Keeter v. U.S.

• Citation: 957 F.Supp. 1160
• Decision Date: 20 March 1997
• Docket Number: No. Civil S-96-1755 LKK/PAN.,Civil S-96-1755 LKK/PAN.
• Court: U.S. District Court — Eastern District of California
• Parties: Sewell L. KEETER, Plaintiff, v. UNITED STATES of America, Internal Revenue Service, Defendant.

957 F.Supp. 1160

Sewell L. KEETER, Plaintiff, v. UNITED STATES of America, Internal Revenue Service, Defendant.

No. Civil S-96-1755 LKK/PAN.

United States District Court, E.D. California.

March 20, 1997.

Sewell L. Keeter, in propria persona, Sacramento, CA, for plaintiff.

G. Patrick Jennings, United States Department of Justice, Trial Attorney, Tax Division, Washington, D.C., for defendant.

ORDER

KARLTON, Chief Judge Emeritus.

This matter is before me on the government's motion for partial dismissal premised on Fed.R.Civ.P. 12(b)(1). A hearing was set for March 17, 1997. In its points and authorities, the government requested that the matter be decided on the papers without oral argument. By telephone, the court granted the request and notified the parties that the hearing was vacated. The court now disposes of the matter based upon the papers and pleadings on file herein.

I. THE PLEADINGS

Plaintiff seeks a refund for taxes paid for the 1991 tax year. See Complaint at ¶¶ 1 & 4. Plaintiff alleges that on August 15, 1992, he filed a timely tax return for the 1991 tax year and that he paid $7,877.00 in income taxes for that year. Id. at ¶ 4. He further alleges that he filed an administrative claim for a $3,510.00 refund on September 24, 1992, but that the IRS rejected the claim and assessed him an additional tax of $854.00, presumably for the 1991 tax year. Id. at ¶ 5.¹ According to the complaint, on March 27, 1995, plaintiff paid the IRS $1,211.00, representing the $854.00 assessment and accrued interest. Id. at ¶ 7. Plaintiff requests judgment in the amount of $3,909.00. Id. at ¶ 10.

II.

STANDARDS FOR DISMISSAL UNDER FED.R.CIV.P. 12(b)(1)

It is well established that the party seeking to invoke the jurisdiction of the federal court has the burden of establishing that jurisdiction exists. KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 201, 81 L.Ed. 183 (1936); Scott v. Breeland, 792 F.2d 925, 927 (9th Cir.1986). On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), the standards that must be applied vary according to the nature of the jurisdictional challenge.

If the challenge to jurisdiction is a facial attack, i.e., the defendant contends that the allegations of jurisdiction contained in the complaint are insufficient on their face to demonstrate the existence of jurisdiction, the plaintiff is entitled to safeguards similar to those applicable when a Rule 12(b)(6) motion is made. The factual allegations of the complaint are presumed to be true, and the motion is granted only if the plaintiff fails to allege an element necessary for subject matter jurisdiction. See 2A J. Moore, J. Lucas & G. Grotheer, Moore's Federal Practice para. 12.07[2.1], at 12-46 to 12-47 (2d ed. 1987); see also Eaton v. Dorchester Development, Inc., 692 F.2d 727, 731 (11th Cir.1982); Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir.1981), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981); Mortensen v. First Fed. Sav. & Loan Ass'n., 549 F.2d 884, 891 (3d Cir.1977). A complaint will be dismissed for lack of subject matter jurisdiction (1) if the case does not "arise under" any federal law or the United States Constitution, (2) if there is no case or controversy within the meaning of that constitutional term, or (3) if the cause is not one described by any jurisdictional statute. Baker v. Carr, 369 U.S. 186, 198, 82 S.Ct. 691, 699, 7 L.Ed.2d 663 (1962).

If the challenge to jurisdiction is made as a "speaking motion" attacking the truth of the jurisdictional facts alleged by the plaintiff, a different set of standards must be applied. Thornhill Pub. Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir.1979). Where the jurisdictional issue is separable from the merits of the case, the district court is free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary. Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.1983); Thornhill, 594 F.2d at 733. "In such circumstances `[n]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.'" Augustine, 704 F.2d at 1077 (quoting Thornhill, 594 F.2d at 733).

However, where the jurisdictional issue and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits, the jurisdictional determination should await a determination of the relevant facts on either a motion going to the merits or at trial.

