Hull v. United States , 146 F.3d 235 ( 1998 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN J. HULL,
Plaintiff-Appellant,
v. No. 97-1931
UNITED STATES OF AMERICA,
Defendant-Appellee.
WALTER E. ATHERTON; NANCY J.
ATHERTON,
Plaintiffs-Appellants,
No. 97-1932
v.
UNITED STATES OF AMERICA,
Defendant-Appellee.
VAUGHN H. DULLABAUN; EUGENIA M.
DULLABAUN,
Plaintiffs-Appellants,
No. 97-1933
v.
UNITED STATES OF AMERICA,
Defendant-Appellee.
Appeals from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, Chief District Judge.
(CA-96-3921-JFM, CA-96-3922-JFM, CA-96-3927-JFM)
Argued: March 5, 1998
Decided: June 8, 1998
Before WILKINSON, Chief Judge, and WIDENER and
NIEMEYER, Circuit Judges.
_________________________________________________________________
Affirmed by published opinion. Judge Niemeyer wrote the majority
opinion, in which Chief Judge Wilkinson joined. Judge Widener
wrote a dissenting opinion.
_________________________________________________________________
COUNSEL
ARGUED: Edward Lee Blanton, Jr., Baltimore, Maryland, for
Appellant. Thomas James Sawyer, Tax Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON
BRIEF: Loretta C. Argrett, Assistant Attorney General, Lynne A.
Battaglia, United States Attorney, Richard Farber, Tax Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee.
_________________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
Section 6532(a) of the Internal Revenue Code requires a taxpayer
who wishes to file a tax refund suit against the United States to do
so within two years after the taxpayer is mailed formal notice of disal-
lowance of the claimed refund or, if the taxpayer waives formal
notice, within two years after the taxpayer's waiver is "filed." At the
request of the Internal Revenue Service Appeals Office in Baltimore,
the taxpayers in these three cases waived formal notice of disallow-
ance and mailed their waivers to the appeals officer in Baltimore. The
appeals officer later sent letters to the taxpayers, indicating that the
taxpayers' files were being closed and referencing receipt of their
waivers. When the taxpayers filed these refund suits within two years
after receiving acknowledgment of their waivers but more than two
years after their waivers were received by the Appeals Office, the dis-
2
trict court dismissed the cases as untimely under I.R.C. § 6532(a)(3).
For the reasons that follow, we affirm.
I
On April 15, 1994, John Hull and other similarly situated taxpayers
filed claims with the IRS for refunds of taxes paid for the 1990 tax
year. The taxpayers claimed that they had been overtaxed for lump
sum distributions from the Maryland Retirement System and that they
were eligible for 10-year income averaging. After the IRS proposed
rejection of the claimed refunds, it assigned an appeals officer in Bal-
timore to the taxpayers' cases to hear administrative appeals brought
by the taxpayers. The appeals officer assigned to the taxpayers' cases
informed William Park, the taxpayers' representative, that the IRS
had adopted a uniform litigation posture for all Maryland Retirement
System cases and that the IRS would not allow any part of the taxpay-
ers' claims. The appeals officer asked Park to waive formal notice of
disallowance of the refund claims, which Park agreed to do. He exe-
cuted waivers on behalf of the taxpayers on December 7, 1994, and
mailed them in duplicate to the appeals officer in Baltimore, request-
ing date-stamped copies in return to show receipt. Park never received
date-stamped copies of the waivers, but three weeks later he received
form letters from the appeals officer, stating for each taxpayer, "We
have closed this case on the basis agreed upon and are sending the
case file to the service center. . . . An official notice of full or partial
disallowance of claim for refund will not be sent because a waiver,
form 2297, was signed." That letter for Hull was mailed on December
29, 1994, and for the other taxpayers, on December 27, 1994.
Form 2297, the waiver form that Park executed on behalf of the
taxpayers, includes a waiver of the requirement that notice of claim
disallowance be sent to the taxpayers by certified or registered mail
and advises persons signing the form that "the filing of this waiver is
irrevocable and it will begin the 2-year period for filing suit for refund
of the claims disallowed as if the notice of disallowance had been sent
by certified or registered mail." The Appeals Office in Baltimore
received the taxpayers' waivers in this case on December 8, 1994, as
indicated by the date stamp: "RECEIVED 1994 DEC-8 AM 10:54
APPEALS OFFICE BALTIMORE MARYLAND." There is no evi-
3
dence in the record when the waiver forms were actually handed to
the appeals officer assigned to the cases.
