115 Fed. Cl. 491
Fed. Cl.2014Background
- Kaplan filed suit in the U.S. Court of Federal Claims seeking a refund of three $100 payments and a declaration that he is not liable for the Trust Fund Recovery Penalties (TFRP) under 26 U.S.C. § 6672; the Government argued lack of subject matter jurisdiction because Kaplan had not paid the full assessment for at least one employee per quarter.
- The IRS assessed $86,902.76 in TFRP against Kaplan for unpaid employment taxes for Merchants Restaurant SA, LLC during the first three quarters of 2008.
- Kaplan had paid three $100 amounts toward the penalties and sought a refund, while the Government contended these payments did not satisfy the jurisdictional requirement.
- The Court previously dismissed for lack of jurisdiction, concluding that extrapolating from limited payroll records was insufficient to show the per-employee quarterly amount.
- Kaplan filed a Rule 59 motion for reconsideration arguing that denying the case on this basis would be manifestly unjust; the Government responded, and the matter is now ripe for decision.
- The Court grants reconsideration, accepts the three $100 payments as sufficient to establish jurisdiction, vacates the prior dismissal, and plans to proceed toward trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether $100 payments establish jurisdiction for a divisible TFRP refund suit | Kaplan argues that a full per-employee payment is not required and that limited or no payroll records suffice | Government contends the jurisdictional threshold requires evidence of full per-employee payment | Yes; $100 payments suffice to establish jurisdiction |
| Whether Kaplan is unfairly deprived of a merits forum by an evidentiary Catch-22 | Kaplan asserts an evidentiary Catch-22 prevents proving he is not a responsible person | Government maintains the standard burdens are separate and not unjust | Court recognizes Catch-22 and grants reconsideration to prevent manifest injustice |
| Whether reconsideration should be granted under Rule 59 based on preventing manifest injustice | Kaplan seeks relief due to manifest injustice from the prior dismissal | Government opposes reconsideration on grounds of late-argument strategy | Reconsideration granted; prior dismissal VACATED and case to proceed |
Key Cases Cited
- Cencast Servs., L.P. v. United States, 94 Fed. Cl. 425 (2010) (precedes disposition of divisible refunds and jurisdictional proof requirements)
- Lucia v. United States, 474 F.2d 565 (5th Cir. 1973) (text on treasury computation in divisible claims)
- Schultz v. United States, 918 F.2d 164 (Fed. Cir. 1990) (acceptance of partial payment toward large assessment)
- Cook v. United States, 52 Fed. Cl. 62 (2002) (partial payment accepted toward penalty for jurisdictional purposes)
- Bluebonnet Sav. Bank, F.S.B. v. United States, 466 F.3d 1349 (Fed. Cir. 2006) (exceptions to late-arguing new theories in motions for reconsideration)
- Jenkins v. United States, 484 F. App’x 511 (Fed. Cir. 2012) (definition of responsible person under § 6672)
- Martin v. United States, 101 Fed. Cl. 664 (2011) (discretion in deciding motions for reconsideration)