Augustine, 704 F.2d at 1077 (citing Thornhill, 594 F.2d at 733-35; 5 C. Wright & A. Miller, Federal Practice & Procedure § 1350, at 558 (1969 & Supp.1987)). On a motion going to the merits, the court must, of course, employ the standard applicable to a motion for summary judgment. Farr v. United States, 990 F.2d 451, 454 n. 1 (9th Cir.1993), cert. denied, 510 U.S. 1023, 114 S.Ct. 634, 126 L.Ed.2d 592 (1993).

III. JURISDICTION TO HEAR CLAIMS FOR TAX REFUNDS

The United States challenges the court's subject matter jurisdiction over plaintiff's refund claim relative to the tax he paid in 1995. It bases its challenge on the fact that plaintiff filed his administrative claim in 1992.

The jurisdictional statute governing a federal income tax refund suit is 28 U.S.C. § 1346(a)(1). United States v. Williams, 514 U.S. 527, 601, 115 S.Ct. 1611, ___, 131 L.Ed.2d 608 (1995).² While pursuant to that statute the United States has waived its sovereign immunity against refund suits, the waiver is limited by 26 U.S.C. § 7422(a), id., which prohibits the bringing of a refund action unless the plaintiff first files an administrative claim in compliance with 26 U.S.C. § 6511.³ Imperial Plan, Inc. v. United States, 95 F.3d 25, 26 (9th Cir.1996). Put another way, a timely claim under 26 U.S.C. § 6511 is a jurisdictional prerequisite for suit. Id. (citing Miller v. United States, 38 F.3d 473, 474 (9th Cir.1994)); Williams, 514 U.S. at 602, 115 S.Ct. at ___.

Under section 6511(a), an administrative claim must be filed either within three years from the time the taxpayer filed the tax return or two years from the time the tax was paid, whichever expires later. Harrah v. United States, 77 F.3d 1122, 1125 (9th Cir.1995).⁴ Plaintiff alleges that he filed his tax return for the 1991 tax year on April 15, 1992, and that he filed his administrative claim on September 24, 1992. The government does not challenge these allegations. Since plaintiff filed a tax return, and then an administrative claim within three years from the date he filed the return, the three year period provided by section 6511(a) applies. In turn, since the administrative claim was filed within three years it would appear that plaintiff has satisfied the jurisdictional prerequisite for suit.

Although the government concedes that the tax and interest plaintiff paid in 1995 was based upon an assessment relative to the 1991 tax year, it nonetheless argues that plaintiff's 1992 administrative claim does not satisfy the jurisdictional prerequisites for his refund action relative to that assessment. The government bases its position on sections 6511(b) and 6512 of the Code. For the reasons set forth below, the court rejects the government's interpretation of the statute.

Section 6511(b) provides certain limitations on the amount of the refund a taxpayer can secure through the administrative claim, and thus through subsequent civil action.⁵ Since plaintiff filed a claim within the three year period, supra, the appropriate subsection for this limitation is § 6511(b)(2)(A).

The question tendered is the jurisdictional consequences of § 6511(b)(2)(A) where the taxpayer timely files a tax return, pays the tax, files a timely administrative claim, and then is assessed an additional tax, which the taxpayer pays. The issue is one of statutory construction. As with any such issue, the first question for a district court is whether there is a binding construction of the statute. See Tello v. McMahon, 677 F.Supp. 1436, 1441 (E.D.Cal.1988) (citations omitted).

Neither party has tendered authority speaking directly to the issue at bar, nor has the court's independent research discovered any. Rather, the cases address a variety of related, but distinct issues.⁶ It thus appears that the question of whether the refund may include additional taxes paid by virtue of a subsequent assessment, so long as the total refund does not exceed the portion of the tax paid prior to the administrative claim, is one of first impression. Accordingly, I turn first to the language of the statute. See Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S.Ct. 2297, 2301, 85 L.Ed.2d 692 (1985) (process of determining congressional intent begins with the language of the Act itself) (citations omitted).

Section 6511(b)(2)(A) provides that the amount of credit "shall not exceed the portion of the tax paid within [three years from the filing of the claim]." The government contends that the Tax Code not only limits the refund to those taxes paid within three years of the claim, as the statute plainly provides, but also that it prohibits the taxpayer from disputing an additional assessment made in response to the taxpayer's claim. There is simply no basis in the plain language of section 6511(b) for creating this additional limitation on the taxpayer's timely filed refund action.

It is fundamental that a statute must be interpreted according to its plain meaning. See Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 1149-50, 117 L.Ed.2d 391 (1992) (court "must presume that a legislature says in a statute what it means and means in a statute what it says there") (citations omitted); see also INS v. Cardoza-Fonseca, 480 U.S. 421, 433 n. 12, 107 S.Ct. 1207, 1214 n. 12, 94 L.Ed.2d 434 (1987) (strong...