Brockamp v. US

• Decision Date: 26 July 1994
• Docket Number: No. CV 93-4601-RSWL (Sx).,CV 93-4601-RSWL (Sx).
• Citation: 859 F. Supp. 1283
• Court: U.S. District Court — Central District of California
• Parties: Marian BROCKAMP, Administrator and sole residuary beneficiary of the estate of Stanley B. McGill, Plaintiff, v. UNITED STATES of America, Defendant.

859 F. Supp. 1283

Marian BROCKAMP, Administrator and sole residuary beneficiary of the estate of Stanley B. McGill, Plaintiff, v. UNITED STATES of America, Defendant.

No. CV 93-4601-RSWL (Sx).

United States District Court, C.D. California.

July 26, 1994.

Robert F. Klueger, Boldra & Klueger, Woodland Hills, CA, for plaintiff.

Nora M. Manella, U.S. Atty., Mason C. Lewis, Chief, Tax Div., Sandra R. Brown, Asst. U.S. Attys., Los Angeles, CA, for defendant.

ORDER

LEW, District Judge.

Plaintiff Marian Brockamp and Defendant United States of America each move for summary judgment regarding Plaintiff's action for recovery of a federal income tax refund. The central issue in this case is whether the doctrine of equitable tolling applies to tax refund cases. After reviewing the arguments presented by both parties, this Court holds that equitable tolling does not apply in Plaintiff's case. Accordingly, Plaintiff's motion for summary judgment is DENIED and Defendant's motion for summary judgment is GRANTED.

I. BACKGROUND

Plaintiff, Marian Brockamp, is the administrator and sole beneficiary of the estate of her father, Stanley B. McGill. On or about April 15, 1984, Stanley McGill mailed to the Internal Revenue Service (IRS) a check for $7,000 accompanied by an application for automatic extension of time (Form 4868) to file his 1983 income tax return. At the time, Mr. McGill was 93 years old and, according to Plaintiff, "mentally deranged."¹ Mr. McGill did not indicate on the check or elsewhere the purpose of the $7,000 check. Despite Mr. McGill's request for an extension of time, he never filed an income tax return for the 1983 taxable year.² On July 15, 1986, more than two years after receiving the $7,000 check, the IRS transferred the funds from Mr. McGill's account into an "Excess Collection Account."

Mr. McGill died intestate on November 7, 1988 at the age of 98. His daughter, Plaintiff Marian Brockamp, was appointed administrator of his estate on January 4, 1989. During the administration of the estate, Mrs. Brockamp discovered the $7,000 payment to the IRS and subsequently requested a refund. In a handwritten letter dated March 13, 1991, Mrs. Brockamp asked the IRS to refund the money because her father had been senile and had mistakenly sent a check for $7,000 instead of $700. On March 27, 1991, Mrs. Brockamp also filed a tax return for Mr. McGill's 1983 tax liability and the IRS assessed $427.00 in taxes. On August 8, 1991, the IRS rejected Mrs. Brockamp's request for a refund. The IRS stated that she was not entitled to a refund because the $7,000 payment was made more than three years prior to her claim.

On August 3, 1993, Mrs. Brockamp filed suit against the United States seeking return of the funds paid to the IRS by Mr. McGill. Plaintiff moves for summary judgment against the United States by arguing that the $7,000 check was a deposit as a matter of law and should be returned to Mr. McGill's estate. Defendant, however, argues that the check was not a deposit but a payment and the applicable statute of limitations had run when Mrs. Brockamp filed a claim for a refund. In addition, Defendant contends that because the statute of limitations for Plaintiff's claim has expired and the doctrine of equitable tolling does not apply in this type of case, the Court must grant its own motion for summary judgment.

II. DISCUSSION

A. SUMMARY JUDGMENT

Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. Where the moving party does not have the burden of proof at trial on a dispositive issue, the moving party may meet its burden for summary judgment by showing an "absence of evidence" to support the non-moving party's case. Celotex v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The non-moving party, on the other hand, is required by FRCP 56(e) to go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553. The non-moving party can meet this requirement by presenting affidavits, depositions, answers to interrogatories or admissions on file. Id. Conclusory allegations unsupported by factual allegations, however, are insufficient to create a triable issue of fact so as to preclude summary judgment. Exxon Corp. v. Fed. Trade Comm'n, 663 F.2d 120, 127 (D.C.Cir. 1980). Furthermore, a non-moving party who has the burden of proof at trial must present enough evidence that a "fair-minded jury could return a verdict for the (opposing party) on the evidence presented." Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).

