Oropallo v. U.S.

Decision Date24 May 1993
Docket NumberNo. 92-1983,92-1983
Citation994 F.2d 25
Parties-1969, 93-1 USTC P 50,314 Charles J. OROPALLO, Plaintiff, Appellant, v. UNITED STATES of America, Defendant, Appellee.
CourtU.S. Court of Appeals — First Circuit

Charles J. Oropallo on brief pro se.

Jeffrey R. Howard, U.S. Atty., James A. Bruton, Acting Asst. Atty. Gen., Gary R. Allen, Gilbert S. Rothenberg and Roger E. Cole, Attys., Tax Div., Dept. of Justice, on brief for appellee.

Before BREYER, Chief Judge, TORRUELLA and CYR, Circuit Judges.

PER CURIAM.

The district court dismissed Charles Oropallo's suit for a tax refund as untimely under 26 U.S.C. § 6511(a). We affirm.

I. Background

Charles Oropallo worked for the Raytheon Service Company during the 1983 calendar year. In 1985, he was incarcerated. Four years later the IRS informed him that he had not filed any tax returns since 1982. Oropallo then obtained his W-2 form from Raytheon. When he filled out his 1983 tax return, he discovered that he had overpaid his taxes by approximately $698. He filed his return on March 19, 1990, claiming that amount as a refund. On May 23, 1990, the IRS mailed him a notice disallowing his claim, explaining that it could not "refund or credit tax that was paid more than 3 years before the filing of the claim...." The notice also told Oropallo that he could sue to recover "any tax ... or other amounts for which this disallowance notice is issued" by filing suit in the appropriate federal district court (or the U.S. Claims Court) within two years from the mailing date of the notice.

Oropallo filed suit in the district court within the two-year period described by the disallowance notice. He alleged that "extremely mitigating and extenuating circumstances" explained his failure to file his 1983 tax return on time. First, he had believed that a six-year limitations period applied. Second, in March 1983, he had suffered carbon monoxide poisoning which left him "extremely incapacitated and unable to function competently for several years" and, for that reason, he had been "completely unaware" that he had not filed his 1983 tax return "and had in fact believed he had timely filed said return." Furthermore, he had been in prison since 1985, prison authorities had impeded his legal efforts on his own behalf, and although he had informed the U.S. Post Office of address changes while incarcerated, he had not received notice that he had not filed the 1983 return until mid-1989.

Without waiting for the government's brief, a magistrate-judge recommended dismissing Oropallo's complaint, finding that the suit was untimely under 26 U.S.C. §§ 7422(a) and 6511(a) and that the court therefore had no subject matter jurisdiction over the suit under 28 U.S.C. § 1346(a)(1). The magistrate-judge also concluded that Oropallo's incarceration had not affected his ability to file a timely tax return, since, while incarcerated, he had in fact filed the return in question. Oropallo objected to the magistrate-judge's recommendations. He noted that the magistrate-judge had not considered his alleged carbon monoxide poisoning before concluding that his late filing was not excused, and he offered as an additional reason for his delay the fact that his ex-wife had taken his tax and financial records in early 1984 and moved to an unknown address. Oropallo also argued that the IRS had consented to his suit because the disallowance notice stated that he could bring suit within two years from the mailing date of the letter and he had done so. The district court subsequently accepted the magistrate-judge's recommendation and dismissed Oropallo's suit.

On appeal, Oropallo alleges that the dismissal of his suit violated his constitutional rights under both the United States and New Hampshire Constitutions. He says that dismissal of his suit deprived him of his property without due process of law and of his right to access to the courts to seek redress for his grievances. He also claims that, given the circumstances he alleges, the statute of limitations should have been tolled. Applying the limitations period to him, he argues, also violated his equal protection rights under the Constitution since, as he claims, the IRS can "reach back" farther in time to make claims against taxpayers than taxpayers can to recover refunds. Finally, Oropallo asserts that the language of the IRS disallowance notice, stating that he could bring suit within two years of the mailing date of the notice, constituted consent to his suit and waived any limitations bar.

We affirm for the reasons described below.