Because Park did not receive duplicate copies of the waiver forms
stamped with the date of receipt and received only the letters advising
the taxpayers that the officer was closing the files, Park construed the
letters as "both an informal acknowledgment of disallowance and
notice that the Waiver was filed on December 29, 1994." He believed
therefore that the December 29 date (or December 27 with respect to
the taxpayers other than Hull) was the last date when suit could be
filed.
In the hope that favorable precedent might be issued by the courts
with respect to the substantive issue about pension plan distributions,
Park decided, as a strategic matter, to hold off the taxpayers' refund
suits for as long as legally possible. On December 11, 1996, more
than two years after Park mailed his waivers to the Appeals Office,
he sent the taxpayers' files to litigation counsel, indicating that their
suits needed to be filed by December 29, 1996. Litigation counsel
filed these three actions in the district court on December 17, 1996 --
more than two years after Park mailed the waivers to the Appeals
Office, more than two years after the Appeals Office received the
waivers, but within two years of when the Appeals Office sent the
acknowledgment letters to the taxpayers.
The IRS filed a motion under Federal Rule of Civil Procedure
12(b)(1) in each action, alleging that the suit was untimely under
I.R.C. § 6532(a)(3) and that the statute of limitations was jurisdic-
tional. The district court agreed with the IRS, concluding that because
a waiver is filed when the taxpayer submits it to the IRS or when the
IRS receives it, the refund suits, filed more than two years after their
waivers were filed, were untimely. These appeals followed.
II
The taxpayers contend that their refund suits, filed on December
17, 1996, were timely because the two-year statute of limitations did
not begin to run until December 27 or 29, 1994, when the appeals
officer "who requested the waiver acknowledged[its] receipt and
advised taxpayer's representative that `an official notice of full or par-
4
tial disallowance of claim for refund will not be sent because a
waiver, Form 2297, was signed.' [Emphasis supplied]." They argue
that for purposes of I.R.C. § 6532(a)(3), a document is filed "when it
is placed in the custody of the officer appointed by law to receive it."
Because there is an absence of any evidence as to when the waivers
were actually received by the appeals officer, they maintain that the
court can only rely on the December 27 or 29 date when the appeals
officer acknowledged receiving the waivers. The taxpayers accept the
district court's reliance on the definition of "to file" as meaning "[t]o
deliver an instrument or other paper to the proper officer or official
for purpose of being kept on file by him," see Black's Law Dictionary
628 (6th ed. 1990), but contend that the district court erred when it
relied so heavily on the date of delivery to the Appeals Office and
ignored the date of receipt by the appeals officer who requested it.
The United States contends that the waivers were filed on Decem-
ber 8, 1994, when they were received by the Baltimore Appeals
Office of the IRS, and that a refund suit filed over two years later was
untimely. The United States contends that "[i]n these circumstances,
the district court was constrained by Section 6532 to dismiss taxpay-
ers' refund suits for lack of subject matter jurisdiction and it properly
did so." The United States argues that the ruling urged by the taxpayer
-- that a document is not filed until it is distributed to a specific IRS
employee assigned to process the document -- "is unsupported by
any authority, is contrary to common sense and would be far more
harmful than beneficial to the vast majority of taxpayers."
Section 6532(a) of the Internal Revenue Code, which controls the
issue before us, reads in pertinent part:
(1) . . . No suit or proceeding under section 7422(a) for
[refund] . . . shall be begun . . . after the expiration of 2
years from the date of mailing by certified mail or registered
mail by the Secretary to the taxpayer of a notice of the disal-
lowance of the [refund].
* * *
(3) . . . If any person files a written waiver of the require-
ment that he be mailed a notice of disallowance, the 2-year
5
period prescribed in paragraph (1) shall begin on the date
such waiver is filed.
I.R.C. § 6532(a)(1), (3) (emphasis added). Accordingly, a tax refund
suit must be filed within two years after the Secretary mails notice of
disallowance of the refund claim or, if the taxpayer waives formal
notice, within two years after such a waiver "is filed." The narrow
issue before us, therefore, is when the taxpayers' waivers were
"filed," as that term is used in the Code.
Our review of this question is circumscribed by settled principles
of sovereign immunity. When courts interpret a statute of limitations
for suits against the government, the statute "`must receive a strict
construction in favor of the Government.'" Badaracco v.
Commissioner, 464 U.S. 386, 398 (1994) (quoting E.I. du Pont de
Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924)). "[A]lthough we
should not construe such a time-bar provision unduly restrictively, we
must be careful not to interpret it in a manner that would extend the
waiver beyond that which Congress intended." United States v. Dalm,
494 U.S. 596, 608 (1990) (quoting Block v. North Dakota, 461 U.S.
273, 287 (1983) (quotation marks omitted)).
