Colman v. United States
96 Fed. Cl. 633
Fed. Cl.2011Background
- Colman notified the IRS in 2003 about embezzlement by Krell and falsified tax returns for Colman’s mother; Krell later pled guilty to filing false tax returns in 2009.
- Colman sought 15 percent of taxes, penalties, interest, or other amounts collected following Krell’s actions.
- IRS denied a reward via Form Letter 1010 (SC) Rev 5-2001, telling Colman to sue in the U.S. Court of Federal Claims if seeking further relief.
- Colman filed suit in 2010 in this court, arguing the IRS consented to jurisdiction and seeking money damages under 26 U.S.C. § 7623(a).
- Defendant moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) and (b)(6), arguing § 7623 is not money-mandating and a binding agreement with the IRS was not shown.
- Court grants dismissal for lack of jurisdiction, finding no substantive money-mandating source and noting the IRS letter cannot confer jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 7623(a) is money-mandating | Colman argues § 7623(a) creates a monetary right. | § 7623(a) is discretionary; not money-mandating. | No; § 7623(a) is not money-mandating. |
| Whether the IRS form letter can confer jurisdiction | IRS consent implied jurisdiction; estoppel should apply. | Agency letters cannot create jurisdiction; estoppel does not apply. | No; letter cannot confer jurisdiction. |
| Whether Tucker Act jurisdiction exists without a money-mandating source | Consent and de facto review of discretionary denial support jurisdiction. | Tucker Act requires a money-mandating source. | Lacks subject matter jurisdiction; dismissal appropriate. |
Key Cases Cited
- Fisher v. United States, 402 F.3d 1167 (Fed.Cir.2005) (Tucker Act requires money-mandating source for jurisdiction)
- United States v. Testan, 424 U.S. 392 (Supreme Court, 1976) (money-mandating standard is read through statutory source of law)
- Khan v. United States, 201 F.3d 1375 (Fed.Cir.2000) (source must create money damages right for jurisdiction)
- Merrick v. United States, 846 F.2d 725 (Fed.Cir.1988) (binding agreement for reward required for jurisdiction under §7623)
- Dacosta v. United States, 82 Fed.Cl. 549 (2008) (§7623 not money-mandating; discretionary statute)
- Conner v. United States, 76 Fed.Cl. 86 (2007) (§7623 not money-damaging; lacks right to money damages)
- Destefano v. United States, 52 Fed.Cl. 291 (2002) (§7623 not money-mandating; discretionary award not guaranteed)
- Confidential Informant v. United States, 46 Fed.Cl. 1 (2000) (statutory scheme not money-mandating for informants)