David v. U.S., Civil Action No. 96-30067-MAP.
| Decision Date | 30 April 1997 |
| Docket Number | Civil Action No. 96-30067-MAP. |
| Parties | George DAVID, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Paul M. Stein, Malkasian, Hicinbothem & Mollica, PA, Framingham, for Plaintiff.
Carina J. Campobasso, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, DC, Susan M. Poswistilo, United States Attorney's Office, Boston, for Defendant.
Upon de novo review this Report and Recommendation are hereby adopted. Defendant's motion (Dkt. No. 8) is hereby ALLOWED, and plaintiff's motion (Dkt. No. 11) is DENIED. Plaintiff's suit cannot survive the letter and spirit of Brockamp.
So Ordered.
The clerk is hereby ordered to enter judgment for the defendant.
REPORT AND RECOMMENDATION REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT (Docket Nos. 8 and 11)
Plaintiff George David ("Plaintiff") claims that Defendant, the Internal Revenue Service of the United States of America ("IRS"), wrongfully refused to pay him a refund for tax year 1989. The parties' cross motions for summary judgment have been referred to this Court for a report and recommendation. See 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, the Court recommends that the IRS's motion for summary judgment be allowed, and that Plaintiff's motion for summary judgment be denied.
The role of summary judgment in civil litigation is to pierce the boilerplate of the pleadings and assay the parties' proof in an effort to determine whether trial is actually required. McIntosh v. Antonino, 71 F.3d 29, 33 (1st Cir.1995) (citing Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir.1992)). Summary judgment is appropriate where the record reveals no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
The Court must view the evidence as a whole, rather than in isolation. Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.1991). The facts, and all reasonable inferences that may be drawn from them, must be viewed in a light most favorable to the non-moving party, see Guzman-Rivera v. Rivera-Cruz, 29 F.3d 3, 4 (1st Cir.1994), who bears the burden of placing at least one material fact into dispute after the moving party shows the absence of any disputed material fact, Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir.1994) (discussing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986)). Absent a genuine dispute of material fact, questions of law are appropriate for resolution on summary judgment. Jimenez v. Peninsular & Oriental Steam Navigation Co., 974 F.2d 221, 223 (1st Cir.1992).
The mere fact that both parties move for summary judgment does not change the foregoing analysis. United Paperworkers Intern. Union Local 14, AFL-CIO-CLC v. International Paper Co., 64 F.3d 28, 32 n. 2 (1st Cir.1995). Barring special circumstances, the Court must consider each motion separately, drawing inferences against each movant in turn. EEOC v. Steamship Clerks Union, Local 1066, 48 F.3d 594, 608 n. 8 (1st Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 65, 133 L.Ed.2d 27 (1995).
The facts are stated in a light most favorable to Plaintiff, the party initially opposing summary judgment. During tax year 1989, $5,599 was withheld from Plaintiff's pay and remitted to the IRS for federal income tax purposes. On April 4, 1990, federal agents, acting pursuant to a search warrant, seized many of Plaintiff's business records including relevant tax documents. Unable to complete his 1989 return on time without the documents, Plaintiff, on April 15, 1990, filed an IRS Form 4868 requesting an extension. Included with this request was Plaintiff's check for $12,000. On July 15, 1990, Plaintiff requested and received a second extension, which expired on October 1 5, 1 990. Plaintiff did not file his 1989 tax return within the extended period.
On February 21, 1992, after a series of motions filed by Plaintiff, the IRS released Plaintiff's documents in accord with a settlement reached between him, his employer and the IRS. Plaintiff claims, however, that he did not actually receive custody of the documents until December 31, 1992, after a number of months of wrangling with his employer.
In the interim, in October of 1992, Plaintiff pleaded guilty to two federal criminal counts: conspiracy to defraud (arising out of Plaintiff's purchase of annuities for an insurance client) and income tax evasion (arising out of Plaintiff's failure to a file a Form 1099 for an employee). In December, Chief Judge Frank H. Freedman sentenced Plaintiff to one year incarceration with three years of supervised release.
