Rock v. United States

• Decision Date: 24 January 1968
• Docket Number: 64 Civ. 2448.
• Citation: 279 F. Supp. 96
• Parties: Daniel J. ROCK, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of New York

279 F. Supp. 96

Daniel J. ROCK, Plaintiff, v. UNITED STATES of America, Defendant.

64 Civ. 2448.

United States District Court S. D. New York.

January 24, 1968.

Rock & Rock, New York City, for plaintiff; Nathaniel L. Rock, New York City, of counsel.

Robert M. Morgenthau, U. S. Atty., for the Southern Dist. of New York, for defendant; Richard M. Hall, Asst. U. S. Atty., of counsel.

OPINION

LEVET, District Judge.

This action is a claim for a refund of federal income taxes paid in 1955 by the plaintiff, Daniel J. Rock. The basis is a loss in the year 1957 which plaintiff proposed to carry back to the year 1955.

The defendant, United States of America, has moved pursuant to Rule 12(b) (1) of the Federal Rules of Civil Procedure for an order dismissing this complaint on the ground that this court lacks jurisdiction over the subject matter due to the untimeliness of plaintiff's claim for a refund.

Plaintiff and his wife properly filed a joint income tax return for the calendar year 1955 and paid the tax due. In an amended individual income tax return filed on or about September 9, 1958, plaintiff reported a loss of $4,829.07 for the calendar year 1957.

Over two and one-half years later, during the latter part of March or early April, 1961, plaintiff visited the offices of the Internal Revenue Service in Jacksonville, Florida, where he allegedly then resided. He desired to make a claim for a refund on the above basis and, after explaining this to an unnamed agent or employee of the Internal Revenue Service, he was given Form 1045, entitled "Application For Tentative Carryback Adjustment" upon which to submit his claim. At this time plaintiff was advised that his claim would have to be filed by April 15th.

Later that day plaintiff telephoned his accountant in New York City, requested him to prepare said refund claim, and sent him Form 1045. Upon completion and return of the form (which the accountant allegedly approved), plaintiff affixed his signature below the printed declaration that he had examined same, etc., and on April 13, 1961 sent it via registered air mail to the District Director of Internal Revenue in Albany, New York. The District Director received plaintiff's Form 1045 on April 20, 1961. Thereafter the Director sent plaintiff a printed form letter, dated May 9, 1961, which in part stated:

"Your Application for Tentative Carry-Back Adjustment, described above, is disallowed because it was not filed within a period of twelve months from the end of the taxable year of the net operating loss or unused excess profits credit from which the carry-back resulted, as provided in the Internal Revenue Code of 1954.

"Based on your application, we suggest you file a claim for refund on enclosed Form 843. The legal period to file the claim is limited to three years from the time the return was filed or due to be filed or two years after payment of tax, whichever is later.

"Enc: Form 1045 Form 843(2)" (Pl. Ex. B)

On or about June 12, 1961, plaintiff filed with the District Director in Albany, New York a claim for refund of taxes paid in 1955, using Form 843, which in bold letters is entitled "CLAIM." This claim was rejected as untimely on or about August 10, 1962 by the District Director in Jacksonville, Florida, to whom the claim had been transferred. Plaintiff then instituted his action for relief here.

Jurisdiction of this court derives only from 28 U.S.C. § 1346 read in combination with 26 U.S.C. § 7422(a), which states in pertinent part:

"(a) No suit * * * shall be maintained in any court for the recovery of * * * any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund * * * has been duly filed with the Secretary or his delegate, according to the provisions of law in that regard, and the regulations of the Secretary or his delegate established in pursuance thereof." (Emphasis supplied)

It is elementary that an untimely claim is not "duly filed." Plaintiff was an individual taxpayer on a calendar year basis of accounting, and, under the most favorable statute of limitations available to him in this case, he had until April 15, 1961 to timely file his claim. See 26 U.S.C. § 6511(d) (2). His claim for a refund was not filed until June 12, 1961.

Plaintiff asserts that the application for a tentative carryback adjustment which he filed on April 13, 1961 should be considered a timely claim for a refund since it contained essentially the same information necessary for a proper claim. With this position, however, I do not agree.

The differences between an application for a tentative carryback adjustment and a claim for a refund are not merely formal; they are substantive, and the statute and regulations as well as Form 1045 itself so state.

26 U.S.C. § 6411, which provides for tentative carryback adjustments, provides in subsection (a) that:

"* * * An application under this section shall not constitute a claim for credit or refund." (Emphasis supplied)

If, indeed, there could be any doubt about the meaning of the statute, such doubt must be dispelled by Reg. § 1.64111(b) (2), which states:

"* * * The filing of an application for a tentative carryback adjustment will not constitute the filing of a claim for credit or refund within the meaning of section 6511 for purposes of determining whether a claim for credit or refund was filed prior to the expiration of the applicable period of limitation. * * * A claim for credit or refund under section 6402 filed after the filing of an application for a tentative carryback adjustment is not to be considered an amendment of such application. * * *"

Despite the clear import of the statute and regulations, however, plaintiff maintains that his filing of Form 1045 was, nevertheless, sufficient to perserve his rights to a refund on the theory that Form 1045 must be considered an informal claim.

In United States v. Kales, 314 U. S. 186, 62 S.Ct. 214, 86 L.Ed. 132 (1941), a leading case in the area of informal refund claims against the government, the standard for testing the sufficiency of such claims was established. There it was held that timely informal notice of a claim was adequate because the informal notice had not misled the Commissioner and he had accepted and treated it as such during a long course of dealings with the taxpayer. When viewed in the light most favorable to plaintiff, however, the facts of the instant case clearly establish that the Commissioner neither considered nor treated plaintiff's application for a tentative carryback adjustment as a claim for a refund.

Applications brought under the tentative carryback adjustment provisions of 26 U.S.C. § 6411 require special treatment by the Secretary or his delegate. Within ninety days, an examination, limited to the discovery of omissions and errors of computation on the application, must be made, and the application allowed or disallowed. Disallowance of a tentative carryback adjustment is final and may not be challenged in any proceeding. See Reg. § 1.6411-3(c).

This unique...