Christian Coalition of Florida, Inc. v. United States ( 2011 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-14630 NOVEMBER 15, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 5:09-cv-00144-WTH-GRJ
CHRISTIAN COALITION OF FLORIDA, INC.,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA,
lllllllllllllllllllllllllllllllllllllll lDefendant - Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(November 15, 2011)
Before MARCUS, WILSON and COX, Circuit Judges.
MARCUS, Circuit Judge:
Christian Coalition of Fla. (“CC-FL”) appeals the district court’s dismissal
of its tax refund suit for mootness. Shortly after the litigation began, the Internal
Revenue Service (“IRS”) refunded the disputed taxes in full. CC-FL claims,
however, that a live controversy still exists because it is also seeking declaratory
and injunctive relief in order to obtain a favorable determination of its tax-exempt
status. CC-FL claims that the failure of the IRS to recognize CC-FL as a tax-
exempt organization has collateral consequences that prevent the tax refund from
rendering this case moot.
After thorough review, we AFFIRM the judgment of the district court.
Filing a claim for a tax refund suit is not simply a procedural hurdle that, once
leapt over, allows a party to seek other forward-looking relief against the IRS after
the refund has been granted. Without a live refund claim, there is no way to
distinguish this case from the kind of pre-enforcement suits that Congress, through
the Anti-Injunction Act and the federal tax exemption to the Declaratory Judgment
Act, has expressly forbidden taxpayers from bringing.
I.
CC-FL is a Florida non-profit corporation, founded in 1990. According to
its complaint, CC-FL is an “advocacy organization” that “teaches concern for the
sanctity of life, traditional family values, an economic system which fosters
individual self-reliance, and faith in God.” CC-FL engages in a substantial
amount of lobbying and “regularly publishes voter guides and legislative
2
scorecards.”
Because of its lobbying activity, CC-FL could not seek tax exemption as a
public charity under 26 U.S.C. § 501(c)(3). Instead, on July 19, 1993, CC-FL
applied to the IRS for recognition of tax exempt status as a social welfare
organization under 26 U.S.C. § 501(c)(4) and 26 C.F.R. § 1.501(a)-1.1 Section
501(c)(4) (together with section 501(a)) exempts from taxation non-profit
organizations “operated exclusively for the promotion of social welfare.” Unlike
public charities, social welfare organizations may engage in lobbying and other
forms of advocacy. They are not permitted, however, to engage in “direct or
indirect participation or intervention in political campaigns on behalf of or in
opposition to any candidate for public office.” 26 C.F.R. § 1.501(c)(4)-1(a)(2)(ii).
On July 25, 2000, the IRS issued a proposed determination letter denying
CC-FL’s application. On October 5, 2000, CC-FL filed a letter with the IRS
protesting and appealing the proposed determination. Although the IRS and CC-
FL held a conference on May 30, 2002 to discuss the proposed determination
letter, the matter was put on hold while the IRS and The Christian Coalition
1
An organization cannot obtain tax exempt status merely by conducting itself in
accordance with the relevant provisions of the Internal Revenue Code; rather, “[i]n order to
establish its exemption, it is necessary that every such organization claiming exemption file an
application” with the IRS. 26 C.F.R. § 1.501(a)-1(a)(2).
3
International, an affiliated but separate legal entity, resolved a similar dispute in
litigation then pending in the United States District Court for the Eastern District
of Virginia.
After that litigation concluded, the IRS issued, via a letter dated July 31,
2008, its final determination that CC-FL did not qualify for tax exempt status
under section 501(c)(4). The IRS stated: “We made this determination for the
following reasons: You were not primarily engaged in activities that promote
social welfare. Your activities primarily constituted direct and indirect
participation in political campaigns on behalf of, or in opposition to, candidates
for public office.” The final determination letter also incorporated in full the
earlier proposed determination letter, which discussed at greater length what the
IRS viewed as CC-FL’s political activities, including publishing voter guides,
releasing legislative scorecards right before elections, and conducting grassroots
political activism seminars. The proposed determination letter concluded: “The
emphasis throughout your materials is on electing to office ‘family friendly’
people in order to impact legislation and policy as insiders. The overwhelming
majority of the evidence in the administrative record, and thus the facts and
circumstances in this case, denotes an organization that is intent upon intervening
in political campaigns.”
