McCaffery v. United States
| Decision Date | 09 August 2021 |
| Docket Number | 19-1112T |
| Parties | GANNON MCCAFFERY and TAYLOR MCCAFFERY, Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Douglas L. Salzer, Ajubita Leftwich & Salzer LLC, New Orleans, LA, for Plaintiffs.
Karen Elisabeth Servidea, Tax Division, Court of Federal Claims Section, United States Department of Justice, Washington D.C., for Defendant. With her on briefs were David A Hubbert, Acting Assistant Attorney General, Tax Division Richard E. Zuckerman, Principal Deputy Assistant Attorney General, David I. Pincus, Chief, Court of Federal Claims Section, and Mary M. Abate, Assistant Chief, Court of Federal Claims Section, United States Department of Justice, Washington, D.C.
Plaintiffs Gannon and Taylor McCaffery ("Plaintiffs" or "the McCafferys") have sued the United States for a refund of allegedly overpaid federal income tax. Compl. ¶¶ 1-3 (ECF 1). The United States moved to dismiss for lack of subject-matter jurisdiction.[1] The issue presented is whether Plaintiffs timely submitted a claim for overpayment to the Internal Revenue Service (IRS), as they were required to do before filing suit. I hold that they did not. This Court therefore GRANTS the motion and DISMISSES the complaint.
Those who overpay federal income taxes may apply to the IRS for a tax refund. A claim for a refund generally must be filed by the taxpayer "within 3 years from the time the return was filed[.]" I.R.C. § 6511(a). Untimely claims must be denied. I.R.C. § 6511(b)(1).
Timely filing can be accomplished in one of two ways: by delivering the claim to the IRS within the deadline, see Doyle v. United States, 88 Fed.Cl. 314, 320 (2009); Buttke v. United States, 13 Cl. Ct. 191, 192 (1987), or by mailing in accordance with the "deemed delivery" rule. The deemed delivery rule provides that when a document is delivered to the IRS by United States mail after an Internal Revenue Code deadline, "the date of the United States postmark stamped on the cover in which such [document] is mailed shall be deemed to be the date of delivery," given the postmark's date is on or before the deadline and the mailing was otherwise proper. I.R.C. § 7502(a).[2] Three other types of documentation of mailed documents - non-United States Postal Service postmarks, mail registration, and markings made by private delivery services - may be treated as equivalent to postmarks. I.R.C. § 7502(b), (c), (f).
Treasury regulations set out additional requirements for using a postmark to satisfy the deemed delivery rule. The regulations establish that the taxpayer bears the risk if the postmark does not qualify:
If the postmark does not bear a date on or before the last date, or the last day of the period, prescribed for filing the document or making the payment, the document or payment is considered not to be timely filed or paid, regardless of when the document or payment is deposited in the mail. Accordingly, the sender who relies upon the applicability of section 7502 assumes the risk that the postmark will bear a date on or before the last date, or the last day of the period, prescribed for filing the document or making the payment.
26 C.F.R. § 301.7502-1(c)(1)(iii). A taxpayer can avoid that risk by using registered mail:
If the document or payment is sent by U.S. registered mail, the date of registration of the document or payment is treated as the postmark date. If the document or payment is sent by U.S. certified mail and the sender's receipt is postmarked by the postal employee to whom the document or payment is presented, the date of the U.S. postmark on the receipt is treated as the postmark date of the document or payment. Accordingly, the risk that the document or payment will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail.
26 C.F.R. § 301.7502-1(c)(2). The regulations also provide for use of extrinsic evidence to prove the contents of an illegible postmark:
If the postmark on the envelope is made by the U.S. Postal Service but is not legible, the person who is required to file the document or make the payment has the burden of proving the date that the postmark was made.
26 C.F.R. § 301.7502-1(c)(1)(iii).
With that legal background in mind, the facts of the case are as follows.[3]Plaintiffs filed their federal income tax return for the 2013 tax year on April 15, 2014 with a total tax liability of $70, 977. Compl. ¶¶ 6-7; Def.'s App. B at B-1-B-2 (ECF 11-1). In 2017, Plaintiffs filed an amended tax return claiming an overpayment of $69, 080 for the 2013 tax year and requesting a refund in that amount. Compl. ¶ 8; Def.'s Mot. to Dismiss at 3; Def.'s App. B at B-15, B-17. The parties agree (and it appears to the Court) that the deadline for claiming an overpayment was April 18, 2017. Def.'s Mot. to Dismiss at 5; Pls.' Opp. at 1, 3.[4] But the IRS noted the receipt date of Plaintiffs' amended return as April 24, 2017 - six days later.