II. Discussion

Since the statute of limitations and equitable tolling issues are at the heart of this case, we address them first.

A. Equitable Tolling of Section 6511(a) and (b)

As the district court noted, 28 U.S.C. § 1346(a)(1) gives federal district courts jurisdiction over suits against the United States "for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected." Likewise, the court correctly observed that the jurisdictional grant in section 1346(a)(1) must be read to incorporate the requirements of 26 U.S.C. §§ 7422(a) and 6511(a). See United States v. Dalm, 494 U.S. 596, 601-02, 608-10, 110 S.Ct. 1361, 1364-65, 1368-69, 108 L.Ed.2d 548 (1990).

Section 7422(a) provides that no suit for a tax refund may be maintained unless "a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof." Section 6511(a) states that a refund claim must be filed "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid." Thus, section 6511(a) distinguishes between taxpayers who file returns and those who do not. Taxpayers who file returns have the longer of three years from the time they filed their return or two years from the time they paid their taxes to file a claim for refund, whereas taxpayers who have not filed returns have only two years from the time they paid their taxes to file their refund claims. A refund suit must have been timely filed under one of the limitations periods in section 6511(a) for the district court to obtain jurisdiction over the suit. Dalm, 494 U.S. at 609, 110 S.Ct. at 1368.

The district court did not explain clearly how Oropallo's claim was untimely under section 6511(a). Its opinion contained language which would support either the conclusion that it had applied the three-year limitations period for taxpayers filing returns or that it had applied the shorter two-year limitations period for taxpayers who did not file returns. The government urges us to affirm the district court's implicit holding that the two-year limitations period for nonfiling taxpayers applies and that Oropallo's late return is not a "return" which triggers application of the three-year limitations period. Although it acknowledges that there is a split in authority on the question whether a return filed after its due date is a "return" within the meaning of section 6511(a), compare, e.g., Musser v. Commissioner, 92-1 USTC p 50,245, 1991 WL 335505 (D.Alaska 1991) (the two-year limitations period measured from the time the tax was paid is applicable to taxpayers filing late returns), with Mills v. United States, 805 F.Supp. 448, 450 (E.D.Tex.1992) (the three-year limitations period beginning when the return is filed applies to a taxpayer filing a late return), the government argues that a finding that taxpayers filing late returns have only two years from the time their taxes are paid to file refund claims better reflects the statutory language.

We need not resolve this question in light of our determination on the tolling issue. For purposes of our present analysis, therefore, we assume for the sake of argument that the cases holding that a late return is a "return" within the meaning of section 6511(a) are correct. Accordingly, we also assume that, if Oropallo filed his claim for a refund within three years of his return, his refund claim would be timely. Under 26 C.F.R. § 301.6402-3(a), a return which claims a refund may be considered a "claim for refund" under section 6511(a). Oropallo's return, which was filed on March 19, 1990, claimed a refund. Therefore, the claim, having been filed on the same day as his return, would obviously have been filed within three years of the filing of the return and so was timely.

This assumption, however, does not mean victory for Oropallo. As the government says, section 6511(b)(2)(A) places a cap on recovery of a refund which, in Oropallo's case, prevents recovery of any taxes paid for the 1983 tax year. Specifically, section 6511(b)(2)(A) states that, with respect to a claim filed during the three-year period in section 6511(a), the amount of the refund is limited to "the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return." Since Oropallo filed his claim on March 19, 1990, he may recover only taxes paid in the preceding three years--i.e., any taxes paid on or after March 19, 1987. (As the government notes, Oropallo has not claimed that he received any extension of time for filing his 1983 return.) Under 26 U.S.C. § 6513(b)(1), Oropallo's taxes were deemed paid on April 15, 1984, well before the cut-off date of March 19, 1987. Therefore, he may not recover any portion of those taxes.

Section 6511(b)(2)(A) explicitly forecloses any refund for taxes not paid within the three-year period preceding the date the claim was filed. 1 Essentially, therefore, it establishes an additional limitations period separate from the three-year period in section 6511(a). See, e.g., ...

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