4
During the lengthy pendency of its application, CC-FL had filed non-profit
information returns, not corporate tax returns, with the IRS. In light of the adverse
determination, the IRS instructed CC-FL to file corporate tax returns for all of the
tax years in question within 30 days of the final determination letter. CC-FL did
so, filing tax returns and making full payments for tax years 1991, 1994-2000, and
2005-2006 on August 27, 2008. CC-FL’s tax liability for these years was quite
small, ranging from $16 (in 1994) to $48 (in 1997).2
On September 25, 2008, CC-FL then filed amended tax returns requesting a
full refund for these tax years on the ground that it is a tax exempt social welfare
organization under section 501(c)(4). By statute, a taxpayer must wait six months
before bringing a tax refund suit. 26 U.S.C. § 6532(a)(1). Within this statutory
window, on December 1, 2008, the IRS refunded CC-FL its tax amounts, plus
statutory interest, for tax years 2005 and 2006, totaling $68.68. The IRS did not
state its reasons for granting the refund.
The IRS did not issue a refund or make a determination within the six
2
In its briefing, CC-FL explains why its tax liability was so small:
Most of CC-FL’s operating budget is acquired in the form of non-taxable
gifts excluded from its gross income pursuant to [I.R.C.] section 102.
Consequently, CC-FL often has very little, if any, tax liability. For
example, for the suit years, CC-FL reported gross receipts in excess of
$2,009,700. Of that amount, approximately $1,700 dollars could properly
be classified as taxable income, resulting in a tax liability of $261.
5
month statutory period as to CC-FL’s claim for the remaining tax years 1991 and
1994-2000. Accordingly, on April 3, 2009, CC-FL filed the refund suit at issue in
the United States District Court for the Middle District of Florida, seeking a full
refund of $261 for those years. CC-FL also sought a declaration that it qualifies as
a tax exempt organization under section 501(c)(4), an injunction prohibiting the
IRS from revoking CC-FL’s tax exempt status, and a declaration that 26 U.S.C. §
501(c)(4) and the accompanying regulations 26 C.F.R. §§ 1.504(c)(3)-1 and
1.504(c)(4)-1 are unconstitutional, both facially and as-applied to CC-FL, for
overbreadth and vagueness.
Shortly after the litigation was filed, the IRS began refunding CC-FL its
claimed tax amounts.3 The IRS determined that, under 26 U.S.C. §§ 6501(a) and
6501(g)(2),4 the three year statute of limitations on assessing and collecting taxes
3
There is some dispute about the timing of these refunds. The IRS asserts that almost all
of the claimed taxes (with the exception of tax year 1995) were refunded or credited to CC-FL
before CC-FL filed suit on April 3, 2009. CC-FL says that it did not receive notice of any of
these refunds until after it commenced suit. Ultimately, this dispute is of little relevance here. It
is undisputed that at least some refunds had not yet been granted at the time CC-FL filed suit, and
it is similarly undisputed, therefore, that CC-FL had a live refund claim at the time the suit was
filed. And the IRS does not contend that the case was never a live one; rather, it argues only that
the case was later rendered moot by its full refund of the claimed taxes.
4
Section 6501(a) provides that “the amount of any tax imposed by this title shall be
assessed within 3 years after the return was filed.” Section 6501(g)(2) provides that if a taxpayer
has a good faith basis for believing it is a tax exempt organization and “files a return as such,”
then this earlier return is the applicable one for purposes of section 6501(a), notwithstanding a
later adverse IRS determination. In other words, for purposes of this case, CC-FL’s non-profit
information returns that it filed for each of the years 1991 and 1994-2000 -- not its later 2008
6
had run for all of the tax years. Accordingly, the IRS treated CC-FL’s tax
payments for those years as overpayments under 26 U.S.C. § 6401(a).5 Pursuant
to 26 U.S.C. § 6402(a),6 the IRS first credited CC-FL’s payments towards an
existing employment tax liability for 2006, and then refunded the rest, sending the
final refund check to CC-FL on August 11, 2009.
On August 17, 2009, the IRS moved to dismiss the refund suit for lack of
subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1). The IRS claimed that
the refund suit was rendered moot because the refunds sought by CC-FL had been
granted in full. The district court agreed, entering an order granting the
government’s motion and dismissing the complaint with prejudice on August 3,
2010, and entering a separate judgment the following day.
II.
“A district court’s decision to grant a motion to dismiss for lack of subject
matter jurisdiction pursuant to Rule 12(b)(1) is a question of law we review de
corporate tax return -- triggered the three year statute of limitations. The taxes were assessed and
collected in 2008, well outside the statute of limitations for all of the tax years at issue.
5
Section 6401(a) provides: “The term ‘overpayment’ includes that part of the amount of
the payment of any internal revenue tax which is assessed or collected after the expiration of the
period of limitation properly applicable thereto.”
6
Section 6402(a) provides: “In the case of any overpayment, the Secretary, within the
applicable period of limitations, may credit the amount of such overpayment, including any
interest allowed thereon, against any liability in respect of an internal revenue tax on the part of
the person who made the overpayment and shall . . . refund any balance to such person.”
7
novo.” Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009).
