Although 8x8 fails to meet the requirements of I.R.C. § 6415(a), it may nevertheless obtain a refund if it had "borne the economic burden of the taxes by paying them out of [its] own pocket and had not collected them from members." Epstein v. United States , 174 Ct.Cl. 1158, 1174, 357 F.2d 928 (1966) (footnote omitted). The question that must be answered here is whether 8x8 passed the expense on to its customers or bore the burden of the tax by paying it.

Other cases from the Federal Circuit analyzing Section 6415(a), though, undermine Bombardier's dependence on Chicago Milwaukee. For example, the Federal Circuit's predecessor dismissed a Section 6415(a) refund claim where the claimant did not bear the economic burden of the tax itself, repay the tax to those from whom it was collected, or obtain consents. Epstein v. United States , 357 F.2d 928, 937–38 (Ct. Cl. 1966). The Court of Claims also had held that allowing a lawsuit to continue without first fulfilling the requirements would defeat the purpose of the statute “to preclude ... unjust enrichment.”

Boyden v. United States, supra, at 222 of 218 F. Supp.; United States v. Howe, 349 F.2d 483, 488 (9th Cir. 1965); McCaughn v. Williams, 23 F.2d 840, 841 (3d Cir. 1928), cert. denied, 276 U.S. 629, 48 S.Ct. 322, 72 L.Ed. 740. See also, Epstein v. United States, 357 F.2d 928, 934 n. 4, 174 Ct.Cl. 1158, 1169 n. 4 (1966). In the latter instance — where the payments were of the isolated and casual character and dependent upon participation in a given event or activity — they have been held not to be dues subject to the tax.

See Section I and footnote 22, supra; see also Graver v. Ill. Dep't of Pub. Aid, 64 Ill.App.3d 820, 21 Ill.Dec. 597, 381 N.E.2d 1044, 1046 (1978) ("The majority rule of law in our nation is that local law determines ownership of funds received with respect to income reported on joint federal income tax returns.").See also United States v. MacPhail, 149 Fed.Appx. 449, 453 (6th Cir. 2005) ("courts have consistently found that a refund should be disbursed in proportion to the amount each spouse paid to the taxes owed," quoting Rev. Rul. 74–611, 1974–2 C.B. 399 ("the wife having paid the entire amount of the tax is entitled to the entire amount of the overpayment")); Epstein v. United States, 357 F.2d 928, 937 (Ct. Cl. 1966) ("recovery may be had only if plaintiff can show that he himself had borne the economic burden of the taxes by paying them out of his own pocket and had not collected them from members"). Illinois law also provides that the filing of a joint tax return does not divest the person who paid the taxes of his ownership interest.

What is clear is that the courts have held organizations to be social clubs within the meaning of 4241 if there is an association or substantial commingling of § defined group of individuals for a common purpose or objective. E.g., United States v. Howe, 349 F.2d 483 (CCA 9th 1065); Epstein v. United States, 357 F.2d 928, 174 Ct.Cl. 1158 (1966). The stipulated facts herein clearly show that the Timber Lake Country Club was promoted and operated as a 'private club with limited membership' and that club members paid their dues in excess of $10 per year for the unlimited privilege of commingling for social, athletic, and sporting purposes (Stip.

This is true even though Cactus Heights is a profit making organization and its members have no proprietary interests therein. Epstein v. United States, 357 F.2d 928, 174 Ct.Cl. 1158 (1966). Correspondingly, however, this organization must also be within the purview of those contemplated by Section 4243(b) which provides the exemption.

(2) Labeling the association "private" does not foreclose consideration of the character of the association. ( Epstein v. United States (1966) 357 F.2d 928 [174 Ct.Cl. 1158].) (3) Membership requirements may be reviewed to determine whether exclusivity is actual or only apparent.