Plaintiff reported to the Allenwood federal detention center on January 8, 1993. Upon his release on October 4, 1993, Plaintiff went immediately to a halfway house in Lawrence, Massachusetts, where he resided until approximately January 5, 1 994. At the halfway house, Plaintiff's travel was restricted to and from his work-release job.
Immediately upon his release from the halfway house, Plaintiff began reviewing his tax records with the purpose of filing his 1989 return. Plaintiff completed his return on or about February 18, 1994, and the return was received by the IRS on February 24, 1994. The return claimed a refund of $11,251. This amount represents the difference between $17,599 (the $12,000 remittance of April 1 5, 1990, plus the $5,599 in payroll deductions during calendar year 1 989) and a tax liability of $6,348. On or about May 16, 1994, the IRS determined that Plaintiff's tax liability for calendar year 1989 was in fact $6,348. However, the IRS refused to grant the refund because of applicable statutory time limits.
On April 23, 1996, Plaintiff, acting pro se, filed the instant complaint, alleging that the IRS wrongfully refused to pay him a refund for tax year 1 989. The complaint demands judgment in the amount of $11,251 plus interest and costs. On December 19, 1996, after discovery was completed, the IRS moved for summary judgment. On January 6, 1997, Plaintiff filed his own motion for summary judgment, together with a lengthy statement of facts, a supporting affidavit and other documentation.
On January 31, 1997, the IRS filed an opposition to Plaintiff's summary judgment motion and three days later, on February 3, Plaintiff's present counsel filed an appearance on Plaintiff's behalf. On that same date, Plaintiff, through counsel, filed an opposition to the IRS's motion for summary judgment.1
There are essentially two issues raised in the parties' motions: (1) whether Plaintiff's remittance of $12,000 in April of 1 990 constituted a "deposit," rather than a "payment" of tax, so that certain statutory bars to recovery do not apply, and (2), if the remittance was not a "deposit," whether Plaintiff is nonetheless entitled to equitable relief from the statutory bars.
Plaintiff's case is brought pursuant to 26 U.S.C. § 7422 which provides, in pertinent part, that no suit for a tax refund may be maintained unless "a claim for refund or credit has been duly filed with the Secretary [of the IRS], 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). A claim for a refund 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." 26 U.S.C. § 6511(a). The First Circuit has assumed that a late return is a "return" within the meaning of section 6511(a). Oropallo v. United States, 994 F.2d 25, 27 (1st Cir.1993). As a result, the First Circuit has also assumed that a claim for a refund filed contemporaneously with a late return "would obviously have been filed within three years of the filing of the return and so [i]s timely" under section 6511(a). Id. ().
Although Plaintiff filed his 1989 return quite late, in February of 1994, by contemporaneously seeking a refund he was well within the three year limitations period prescribed by section 6511(a). Accordingly, like the taxpayer in Oropallo, Plaintiff's claim for a refund was timely under section 6511(a). Because of other statutory provisions, however, the timeliness of his refund request did not automatically get Plaintiff the refund he sought. Thus, although the IRS cites the time limits expressed in section 6511(a), it actually relies on another cited statutory bar — the cap on recovery found in section 6511(b)(2)(A).
Section 6511(b)(2)(A) provides, with respect to a claim timely filed during the three year period in section 6511(a), that 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." 26 U.S.C. § 6511(b)(2)(A). Since Plaintiff filed his claim on February 24, 1994, he may only recover taxes paid in the preceding three years and six months, the six months representing the time of his extensions. Thus, Plaintiff's recovery would be limited to any taxes "paid" on or after August 24, 1990. Under 26 U.S.C. § 6513(b)(1), the IRS asserts, Plaintiff's 1989 taxes were deemed paid on April 1 5, 1990, more than four months prior to the cut-off date of August 24, 1 990. Accordingly, the IRS argues, under the plain language of section 6511(b)(2)(A), Plaintiff may not recover any portion of those taxes. This brings the Court to Plaintiff's arguments.
Plaintiff first attempts to escape the strictures of section 6511(b)(2)(A) by arguing that the...
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