Similarly, “[w]hether a case is moot is a question of law that we review de novo.”
Sheely v. MRI Radiology Network, P.A., 505 F.3d 1173, 1182 (11th Cir. 2007).
A.
We begin with a brief discussion of the relevant jurisdictional statutes. The
United States, as a sovereign entity, is immune from suit unless it consents to be
sued. United States v. Dalm, 494 U.S. 596, 608 (1990); United States v. Testan,
424 U.S. 392, 399 (1976); United States v. Sherwood, 312 U.S. 584, 586 (1941).
“[T]he terms of its consent to be sued in any court,” as expressed by statute,
“define that court’s jurisdiction to entertain the suit.” Sherwood, 312 U.S. at 586.
Accordingly, the terms of the statute or statutes waiving immunity are construed
strictly, and courts may only entertain suits that are in full accord with such
statutes. See Soriano v. United States, 352 U.S. 270, 276 (1957) (“[L]imitations
and conditions upon which the Government consents to be sued must be strictly
observed and exceptions thereto are not to be implied.” (citing Sherwood, 312
U.S. at 590-91)); accord McMaster v. United States, 177 F.3d 936, 939 (11th Cir.
1999).
The primary jurisdictional statute governing judicial review of federal tax
decisions is 28 U.S.C. § 1346(a). It provides, in relevant part:
8
The district courts shall have original jurisdiction, concurrent
with the United States Court of Federal Claims, of: (1) Any civil
action against the United States for the recovery of any
internal-revenue tax alleged to have been erroneously or illegally
assessed or collected, or any penalty claimed to have been
collected without authority or any sum alleged to have been
excessive or in any manner wrongfully collected under the
internal-revenue laws[.]
28 U.S.C. § 1346(a). Title 26 U.S.C. § 7422, which governs civil actions for tax
refunds, requires a taxpayer to first file a claim for a refund or credit with the IRS
before he may commence a tax refund suit. See 26 U.S.C. § 7422(a). And 26
U.S.C. § 6532(a)(1) provides that a taxpayer may not bring a suit “under section
7422(a) for the recovery of any internal revenue tax, penalty, or other sum . . .
before the expiration of 6 months from the date of filing the claim required under
such section.”
Aside from the statutes describing the affirmative requirements for bringing
a tax refund suit, Congress has also expressly excluded from judicial review other
types of federal tax disputes. The Declaratory Judgment Act (“DJA”), 28 U.S.C. §
2201, which generally authorizes courts to issue declaratory judgments as a
remedy, excludes federal tax matters from its remedial scheme.7 See Raulerson v.
7
The Declaratory Judgment Act provides:
In a case of actual controversy within its jurisdiction, except with respect to
Federal taxes other than actions brought under section 7428 of the Internal
Revenue Code of 1986, a proceeding under section 505 or 1146 of title 11, or in
9
United States, 786 F.2d 1090, 1093 n.7 (11th Cir. 1986) (“Th[e DJA] proscribes
judicial declaration of the rights and legal relations of any interested parties in
disputes involving federal taxes.” (internal quotation marks omitted)). And the
Anti-Injunction Act (“AIA”), 26 U.S.C. § 7421, provides that, except for suits
brought under a handful of enumerated statutory exceptions, “no suit for the
purpose of restraining the assessment or collection of any tax shall be maintained
in any court by any person, whether or not such person is the person against whom
such tax was assessed.” 26 U.S.C. § 7421(a).
Taking these provisions together, it is clear that, with certain exceptions not
applicable here, judicial review of IRS determinations is largely circumscribed to
entertaining suits for the refund of already-paid taxes. See Bob Jones Univ. v.
Simon, 416 U.S. 725, 731-32 & n.7 (1974) (noting the “congressional antipathy
for premature interference with the assessment or collection of any federal tax”
and that the “pressures operating on organizations . . . to seek injunctive relief
any civil action involving an antidumping or countervailing duty proceeding
regarding a class or kind of merchandise of a free trade area country (as defined in
section 516A(f)(10) of the Tariff Act of 1930), as determined by the administering
authority, any court of the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of any interested party
seeking such declaration, whether or not further relief is or could be sought. Any
such declaration shall have the force and effect of a final judgment or decree and
shall be reviewable as such.
28 U.S.C. § 2201(a) (emphasis added).
10
against the Service . . . conflict directly with a congressional prohibition of pre-
enforcement tax suits”). Against the backdrop of sovereign immunity, these
statutes prescribe the terms of the United States’ limited consent to be sued
regarding federal tax matters, and accordingly “define th[e] court’s jurisdiction to
entertain the suit.” Sherwood, 312 U.S. at 586.
B.
