Ohio Nat. Life Ins. Co. v. U.S.

• Decision Date: 20 December 1990
• Docket Number: Nos. 89-3888,89-3889,s. 89-3888
• Parties: -388, 91-1 USTC P 50,009 The OHIO NATIONAL LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 320

922 F.2d 320

67 A.F.T.R.2d 91-388, 91-1 USTC P 50,009

The OHIO NATIONAL LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Nos. 89-3888, 89-3889.

United States Court of Appeals,

Sixth Circuit.

Argued June 11, 1990.

Decided Dec. 20, 1990.

Joseph M. Fischer, Stuart G. Summers, Ohio Nat. Life Ins. Co., Cincinnati, Ohio, Michael F. Kelleher (argued), John P. McAllister, William F. Hanrahan, Groom & Nordberg, Washington, D.C., for plaintiff-appellee.

Charles M. Greene, U.S. Dept. of Justice, Tax Div., Washington, D.C., Gerald L. Kaminski, Asst. U.S. Atty., Cincinnati, Ohio, Gary R. Allen, Acting Chief, David English Carmack, Robert W. Metzler (argued), U.S. Dept. of Justice, Appellate Section Tax Div., Washington, D.C., for defendant-appellant.

Before KEITH and JONES, Circuit Judges, and ENGEL, Senior Circuit Judge.

ENGEL, Senior Circuit Judge.

The United States appeals from a judgment entered in the district court in favor of plaintiff Ohio National Life Insurance Company ("Ohio National"). The district court granted Ohio National the sum of $653,764.17 and statutory interest as presented in the stipulated amount of taxes which it had overpaid during the calendar years 1976, 1977 and 1978. The only question before the district court and on appeal is whether Ohio National's suit to recover the overpaid taxes was timely or was barred by the applicable two year period of limitations. We agree with the district court that the suit was timely brought and accordingly affirm.

I.

On December 23, 1982, the IRS sent Ohio National "Notices of Assessment" of taxes for calendar years 1976, 1977, 1978. Ohio National timely paid the amounts, but filed a claim for a refund of the taxes on December 28, 1984. The IRS disallowed the claim, sending a statutory "notice of disallowance" to Ohio National on February 5, 1986. See 26 U.S.C. Sec. 6532(a); 26 CFR Sec. 301.6532-1(a) (1990). The notice informed Ohio National that it could file suit within two years from the mailing date of the notice of claim disallowance, as provided in section 6532(a). The notice also stated that if the taxpayer had provided a waiver of the notice of disallowance (Form 2297), as permitted under section 6532(a)(3), the period for bringing suit began to run on the date the waiver was filed.

On February 2, 1988, Ohio National filed its complaint pursuant to section 7422 of the IRS Code, which provides for recovery of internal revenue taxes and interest on tax overpayments. The taxpayer contends, therefore, that its February 2, 1988 complaint is timely since it was filed less than two years after the February 5, 1986 notice of disallowance. See Sec. 6532(a)(1).

On October 20, 1988, almost nine months into the taxpayer's suit, the IRS informed Ohio National that it had found in its files a "Waiver of Statutory Notification of Claim Disallowance." On December 22, 1988, the IRS filed a motion to dismiss alleging that the taxpayer's suit was jurisdictionally barred since the taxpayer had filed the waiver. Attached to this motion was the waiver form, which the parties agree was signed by an agent of Ohio National on July 8, 1985. Although the form was dated July 8, 1985, there is no notation on the document evidencing when or if the form was actually filed.

The waiver produced by the IRS provided that "the filing of this waiver is irrevocable and it will begin the 2-year period for filing suit for refund of the claims disallowed as if the notice of disallowance had been sent by certified or registered mail." Although Ohio National admits that an agent executed the document, it vigorously disputes that the document was actually filed. If the document was actually filed on or about the execution date of July 8, 1985, then Ohio National's February 2, 1988 complaint would be time-barred since the limitations period would commence on the filing of that waiver. See Sec. 6532(a)(3).

In opposition to the IRS's motion, Ohio National submitted an affidavit from Paul Bergmann, the Ohio National agent who signed the waiver form. Bergmann acknowledged that the signature on the Form 2297 waiver was his own, but he denied any recollection of actually signing or filing the form. He also outlined Ohio National's standard business practice with respect to filing, which included photocopying documents as well as recording the date of filing. Bergmann also stated that Ohio National's files had no record or evidence of the waiver form in question, nor any return receipt from the IRS. The IRS did not file a response to Ohio National's opposition to its motion.

