Georg Schaeffler v. United States, 889 F.3d 238

Georg and Bernadette Schaeffler filed a joint 2002 U.S. income tax return in October 2003 and later filed a second amended 2002 return (April 2013) claiming a $5,170,760 overpayment and refund.
The 2013 amendment showed a net decrease in 2002 foreign tax credit ($1,592,765) and a large increase in 2002 minimum tax credit ($6,763,525) tied to a 2012 amendment to their 2001 return.
IRS denied the refund claim as untimely (Jan. 2014). The Schaefflers sued for the refund in Dec. 2015; the Government moved to dismiss for lack of subject-matter jurisdiction under IRC time limits.
Legal question turned on two statute-of-limitations provisions: the general rule in IRC § 6511(a) (3 years from filing or 2 years from payment) and the special ten-year rule in IRC § 6511(d)(3)(A) for overpayments "attributable to" foreign taxes for which credit is allowed.
The district court dismissed as untimely; the Fifth Circuit reviewed de novo and affirmed, holding the special ten-year rule did not apply and no qualifying 2002 tax payment occurred within two years before the refund claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 6511(d)(3)(A)’s ten-year limitation applies: is the 2002 overpayment "attributable to" foreign taxes for which credit is allowed?	Schaeffler: 2002 changes in German tax liabilities triggered § 905(c)(1)(A) reporting and a U.S. redetermination that caused the 2002 overpayment, so the overpayment is "attributable to" foreign taxes.	Government: 2002 foreign tax changes produced a net reduction in foreign tax credit (not an allowance/increase) and thus did not cause the overpayment; the increase in minimum tax credit caused the overpayment.	Held: No. "Attributable to" requires causation; the overpayment was caused by an increase in minimum tax credit, not by an allowance/increase of foreign tax credit, so § 6511(d)(3)(A) does not apply.
Whether the refund was timely under § 6511(a)’s 2-year-from-payment clause (i.e., was there a qualifying 2002 tax "payment" within two years of the refund claim?)	Schaeffler: Adjustments from the 2001 amended return and carryforward/application of credits to 2002 should count as a payment for § 6511(a).	Government: "Paid" means a transfer/credit of an overpayment to satisfy a tax liability; carryforwards and intra-year offsetting adjustments do not constitute a payment for 2002.	Held: No. "Paid" requires transfer/credit of an overpayment; the carryforward/application of minimum tax or foreign tax credits did not constitute a payment of 2002 tax within § 6511(a).

Electrolux Holdings, Inc. v. United States, 491 F.3d 1327 (Fed. Cir.) ("attributable to" means "due to, caused by, or generated by"; direct-cause analysis)
Woods v. United States, 571 U.S. 31 (Supreme Court) (misstatement and underlying condition can be "inextricably intertwined" for attribution analysis)
Republic Petroleum Corp. v. United States, 613 F.2d 518 (5th Cir.) (offsetting adjustments for a single tax year do not constitute a payment under § 6511(a))
Kingston Products Corp. v. United States, 368 F.2d 281 (Ct. Cl.) (distinguishing credit of an overpayment from intra-year adjustments; credit of an overpayment deemed a payment)
Stanford v. Comm’r, 152 F.3d 450 (5th Cir.) (interpreting "attributable to" in tax-code context as causation language)