District of Columbia Office of Tax & Revenue v. Sunbelt Beverage, LLC
64 A.3d 138
D.C.2013Background
- Sunbelt Beverage filed D-65 partnership returns for 2002–2004, treating itself as a pass-through for its corporate parent; the returns reported gross income and other figures but omitted the DC apportionment factor.
- Sunbelt Holding, not Sunbelt Beverage, filed the corresponding DC D-20 corporate returns and paid taxes; Sunbelt Beverage asserted the parent paid the District taxes on its income.
- OTR sought to assess back taxes based on the 65s, alleging the misfiled returns were either nullities or insufficient for the three-year limitations period to run.
- The District’s tax scheme requires D-30 or D-20 forms, with apportionment factors used to determine DC-source income and tax liability; the D-65 is an informational partnership return and not usually used for apportionment, unless the LLC qualifies as a partnership under DC law.
- OTR argued that missing apportionment data or a deficient filing could extend or reset the limitations period or allow assessment at any time under DC Code § 47-4301(d)(1)–(C); Sunbelt urged that a default three-year period applied since the filing was a good-faith albeit erroneous return.
- The court held that Sunbelt Beverage’s D-65 triggered the default three-year statute of limitations, finding the filing was a genuine, though mistaken, attempt to satisfy tax obligations and that omissions were amendable rather than rendering the return a nullity, affirming summary judgment for Sunbelt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a D-65 return trigger the three-year statute? | Sunbelt: yes, it is a return and starts the period. | OTR: no, because it’s missing apportionment data to compute taxes. | Yes; the D-65 triggered the three-year limit. |
| Is missing apportionment data a nullity or an amendable omission? | Sunbelt: omission is amendable, not a nullity per Zellerbach. | OTR: any missing data defeats the return for SOL purposes. | Omission is amendable; not a nullity. |
| Can ‘failure to file a return’ under § 47-4301(d)(1)(C) override the three-year default? | Sunbelt: not a failure to file; a mistaken but genuine filing occurred. | OTR: statutory exception permits action any time for failure to file. | No; the trespass does not fit ‘failure to file’ as used here. |
| Does federal case law on returns guide the DC statute here? | Sunbelt: controlling precedents show a return need not be perfect to trigger SOL. | OTR: the DC framework should be construed consistently with government interests. | Yes; federal doctrine supports triggering the three-year period. |
Key Cases Cited
- Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934) (perfect accuracy not required to rescue a return from nullity)
- Germantown Trust v. Commissioner, 309 U.S. 304 (1940) (informational return may still allow liability calculation)
- Lane-Wells Co., 321 U.S. 219 (1944) (single-return rule; data for liability must be provided on the return)
- Florsheim Bros. Drygoods Co. v. United States, 280 U.S. 453 (1930) (return may trigger SOL even if defective if intended to be a return)
- Beard v. Commissioner, 82 T.C. 766 (1984) (four-factor test for whether a filing constitutes a return)