Bauer v. U.S.
| Decision Date | 25 April 1979 |
| Docket Number | No. 78-1699,78-1699 |
| Citation | 594 F.2d 44 |
| Parties | 79-1 USTC P 9348 Carl W. BAUER and Jane C. Bauer, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
John A. Stassi, II, New Orleans, La., for plaintiffs-appellants.
Edward L. Shaheen, U. S. Atty., Shreveport, La., M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews, Act. Chief, Jonathan S. Cohen, William S. Estabrook, III, Tax Div., U. S. Dept. of Justice, Washington, D. C., for defendant-appellee.
Appeal from the United States District Court for the Western District of Louisiana.
Before THORNBERRY, CLARK and RONEY, Circuit Judges.
This is a tax refund case. The sole issue on appeal is whether taxpayers timely filed the action. Taxpayers, Carl W. Bauer and Jane C. Bauer, filed separate returns for 1969 and 1970 and a joint return for 1971 in which they claimed both a depletion deduction and a charitable contribution deduction. In March of 1972, taxpayers filed a claim for refund for taxable years 1969 and 1970 asserting they were entitled to an increased depletion allowance. This claim prompted the Internal Revenue Service to audit taxpayers' 1969, 1970, and 1971 returns. In September, 1972, the Service notified taxpayers that it would allow the claim for an increased depletion allowance, but that it had also determined that taxpayers' claims for contribution deductions were improper. For the taxable years of 1969 and 1970, the Service therefore reduced taxpayers' refund attributable to the depletion deductions by the increased taxes attributable to the disallowed contribution deductions. Because the Service also disallowed taxpayers' charitable contribution deductions for 1971, for which taxpayers had not filed a claim, a deficiency arose for that year, which taxpayers paid. Taxpayers protested the disallowance of the charitable contributions to the Appellate Division of the Internal Revenue Service and executed Forms 872, Consent Fixing Period of Limitation Upon Assessment of Income Tax, extending the statutory period for making an assessment of taxes for the taxable year 1969 to June 30, 1974. In December, 1973, each taxpayer separately executed Forms 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment, for the taxable years 1969, 1970, and 1971. In January, 1974, taxpayers received notices that for the taxable years 1969 and 1970 the Appellate Division had allowed their claim for refund with respect to the depletion deductions but had disallowed their charitable contribution deductions. The Service did not at that time respond to taxpayers' claims for the 1971 taxable year. Taxpayers took no further action until April of 1975 when they filed a formal claim for refund for 1971 on Form 843 asserting both the depletion allowance and the charitable contribution claims. This claim stated: "Related claims are being filed with respect to years 1969 and 1970." In December, 1975, the Service allowed the depletion claim in full but denied the charitable contribution deduction. Taxpayers filed this action with the district court in March, 1976, asserting that the Service improperly denied their charitable contribution claims for all three taxable years. On cross-motions for summary judgment, the district court held that the notice of disallowance taxpayers received in January, 1974, triggered the two year period within which the Code required taxpayers to file suit. Because taxpayers had not filed suit within this period, the court held their claims for refund with respect to 1969 and 1970 were untimely. Because the Service did not disallow taxpayers' claim with respect to 1971 until December, 1975, however, the court held that this aspect of the suit was timely and found in favor of taxpayers on the merits. Taxpayers appeal.
The parties agree that if taxpayers had previously filed a claim for refund based on the charitable contribution deductions, the January, 1974 notice constituted a disallowance of the claim and that taxpayers had two years from the date of that notice to file an action in the district court pursuing that claim. Smith v. United States, 478 F.2d 398 (5 Cir. 1973); I.R.C. § 6532(a) (1). The parties also agree, however, that if taxpayers had not presented the charitable contribution claim to the Service before the January, 1974 notice of the disallowance, that notice did not begin the running of the statute of limitations. See United States v. Rochelle, 363 F.2d 225, 233 (5 Cir. 1966); I.R.C. § 7422(a). Taxpayers therefore argue that the only claim they had presented to the Service prior to the 1974 notice was that of March, 1972, which raised only the depletion allowance issue. In the district court, the I.R.S. argued and the judge agreed that taxpayers' administrative protest and appeal of the disallowance of the charitable deductions for 1969 and 1970 constituted a claim for refund. Therefore, the court held that the subsequent notice of disallowance triggered the statute of limitations. The Service has now abandoned this argument, however, and urges us to affirm the district court's judgment on another ground, not argued below. See Lowe v. Pate Stevedoring Co., 558 F.2d 769, 770-71 n.2 (5 Cir. 1977); Spurlin v. General Motors Corp., 531 F.2d 279 (5 Cir. 1976). It argues that the Forms 870 that taxpayers executed in December, 1973, were claims for refund based on the charitable contribution theory. We accept this argument and therefore need not decide whether the rationale of the district court was correct.
The regulations explain the preferred methods by which to submit claims for refund to the I.R.S. Treas.Reg. § 301.6402-3. "Informal claims" not in compliance with the regulations are also sufficient, however, if they satisfy certain requirements of clarity and specificity. United States v. Kales, 314 U.S. 186, 62 S.Ct. 214, 86 L.Ed. 132 (1941); Helis v. Usry,496 F.2d 1319 (5 Cir. 1974). Several courts have discussed whether the submission of an I.R.S. form other than those mentioned in the regulations constituted a permissible informal claim for refund. Barenfeld v. United States, 442 F.2d 371, 194 Ct.Cl. 903 (1971) (Form 870); Cumberland Portland Cement Co. v. United States, 104 F.Supp. 1010, 122 Ct.Cl. 580 (1952) (); True Bros. v. United States, 93 F.Supp. 107 (D.Mass.1950) (same). Each of these courts decided that the particular form before it did...
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