Opinion
Civil Action No. 4:00-CV-0072-HLM
August 22, 2001
David DeCoursey Aughtry, Vivian D. Hoard, David Ross MacKusick, Chamberlain Hrdlicka White, Williams Martin, Counsel for Plaintiff
Ann Carroll Reid, Counsel for Defendant
ORDER
This case involves a suit to recover tax refunds. The case is before the Court on Defendant's Motion for Summary Judgment [11].
I. Background
Keeping in mind that when deciding a motion for summary judgment, the Court "must view the evidence and all factual inferences in the light most favorable to the party opposing the motion," the Court provides the following statement of facts. Reynolds v. Bridgestone/Firestone, Inc., 989 F.2d 465, 469 (11th Cir. 1993). This statement does not represent actual findings of fact; rather, it is intended simply to place the Court's legal analysis within the context of a specific case or controversy. Swint v. City of Wadley, 51 F.3d 988, 992 (11th Cir. 1995) ("[W]hat we state as `facts' in this [order] for purposes of reviewing the ruling on the summary judgment motion may not be the actual facts. They are, however, the facts for present purposes, and we set them out below.").
Plaintiff is a Georgia corporation with its principal place of business in Dalton, Georgia. (Compl. ¶ 1.) Plaintiff is engaged in the carpet business. (Pl.'s Resp. Def.'s Statement Material Facts ¶ 1.)
On or about April 20, 1993, Plaintiff filed a corporate income tax return for the year ended December 31, 1991, reporting a net operating loss of $582,587. (Aff. of Jerome Maurer ¶ 4; Aff. of Thomas C. Russe ¶¶ 7-8; Aff. of Stephen Todd Jones ¶ 4.) Net operating losses are automatically carried back for three previous tax years unless the taxpayer affirmatively elects to waive the automatic carryback. (Russe Aff. ¶ 9.) Plaintiff did not make an election to waive the automatic three-year carryback of its net operating loss for the 1991 tax year. (Id.)
Thomas C. Russe, Certified Public Accountants ("the Russe Firm"), prepared Form 1120X claims for refunds for the tax years 1988, 1989, and 1990. (Maurer Aff. ¶¶ 4, 10-11; Russe Aff. ¶¶ 15-16.) Those claims for refunds were based on net operating loss carrybacks from the 1991 tax year, and sought refunds of $4,976, $9,077, and $167,656, respectively. (Pl.'s Resp. Def.'s Statement Material Facts ¶ 7.)
On September 15, 1995, Stephen Todd Jones signed the Form 1120X refund claims for the 1988, 1989, and 1990 tax years on behalf of Plaintiff. (Jones Aff. ¶¶ 9-10; Russe Aff. ¶ 14, 17.) On that same day, the Russe Firm postmarked the envelope containing Plaintiff's Form 1120X refund claims for the 1988, 1989, and 1990 tax years, using a private postage meter and postage scale. (Russe Aff. ¶ 25.) The envelope was addressed to the Internal Revenue Service ("IRS") office in Atlanta, Georgia, and bore the Russe Firm's return address. (Id. ¶ 27.) Plaintiff, however, does not have a true copy of the addressed and postmarked envelope. (Pl.'s Resp. Def.'s Statement Material Facts ¶ 11; Def.'s Mot. Summ. J. Ex. 4.)
On September 15, 1995, Jerome Maurer, a staff accountant with the Russe Firm, mailed the envelope containing Plaintiff's Form 1120X refund claims for the 1988, 1989, and 1990 tax years from the United States Post Office in downtown Chattanooga, Tennessee. (Russe Aff. ¶¶ 26-28.) Although the post office itself closed at 5:30 p.m. on September 15, 1995, the last mail pickup from the mail receptacle outside the post office was scheduled to occur at 7:00 p.m. (Decl. of Cecylia K. Dunning ¶ 3; Russe Aff. ¶ 31.) Mr. Maurer deposited the envelope containing Plaintiff's Form 1120X refund claims for the 1988, 1989, and 1990 tax years into the mail receptacle outside the post office after 5:30 p.m., but prior to 7:00 p.m., on September 15, 1995. (Russe Aff. ¶ 28; Maurer Aff. ¶¶ 14-17.)
The IRS has no record of receiving Plaintiff's Form 1120X refund claims for the 1988, 1989, and 1990 tax years. (Pl.'s Resp. Def.'s Statement Material Facts ¶ 13; Decl. of Margaret A. Ward ¶ 7.) The claims were never returned to the Russe Firm. (Russe Aff. ¶ 29.)
On March 10, 2000, Plaintiff filed this lawsuit. Plaintiff seeks to recover tax refunds for the tax years 1988, 1989, and 1990.
On February 1, 2001, Defendant filed its Motion for Summary Judgment. Defendant argues that no genuine issue of material fact exists with respect to whether Plaintiff filed its Form 1120X claims for refunds for the tax years 1988, 1989, and 1990 in a timely fashion.
II. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) authorizes summary judgment when all "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In short, everything in the record must demonstrate the absence of a genuine issue of material fact. Herzog v. Castle Rock Entertainment, 193 F.3d 1241, 1246 (11th Cir. 1999)
The party seeking summary judgment bears the burden of demonstrating the absence of a genuine dispute as to any material fact. Herzog, 193 F.3d at 1246 (citing Adickes v. S.H. Kress Co., 398 U.S. 144 (1970)). The party requesting summary judgment "`always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.'" Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1281 (11th Cir. 1999) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)) (internal quotation marks omitted). "The movant can meet this burden by presenting evidence showing that there is no dispute of material fact, or by showing that the nonmoving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof." Id. at 1281-82. "There is no requirement, however, `that the moving party support its motion with affidavits or other similar materials negating the opponent's claim.'"Id. at 1282 (quoting Celotex, 477 U.S. at 323)
Once the moving party has supported its motion adequately, the non-movant has the burden of showing summary judgment is improper by coming forward with specific facts that demonstrate the existence of a genuine issue for trial. Graham, 193 F.3d at 1282; Matshusita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The non-moving party "need not present evidence in a form necessary for admission at trial; however, he may not merely rest on his pleadings."Graham, 193 F.3d at 1282.
After the non-moving party properly has responded to a proper motion for summary judgment, the Court may grant the motion for summary judgment if the Court concludes that there is no genuine issue of material fact and that the moving party is entitled to summary judgment as a matter of law. St. Charles Foods, Inc. v. America's Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir. 1999). When making this determination, the Court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion. Hinson v. Edmond, 192 F.3d 1342, 1348 (11th Cir. 1999); St. Charles Foods, Inc., 198 F.3d at 819. The Court also must "`resolve all reasonable doubts about the facts in favor of the non-movant.'" St. Charles Foods, Inc., 198 F.3d at 819 (quoting United of Omaha Life Ins. v. Sun Life Ins. Co., 894 F.2d 1555 (11th Cir. 1990 Additionally, "`[i]f reasonable minds might differ on inferences arising from undisputed facts, then the court should deny summary judgment.'" Id. (quoting Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983)) (alteration in original). Moreover, "credibility determinations, the weighing of evidence, and the drawing of inferences from the facts are the function of the jury."Graham, 193 F.3d at 1282. Finally, "[i]f the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial." Herzog, 193 F.3d at 1246.
When considering motions for summary judgment, the Court does not make decisions as to the merits of disputed factual issues. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Ryder v. Int'l Corp. v. First Am. Nat'l Bank, 943 F.2d 1521, 1523 (11th Cir. 1991). Rather, the Court only determines whether genuine issues of material fact exist to be tried. Graham, 193 F.3d at 1282. Applicable substantive law identifies those facts that are material and those that are irrelevant. Id. Disputed facts that do not resolve or affect the outcome of a suit properly will not preclude the entry of summary judgment. Anderson, 477 U.S. at 248.
In addition to materiality, the Court also must consider the genuineness of the alleged dispute. Graham, 193 F.3d at 1282. A dispute is genuine if "`the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Id. (quoting Anderson, 477 U.S. at 248). The non-movant "`must do more than show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita, 475 U.S. at 586). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 289 (1968)). The standard for summary judgment thus mirrors the "standard necessary to direct a verdict: `whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Graham, 193 F.3d at 1283 (quotingAnderson, 477 U.S. at 251-52).
III. Discussion
28 U.S.C.A. § 1346(a)(1) gives federal courts jurisdiction over suits for the refund of federal income taxes. 26 U.S.C.A. § 1346(a)(1). 28 U.S.C.A. § 1346(a)(1), "together with 26 U.S.C. § 7422(a), constitutes a waiver by the United States of its sovereign immunity with respect to refund suits by taxpayers to recover internal revenue taxes alleged to have been erroneously or illegally assessed." Miller v. United States, 784 F.2d 728, 729 (6th Cir. 1986) (per curiam). Section 7422(a) states that no refund suit may be maintained in federal district court until a corresponding claim for refund has been filed with the IRS. § 7422(a). The taxpayer bears the burden of showing that jurisdiction exists. Miller, 784 F.2d at 729.
As a general rule, a tax return is not considered to be filed with the IRS until the tax return is delivered to, and received by, the IRS.Miller, 784 F.2d at 730; In re Young, 230 B.R. 895, 897 (Bankr. S.D.Ga. 1999); In re Harper, 153 B.R. 84, 85 (Bankr. N.D.Ga. 1993); In re O'Neill, 134 B.R. 48, 49 (Bankr. M.D.Fla. 1991). 26 U.S.C.A. § 7502, however, creates two exceptions to this general rule. 26 U.S.C.A. § 7502. First, § 7502(a) provides that if the return is mailed prior to its due date but is received by the IRS after its due date, the postmark is deemed to be the date of delivery for the return. § 7502(a). "Second, if the return is sent by registered or certified mail, the receipt for the registration is prima facie evidence that the return was delivered to the IRS," and the date of the receipt for the registration is deemed to be the date of filing for the return. In re Young, 230 B.R. at 897; § 7502(c).
