Opinion
93-CV-0120-B
September 30, 1993
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
The above-entitled matter having come before the Court upon the parties' cross motions for summary judgment, and the Court having reviewed the materials on file herein, having heard argument from the parties, and being fully advised in the premises, FINDS and ORDERS as follows:
Background
The plaintiff, David Fullmer, seeks recovery of Internal Revenue taxes which he alleges were overpaid. Fullmer filed a claim with the IRS for a refund of these payments and because the IRS has not ruled on his claims, he brought this action to recover the refund.
Plaintiff Fullmer's business fell behind in its financial obligations in the early 1980's. Mr. Fullmer was unable to pay all of his employment tax liabilities as they came due. He ultimately filed a voluntary petition for bankruptcy under Chapter 11 on May 14, 1982. The total amount of his tax liability was disputed. This dispute resulted in a Tenth Circuit decision adverse to the Fullmer bankruptcy estate. In re Fullmer, 962 F.2d 1463 (10th Cir. 1992). During the pendency of the appeal to the 10th Circuit, two of the plaintiff's daughters suffered injuries, one of which was fatal, on a carnival ride at the Sweetwater County fair. In July of 1990 the plaintiff and his wife settled on their personal injury and wrongful death actions. In July 1990, the IRS levied the plaintiff's attorneys for the settlement proceeds and on August 30, 1990, the attorneys gave the IRS a check for $65,567.30 to pay the levy in full.
The plaintiff seeks recovery of Employer's Quarterly Federal Taxes (form 941) for the third quarters of 1980 and 1981 and the quarter ending December 31, 1981, and Employer's Annual Federal Unemployment Taxes (form 940) for the 1980 and 1981 tax years. Plaintiff alleges that these taxes were overpaid because the amounts collected by the IRS were collected after the limitations period for collection had expired. Upon the parties' stipulation, this Court has dismissed the plaintiff's claim for recovery of the quarterly taxes for the third quarters of 1980 and 1981.
The parties filed cross motions for summary judgment with respect to the three remaining claims.
Standard of Review
"By its very terms, [the Rule 56(c)] standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there is no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).
The trial court decides which facts are material as a matter of law. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248; see also Carey v. United States Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987). Summary judgment may be entered "against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Carey, 812 F.2d at 623. The relevant inquiry is "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." Carey, 812 F.2d at 623. In considering a party's motion for summary judgment, the court must examine all evidence in the light most favorable to the nonmoving party. Barber v. General Elec. Co., 648 F.2d 1272, 1276 n. 1 (10th Cir. 1981).
Discussion
There are essentially two issues which the Court must address: first, whether the Court has jurisdiction over the plaintiff's claim for refund of the Employer's Quarterly Federal Taxes (form 941) for the quarter ending December 31, 1980, and second, whether the IRS's collection of the Employer's Annual Federal Unemployment Taxes (form 940) for the 1980 and 1981 tax years was timely.
A. Employer's Quarterly Federal Taxes for the Quarter Ending December 31, 1980
The filing of an administrative claim for a refund with the IRS is a jurisdictional requirement for bringing a claim for a refund of taxes in federal district court. 26 U.S.C. § 7422(a) (1988). The Supreme Court has stated that "unless a claim for refund of a tax has been filed within the time limits imposed by [Internal Revenue Code] § 6511(a), a suit for refund . . . may not be maintained in any court." Dalm v. United States, 494 U.S. 596, 602 (1990). In other words, if there is no evidence that an administrative claim was made, a court has no jurisdiction over the claim for a refund. The purpose of this requirement is to afford the IRS an opportunity to consider and dispose of claims without the expense and time required if each claim were to be litigated. Herrington v. United States, 416 F.2d 1029, 1032 (10th Cir. 1969). The defendant contends that because no administrative claim was filed with respect to the quarterly unemployment taxes for the quarter ending December 31, 1980, this Court has no jurisdiction over that claim.
In his complaint, the plaintiff sought refunds of Employer's Quarterly Federal Taxes for the tax quarters ending September 30, 1980, September 30, 1981 and December 31, 1981. The parties have resolved the claims for refunds of the taxes paid for the third quarters of 1980 and 1981, and therefore only the claim for the quarter ending December 31, 1981 remains. Plaintiff's motion for summary judgment, however, addresses the refund of Employer's Quarterly Federal Taxes for the quarter ending December 31, 1980. As the defendant correctly points out, this was the first time that this claim was mentioned.
The plaintiff does not allege in his pleadings that an administrative claim was filed with respect to this period, nor is there any indication on the administrative claim attached to the pleadings that such a claim was ever made. Furthermore, the plaintiff never sought to amend the pleadings to address this deficiency, nor is there evidence that he sought to amend his administrative claim. The plaintiff contends that the December 1981 date in his claim with the IRS and his initial complaint were clerical errors and that it is clear from his pleadings which taxes are the subject of his refund claim. This Court cannot agree.
The plaintiff urges the Court to treat this claim as an informal claim. Generally, claims for tax refunds must strictly conform to statutory requirements, setting forth in detail each ground upon which a refund is being claimed. See generally 47B C.J.S. § 1192 (1993) (citing cases). However, on informal claim for refund may be valid if it is clear and explicit in alerting the IRS of the refund that is sought. Martin v. United States, 833 F.2d 655 (7th Cir. 1987); Arch Engineering Co., Inc. v. United States, 783 F.2d 190 (Fed. Cir. 1986). This Court knows of no cases where a claim for one tax period was considered an informal claim for another and the Court declines to do so here.
