Kiselis v. United States
131 Fed. Cl. 54
| Fed. Cl. | 2017Background
- In 2005 the IRS prepared a Substitute for Return (SFR) for Kiselis for tax year 2000 based on third‑party Forms 1099, assessing large tax, interest, and penalties after he failed to file.
- The IRS sent deficiency and collection notices; after final notice the IRS levied $46,697.17 from Kiselis's Bank of America account on September 15, 2009.
- Kiselis later filed a purported 2000 Form 1040 on January 9, 2013 reporting $800 AGI and claiming a $46,679.17 refund; the IRS denied the claim and Appeals sustained the denial.
- The IRS ultimately abated the SFR assessments and refunded $98,229.79 (including funds levied from Morgan Stanley) plus interest, but did not refund the $46,697.17 taken from the Bank of America account.
- Kiselis sued in the Court of Federal Claims seeking return of the $46,697.17 and other relief; the government moved to dismiss for lack of jurisdiction or failure to state a claim.
- The court found Kiselis’s January 2013 return/claim invalid under Treasury Regulation 26 C.F.R. §301.6402‑3 because it lacked Schedule D and sufficient data to compute tax and thus dismissed for lack of subject‑matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction under 28 U.S.C. §1346/26 U.S.C. §7422 — did Kiselis file a valid administrative refund claim before suit? | Kiselis contends his Jan. 9, 2013 Form 1040 (accepted by IRS) constituted a refund claim and starts the court’s jurisdiction. | The Jan. 9, 2013 filing is defective and does not meet regulatory requirements to be a valid refund claim. | Held: No; the return was not a valid refund claim, so the Court lacks jurisdiction. |
| Validity of return — did the return contain sufficient information (per 26 C.F.R. §301.6402‑3 and case law)? | Return sufficed; IRS acceptance established validity. | Return omitted Schedule D and failed to disclose third‑party reported distributions, so it lacked essential data and intent. | Held: Invalid — omission of Schedule D and lack of sufficient data/intent rendered it not a proper return. |
| Timeliness / Section 6511 look‑back limitation — if claim valid, what refund amount is available? | (Implicit) Kiselis seeks full return of funds levied in 2009. | Even with a valid claim, refund limited to taxes paid within 3 years of claim per §6511(b)(2)(A). | Held: Look‑back limits remedy; claim to 2009 levy would be allowed only if timely filed within 3 years. |
| Claims for collection damages (unauthorized levy) — is Court of Federal Claims the proper forum? | Kiselis seeks damages related to levy. | District courts have exclusive jurisdiction over §7433 damage claims for wrongful collection. | Held: Damages claims under §7433 lie in district court, not this Court; dismissed or outside jurisdiction here. |
Key Cases Cited
- United States v. Dalm, 494 U.S. 596 (1990) (§7422 strict administrative‑claim prerequisite to tax refund suits)
- Waltner v. United States, 679 F.3d 1329 (Fed. Cir. 2012) (Treasury regulations govern when a filed return constitutes a refund claim)
- Angelus Milling Co. v. Commissioner, 325 U.S. 293 (1945) (Commissioner entitled to require information in particular form to evaluate refund claims)
- Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934) (return must evince honest and genuine effort to comply with tax law)
- United States v. Moore, 627 F.2d 830 (7th Cir. 1980) (forms lacking essential information are not returns for refund purposes)
- Diamond v. United States, 107 Fed. Cl. 702 (2012) (look‑back §6511(b) limits refund remedies; regulation/return requirements analyzed)
- Kehmeier v. United States, 95 Fed. Cl. 442 (2010) (incomplete forms that omit essential data are not valid returns for §7422 purposes)