Snyder & Associates Aquisitions LLC v. United States
133 Fed. Cl. 120
| Fed. Cl. | 2017Background
- TTP (tax preparation) and SAA (RAL lender), owned by Kerry Snyder, claim the IRS’s revocation of TTP’s EFIN and unpaid RALs destroyed their businesses and goodwill and seek ~$2.6M (including ~$48,760 in alleged unpaid RALs and bank fees).
- An independent contractor, Nancy Hilton, admitted to preparing fraudulent returns and cooperating with an IRS undercover sting; she used TTP’s EFIN and referred clients to SAA.
- After discovering fraud, IRS Special Agent (SA) Daniels allegedly told Snyder to allow certain RAL checks to clear and promised the IRS would cover outstanding RAL losses; no written promise or HQ approval was obtained.
- Plaintiffs say the IRS later revoked TTP’s EFIN (Dec. 2010), causing client loss; the EFIN was later reinstated but they claim the businesses had failed by then. Plaintiffs also claim unreimbursed RALs and fees from cooperating with the sting.
- The government denied contractual authority to bind payment; IRS HQ and procurement authorities declined to pay; no evidence an official with contracting authority ratified SA Daniels’s alleged promises.
- The Court granted summary judgment for the United States: (1) no cognizable property interest in the EFIN/e-file participation for takings purposes; (2) no enforceable contract because SA Daniels lacked actual authority and no institutional ratification occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether revocation of EFIN and loss of e-file ability is a compensable taking | Snyder: EFIN revocation deprived businesses and goodwill — a taking requiring compensation | U.S.: EFIN participation is a regulatory privilege, not a vested property interest | Court: No cognizable property interest; no takings claim |
| Whether unpaid RALs and bank fees are recoverable as a taking | Snyder: amounts owed from IRS promises constitute property taken | U.S.: Any right is contractual, not a separate property interest — takings unavailable | Court: Claim coextensive with contract; cannot be pursued as a taking |
| Whether SA Daniels’s alleged promise created an enforceable contract | Snyder: SA Daniels promised reimbursement; plaintiffs relied and provided services | U.S.: SA Daniels lacked actual authority to bind the government | Court: No actual authority (express or implied); no contract |
| Whether any supervisor or agency ratified SA Daniels’s promise | Snyder: Supervisors (e.g., DeMarco) had knowledge and ratified at institutional level | U.S.: No supervisor with contracting authority knew; procurement authority resides with contracting officials | Court: No ratification — supervisors lacked actual contracting authority |
Key Cases Cited
- Mitchell Arms, Inc. v. United States, 7 F.3d 212 (Fed. Cir. 1993) (no property interest in permits subject to pervasive regulatory control)
- Huntleigh USA Corp. v. United States, 525 F.3d 1370 (Fed. Cir. 2008) (two-part takings test: cognizable property interest then compensable taking)
- Am. Pelagic Fishing Co. v. United States, 379 F.3d 1363 (Fed. Cir. 2004) (if no property interest, takings analysis ends)
- Winter v. Cath-Dr/Balti Joint Venture, 497 F.3d 1339 (Fed. Cir. 2007) (government apparent authority insufficient; actual authority required to bind U.S.)
- Schism v. United States, 316 F.3d 1259 (Fed. Cir. 2002) (private parties bear risk that government agents lack actual authority)
- Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380 (U.S. 1947) (principle that private parties cannot rely on apparent authority of government agents)
- Villars v. United States, 126 Fed. Cl. 626 (Fed. Cl. 2016) (elements of contract with government and standards for ratification)