Heger v. United States
| Decision Date | 20 January 2012 |
| Docket Number | No. 11-134T,11-134T |
| Parties | ROBERT M. HEGER, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Claim for refund of taxes paid; substantial variance doctrine; I.R.C. § 7422(a); 26 C.F.R. § 301.6402-2(b)(1); application of standards for summary judgment; burden of proof; 26 U.S.C. § 7491; loss or destruction of IRS administrative files
Robert M. Heger, pro se, Phelan, California.
Gregory S. Knapp, Attorney, Court of Federal Claims Section, Tax Division, United States Department of Justice, Washington, D.C., for defendant. With him on the briefs were John A. DiCicco, Principal Deputy Assistant Attorney General, Steven I. Frahm, Chief, and Mary M. Abate, Assistant Chief, Court of Federal Claims Section, Tax Division, United States Department of Justice, Washington, D.C.
In this tax-refund case, plaintiff Robert M. Heger seeks the refund of $311,640.36 paid by a title company on his behalf to the Internal Revenue Service ("IRS") for taxes, penalties, and interest allegedly owed for tax years 1996 through 2001. The United States ("the government") has counterclaimed for $36,025.17 for taxes, penalties, and interest allegedly owed and unpaid by Mr. Heger for the 2006 tax year. Mr. Heger has moved for summary judgment regarding the taxes and penalties for 1996 through 2001 on the grounds that he had no taxable income for those years and that the IRS failed to furnish him notices of deficiency for the amounts allegedly owed. The government has filed a cross-motion to dismiss the claims of Mr. Heger insofar as they are based on the contention that the taxes and penalties were imposed absent notices of deficiency. Both motions have been briefed and argued and are ready for disposition.
On March 20, 2008, Cornerstone Title Company issued checks of $311,640.36 and $475.75 payable to the IRS for taxes, penalties, and interest allegedly owed by Mr. Heger for tax years 1996 through 2001. Compl. ¶¶ 1, 5; Addendum to Pl.'s Mot. for Partial Summary Judgment ("Pl.'s Addendum") Exs. B-1, B-2. Apparently, the tax obligations were secured by liens on a property owned by Mr. Heger as a result of a bequest made by Mr. Heger's father, and those obligations were satisfied and the liens removed by the payment by the title company out of proceeds received upon sale of the property. Compl. ¶ 5; Pl.'s Mot. for Partial Summary Judgment ("Pl.'s Mot.") at 8.
On November 24, 2008, Mr. Heger submitted a letter to the IRS Commissioner in Washington, D.C., requesting a refund of the money paid. See Pl.'s Addendum Ex. A. In the letter, Mr. Heger contended that "for years 1996 [through] 2001 I did not have any taxable income and therefore am entitled to [a full] refund." Id. The IRS did not respond to Mr. Heger's refund request. Compl. ¶ 9. After passage of considerable time, on September 27, 2010, Mr. Heger mailed a request for records invoking the Freedom of Information Act to an IRS office located in Chamblee, Georgia. See Notice of Errata Ex. A. This request specifically sought copies of any available notices of deficiency, and any proof of their mailing, related to his income taxes for tax years 1996 through 2001. Id.2 The IRS did not respond to Mr. Heger's request. Pl.'s Opp'n to Def.'s Mot. to Dismiss ("Pl.'s Opp'n") at 3.
Roughly six months later, on March 2, 2011, Mr. Heger filed the complaint in the present action. The government's answer denied Mr. Heger's claims and asserted a counterclaim of $36,025.17 for taxes allegedly unpaid by Mr. Heger for the 2006 tax year. Although neither party has directly addressed the counterclaim in the pending motions, the dispute over taxes for 2006 appears to stem from Mr. Heger's alleged failure to report as income his receipt of $206,775 from a life insurance and annuity company in that year. See Def.'s Opp'n to Pl.'s Mot. ("Def.'s Opp'n") Exs. 12, 14.
On August 23, 2011, Mr. Heger moved for partial summary judgment on his refund claims for the 1996 through 2001 tax years, arguing in accord with his complaint that he had no taxable income for those years and that the IRS had failed to furnish him with notices of deficiency. Thereafter, on October 18, 2011, Mr. Heger filed an addendum to his motion consisting of, among other things, a copy of the original refund-request letter sent to the IRS Commissioner. See Pl.'s Addendum Ex. A. On October 26, 2011, in light of the addendum, the government moved to dismiss Mr. Heger's complaint in part. The government contends that Mr. Heger's refund request to the IRS Commissioner, if construed as an administrative refund claim, raises only the no-taxable-income argument. See Def.'s Mot. to Dismiss ("Def.'s Cross-Mot."). As a consequence, the government takes the position that the other claim raised by Mr. Heger, that he was never provided with notices of deficiency, must be dismissed for lack of jurisdiction under the so-called variance doctrine. See id. at 4-5. Given this jurisdictional contention, the court will turn first to the government's cross-motion.