On March 1, 1989, the district court denied the IRS's motion. The district court held that the paucity of evidence as to when the waiver was filed, rather than executed, indicated that the period of limitations must be computed from the date of the notice of disallowance rather than the waiver. The district court therefore held that Ohio National's action was timely.

The IRS sought a reconsideration of the order, arguing that the district court erroneously shifted the burden of proof to it on this jurisdictional question. The IRS alleged that the taxpayer must demonstrate when the waiver was filed. The IRS attached to its motion for reconsideration a declaration from Jay Ingram, a revenue agent with the IRS, as well as a copy of a "Form 3198," or "Special Handling Notice." According to Ingram, he was assigned to the Ohio National file, but subsequently transferred the file when his duties were completed. He states that he attached the special handling notice to the file when he transferred the file to his "Group Manager" on or before July 9, 1985. ¹ The special handling notice contains the following notation: "Taxpayer signed form 2297 waiver of claim notice. Prior years in court on same issues. CLAIMS ARE DISALLOWED IN FULL." Although this notice also bears no date, the IRS argued that the document, taken with Ingram's declaration, indicates that the waiver was filed on or before July 9, 1985. ² Based upon this special handling notice, the IRS moved for reconsideration and for an evidentiary hearing on the issue of the filing date of the waiver. The district court denied the motion to reconsider on April 17, 1989. The IRS's subsequent motion to set a trial date on the jurisdictional question was also denied, without an opinion, on May 18, 1989.

On July 17, 1989, the district court entered a judgment against the United States in the amount of $653,764.17, plus statutory interest, for overpayment of federal taxes for tax years 1976, 1977, and 1978. This judgment was entered based upon a stipulation by the parties, but the IRS reserved the right to appeal the earlier adverse jurisdictional judgment. The IRS timely appealed from the July 17, 1989 Order. The sole issue on appeal is whether the district court correctly concluded that the taxpayer's action was not barred by the time limits set forth in section 6532(a).

II.

Ohio National's complaint asserts subject matter jurisdiction under 28 U.S.C. Sec. 1346(a)(1). Under this provision, a district court has jurisdiction over "[a]ny civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws." As recently recognized by the Supreme Court, the "spacious terms" of section 1346(a)(1) must be "read in conformity with other statutory provisions which qualify a taxpayer's right to bring a refund suit upon compliance with certain conditions." United States v. Dalm, --- U.S. ----, 110 S.Ct. 1361, 1364, 108 L.Ed.2d 548 (1990).

Ohio National brought suit under one of these companion statutes, 26 U.S.C. Sec. 7422(a), which is nearly identical to section 1346(a)(1) and similarly limits a taxpayer's suit. Language in section 7422(a) is also general and reference must be made again to another provision, section 6532(a), which delineates the prerequisites to a refund suit for taxes wrongfully assessed. Section 6532(a) provides in pertinent part:

Sec. 6532. Periods of limitation on suits

(a) Suits by taxpayers for refund.--

(1) General Rule.--No suit or proceeding under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall be begun before the expiration of 6 months from the date of filing the claim required under such section unless the Secretary renders a decision thereon within that time, nor after the expiration of 2 years from the date of mailing by certified mail or registered mail by the Secretary to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates.

(2) Extension of time.--The 2-year period prescribed in paragraph (1) shall be extended for such period as may be agreed upon in writing between the taxpayer and the Secretary.

(3) Waiver of notice of disallowance.--If any person files a written waiver of the requirement that he be mailed a notice of disallowance, the 2-year period prescribed in paragraph (1) shall begin on the date such waiver is filed.

(4) Reconsideration after mailing of notice.--Any consideration, reconsideration, or action by the Secretary with respect to such claim following the mailing of a notice by certified mail or registered mail of disallowance shall not operate to extend the period within which suit may be begun....

As with most periods of limitation involving suits against the sovereign, ³ the prerequisites to suit described in section 6532's "general rule" are jurisdictional. ⁴ Johnson v. United States, 81-1 U.S.T.C. p 9298 (6th Cir.1981) (per curiam) (affirming lower court's ruling that it lacked jurisdiction on account of the taxpayer's failure to file suit within two years); Daniel v. United States, 454 F.2d 1166, 1167 (6th Cir....