B. JURISDICTION AND 26 U.S.C. § 6511

Federal district courts have 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...." 28 U.S.C. § 1346(a)(1). A district court may not entertain a suit, however, 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." 26 U.S.C. § 7422(a); see also Miller v. United States, 949 F.2d 708, 712 (4th Cir.1991) (stating that jurisdictional prerequisite is not waivable by the government). Most importantly, under 26 U.S.C. § 6511(a) 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.

26 U.S.C. § 6511(a). Thus, Section 6511(a) distinguishes between taxpayers who file returns and those who do not. See Oropallo v. United States, 994 F.2d 25, 26 (1st Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 705, 126 L.Ed.2d 671 (1994). Taxpayers who file returns have three years from the time they filed their return or two years from the time they paid their taxes to claim a refund. Taxpayers who have not filed returns, on the other hand, must file a claim for refund within two years of the alleged overpayment. See 26 U.S.C. § 6511(a); Oropallo, 994 F.2d at 26. A refund cause of action must be timely filed under one of the limitations periods in Section 6511(a) for the district court to obtain jurisdiction over the suit. See United States v. Dalm, 494 U.S. 596, 607, 110 S.Ct. 1361, 1368, 108 L.Ed.2d 548.

In addition to the time limitations of Section 6511(a), Section 6511(b) limits the amount of a refund recoverable by a claimant. Specifically, if a person files a timely claim within the three-year period mentioned in Section 6511(a), the amount of a 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.

26 U.S.C. § 6511(b)(2)(A). If, however, a claim was not timely filed within the three-year period mentioned in Section 6511(a), the amount of

refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim.

26 U.S.C. § 6511(b)(2)(B). Thus, if a claim was filed within three years of filing a return, Section 6511(b) explicitly forecloses any refund of taxes not paid within the three-year period preceding the date the claim for refund was filed. Section 6511(b) establishes an additional limitations period separate from the three-year time limitation period in Section 6511(a). See Oropallo, 994 F.2d at 27; see also Mills v. United States, 805 F.Supp. 448, 450 (E.D.Tex.1992). In addition, if a return was not filed within the three-year period described in Section 6511(a), Section 6511(b) specifically precludes the refund of payments made before the two years preceding the date of the claim for refund. If, however, the remittance is not considered a "payment," the restrictions mandated under Sections 6511(a) and 6511(b)(2) do not apply.

C. WHETHER MR. MCGILL'S CHECK WAS A PAYMENT OR DEPOSIT

Plaintiff contends that the $7,000 check sent to the IRS is a "deposit" and is therefore not subject to the limitations period codified in Section 6511(a). Primarily, Plaintiff argues that because the IRS never made an assessment of the taxes owed by Mr. McGill, the $7,000 check was treated as a deposit and is not subject to Section 6511(a). Plaintiff's argument, however, is unavailing. Although the mere transfer of money by a taxpayer is insufficient to classify the remittance as a payment, see United States v. Dubuque Packing Co., 233 F.2d 453, 459 (8th Cir.1956) ("not every transfer of money by a taxpayer to a Federal tax authority will constitute a `payment'.... Some further act is necessary"), Mr. McGill's check was accompanied by an application for extension of time to file his 1983 tax return. Absent a designation by the taxpayer, a remittance with an application for extension of time to file a return is deemed a payment. See 26 U.S.C. § 6151(a) ("Except as otherwise provided ... when a return of tax is required ..." the taxpayer shall "pay such tax ... at the time and place fixed for filing the return (determined without regard to any extension of time for filing the return)."); Ehle v. United States, 720 F.2d 1096, 1097 (9th Cir.1983); Rose v. United States, 256 F.2d 223, 226 (3d Cir.1958). In England v. United States, 760 F.Supp. 186 (D.Kan.1991), the court held that as a matter of law, remittances accompanied with an IRS Form 4868 application for extension are payments of estimated tax which are subject to the statute of limitations under Section 6511(a). But see Risman v. Comm'r of Internal Revenue, 100 T.C. 191, 199, 1993 WL 72856 (U.S.T.C.1993) (criticizing holding in England that filing of Form 4868 with remittance is automatically deemed an estimated payment). Similarly, in the present case Mr....