Plaintiff argues that a genuine dispute exists whether Plaintiff filed its 1120X claims for refund for the 1988, 1989, and 1990 tax years. For the following reasons, the Court rejects Plaintiff's argument.
First, Plaintiff did not send its claims for refund by certified or registered mail. Plaintiff therefore cannot rely upon § 7502(c) to show that its claims for refund were filed with the IRS.
Second, the majority of courts interpreting § 7502(a) have concluded that § 7502(a) applies only if IRS actually receives the claims for refund. Washton v. United States, 13 F.3d 49, 50 (2d Cir. 1993) (per curiam); Miller, 784 F.2d at 730; In re O'Neill, 134 B.R. at 50. It is not sufficient merely to place the claims for refund in a mail receptacle. Washton, 13 F.3d at 50. Because the undisputed evidence in the case shows that the IRS never received Plaintiff's claims for refund, § 7502(a) does not apply. (Pl.'s Resp. Def.'s Statement Material Facts ¶ 13; Decl. of Margaret A. Ward ¶ 7.)
Third, Plaintiff may not rely upon extrinsic evidence of mailing, such as the testimony of Mr. Russe, Mr. Jones, and Mr. Maurer, to show that Plaintiff filed its claims for refund. Although the Eleventh Circuit has not considered whether taxpayers may use extrinsic evidence to prove filing, the former Fifth Circuit addressed this issue and refused to allow such evidence. Drake v. Commissioner, 554 F.2d 736, 738 (5th Cir. 1977). The Drake decision is binding upon this Court. Bonner v. City of Prichard, 661 F.2d 1206, 1209-10 (en banc). The Court therefore may not consider extrinsic evidence when determining whether Plaintiff filed its claims for refund. Washton, 13 F.3d at 50; Surowka v. United States, 909 F.2d 148, 150 (6th Cir. 1990); In re Huber, 211 B.R. 767, 770 (Bankr. M.D.Fla. 1997); In re Beautiful Plants, No. 94-294-8B1, 1996 WL 211803, at *2 (Bankr. M.D.Fla. Feb. 7, 1996); In re O'Neill, 134 B.R. at 50.
Fourth, to the extent that Plaintiff claims that § 7502 applies to its claims for refund because Plaintiff's accountant used a private postage meter to postmark the envelope containing Plaintiff's claims for refund, the Court rejects this claim. Section 7502(b) provides that § 7502 "shall apply in the case of postmarks not made by the United States Postal Service only to the extent of regulations prescribed by the Secretary." § 7502(b). The corresponding regulation states, in relevant part:
(c) Mailing requirements — (1) In general. Section 7502 does not apply unless the document or payment is mailed in accordance with the following requirements.
(B) Postmark made by other than U.S. Postal Service — (1) In general. If the postmark on the envelope is made other than by the U.S. Postal Service —
(i) The postmark so made must bear a legible date on or before the last date, or the last day of the period, prescribed for filing the document or making the payment; and
(ii) The document or payment must be received by the agency, officer, or office with which it is required to be filed not later than the time when a document or payment contained in an envelope that is properly addressed, mailed, and sent by the same class of mail would ordinarily be received if it were postmarked at the same point of origin by the U.S. Postal Service on 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). Because Plaintiff has failed to satisfy the requirements of 26 C.F.R. § 301.7502-1(c), § 7502 does not apply to Plaintiff's claims for refund.
Fifth, Plaintiff's argument that the mailbox rule applies to Plaintiff's claims for refund also is without merit. "Under the judicially created mailbox rule, a letter that is properly addressed and placed in the mails raises a presumption that it was received by the addressee." In re Harper, 153 B.R. at 85. The majority of courts that have addressed the issue have concluded that "§ 7502 rendered the presumption of receipt raised by the mailbox rule inapplicable" to tax documents. Id.; see also Surowka, 909 F.2d at 150 ("the only exceptions to the physical delivery rule for the filing of tax returns are contained in section 7502"); Miller, 784 F.2d at 731 ("the only exceptions to the physical delivery rule available to taxpayers are the two set out in section 7502"). Plaintiff therefore cannot rely on the mailbox rule in this case.
For the above reasons, the Court concludes that Plaintiff has failed to create a genuine dispute with respect to whether Plaintiff filed its 1120X claims for refund for the 1988, 1989, and 1990 tax years. The Court thus lacks jurisdiction to entertain this action. § 7422(a). Consequently, the Court grants Defendant's Motion for Summary Judgment.
IV. Conclusion
ACCORDINGLY, the Court GRANTS Defendant's Motion for Summary Judgment [11], and DISMISSES this case.