The Tucker Act, 28 U.S.C. § 1491(a)(1), grants this court jurisdiction over federal tax-refund claims. See Ledford v. United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002); Dominion Res., Inc. v. United States, 97 Fed. Cl. 239, 246 (2011); cf. 28 U.S.C. § 1346(a)(1) (). The plaintiff bears the burden of demonstrating that each of his or her claims falls within this jurisdictional grant. See Barrett v. Nicholson, 466 F.3d 1038, 1041 (Fed. Cir. 2006) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 188-89 (1936)). In doing so, although "unchallenged allegations of the complaint should be construed favorably to the pleader," Hamlet v. United States, 873 F.2d 1414, 1416 (Fed. Cir. 1989) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)); see also Erickson v. Pardus, 551 U.S. 89, 94 (2007), disputed jurisdictional facts must be proved by a preponderance of the evidence, see Nez Perce Tribe v. United States, 83 Fed. Cl. 186, 188 (2008). In this respect, Mr. Heger's pro se pleadings are to be construed liberally, but leniency alone cannot relieve Mr. Heger of his burden to show jurisdiction. See, e.g., Jackson v. United States, 100 Fed. Cl. 34, 39 (2011) (quoting Riles v. United States, 93 Fed. Cl. 163, 165 (2010) (in turn citing Hughes v. Rowe, 449 U.S. 5, 9 (1980); Taylor v. United States, 303 F.3d 1357, 1359 (Fed. Cir. 2002))).
In tax-refund cases, the variance doctrine limits this court's jurisdiction. Ottawa Silica Co. v. United States, 699 F.2d 1124, 1139 (Fed. Cir. 1983). The doctrine springs from I.R.C. § 7422(a), which requires taxpayers to file a refund claim with the IRS before proceeding with an action in court for refund, and 26 C.F.R. § 301.6402-2(b)(1), which instructs taxpayers that a "claim must set forth in detail each ground upon which a . . . refund is claimed and facts sufficient to apprise the [IRS] of the exact basis thereof." "Courts have long interpreted [these two provisions] as stating a 'substantial variance' rule which bars a taxpayer from presenting claims in a tax refund suit that 'substantially vary' the legal theories and factual bases set forth in the tax refund claim presented to the IRS." Lockheed Martin Corp. v. United States, 210 F.3d 1366, 1371 (Fed. Cir. 2000) (citing Cook v. United States, 599 F.2d 400, 406 (Ct. Cl. 1979)); see also Marandola v. United States, 76 Fed. Cl. 237, 243 (2007) (). This prohibition on presenting new claims to the trial court serves to give the IRS fair notice at the administrative level of the nature of the claims it must correct or defend. See Lockheed Martin, 210 F.3d at 1371; Union Pac. R.R. Co. v. United States, 389 F.2d 437, 442 (Ct. Cl. 1968).
The issue presented by the government's cross-motion to dismiss is whether any of the claims set out in the complaint "substantially vary" from the claim or claims Mr. Heger submitted to the IRS via the letter sent to the IRS Commissioner. A comparison of the two submissions shows that the refund request alleges only one basis for recovery, which states in full: "for years 1996, 1997, 1998, 1999, 2000 and 2001 I did not have any taxable income and therefore am entitled to the refund of the $311,640.36." Pl.'s Addendum Ex. A. In contrast, Mr. Heger's complaint sets out two bases for recovery. The first, titled "Factual and Legal Basis for Claim; Non-Receipt of Taxable Income," states that "any income [Mr.] Heger received for the years in question was not taxable as contemplated under . . . [f]ederal [s]tatutes." Compl. ¶ 7. The second, titled "Factual and Legal Basis for Claim; Failure to Issue Statutory Notice of Deficiency," states that Compl. ¶ 8.
In short, neither the facts nor the legal theory of Mr. Heger's notice-of-deficiency argument were expressed in his refund request. As the Supreme Court opined in United States v. Garbutt Oil Co., 302 U.S. 528, 533 (1938), the IRS Commissioner is "entitled to take [the claim] at face value and to examine only the points to which [the taxpayer] directed his attention." See also Lockheed Martin, 210 F.3d at 1371 ().
Given these general principles, Mr. Heger submits two reasons why the claim...
To continue reading
Request your trial