“Article III of the Constitution limits the jurisdiction of federal courts to
‘cases’ and ‘controversies.’” Socialist Workers Party v. Leahy, 145 F.3d 1240,
1244 (11th Cir. 1998). As we have explained, there are “three strands of
justiciability doctrine -- standing, ripeness, and mootness -- that go to the heart of
the Article III case or controversy requirement.” Harrell v. The Fla. Bar, 608 F.3d
1241, 1247 (11th Cir. 2010) (internal quotation marks and alterations omitted).
With regard to the third strand, the Supreme Court has made clear that “a federal
court has no authority ‘to give opinions upon moot questions or abstract
propositions, or to declare principles or rules of law which cannot affect the matter
in issue in the case before it.’” Church of Scientology of Cal. v. United States,
506 U.S. 9, 12 (1992) (quoting Mills v. Green, 159 U.S. 651, 653 (1895)); see
Harrell, 608 F.3d at 1265. As a panel of this Court has put it, “[a]n issue is moot
when it no longer presents a live controversy with respect to which the court can
11
give meaningful relief.” Friends of Everglades v. S. Fla. Water Mgmt. Dist., 570
F.3d 1210, 1216 (11th Cir. 2009) (internal quotation marks omitted). Moreover,
we do not determine questions of justiciability simply by looking to the state of
affairs at the time the suit was filed. Rather, the Supreme Court has made clear
that the controversy “must be extant at all stages of review, not merely at the time
the complaint is filed.” Preiser v. Newkirk, 422 U.S. 395, 401 (1975) (quoting
Steffel v. Thompson, 415 U.S. 452, 459 n.10 (1974)).
1.
CC-FL contends that the district court erred in concluding that CC-FL could
not seek declaratory and injunctive relief after being granted a full refund because
of the Anti-Injunction Act and the tax exception to the Declaratory Judgment Act.
CC-FL claims those statutes do not apply in post-enforcement refund suits (even
when there is no longer a live refund component to the suit), as opposed to pre-
enforcement suits filed before the assessment or collection of any tax. CC-FL’s
theory is that, having jumped through all of the congressionally-mandated hoops
by properly filing a refund claim for $261 to unlock the courthouse doors, it may
now seek the relief it wanted all along -- declaratory and injunctive relief -- even
when the $261 is no longer at issue.
The government responds that this case has become moot, noting that the
12
tax refund relief CC-FL seeks has been granted, and that there is no longer any
amount at issue for the suit years. The government points out that it was required
by statute to credit or refund the taxes at issue because the three-year collection
and assessment period had run. The government also notes that, as a general
matter, a refund suit for particular tax years decides only the tax liability for those
years, and not for future years. The government contends that CC-FL cannot
maintain this action simply as a vehicle to preemptively obtain favorable tax status
for future years. Forward-looking claims of this kind, the government argues, are
barred by the Anti-Injunction Act and the tax exception to the Declaratory
Judgment Act.
The government has the better of the argument. Although neither the
Supreme Court nor this Circuit has squarely addressed whether declaratory and
injunctive relief are available in the context of a tax refund suit, the leading case
on the application of the Anti-Injunction Act is Bob Jones Univ. v. Simon, 416
U.S. 725 (1974). In Bob Jones, the Supreme Court made clear that the AIA
prohibits courts from entertaining pre-enforcement suits challenging the IRS’s
assessment or collection of federal taxes.8 The Court held that filing these
8
While the Supreme Court did not directly apply the DJA, it observed: “There is no
dispute, however, that the federal tax exception to the Declaratory Judgment Act is at least as
broad as the Anti-Injunction Act. Because we hold that the instant case is barred by the latter
13
forward-looking suits, as opposed to paying the taxes arising from the dispute,
then claiming a refund, was contrary to the clear terms of the AIA preventing
courts from entertaining any “suit for the purpose of restraining the assessment or
collection of any tax.” Id. at 736 (quoting 26 U.S.C. § 7421(a)). The Court noted
that although the AIA “apparently has no recorded legislative history,” id., its
“principal purpose” is “the protection of the Government’s need to assess and
collect taxes as expeditiously as possible with a minimum of preenforcement
judicial interference, ‘and to require that the legal right to the disputed sums be
determined in a suit for refund.’” Id. at 736-37 (quoting Enochs v. Williams
Packing and Navigation Co., 370 U.S. 1, 7 (1962)).
The facts and procedural posture of Bob Jones are instructive. Bob Jones
University, located in Greenville, South Carolina, is a private Christian university.
See id. at 734-35. At the time of the Supreme Court’s decision, the University
refused to admit African-Americans as students and prohibited its students from
interracial dating. Id. at 735. Although the University had been granted tax-
exempt status back in 1942 under a predecessor of what is now 26 U.S.C. §
501(c)(3), in 1970 the IRS announced that it would no longer allow tax-exempt
provision, there is no occasion to resolve whether the former is even more preclusive.” Bob
Jones, 416 U.S. at 732 n.7.