Moreover, in tax cases and particularly in those involving the con-
struction of limitations statutes, equitable considerations are of lim-
ited consequence. See Webb v. United States, 66 F.3d 691, 694 (4th
Cir. 1995). Rather, "the task of an appellate court in such cases is `not
that of weighing equities, but of determining technical application of
the law [consistent] with the well-established view that tax laws are
technical and, for the most part, are to be accordingly interpreted.'"
Id. (quoting Ewing v. United States, 914 F.2d 499, 501 (4th Cir.
1990)). We have observed that "[a] ruling that a refund claim is filed
too late can be a harsh one. But we are not authorized to provide relief
from the clear statutory requirements. The United States consents to
be sued for tax refunds only when the refund claim is filed in accor-
dance with the Internal Revenue Code." Blatt v. United States, 34
F.3d 252, 257 (4th Cir. 1994) (citations omitted).
With these interpretive principles in hand, we turn to determine
what the tax code means when, in § 6532(a), it provides that the two-
6
year period for filing refund suits shall begin"on the date such waiver
is filed."
In the absence of a statutory or regulatory definition, a document
is "filed," as that term is readily understood, when it is "place[d]
among official records as prescribed by law," Merriam Webster's
Collegiate Dictionary 434 (10th ed. 1994), or when it is "deliver[ed]
. . . to the proper officer or official for the purpose of being kept on
file by him as a matter of record and reference in the proper place,"
Black's Law Dictionary 628 (6th ed. 1990). Thus,"to file" a docu-
ment with the Internal Revenue Service means to deliver it to the
agency so that the agency receives it, and similarly, "to file" with an
official is to deliver it to him so that he receives it. Delivery and
receipt are the essential components of filing. Thus, "filing" does not
incorporate any notion that the document must be executed by the
filer, nor does it require that notice be communicated to the filer that
a document has been received.
When a document is filed in person, it is filed when the filer deliv-
ers it to and it is received by the party with whom it is to be filed.
When it is filed by mail, it is likewise filed when the postal service
delivers it to and it is received by the party with whom it is to be filed.
While mailing may create a presumption of receipt and therefore of
filing, the presumption may be rebutted. Moreover, when a paper is
filed by mail, the date of filing remains the date which it is received,
unless the applicable statute or regulation provides otherwise.
These attributes of "filing" are not disputed by the taxpayers.
Indeed, they are well established. See, e.g., Smith v. United States, 96
F.3d 800, 801-02 (6th Cir. 1996); Miller v. United States, 784 F.2d
728 (6th Cir. 1986); Phinney v. Bank of the Southwest Nat'l Ass'n,
335 F.2d 266 (5th Cir. 1964).
The Internal Revenue Code does include a general rule for when
a document which is "required to be filed" is deemed to be filed. Sec-
tion 7502 provides that a document required to be filed may be mailed
and the date of the United States postmark "shall be deemed to be the
date of delivery." I.R.C. § 7502(a)(1). Section 7502 thus, by deeming
a mailing to be "delivery" for documents that must be "filed," equates
"delivery" with "filing." While the provision by its terms applies only
7
to documents "required to be filed," thus giving the filer of such docu-
ments the benefit of a mailing date as distinguished from a delivery
date, the negative inference to be drawn from this section is that docu-
ments not "required to be filed," such as the waivers in this case, must
be delivered, as opposed to simply mailed, in order to be filed.
Accordingly, we hold that a waiver form is filed as that term is
used in I.R.C. § 6532(a)(3) when it is delivered to and received by the
person or agency with whom it is to be filed.
In this case, the taxpayers mailed their waivers to the appeals offi-
cer on December 7, 1994, and the Appeals Office, to which the waiv-
ers were mailed, received them on December 8, as indicated by the
mailroom receipt stamp. There is no record of when mailroom per-
sonnel physically delivered the waivers to the particular appeals offi-
cer's desk. The question thus remains whether, under§ 6532, delivery
to and receipt by the IRS as an agency constitutes filing. We conclude
that the internal routing and delivery of documents within an agency
is irrelevant to when a document is filed with the agency, and that it
is the agency's receipt that matters, not receipt by the particular
employee working on the case.
Both the regulatory framework and policy concerns surrounding
§ 6532 support this conclusion. The regulations make clear that indi-
vidual IRS employees are not, as a class, authorized to extend the lim-
itations periods imposed by law. Rather, an extension is effective only
if it is "signed by a district director, a director of an internal revenue
service center, or an assistant regional commissioner." 26 C.F.R.