A party cannot make a claim with respect to one tax period and expect the IRS to determine that he really meant to refer to another tax period. See Nucorp, Inc. v. United States, 23 Ct. Cl. 234 (1991); Union Pacific R.R. Co. v. United States, 389 F.2d 437 (Ct.Cl. 1968) (stating "[a] request for refund for a particular year does not constitute a claim for any other year"). In seeking a refund from the IRS, a plaintiff has the burden of bringing his claim to the attention of the government. Herrington v. United States, 416 F.2d 1029, 1032 (10th Cir. 1969). In this case, the plaintiff has failed to do so with respect to his claim for a refund of 1980 Quarterly Unemployment Taxes for the quarter ending December 31, 1980. The plaintiff failed to plead that he has made an administrative claim and there is no evidence that the plaintiff ever made such a claim. Accordingly, this Court has no subject matter jurisdiction over this claim. The Court therefore grants summary judgment for the defendant with respect to the plaintiff's claim for refund of this tax payment.
B. Statute of Limitations
The defendant contends that the collection of the Employer's Annual Federal Unemployment Taxes (form 940) for the 1980 and 1981 tax years was timely made. Both parties agree that the appropriate limitations period is six years from the date of assessment under 26 U.S.C. § 6502(a) , as in effect in August, 1990. In addition, both parties agree that the Internal Revenue Code suspends this limitations period during such time in which collection of the tax is prohibited due to a bankruptcy proceeding, and for six months thereafter. 26 U.S.C. § 6503(i) (1988). The parties further agree that collection was, in fact, suspended from May 14, 1982 through April 11, 1984 because of the plaintiff's bankruptcy proceedings. Finally, the parties agree that the notice of the levy at issue was served in July 1990.
This section was amended, effective November 5, 1990, extending the statute of limitations to ten years for the collection of any taxes on which the statute had not already run. 1990 Pub.L. No. 101-508, § 11317(a)(1).
The United States contends that notice of the levy was served on July 9, 1990, and the plaintiff contends that it was served on July 16, 1990. Because the Court holds that the IRS had until September 10, 1990 to collect the 1980 unemployment taxes and until August 27, 1990 to collect the 1981 taxes, this dispute does not effect the outcome of the suit. Therefore, it is not "material" in terms of a Fed.R.Civ.P. 56(c) summary judgment. See Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986).
The only points of contention between the parties are the dates on which the statute of limitations period began to run for the collection of the plaintiff's Employer's Annual Federal Unemployment Taxes (form 940) for the 1980 and 1981 tax years. The plaintiff relies on the dates on which the returns were filed, set forth in the Certificate of Assessment, as the dates on which the limitations period began to run. He maintains that the 1980 taxes were assessed on April 30, 1981 and the 1981 taxes were assessed on February 19, 1982. The defendant, on the other hand, contends that the relevant dates are September 19, 1984, for the 1980 taxes and March 29, 1982, for the 1981 taxes. These dates are set forth on the Certificate of Assessment as the "23C date" for assessment. The plaintiff agrees that these dates are the correct dates of assessment, but contends that the limitations period began running on the earlier filing dates.
It is well-established that the "23C date" on the certificate of assessment is presumed to be the date upon which the assessment was made. See Geiselman v. U.S., 961 F.2d 1, 5-6 (1st Cir. 1992); Rocovich v. United States, 933 F.2d 991, 994 (Fed. Cir. 1991); United States v. Chila, 871 F.2d 1015 (11th Cir. 1989).
Both the plain language of the Internal Revenue Code and authority from courts that have addressed this issue indicate that the limitations period for collection begins running on the date of assessment, the 23C date. The legislative scheme was to permit the I.R.S. to make an assessment within three years after the filing of a return, and if such an assessment was made, the six-year limitations period began to run for collection. Section 6501(a) provides, "[e]xcept as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed. . . ." 26 U.S.C.§ 6501(a) (1993 Supp.). The code then provides, "[w]here assessment of any tax imposed by this title has been made within the period of limitation properly applicable thereto, such tax may be collected by levy . . . only if the levy is made . . . within 6 years after the assessment of the tax. . . ." 26 U.S.C. § 6502 (1988) (emphasis added). According to IRS regulations, an assessment is made when the assessment officer prepares and signs the Assessment Certificate (Form 23C). Treas.Reg. § 301.6203-1. The only reasonable construction of this language is that Congress intended the statute of limitations to run, not from the date of filing, but from the date of the assessment officer's signing of the assessment certificate.
In United States v. McCallum, 970 F.2d 66, 68 (5th Cir. 1992), the court held that the assessment at issue was not made until the assessment officer signed the Certificate of Assessment, and even though a report of tax liability was made earlier, the six-year statute of limitations did not begin until the Assessment Certificate date. Id.; See also United States v. Amori, 136 F. Supp. 601, 602 (N.D. Cal. 1955) ("assessment" refers to assessment by Commissioner, not to self-assessment allegedly occurring when taxpayer files return). Similarly, in the case at bar, the statute of limitations did not begin to run until the assessment date. This date is the date of the Assessment Certificate, the "23C date." Accordingly, the statute of limitations began running on September 10, 1984 for the 1980 taxes and March 29, 1982 for the 1981 taxes. This means that the United States had until September 10, 1990 (six years after the assessment date) to collect the 1980 taxes, and until August 27, 1990 (six years after the assessment date plus 881 days because of the plaintiff's bankruptcy proceedings during which the limitations period was suspended) to collect the 1981 taxes. Therefore the July, 1990 levy was timely. As a result, the plaintiff's claims for a refund are unfounded.
THEREFORE, IT IS ORDERED that defendant's motion for summary judgment be, and the same hereby is, GRANTED. It is further ORDERED that plaintiff's motion for summary judgment be, and the same hereby is, DENIED.