14
status for schools maintaining racially discriminatory admissions policies.9 Id.
Before the IRS could take official action, Bob Jones University filed suit seeking
declaratory and injunctive relief to prevent the IRS from revoking the University’s
tax-exempt status.
The Supreme Court recognized the substantial consequences revocation of
tax-exempt status can have on a 501(c)(3) organization and the powerful
incentives such organizations have to bring suits seeking declaratory and
injunctive relief. Id. at 731. Nonetheless, the Supreme Court recognized that
these “pressures operating on organizations facing revocation of § 501(c)(3) status
to seek injunctive relief against the Service pending judicial review of the
proposed action conflict directly with a congressional prohibition of such
pre-enforcement tax suits.” Id. The Supreme Court went on to observe that the
University could obtain review by paying income or employment taxes in full, and
then bringing a suit for a refund. Id. at 746-47. The Court conceded that the
9
Title 26 U.S.C. § 501(c)(3) is the provision of the Internal Revenue Code that grants
tax-exempt status to public charities. Notably, donations to 501(c)(3) organizations are tax-
deductible, unlike donations to 501(c)(4) organizations (the section at issue in this case).
Accordingly, revocation of 501(c)(3) status for a charity “is likely to result in serious damage to a
charitable organization,” because “[m]any contributors simply will not make donations to an
organization that does not appear on the Cumulative List [the IRS’ official list of approved
501(c)(3) organizations].” Bob Jones, 416 U.S. at 730. Unless they have a strong attachment to
the organization in question, individuals seeking to make tax-deductible charitable donations will
simply divert their largesse elsewhere in the event an organization loses its 501(c)(3) status.
15
government’s interest in protecting the administration of the federal tax system
from judicial interference can often lead to imperfect and harsh results for an
organization that has a dispute with the IRS:
We do not say that these avenues of review are the best that can
be devised. They present serious problems of delay, during which
the flow of donations to an organization will be impaired and in
some cases perhaps even terminated. But, as the Service notes,
some delay may be an inevitable consequence of the fact that
disputes between the Service and a party challenging the Service's
actions are not susceptible of instant resolution through litigation.
And although the congressional restriction to postenforcement
review may place an organization claiming tax-exempt status in
a precarious financial position, the problems presented do not rise
to the level of constitutional infirmities, in light of the powerful
governmental interests in protecting the administration of the tax
system from premature judicial interference, and of the
opportunities for review that are available.
Id. at 747-48 (citations omitted).
Finally, in a footnote on which CC-FL heavily relies, the Supreme Court
emphasized that the University did not bring its case as a refund action. The Court
stated that “we have no occasion to decide whether the Service is correct in
asserting that a district court may not issue an injunction in such a suit, but is
restricted in any tax case to the issuance of money judgments against the United
States.” Id. at 748 n.22. The Court also noted that “there would be serious
question about the reasonableness of a system that forced a § 501(c)(3)
16
organization to bring a series of backward-looking refund suits in order to
establish repeatedly the legality of its claim to tax-exempt status and that
precluded such an organization from obtaining prospective relief even though it
utilized an avenue of review mandated by Congress.” Id.
CC-FL attempts to distinguish Bob Jones by claiming that the AIA and DJA
only apply to suits seeking purely declaratory and injunctive relief, filed before
any tax was assessed or collected. CC-FL argues that this case is different,
because it met all of the jurisdictional and statutory requirements for a refund suit,
and that this case falls into the scenario expressly left unresolved by the Supreme
Court in Bob Jones: a tax refund suit in which the claimant also seeks declaratory
and injunctive relief.
Absent a live refund claim, however, CC-FL’s attempt to distinguish this
case from Bob Jones is unavailing. While CC-FL wanted to obtain its refund on
the most favorable grounds possible, a refund is a refund, and the IRS returned all
of the disputed taxes shortly after this litigation began. We need not decide today
the still-unresolved issue of whether, in a live refund suit, a court may also award
declaratory and injunctive relief. It is enough to say that, regardless of this case’s
origins as a tax refund suit, absent any live refund component, the district correctly
concluded that it was without jurisdiction to entertain a suit containing solely
17
forward-looking claims seeking declaratory and injunctive relief from the IRS.
These types of suits are expressly proscribed by the DJA and AIA.