§ 301.6532-1(b). In this case, while the taxpayers may have been
dealing with an individual appeals officer within the agency, the tax-
payers' claims are against the agency, not the officer, and the officer
had no authority under the regulations to affect the statute of limita-
tions for those claims.
Similarly, the regulations governing the application of § 6532(d)
bolster the conclusion that filing under § 6532(a)(3) requires delivery
to the IRS and not to one of its employees. They provide that after
the taxpayer executes a waiver, no "action" by the IRS will operate
to "extend the period for bringing suit." 26 C.F.R. § 301.6532-1(d).
The clear import of this regulation is to prevent IRS officials from
8
impacting the statute of limitations except as authorized by law. Thus,
the appeals officer's sending of the form letters to the taxpayers on
December 27 and 29 could not operate to extend the two-year period
for bringing suit which was fixed in the statute by the filing date of
the taxpayers' waivers.
Policy concerns also require a conclusion that "filing" means deliv-
ery to and receipt by the IRS and not by a particular employee. Were
the date to be determined by when a particular employee receives the
document, extra, arbitrary elements would be introduced into the
determination of when a statute of limitations begins to run. Surely,
it is not argued that if the particular officer assigned the cases had
resigned and was no longer with the agency, the statute of limitations
would not begin to run because the waiver was not delivered to the
officer. Under our holding, instead of forcing the IRS to prove when
a particular appeals officer in charge of a case received a particular
waiver and grounding the commencement of suit on the fortuities of
internal routing, both the IRS and the taxpayers are assured of the cer-
tainty of the IRS's mailroom-stamped dates. Such a holding rein-
forces § 6532(a)(3)'s purpose of authorizing a waiver of formal notice
and substituting for the formal-notice mailing date a clear, fixed date
for the commencement of the period for filing any refund suit.
Although the taxpayers maintain that the holding which they urge
need not have repercussions on other areas of the tax code, they can-
not avoid the necessary implications that would follow from a holding
that the date of filing is the date of a particular official's receipt of
a waiver. Despite the fact that the filing of a waiver is voluntary, tax-
payers in general would be loath to have the date of their submissions
to the IRS depend on the IRS's internal routing system. Concerns of
fairness to both the government and to taxpayers dictate that both
abide by the same rules as to filing. As the United States hypothesized
in its brief, would it be fair to a taxpayer, who delivered his refund
claim to the IRS on the last day permitted, to be told his claim was
late because it did not reach the assigned employee until after the
deadline? We think not. See, e.g., Webb , 66 F.3d at 695 ("[A]s stat-
utes of limitation are applied in the field of taxation, the taxpayer
sometimes gets advantages and at other times the Government gets
them. Both hardships to the taxpayers and losses to the revenues may
9
be pointed out" (quoting Rothensies v. Electric Storage Battery Co.,
329 U.S. 296, 302 (1946))).
The taxpayers argue that in this case the appeals official asked, as
a professional courtesy, that the IRS's formal notice of disallowance
be waived, and that the taxpayers elected to accommodate the officer
only on the condition that the appeals officer return copies of the
waivers with receipt date stamps affixed. They argue therefore that
the proper official with whom to file the waivers in these cases was
the particular officer being accommodated and not the IRS. This argu-
ment, however, would require us to modify the clear statutory and
regulatory language to allow IRS employees to reach private arrange-
ments for tolling limitations. As already noted, such arrangements are
generally precluded. See 26 C.F.R. § 301.6532-1(b), (d). Moreover, in
context, § 6532(a) requires the filing of waivers with the IRS and not
with particular employees. The taxpayers' claims are against the
agency, not the employee, and authorization to sue the IRS is a legis-
lative grace that is carefully circumscribed by Congress. To allow the
scope of a waiver of immunity to be defined by the vagaries of each
individual IRS employee would undermine this policy. Moreover, the
limitations period for filing suits would thus depend on when a waiver
is laid on an employee's desk or when he noticed it, picked it up, or
read it. Surely, the taxpayers would not suffer patiently if a document,
clearly received by the IRS, was lost before it was delivered to the
appeals officer. Would the taxpayers then agree to the adverse conse-
quences of such a rule? Surely not.
Even if we were to recognize the appeals officer as the proper per-
son with whom to file a waiver of notice of disallowance, the evi-
dence in this case indicates that the document was received at the
appeals officer's Baltimore office on December 8. While it was date-
stamped in the mailroom for the Baltimore Appeals Office, the mail-
room was clearly the room through which the appeals officer received
his mail. We believe that receipt by the Appeals Office mailroom is
a sufficient proxy for receipt by the appeals officer.
