United States District Court, Southern District of New York
July 10, 2000
PHILIP W. KIRSH AND RONA KIRSH, PLAINTIFFS,
UNITED STATES OF AMERICA, DEFENDANT.
The opinion of the court was delivered by: Preska, District Judge.
MEMORANDUM and ORDER
Plaintiffs, Philip Kirsh and Rona Kirsh, seek a refund of
$50,590 claiming overpaid taxes from 1993, 1992 and 1991 due to
net operating loss ("NOL") carryback from 1994. The United States
has made a motion to dismiss for lack of subject matter
jurisdiction on the ground that plaintiffs failed to file a
timely formal or informal claim. For the following reasons,
defendant's motion is granted.
The following facts are not in dispute. Following the granting
of an extension by the Internal Revenue System ("IRS"),
plaintiffs' 1994 federal income tax return was due on October 15,
1995. (See Serpe Decl. Ex. 1, ¶ 5.) Plaintiffs filed their 1994
tax return in or about August 1996. (See id., ¶ 6.)
On or about November 17, 1997, plaintiffs filed Form 1045,
Application for Tentative Refund, for the 1994 tax year to claim
the net operating loss ("NOL") carryback to 1993, 1992 and 1991.
(See id., ¶ 7.) On December 11, 1997, the IRS denied
plaintiffs' claim for a refund because it had not been filed
within twelve months after the end of the year in which the NOL
carrybacks resulted. (See id., ¶ 8.) The IRS explained that
plaintiffs could file a Form 1040X, Amended U.S. Individual
Income Tax Return, for each of the years in which the NOL
carrybacks resulted, i.e., 1993, 1992 and 1991. (See id.) The
IRS also warned plaintiffs that the statutory limit for claims
based on the 1994 tax year was April 15, 1998.*fn1 (See id. at
Despite the IRS's warning, plaintiffs filed Form 1040X in or
about January 1999, and it was received by the IRS on February 6,
1999. (See id., ¶ 9.) The IRS denied this claim in a letter
dated April 21, 1999 stating that the Form 1040X was not timely
because plaintiffs had failed to file within the three-year
statute of limitations. (See id. at Ex. D.)
Plaintiffs appealed this disallowance contending that the
filing of Form 1045 in November 17, 1997 gave the IRS sufficient
and complete notice of plaintiffs' refund claim to constitute an
informal claim for a refund within the statute of limitations
period. (See id., ¶ 10.) The IRS denied the appeal. (See id.)
Plaintiffs then commenced this action.
I. Motion to Dismiss Standard
In considering a motion to dismiss under Rule 12(b)(1), I must
view the complaint in the light most favorable to the plaintiff.
See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40
L.Ed.2d 90 (1974); Yoder v. Orthomolecular Nutrition Inst.,
Inc., 751 F.2d 555, 562 (2d Cir. 1985). I must accept as true
the factual allegations stated in the complaint, see Zinermon v.
Burch, 494 U.S. 113, 118, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990),
and draw all reasonable inferences in favor of the plaintiff,
see Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 30
L.Ed.2d 652 (1972); Hertz Corp. v. City of New York,
1 F.3d 121, 125 (2d Cir. 1993). A motion to dismiss may be granted only
if it appears beyond doubt that the plaintiff can prove no set of
facts in support of her claim
which would entitle her to relief. See Conley v. Gibson,
355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Even under this
liberal standard, however, I find that plaintiffs' claim suffers
from deficiencies that mandate its dismissal.
II. Subject Matter Jurisdiction
It is well established that under the doctrine of sovereign
immunity, no person may sue the federal government absent its
consent to be sued. See F.D.I.C. v. Meyer, 510 U.S. 471, 114
S.Ct. 996, 127 L.Ed.2d 308 (1994); see also Morpurgo v. Bd. of
Higher Educ. of N.Y., 423 F. Supp. 704 (S.D.N.Y. 1976). In
consenting to be sued, the government may establish terms of its
consent. See United States v. Mitchell, 445 U.S. 535, 100 S.Ct.
1349, 63 L.Ed.2d 607 (1980). If the delineated terms are not met,
a court does not have jurisdiction over the action. See id. at
538, 100 S.Ct. 1349.
"Through 28 U.S.C. § 1346, Congress has broadly consented to
suits [seeking a refund of taxes allegedly erroneously assessed
or collected] against the U.S. in district courts." United
States v. Forma, 42 F.3d 759, 763 (2d Cir. 1994). Prior to
initiating an action in federal court pursuant to
28 U.S.C. § 1346, 26 U.S.C. § 7422(a) requires that a claim be "duly filed"
with the IRS.*fn2 See United States v. Felt & Tarrant Mfg.
Co., 283 U.S. 269, 51 S.Ct. 376, 75 L.Ed. 1025 (1931). "Duly
filed" has been defined as filing a claim within the statute of
limitations. See Rock v. United States, 279 F. Supp. 96, 98
(S.D.N.Y. 1968) ("It is elementary that an untimely claim is not
In addition to the above regulations, 26 U.S.C. § 6511(d)(2)
states that the limitation period on the allowance of refunds of
federal taxes based on an NOL carryback is "3 years after the
time prescribed by law for filing the return (including extension
thereof). . . ."*fn3
There can be little doubt that plaintiffs failed to "duly file"
a formal claim at the IRS for a refund. According to the
undisputed facts, plaintiffs were granted a six-month extension
to file their 1994 income tax returns. (See Serpe Decl. Ex. 1,
¶ 5.) Therefore, the deadline to file the Form 1040X as provided
by Section 6511(d)(2) would have been October 15, 1998. However,
plaintiffs concede that they filed Form 1040X in or about January
1999, more than three months later than the elapse of the
three-year statute of limitations. (See id. at Ex. D.) For this
reason, it is clear that plaintiffs failed to file a timely
formal claim for refund.