The congressional response to Bob Jones is also instructive, and favors the
government’s position here. Congress recognized the potential harshness of the
Supreme Court’s holding for 501(c)(3) charities that might lose virtually all of
their donations, and responded to the “serious question” raised by forcing
501(c)(3) charities to repeatedly file backward-looking refund suits. Accordingly,
in 1976, Congress enacted 26 U.S.C. § 7428, which, in relevant part, permits the
United States Tax Court, the United States Court of Federal Claims, or the United
States District Court for the District of Columbia to entertain declaratory judgment
actions “with respect to the initial qualification or continuing qualification of an
organization as an organization described in section 501(c)(3).” 26 U.S.C. §
7428(a); see Tax Reform Act of 1976, Pub. L. No. 94-455, § 1306, 90 Stat. 1520
(1976).10
Notably, however, Congress did not enact any exception to the Declaratory
Judgment Act or Anti-Injunction Act for organizations seeking tax-exempt status
under other provisions of section 501(c), including for organizations like CC-FL
10
In this vein, Congress also amended the DJA, 28 U.S.C. § 2201, to carve out an
exception (to the broader federal tax exception) for suits brought under 26 U.S.C. § 7428.
18
seeking tax-exempt status as a social welfare organization under section 501(c)(4).
We find this distinction meaningful, and decline to read additional remedies into
the legislative scheme chosen by Congress. “Where Congress has provided a
comprehensive statutory scheme of remedies, as it did here, the interpretive canon
of expressio unius est exclusio alterius applies.” Christ v. Beneficial Corp., 547
F.3d 1292, 1298 (11th Cir. 2008); accord Shotz v. City of Plantation, Fla., 344
F.3d 1161, 1171 n.15 (11th Cir. 2003). The principle of expressio unius simply
says that when a legislature has enumerated a list or series of related items, the
legislature intended to exclude similar items not specifically included in the list.
See United States v. Castro, 837 F.2d 441, 442 (11th Cir. 1988) (“A general guide
to statutory construction states that the mention of one thing implies the exclusion
of another; expressio unius est exclusio alterius.”) (internal quotation marks
omitted). Thus, it is clear that Congress has granted organizations claiming
501(c)(4) tax-exempt status fewer avenues for judicial relief than those
organizations seeking 501(c)(3) status.
2.
CC-FL also contends that the case is not moot because it seeks more than
the mere refund of $261 in federal taxes, and that collateral consequences result
from the failure of the IRS to issue a favorable determination letter. CC-FL lists
19
three primary consequences that, it claims, warrant further relief: (1) “CC-FL is
deprived of the advance public recognition of its exempt status for future tax
years,” and must instead continue to file federal corporate tax returns; (2) “donors
are less likely to contribute to an organization treated as a for-profit corporation by
the [IRS] rather than one recognized as exempt from federal income taxes”; and
(3) CC-FL will have to pay state taxes because “Florida state tax liability is
controlled by its federal tax status.” See Fla. Admin. Code r. 12-12C-
1.022(1)(e).11
We are not persuaded. These consequences do not allow us to carve out an
exception to the unambiguous prohibitions found in the Anti-Injunction Act and
Declaratory Judgment Act. In the first place, we have no power to rewrite the
language of these statutes. United States v. Blue Cross and Blue Shield of Ala.,
Inc., 156 F.3d 1098, 1111 (11th Cir. 1998) (“When the language of a statute is
11
Fla. Admin. Code r. 12-12C-1.022(1)(e) provides, in relevant part:
Any nonprofit or other tax-exempt organization, including a private
foundation, which is exempt from federal income tax under Section
501(a), I.R.C., and is described in Section 501(c), I.R.C., is required to file
a Form F-1120 [Florida corporate income tax return] only when such
organization has “unrelated trade or business taxable income,” as
determined under Section 512, I.R.C., or is filing a Form 990T with the
Internal Revenue Service.
(emphasis added). In other words, as a general matter, organizations recognized by the IRS as
tax-exempt do not have to file state corporate tax returns in Florida.
20
unambiguous, we are bound to give it its plain meaning . . . .”); see also Bob
Jones, 416 U.S. at 750 (“Congress . . . is the appropriate body to weigh the
relevant, policy-laden considerations” of permitting not-for-profit organizations to
obtain preventative injunctive relief against the IRS) (emphasis added).
Moreover, CC-FL’s arguments prove far too much. As for CC-FL’s future
federal and state tax liabilities, if those were sufficient to permit the district court
to retain jurisdiction over the suit, then the limitations found in the Anti-Injunction
Act and Declaratory Judgment Act would be rendered meaningless. Any taxpayer
denied tax-exempt status will have to pay federal and state taxes going forward. If
we were to adopt the rule urged by CC-FL, then all adverse IRS determinations
regarding an organization’s claim to tax-exempt status would be susceptible to
challenge in federal district court.
