United States District Court, Eastern District of New York
February 15, 1991
DORIS JOHNSEN, ET AL., PLAINTIFFS,
UNITED STATES OF AMERICA, DEFENDANT.
The opinion of the court was delivered by: Dearie, District Judge.
MEMORANDUM AND ORDER
The government has moved to dismiss plaintiffs' action for a
tax refund pursuant to 26 U.S.C. § 6511(b)(2)(A). For the
reasons that follow, defendant's motion is DENIED.
In 1983, the Multzmans overpaid approximately twenty-five
thousand dollars in taxes to the government. A completed tax
return for that year remained unsigned in their home.
For some time prior to 1983, the Multzmans were extremely
eccentric, spoke to nonexistent persons and lived under
hazardous conditions despite their healthy financial status. In
early 1985, Ethel Multzman was diagnosed to be suffering from
senile psychosis. The following year, her husband was
adjudicated incompetent, and soon thereafter he passed away. In
1987, Mrs. Multzman and her adult son were also adjudicated
incompetents. The government does not dispute, for purposes of
this motion, that the Multzmans were incompetent in 1983 and
that they overpaid their taxes that year. In addition, the
parties have reached agreement on the exact amount of the
Plaintiff Doris Johnsen was appointed Committee of the Person
and Property of Ethel Multzman in February of 1987. As soon as
she discovered that a prepared 1983 return had never been
filed, she immediately filed an administrative claim for a
refund which was summarily denied in June of that year,
presumably on timeliness grounds. In June of 1989, Ms. Johnsen
commenced this action for a refund of the 1983 overpayment
pursuant to 26 U.S.C. § 6511(b)(2)(A).
For the reasons discussed below, the government's motion to
dismiss is denied.
Federal courts have generally held that mental incompetence
does not toll statutes of limitations in suits against the
government. E.g., Barren v. United States, 839 F.2d 987, 992
(3d Cir. 1988); cert. denied, 488 U.S. 827, 109 S.Ct. 79, 102
L.Ed.2d 55 (1988). Sovereign immunity concerns have
traditionally generated this strict adherence to time
limitations in actions against the government. Lopez v.
Citibank, N.A., 808 F.2d 905, 906 (1st Cir. 1987). However,
federal statutes of limitations in suits between private
litigants have been subject to equitable tolling due to
considerations such as mental incompetence. Irwin v. Veterans
Admin., ___ U.S. ___, 111 S.Ct. 453, 457, 112 L.Ed.2d 435
(1990); e.g., Thomas v. Humfield, 916 F.2d 1032, 1035 (5th Cir.
In its recent Irwin decision, the Supreme Court held that the
same equitable tolling principles applicable to suits between
private parties should also apply to suits against the
government. The Court reasoned that
[o]nce Congress has made such a waiver [of
sovereign immunity], we think that making the rule
of equitable tolling applicable to suits against
the Government, in the same way that it is
applicable to private suits, amounts to little, if
any, broadening of the congressional waiver. Such
a principle is likely to be a realistic assessment
of legislative intent as well as a practically
useful principle of interpretation.
Id. 111 S.Ct. at 457.*fn1
The legislative history of Section
6511(b)(2)(A) is absolutely devoid of any indication that
Congress intended to preclude such equitable tolling in tax
refund actions. H.R.Rep. No. 1337, 83rd Cong., 2 Sess.,
reprinted in 1954 U.S. Code Cong. & Admin. News 4017, 4563;
S.Rep. No. 1622, 83rd Cong., 2 Sess., reprinted in 1954
U.S. Code Cong. & Admin. News 5235. Accordingly, the Court must
now apply the principles enunciated in suits between private
Equitable tolling for mental incompetence is analyzed on a
case-by-case basis. Lopez, 808 F.2d at 907. The Second Circuit
has acknowledged that "cases occasionally arise where the
equities in favor of tolling are `so great that deference to
the agency's judgment is inappropriate'." New York v. Sullivan,
906 F.2d 910, 917 (2d Cir. 1990). This case presents such a
Plaintiffs have not simply "failed to exercise due diligence"
in filing for a tax refund within the statutory period.
Irwin, 111 S.Ct. at 458. As mental incompetents, the Multzmans
made numerous excess payments to the government during 1983 and
yet failed to file a return for that year although there is
clear evidence that a return was in fact prepared.
The government concedes that plaintiffs are due a sizeable
refund. Indeed there is nothing in the record before the Court
that even suggests that the equities do not fall decidedly in
plaintiffs' favor. The government attempts to distinguish
Irwin by arguing that it only applies to suits against the
government, and therefore equitable tolling will not revive an
administrative claim. This rather predictable position may be
of some comfort to the Internal Revenue Service and other
governmental institutions, but it provides no safe harbor for
the government here where the equities so clearly invite
favorable consideration of the recognized merits of plaintiffs'
Accordingly, under the authority of Irwin and in light of the
facts presented by the parties, the Court concludes that the
statute of limitations tolled until the appointment of
plaintiff Johnsen. Ms. Johnsen filed the administrative claim
immediately following her appointment, and the action was filed
within three years of the denial of that claim. The motion to
dismiss is denied.