The IRS scanned the following image of the envelope in which Plaintiffs' amended return arrived, though it did not keep the actual envelope:
(Image Omitted)
Def's App. B at B-35.[5]
The image has Plaintiffs' surname and address handwritten on the top left, the IRS's address centered, and four postage stamps in the top right corner. Each stamp bears the same two lines of text: "US POSTAGE $0.49" and "SOLD APR [] FIRST CLASS."). Id. The bottom-right stamp appears to read "SOLD APR 17, 2017 FIRST CLASS," but the exact dates on the others are illegible. Id. The envelope bears the partly legible date "04/24/201[]" near the bottom right, and an alphanumerical sequence - "09B 030" - across the stamps along the right edge. Several dots and lines appear near the middle of the top edge of the envelope, but they do not form any distinct characters, shapes, or images, and there is no way to tell how they were made.
In a letter dated August 3, 2017, the IRS disallowed Plaintiffs' claim as untimely: Pls.' Ex. B (ECF 1-1). Plaintiffs then filed suit, seeking a refund of $69, 080 for the 2013 tax year. Compl. ¶¶ 3, 16.
The United States moved to dismiss for lack of subject-matter jurisdiction pursuant to RCFC 12(b)(1) and 12(h)(3). This Court held a hearing on the motion. See Tr. of Oral Arg. (ECF 23). Although the Court offered the parties an opportunity to present oral testimony, the parties agreed not to do so. See Joint Proposal at 2 (ECF 19). Instead, the parties stipulated (1) to the authenticity and admissibility of several documents, and (2) that individuals who signed declarations in opposition to the motion to dismiss would testify consistently with those declarations if called. Id. at 1-2. Plaintiff Gannon McCaffery declared that he delivered the couple's amended return to the post office after purchasing stamps on April 17, 2017, then sent an email to his accountant confirming delivery. See App. to Pls.' Opp. to Mot. to Dismiss at A-4-A-5 (ECF 12-1) (G. McCaffery Decl.). Plaintiffs' accountant authenticated her receipt of the email. See id. at A9 (A. Gomila Decl.).
A plaintiff in this Court must establish subject matter jurisdiction by a preponderance of the evidence. Keehn v. United States, 110 Fed.Cl. 306, 318-19 (2013) (citing Riles v. United States, 93 Fed.Cl. 163, 165 (2010)). If a plaintiff fails to do so, the case must be dismissed. RCFC 12(h)(3); see also Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998); Lovett v. United States, 145 Fed.Cl. 175, 178 (2019); St. Bernard Par. Gov't v. United States, 916 F.3d 987, 992-93 (Fed. Cir. 2019).
In this case, jurisdiction is premised on the Tucker Act, which authorizes the Court to hear "any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort." 28 U.S.C. § 1491(a)(1). The Tucker Act does not confer any substantive rights, United States v. Testan, 424 U.S. 392, 398 (1976), so a plaintiff seeking to invoke Tucker Act jurisdiction must identify an independent right to money from the United States. Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299, 1306 (Fed. Cir. 2008) (citing to Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005)).
This Court has jurisdiction to hear claims for refunds of internal revenue taxes "alleged to have been erroneously or illegally assessed or collected." 28 U.S.C. § 1346(a)(1). But in order for this Court to maintain jurisdiction over refund claims, the taxpayer must first have filed a timely refund claim according to IRS guidelines. See I.R.C. §§ 6511(a), 7422(a); see also United States v. Dalm, 494 U.S. 596, 602 (1990) ("[U]nless a claim for refund of a tax has been filed within the time limits imposed by [I.R.C.] § 6511(a), a suit for refund . . . may not be maintained in any court.").
The parties do not dispute that Plaintiffs' refund application was delivered to the IRS after the April 18, 2017 actual-delivery deadline. Given that this Court lacks jurisdiction over tax refund claims that are not timely presented to the IRS, see Dalm, 494 U.S. at 602, the issue is whether Plaintiffs have established timeliness under the deemed delivery rule.
The Internal Revenue Code and Treasury's implementing regulations provide the sole framework for...
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