The Supreme Court’s discussion in Bob Jones also highlights the weakness
of CC-FL’s claim that it would suffer reduced donations if denied declaratory or
injunctive relief. Donations to 501(c)(3) charities -- unlike those to 501(c)(4)
organizations that engage in lobbying activity -- are generally tax deductible, see
26 U.S.C. § 170, meaning that revocation of an organization’s 501(c)(3) status will
likely result in a massive drop in donations to that organization, as donors seeking
favorable tax treatment make contributions elsewhere. Presumably recognizing
21
this distinction, CC-FL instead says that donors will have more “peace of mind” in
donating to a 501(c)(4) organization because those potential donors can rest
assured that the organization will not use those donations for the “private
inurement” of its members. See 26 U.S.C. § 501(c)(4)(B). But if the severe
consequences of losing tax exempt status for a 501(c)(3) organization, even the
potential “ruination of the taxpayer’s enterprise,” were deemed by the Supreme
Court insufficient reason to carve out an exception to the AIA, see Bob Jones, 416
U.S. at 745, 747, then CC-FL’s far more modest claim would seem to be plainly
insufficient to avoid the clear terms of the AIA and DJA.
CC-FL’s collateral consequences argument is, at best, an incomplete attempt
to satisfy the narrow judicially-created exception to the Anti-Injunction Act. In
Enochs v. Williams Packing, the Supreme Court held that a taxpayer may seek
preventative injunctive relief against the IRS only upon satisfying two
independent prongs: first, that he will suffer “irreparable injury” if not awarded
injunctive relief, and second, “that under no circumstances could the Government
ultimately prevail.” 370 U.S. at 6-7. CC-FL’s claim of collateral consequences
bears solely on the first prong of the Williams Packing test. The Supreme Court
has made clear, however, that a taxpayer must establish both prongs of the judicial
exception to the Anti-Injunction Act before a court may entertain his claim for
22
injunctive relief against the IRS. See Alexander v. “Americans United” Inc., 416
U.S. 752, 762 (1974) (“[A]llowing injunctive relief on the basis of this showing
[of irreparable injury] alone would render [the Anti-Injunction Act] quite
meaningless.”); accord Bob Jones, 416 U.S. at 745 (“Williams Packing switched
the focus of the extraordinary and exceptional circumstances test from a showing
of the degree of harm to the plaintiff absent an injunction to the requirement that it
be established that the Service’s action is plainly without a legal basis.”). And
CC-FL has not shown, or even argued, that the IRS’s adverse determination is
plainly without a legal basis or that under no circumstances could the IRS prevail.
In short, the collateral consequences advanced by CC-FL do nothing to undermine
the conclusion that this suit was rendered moot upon the full refund of taxes by the
IRS.
C.
CC-FL’s final claims are drawn from the judicially-created exceptions to the
mootness doctrine. CC-FL first contends that even if the full refund of taxes
would ordinarily render a refund suit moot, this case falls under the exception to
the mootness doctrine governing cases or controversies “capable of repetition yet
evading review.” “[T]he capable-of-repetition doctrine applies only in exceptional
situations, and generally only where the named plaintiff can make a reasonable
23
showing that he will again be subjected to the alleged illegality.” City of Los
Angeles v. Lyons, 461 U.S. 95, 109 (1983) (citing DeFunis v. Odegaard, 416 U.S.
312, 319 (1974)). As the Supreme Court has made clear, the exception applies
only where “(1) the challenged action is in its duration too short to be fully
litigated prior to cessation or expiration; and (2) there is a reasonable expectation
that the same complaining party will be subject to the same action again.’” Davis
v. FEC, 554 U.S. 724, 735 (2008) (quoting Spencer v. Kemna, 523 U.S. 1, 17
(1998)); see also Bourgeois v. Peter, 387 F.3d 1303, 1308 (11th Cir. 2004).
The first prong of the exception -- that the challenged action is too short to
be fully litigated -- is not met here. Nothing about the IRS’s adverse
determination or assessment and collection of taxes is “too short to be fully
litigated.” Every year in which CC-FL pays taxes, it may claim a refund, and,
should the IRS fail to provide the refund within the six month statutory period,
CC-FL may file a refund suit and obtain full judicial review of the dispute. As the
Supreme Court has noted, “[t]hese review procedures offer petitioner a full, albeit
delayed, opportunity to litigate the legality of the Service’s revocation of tax-
exempt status and withdrawal of advance assurance of deductibility.” Bob Jones,
416 U.S. at 746. CC-FL says that it is too easy for the IRS to simply refund the
taxes, either within the six month statutory period or shortly after litigation begins,
24
but that complaint does not fit within the narrow exception to mootness for cases
“evading review.” Rather, it is a complaint that the congressional scheme for
challenging adverse determinations by the IRS is too limited. However
inequitable or frustrating CC-FL may find this statutory scheme, the Supreme
Court has made clear that “the problems presented do not rise to the level of
constitutional infirmities.” Id. at 747. Accordingly, we decline to use this
exception to the mootness doctrine to create an end-run around the AIA and DJA.
