so both the second and third deadlines are unhelpful to him. Id. Nevertheless, Weisbart did file a tax return for the 1991 year and also filed his refund claim "within 3 years from the time [that] return was filed" as seemingly required by section 6511(a)'s 3-year deadline. Id. The sticking point is that Weisbart's 1991 tax return was untimely filed. And in Miller v. United States, 38 F.3d 473, 475 (9th Cir. 1994), the Ninth Circuit squarely held that to satisfy section 6511(a)'s 3-year deadline for a refund, a taxpayer must have timely filed a tax return.
Surprisingly, in its brief on this appeal, the IRS requests that we decline to follow Miller. The Service concedes that section 6511(a) gave Weisbart 3 years from the filing of his tax return to file his refund claim, even though the return itself was untimely. The IRS cites its 1976 Revenue Ruling on this subject, which instructs that to be timely under section 6511(a), a refund claim need only be filed within 3 years of the filing of a tax return, irrespective of the timeliness of that return. See Rev. Rul. 76-511, 1976-2 C.B. 428. These concessions, however, do not relieve us of our independent obligation to determine whether the jurisdictional requirements of section 6511(a) are met. See Rosenbluth Trading, 736 F.2d at 47. After reviewing the pertinent authorities, we are satisfied that those requirements have indeed been met.
As already noted, Miller held that in order to satisfy the 3-year deadline imposed by section 6511(a), a taxpayer must have timely filed a tax return. See id., 38 F.3d at 475. The court reasoned that such a reading was compelled by "the statutory insistence that a claim be filed within two years after the payment of the taxes `if no return was filed by the taxpayer.'" Id. (quoting 26 U.S.C. § 6511(a)). Equating the failure to file a timely return to the filing of no return, the Miller court concluded that in the absence of a timely return, it was necessary for the taxpayer to satisfy the 2-years-from-payment deadline established by section 6511(a). See id. Acceding to the IRS's request, we decline to follow Miller.
Before 1958, a taxpayer clearly had to timely file a tax return to take advantage of the 3-year deadline of section 6511(a). See Technical Amendments Act of 1958, Pub. L. No. 85-866, § 82(a), 72 Stat. 1606, 1663. In contrast, however, the IRS enjoyed 3 years to audit a return, and this 3 years began to run "from the date the return was actually filed, whether or not filed when it was due." S. Rep. No. 85-1983 (1958) and H.R. Conf. Rep. No. 85-2632 (1958), reprinted in 1958 U.S.C.C.A.N. 4791, 4887 (emphasis added). Congress leveled the playing field in 1958, by jettisoning the requirement that a return had to be filed on time as a prerequisite to recovering a refund in the ensuing 3 years. See id. As a result, contrary to the Miller court's holding, a timely filed return is no longer required in order to satisfy the 3-year deadline of section 6511(a).
Almost all the courts addressing this issue have accepted this proposition. See Webb v. United States, 66 F.3d 691, 700 (4th Cir. 1995) (quoting Oropallo v. United States, 994 F.2d 25, 30 n.7, 31 (1st Cir. 1993)); Curry v. United States, 774 F.2d 852, 855 (7th Cir. 1985); Video Training Source, Inc. v. United States, 991 F. Supp. 1256, 1260 (D. Colo. 1998); Porter v. United States, 919 F. Supp. 927, 931 (E.D. Va. 1996); Sy v. United States, 968 F. Supp. 345, 347 (E.D. Mich. 1997); Mills v. United States, 805 F. Supp. 448, 450 (E.D. Tex. 1992).
There is an anomaly here, as the First Circuit has noted: reading section 6511(a) to dispense with the requirement of a timely return renders its time limitations largely "illusory." Oropallo, 994 F.2d at 30. Indeed, so read, section 6511(a) would allow "a taxpayer to file a tax return 40 years late and still have 3 additional years in which to file a claim for refund." Id. (internal quotation marks and citation omitted). Admittedly, this is counter-intuitive. Nevertheless, this construction makes sense: a central aim of section 6511(a) is not to bar stale refund claims, but to ensure that a taxpayer give the IRS notice of such claims before suing in federal court. Cf. Ahmed v. United States, 147 F.3d 791, 796 (8th Cir. 1998) (discussing 26 U.S.C. § 7422); Beckwith Realty, Inc. v. United States, 896 F.2d 860, 862-3 (4th Cir. 1990) (same). This gives the IRS in the first instance a chance to correct claimed errors and, if disagreement persists, to limit the litigation to the issues which have been re-examined by the Service and which it is prepared to defend. See Beckwith Realty, 896 F.2d at 862- 63.1
Turning to the particulars of the instant case, Weisbart succeeded in filing his refund claim within 3 years of the filing of his return. True, Weisbart filed no independent claim for a refund. However, Treasury Regulation § 301.6402-3(a)(5) provides that where an individual files a tax return disclosing an overpayment, that return itself "shall constitute a claim for refund... within the meaning of... section 6511." Under this regulation, Weisbart's 1991 tax return disclosed an overpayment, and therefore constituted a refund claim. And since the tax return and refund claim were in the same document, and were necessarily filed simultaneously, Weisbart's refund claim was clearly filed "within 3 years from the time the return was filed." 26 U.S.C. § 6511(a).
The district court properly exercised jurisdiction over Weisbart's refund suit under the 3-year deadline established by section 6511(a).
The Tax Code was obviously not set up to indulge the...
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