Acknowledging that they did not file a timely 1040X form,
plaintiffs claim that the filing of Form 1045 in or about
November 17, 1997 should be considered a timely informal claim
that would satisfy the statute of limitations provided by Section
6511(d)(2). (See Plaintiffs' Memorandum of Law in Opposition of
Motion to Dismiss at 2) (hereinafter "Pls.' Mem."). Case law and
regulatory statutes dictate that this cannot be so.
First, there is explicit language in both the regulations and
on the forms that clearly states that Form 1045 will not
constitute a claim for refund and that Form 1045 and Form 1040X
may not be interchanged. Specifically, Section 6411(a),
which provides the right to apply for a tentative carryback
adjustment (Form 1045), states, "an application under this
subsection shall not constitute a claim for credit or refund."
26 U.S.C. § 6411(a). Moreover, the Instructions for Form 1045 also
warn that "this application for a tentative carryback adjustment
is not a claim for credit or refund. . . . But you may file a
regular claim for credit or refund before the limitation period
expires, as explained below under Form 1040X or Other Amended
Return." (See Serpe Decl. Ex. 5.)
Furthermore, case law firmly supports the notion that Form 1045
does not provide timely informal notice for Form 1040X. In Rock
v. United States, 279 F. Supp. 96 (S.D.N.Y. 1968), the court held
that "the differences between an application for a tentative
carryback adjustment [Form 1045] and a claim for a refund [Form
1040X] are not merely formal; they are substantive, as the
statute and regulations as well as Form 1045 itself so state."
Id. at 99. Moreover, plaintiffs do not cite any case law that
explicitly deems Form 1045 an informal claim for a refund.
Plaintiffs would like me to disregard both case law and clear
regulatory language in favor of an argument that rests on
congressional intent as expressed in the legislative history of
Section 6411 and recent technological advances.
First, plaintiffs claim that the Rock Court did not consider
congressional intent of Section 6411. (See Pls.' Mem. at 4.)
However, it is a well-established principle that a court need not
look to legislative history if the statutory language is clear
and unambiguous. See Robinson v. Shell Oil Co., 519 U.S. 337,
340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) ("[A court's] first
step in interpreting a statute is to determine whether the
language at issue has a plain and unambiguous meaning with regard
to the particular dispute in the case, and inquiry must cease if
the statutory language is unambiguous and the statutory scheme is
coherent and consistent. . . ."); see also Disabled in Action of
Metro. N.Y. v. Hammons, 202 F.3d 110, 119 (2d Cir. 2000) ("In
construing the terms of a statute, we look first to the language
itself."); Beckett v. Prudential Ins. Co., 893 F. Supp. 234, 238
(S.D.N.Y. 1995) ("[W]here the statutory language is unambiguous,
[a] court must do no more and no less than apply language as
written."). In the instant case, the language in Section 6411 is
both clear and unambiguous in setting forth the application's
requirements and deadlines. Accordingly, I may not consider the
legislative history in interpreting the statute.
Plaintiffs next contend that to grant Defendant's motion to
dismiss in this action would "eviscerate" the Supreme Court's
holding in United States v. Kales, 314 U.S. 186, 62 S.Ct. 214,
86 L.Ed. 132 (1941). In Kales, plaintiff wrote a letter
regarding an excessive tax assessment to the tax collector and
the IRS Commissioner. See id. at 190, 62 S.Ct. 214. Plaintiff
later made a formal claim for refund of those excessive taxes,
but the statute of limitations had already run. See id. at 191,
62 S.Ct. 214. The Court held that the letter, which was written
within the statute of limitations, acted as informal timely
notice to the IRS and, therefore, plaintiff's claim for refund
was not barred. See id. at 196, 62 S.Ct. 214. The Court noted
that "neither the original nor the amended claim has ever been
rejected as inadequate. . . . There has been no objection to the
claim on the ground that it was informal, deficient in its
content, or untimely." Id. The Court continued that
"respondent's amended formal claim of September 11, 1928 only
made more specific the allegations of her earlier informal claim.
. . ." Id. at 195, 62 S.Ct. 214.
However, Kales can and must be distinguished from the instant
case. Here, the IRS clearly rejected plaintiffs' original Form
1045 claim on the ground that it was untimely. (See Serpe Decl.
Ex. 1, ¶ 8.) Furthermore, since Form 1045 and Form 1040X are
separate and distinct forms, plaintiffs cannot claim that the
later formal claim was simply making "more specific"
the earlier informal claim. In fact, the instructions for Form
1045 explicitly so state.*fn4
Finally, plaintiffs argue that this court should not be bound
by Rock because of the advances in computerization that now
allow "any agent [to] access information about a particular
taxpayer." (Pls.' Mem. at 4.) While computerization at the IRS is
laudable, it is not relevant to the particulars of this case and
does not mandate that explicit statutory language and relevant
case law be ignored.
For the reasons stated above, the defendant's motion to dismiss
The Clerk of the Court shall mark this action closed and all
pending motions deemed as moot.