Nor is the second prong of the exception -- a reasonable expectation that the
complaining party will be subject to the same action in the future -- met here. It is
true, if stated broadly enough, that this case involves an issue (CC-FL’s tax
exempt status) that is likely to arise in future years yet may never be fully
considered by a federal court (because in a given year, CC-FL may incur no tax
liability, or the IRS may choose to refund the inevitably small amount of CC-FL’s
claim within the six month statutory window rather than litigate, as it did with
respect to the 2005 and 2006 tax years). But a proper framing of the issue raised
in this litigation is a narrower one.12 The issue is not whether CC-FL is a tax-
12
Moreover, even if we frame the issue broadly, CC-FL still cannot meet the first prong
of the mootness exception for cases capable of repetition yet evading review, because the IRS’s
adverse determination and demand for taxes in any given tax year are not too short in duration to
be fully litigated.
25
exempt organization, now and in the future, but rather whether it was entitled to a
refund for the past tax years 1991 and 1994-2000. “Income taxes are levied on an
annual basis. Each year is the origin of a new liability and of a separate cause of
action.” Commissioner v. Sunnen, 333 U.S. 591, 598 (1948). And as the Supreme
Court has said, “there must be a reasonable expectation or a demonstrated
probability that the same controversy will recur involving the same complaining
party.” Murphy v. Hunt, 455 U.S. 478, 482 (1982) (emphasis added) (internal
quotation marks omitted). The same controversy -- CC-FL’s tax liabilities for the
years 1991 and 1994-2000 -- is not an issue capable of repetition. Rather, the
hypothetical future controversy advanced by CC-FL would be at most a similar
one. The tax amounts in dispute and the nature of the claim for a refund are
specific to each individual tax year. Sunnen, 333 U.S. at 598. Similarly, the
proper resolution of CC-FL’s claim to tax-exempt status in a given tax year will
depend on CC-FL’s conduct in that year. Thus, for example, the IRS or the
district court would have to determine whether, in the specific tax year at issue,
CC-FL has engaged in “direct or indirect participation or intervention in political
campaigns on behalf of or in opposition to any candidate for public office.” 26
C.F.R. § 1.501(c)(4)-1(a)(2)(ii).
CC-FL’s second claim is that the IRS has voluntarily ceased its unlawful
26
conduct by refunding the taxes at issue, and that its voluntary cessation in
response to this litigation does not render the case moot. We recently discussed
the “voluntary cessation” exception to mootness in Harrell v. The Fla. Bar, noting
that “it has long been the rule that voluntary cessation of allegedly illegal conduct
does not deprive the tribunal of power to hear and determine the case, i.e., does
not make the case moot.” 608 F.3d at 1265 (internal quotation marks and
alteration omitted). When a party abandons a challenged practice voluntarily, the
party alleging mootness -- here, the IRS -- bears the burden of demonstrating that
the wrongful activity is not likely to recur. Id. The burden requires a showing
that: “(1) it can be said with assurance that there is no reasonable expectation . . .
that the alleged violation will recur, and (2) interim relief or events have
completely and irrevocably eradicated the effects of the alleged violation.” Id.
(quoting Los Angeles Cnty. v. Davis, 440 U.S. 625, 631 (1979)).
While CC-FL rightly calls this a “heavy burden,” see Friends of the Earth,
Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000), it fails to
recognize that the predicate condition has not been satisfied here. In refunding the
amounts at issue in this case, the IRS did not abandon its practice or position --
voluntarily or otherwise -- that CC-FL is not a tax-exempt organization and that
CC-FL should have paid corporate income taxes for the years at issue in the suit.
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Rather, the IRS was required by statute to credit or refund the taxes at issue
because the three year statutory period for assessing and collecting those taxes had
run. See 26 U.S.C. §§ 6401(a), 6402(a), 6501(a), 6501(g)(2). As the IRS points
out, CC-FL’s refund was not granted in response to pending litigation, “but rather
was compelled by the operation of the Internal Revenue Code.”13
The order and judgment of the district court dismissing this case as moot are
AFFIRMED.
13
This point also highlights the possibility that, should a similar dispute over CC-FL’s
tax exempt status arise in a future tax refund suit, the “voluntary cessation” exception to
mootness may have a role to play if the IRS fails to refund the disputed taxes within the six
month statutory period, and then later refunds the taxes after litigation begins, solely to deprive
the court of jurisdiction and without any independent basis for granting the refund. We offer no
opinion on the merits of a voluntary cessation claim presented under such circumstances, as those
circumstances do not describe the case currently before us.
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