To support their contention that they are entitled to rely on the
December 27 and 29 letters acknowledging receipt of the waivers, the
taxpayers cite to the decisions in Ohio Nat'l Life Ins. Co. v. United
States, 922 F.2d 320 (6th Cir. 1990), and Miller v. United States, 500
10
F.2d 1007 (2d Cir. 1974). Neither decision, however, provides the
support which they claim. In both cases, the courts held that, despite
the filing of a waiver, the IRS extended the statute of limitations when
it subsequently sent the taxpayer a formal notice of disallowance that
specifically stated that the statute of limitations commenced with the
date of the notice. See Miller, 500 F.2d at 1008-9; Ohio Nat'l Life Ins.
Co., 922 F.2d at 322. Thus, the taxpayers in those cases had conflict-
ing dates for limitations purposes and were explicitly told by the IRS
that the statute began to run as of the date of the notice and not the
date when the waiver was received. Conflicting notices are not before
us in these cases. The form letters that the taxpayers claim to have
relied on were not formal notices of disallowance and they made no
statement about the date on which the waiver was filed or when limi-
tations began to run. Rather, the taxpayers chose to rely on informal
communications that only indicated that their files were being closed
and acknowledged that their waivers had already been received. The
only notice that the taxpayers received in these cases was the sub-
stance of the statement contained in the waivers themselves that the
time for filing refund suits would begin to run when the waivers were
filed. That written advice was consistent with the statutory provision.
See I.R.C. § 6532(a)(3).
The taxpayers in these cases consciously elected to use the maxi-
mum time allowed by law for filing their refund suits, but in doing
so failed to check with the Appeals Office to determine when their
waivers were received. Moreover, they chose to overlook the knowl-
edge that waivers mailed on December 7 would presumably be
received by the IRS within a few days. Instead of acting on this well-
known presumption, they chose, at their own risk, to rely on form let-
ters sent December 27 and 29, which indicated that their files were
being closed.
For the foregoing reasons, we affirm the judgment of the district
court.
AFFIRMED
11
WIDENER, Circuit Judge, dissenting:
I respectfully dissent. Although I do not necessarily disagree with
the majority's abstract statement of the law, I am of opinion that the
facts of the case require a different application of the law and thus a
different result. The majority does not take into account that the gov-
ernment may well have, and probably did, break an agreement entered
into with the taxpayers and now seeks court approval of that breach.1
Therefore, I would vacate the judgment of the district court.
According to the papers submitted in this case, an IRS Appeals
Officer provided plaintiffs' representative, William F. Park, with the
Form 2297 waiver and "instructed him to return two signed copies of
the waiver." The instructions printed on Form 2297 also indicated that
the form should be signed in duplicate. Under I.R.C.§ 6532(a)(3), the
two-year statute of limitations begins running on the date the Form
2297 waiver is "filed." Park thus fully expected that one of the copies
of Form 2297 submitted to the IRS would be date-stamped and
returned to him in order to make certain the date on which the waiver
was filed. No date-stamped copy of the Form 2297 was ever returned
to Park. However, the taxpayers did receive an acknowledgment letter
dated December 29, 19942 from the IRS indicating that their case had
been closed "on the basis agreed upon."
The district court treated defendant's motion as a motion to dis-
miss. However, the district court considered matters outside of the
pleadings in reaching its decision. So, the defendant's motion is
viewed as a motion for summary judgment under Fed. R. Civ. Proc.
12(b). As such, the evidence and all inferences to be drawn from the
underlying facts must be viewed in the light most favorable to the
nonmoving party. Miltier v. Beorn, 896 F.2d 848, 852 (4th Cir. 1990)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)).
_________________________________________________________________
1 As the majority opinion notes, the forms were sent in duplicate to the
Appeals Officer of the IRS, "requesting date-stamped copies in order to
show receipt."
2 The opinion of the district court indicates one letter may have been
dated December 27th.
In all events, the cases were filed on December 17, 1996, well within
the two year limitations period of December 27th or 29th, 1994.
12
Viewed in the light most favorable to the plaintiffs, the record per-
mits, even if it does not require, a finding of fact that the IRS had
entered into an agreement with the taxpayers whereby it would return
to them a date-stamped copy of the Form 2297. In addition, the record
supports an inference that if a date-stamped copy had been returned,
then the taxpayers would have filed their suits within the statutory
period. I am of opinion that the government should not be permitted
to benefit from its breach of an agreement made with the taxpayers
to return a date-stamped copy of Form 2297.
Accordingly, I would vacate the judgment of the district court and
allow a jury or other fact finder to determine whether such an agree-
ment was part of the "basis agreed upon," to use the language of the
government in its letter of December 29th.
13