480 F.2d 1319 | Ct. Cl. | 1973
delivered the opinion of the court:
The matter to be decided is defendant’s motion to diKmisg the petition on the ground that the court lacks jurisdiction
On April 14, 1964, the plaintiff
After dealing with the net loss on his 1965 return, the taxpayer attempted to take advantage of the unused balance by carrying it forward and later deducting it on his 1968 tax return. The attempted deduction in 1968 of the 1965 loss was improper, however, since the net loss should first have been carried back 3 years to 1962 and then 1963, making these the years in which adjustments should have been made to the taxpayer’s returns. Both the plaintiff and the defendant are now agreed that this was the proper way to treat the net loss. The plaintiff sought to take advantage of these adjustments by filing formal claims for refund on January 22,1971, in which he claimed $8,224.25 for 1962 and
The defendant argues that since section 7422(a) of the Code requires the filing of a valid claim for refund as a condition precedent to the maintenance of any suit for the refund of taxes, and since section 6511(d) (2) (A), defining the limitation period within which claims for refunds due to net operating loss carrybacks must be filed, required the filing of such a refund claim in this case prior to April 15, 1969; the taxpayer’s claim, filed January 22, 1971, was untimely. The plaintiff admits to not having filed a timely formal claim for refund by the end of the limitations period on April 15,1969, but urges instead that his 1968 income tax return, filed April 14, 1969, in which he attempted to carry forward his 1965 loss as a deduction, when coupled with information available to the IRS, constituted an acceptable informal claim for refund of his 1962 and 1963 taxes. Any deficiencies in the form of the refund claim are claimed to be retroactively cured by the formal claims filed on J anuary 22,1971.
There have been numerous cases dealing with the issue of what constitutes an informal refund claim. “* * * [Ejach case must be decided on its own peculiar set of facts with a view towards determining whether under those facts the Commissioner knew, or should have known, that a claim was being made.” Newton v. United States, 143 Ct. Cl. 293, 300, 163 F. Supp. 614, 619 (1958). The general test is whether “[t]he Commissioner’s attention should have been focused on the merits of the particular dispute” by the alleged informal claim. Angelus Milling Co. v. Commissioner, 325 U.S. 293, 297 (1945); see also United States v. Kales, 314 U.S. 186 (1941). The court, therefore, in dealing with this issue must carefully examine the facts presented in order to determine if the Commissioner did have notice, sufficient to focus his attention on the merits of the plaintiff’s claim.
The plaintiff argues that a similar conclusion should not be reached in this case, citing the more recent decision of the court in American Radiator & Stand. Sanitary Corp. v. United States, 162 Ct. Cl. 106, 318 F. 2d 915 (1963). In that case, the taxpayer had mentioned in three places on his 1949 tax return that he had certain amounts that were refundable due to the excess cost of replacing inventory involuntarily lost in prior years. This written component, when taken together with information available to a revenue agent, who had audited the taxpayer’s accounts and knew the precise amounts and years involved for the excess cost of replacing the lost inventory, was sufficient to conclude that “before the expiration of the three-year period, a responsible employee of the Internal Kevenue Service had ‘notice fairly advising the Commissioner of the nature of the taxpayer’s claim.’ ” 162 Ct. Cl. at 116, 318 F. 2d at 921. The plaintiff does not discuss the holding in Byron Weston, but contends that the decision in American Radiator established the new rule that an informal refund claim need only contain a written component (the 1949 tax return), and the knowledge of the revenue agent as to the specifics of the years and amounts in question in order to be valid. The taxpayer contends that both of these elements are present in the case now before the court since his attempt to take the deduction in 1968 constituted the written component which, when combined with information
The court’s opinion in American Radiator contains a lengthy analysis of the cases that had been decided up to 1963, which dealt with the same issue, including Byron Weston. Those decisions were relied upon by the court rather than distinguished or reversed by it. The distinctions between American Radiator and this case (or Byron Weston) are most clearly drawn by looking to the content of the written memorandum in each case. In American Radiator the taxpayer had noted on his 1949 tax return that he was due certain estimated refunds as the result of the excess costs incurred in replacing inventory lost in prior years. It was more than a simple attempt to take a deduction which was not allowed, as in this case and Byron Weston. The specific amounts and the years subject to the refund were not mentioned on the return, but were known to the IES agent handling the taxpayer’s audit, who expected formal refund claims to be filed. Therefore, the defendant was not misled by the absence of these items in the return itself. The crucial point was that the 1949 return made it clear, at that time, that the plaintiff was claiming credit for a tax refund. The same is not true in this case. Here, the plaintiff’s attempt to take the deduction in 1968 did not provide notice to the defendant that it was also seeking, in the alternative, a refund applicable to 1962 and 1963, although the IES may have known that this was likely. It has been held on numerous occasions that, simply because the IES has access to information that could make it think the taxpayer might desire to claim a refund, “the Internal Eevenue Service is not required to weigh circumstantial evidence in order to determine whether a taxpayer is asldng for a tax refund.” Barenfeld v. United States, 194 Ct. Cl. 903, 912, 442 F. 2d 371, 375 (1971); see also Fruehauf Cory. v. United States, 201 Ct. Cl. 366, 477 F. 2d 568 (1973); Commercial Solvents Corp. v. United States, 192 Ct. Cl. 339, 427 F. 2d 749, cert. denied, 400
For the above reasons, it is concluded that the taxpayer’s attempt to take the deduction in 1968 did not constitute an informal claim for refund. The taking of further evidence, as requested by the plaintiff, in order to determine precisely what the IES agents knew of the plaintiff’s claim up to April 15, 1969, is unnecessary once it is determined that the written memorandum of the claim (the 1968 tax return) was insufficient. One further argument raised by the plaintiff in opposing the defendant’s motion to dismiss appears to be an afterthought, considering the abbreviated treatment it received from both parties, but it should, nonetheless, be briefly discussed.
The difficulty with the taxpayer’s argument is that it ignores the statutory requirement that there be a “determination” within the meaning of the mitigation sections. Section 1313, which immediately follows the section upon which taxpayer relies, provides:
§ 1313. Definitions.
(a) Determination.
For purposes of this part, the term “determination” means—
(1) a decision by the Tax Court of a judgment, decree, or other order by any court of competent jurisdiction, which has become final;
(2) a closing agreement made under section 7121;
(3) a final disposition by the Secretary or his delegate of a claim for refund.
‡ ‡ $
(4) under regulations prescribed by the Secretary or his delegate, an agreement for purposes of this part signed by the Secretary or his delegate and by any person, relating to the liability of such person (or the person for whom he acts) in respect of a tax under this subtitle for any taxable period.
See also, Rev. Rul. 73-82, 1973 INT. EEV. BULL. NO. 7, at 36-37. None of the facts alleged by the taxpayer constitutes a determination with respect to the taxpayer’s 1968 return.
For all of the above reasons, the defendant’s motion to dismiss is granted. The plaintiff’s petition is dismissed.
The petition was amended to include the plaintiff’s former wife, Margery Kuelm (presently Mrs. David V. Uihlein), as a party plaintiff since tie 1962 and 1963 tax returns now under consideration were filed jointly by the named plaintiff and his then wife. For convenience, party-plaintiffs will be referred to in the singular.
Opinion amended per Order dated September 25,1973.