Diamond v. States
107 Fed. Cl. 702
| Fed. Cl. | 2012Background
- Pls Diamond and del Rosario, residents of Japan, paid 2005 U.S. taxes via withholding on U.S.-source income.
- They filed a joint 2005 tax return on June 4, 2006 seeking a refund of $10,645.40.
- The original return lacked SSNs/TINs, omitted wage/foreign income, and did not include Form 2555 or FBAR; jurat was altered.
- IRS deemed the 2005 return frivolous and refused to accept it, issuing guidance to file a corrected return.
- Pls made multiple attempts to obtain relief (forms 911, correspondence, March 2011 denial); they refiled a 2010 return with partial improvements.
- Plaintiffs filed suit in June 2012 seeking a refund; government moved to dismiss for lack of subject-matter jurisdiction under RCFC 12(b)(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has subject-matter jurisdiction over a tax-refund claim | Diamond del Rosario seek refund via 7422; amended/refiled returns constitute a claim | Government asserts no valid Beard-compliant return exists | No jurisdiction; no valid Beard-compliant return filed |
| Whether the original 2005 return satisfied Beard criteria | Original filing should count as a Beard-compliant return | Original return lacked data, was not executed under penalty of perjury, and altered jurat | Original return fails three Beard criteria; not a valid return |
| Whether the amended 2010 return cured defects and was timely | Amended return should be timely under 6511(a) as first proper return | Amended return still fails Beard criteria and does not provide sufficient data | Amended return fails Beard criteria; no jurisdiction |
| Whether look-back/limitations under 6511 affect jurisdiction | Look-back period should permit refund recovery from 2005 | Look-back issues affect remedy, not jurisdiction; 6511 timing supports no claim | Look-back limitations do not establish jurisdiction; still no valid claim |
| Whether the claim could be cured by submitting proper documentation | Additional W-2, 1042-S, 8805, etc., could support withholding | Deficiencies cannot be cured to create a valid Beard-compliant return | Cannot cure missing data to create jurisdiction |
Key Cases Cited
- Beard v. Commissioner, 82 T.C. 766 (1984) (Beard criteria for a valid tax return: data, being document, honest effort, signature under penalty)
- United States v. Clintwood Elkhorn Min. Co., 553 U.S. 1 (2008) (statutory requirement to file refund claim before suit under 7422(a))
- McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178 (1936) (burden to establish jurisdiction rests with plaintiff; preponderance standard)
- Mosel v. United States, 738 F.2d 157 (6th Cir.1984) (data necessary to calculate tax omitted equals failure to file proper return)
- Florsheim Bros. Drygoods Co. v. United States, 280 U.S. 453 (1930) (principles for what constitutes a valid return)
- Jascourt v. United States, 207 Ct.Cl. 955, 521 F.2d 1406 (1975) (treatment of return validity and judicial interpretation)
- VanCanagan v. United States, 231 F.3d 1349 (Fed.Cir.2000) (considerations for filing and recognition of credits/refunds)
- Murdock v. United States, 103 Fed.Cl. 389 (2012) (look-back-period under 6511 not jurisdictional; affects remedy)
- United States v. Baral, 528 U.S. 431 (2000) (statutory limitations and look-back principles referenced)