Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-01109/USCOURTS-caDC-14-01109-0/pdf.json

Parties Involved:
Commissioner of Internal Revenue Service
Appellee
Geoffrey Kenneth Willson
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 24, 2015 Decided November 6, 2015

No. 14–1109

GEOFFREY KENNETH WILLSON,

APPELLANT

v.

COMMISSIONER OF INTERNAL REVENUE SERVICE,

APPELLEE

On Appeal from the Order of 

the United States Tax Court

Geoffrey K. Willson, pro se, argued the cause and filed 

briefs for the appellant. 

Clint A. Carpenter, Attorney, United States Department of 

Justice, argued the cause for the appellee. Tamara W. 

Ashford, Acting Assistant Attorney General, Michael J. 

Haungs and John A. Nolet, Attorneys, were on brief. Kenneth 

W. Rosenberg, Attorney, entered an appearance.

Before: HENDERSON, KAVANAUGH and PILLARD, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

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KAREN LECRAFT HENDERSON, Circuit Judge: Due to a 

clerical error by the Internal Revenue Service (IRS), Geoffrey 

Willson received his 2006 income tax refund twice. When the 

IRS sought to recover the erroneous refund by levy, Willson 

challenged the collection efforts first in an IRS administrative 

proceeding, then in the tax court. At the tax court stage, the 

IRS changed course; it conceded the levy was an improper 

collection method, zeroed out Willson’s disputed tax liability 

and moved to dismiss the case as moot. Willson, however, 

objected to dismissal. He had paid $5,100 to the IRS during 

the course of the administrative proceedings and, in his view, 

he is entitled to a return of these funds. He maintains that this 

continuing controversy precludes dismissal on mootness 

grounds. The tax court rejected this contention and so do we. 

For the following reasons, we affirm the tax court’s dismissal 

of Willson’s case as moot.

I.

Breathing life into the adage that no good deed goes 

unpunished, Willson’s tax troubles began when he overpaid

his 2004 federal income taxes by more than $28,000. Rather 

than seek a refund of the overpayment, Willson elected on his 

2004 tax return to apply the credit forward to cover his future 

tax liability. The 2004 overpayment credit more than covered 

Willson’s 2005 tax liability so that, when it came time for 

Willson to file his 2006 tax return, a total overpayment credit 

of $13,193.55 remained. On his 2006 return, Willson

reported a $0.00 tax liability and an additional $30.00 tax 

credit, leaving a $13,223.55 overpayment credit at his disposal. 

Willson again forwent a refund and elected to apply the entire 

overpayment credit to his 2007 taxes. 

When he filed his 2007 tax return, Willson took a different 

approach to the overpayment credit from the one he had 

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followed the previous three years. Instead of continuing to 

apply the full amount ($13,223.55) forward to 2008, he 

requested that the IRS refund him $10,000. The remainder 

was to be applied to any liabilities for both 2007 and future 

years.

Unfortunately, the IRS bungled Willson’s 2006 and 2007 

requests. First, when it processed Willson’s 2006 return, it 

did not carry the overpayment credit forward to 2007 as 

Willson requested; rather, it sent Willson a $13,223.55 refund 

check. This should have zeroed out the overpayment credit, 

leaving Willson liable for his 2007 taxes. But when the IRS 

processed the 2007 return, it again counted the $13,223.55 

credit. In accordance with Willson’s request, it applied the 

credit against his 2007 taxes and then directly deposited the 

$10,000 refund Willson requested, plus an additional $600 tax 

relief credit and interest in the amount of $85.48. Willson 

thus received from the IRS both a $13,223.55 check and a 

$10,685.48 direct deposit.

Eventually realizing its mistake, the IRS moved to correct 

it. It entered an overpayment credit reversal on Willson’s 

2006 tax account, effectively creating a new 2006 tax liability 

of $13,193.55, and in March 2011 sent Willson final notice that 

it intended to levy on his property to recover the amount of the 

new liability in full. In response, Willson requested a 

Collection Due Process (CDP) hearing to challenge the 

proposed levy before a neutral IRS hearing officer. The IRS 

Appeals Office obliged, holding a hearing over the ensuing 

months via telephone and exchange of written correspondence. 

While Willson’s CDP hearing progressed, the plot 

thickened. First, the IRS processed Willson’s 2009 tax return. 

The return reported a total overpayment credit (continuing 

from 2007 and 2008) of $2,206.55. On March 30, 2010, the 

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IRS had also received from Willson a $100 payment that it 

applied toward his 2009 taxes. The IRS thus credited Willson 

with $2,306.55 in total overpayments for the 2009 tax year. 

Rather than refunding this amount or applying it to the next tax 

year, the IRS applied the overpayment to partially offset 

Willson’s newly created 2006 liability. Then, Willson 

apparently realized for the first time that he had in fact received 

a double refund. On May 24, 2011, Willson sent a letter to an 

IRS representative acknowledging that he had received more 

than he was due. He believed the overpayment was “in the 

region of about $10,000.00” and enclosed a $5,000 check with 

the letter, stating that the payment was “not as payment for the 

2006 demands which are clearly errors but as an immediately 

affordable amount to begin returning an overpayment made 

entirely as an IRS error.” Ltr. from Geoffrey K. Willson to 

Joy Wannamaker, IRS Case Advocate 2 (May 24, 2011). He 

also offered to pay another $6,000 over three years. 

Largely ignoring Willson’s proposed compromise, on July 

6, 2012, the IRS Appeals Office issued its final “Notice of 

Determination” sustaining the proposed levy action. As of 

that date, approximately $6,000 remained subject to levy—the 

balance of the 2006 assessment ($13,193.55), less the amount 

the IRS had already “recovered” from Willson ($7,306.55, 

consisting of Willson’s $5,000 payment and the $2,306.55 

offset from Willson’s 2009 tax return). 

Willson appealed the IRS determination to the tax court. 

There, the IRS conceded that under relevant law it was not 

permitted to collect Willson’s erroneous refund by creating a 

new 2006 assessment; rather, its only options to recover the 

refund were to (1) pursue an erroneous refund suit under 26 

U.S.C. § 7405, for which the two-year statute of limitations 

had already expired; (2) accept voluntary repayment from 

Willson or (3) exercise its common-law right to offset a debt

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owed to the government with a debt owed to the taxpayer so 

long as it did so within two years of the date of the refund. 

Because it had created the 2006 assessment improperly, the 

IRS abated the assessment, leaving a zero dollar balance on 

Willson’s 2006 tax account. It also determined that it was 

time barred from using its set-off power to retain the 

overpayment Willson reported on his 2009 tax return 

($2,206.55) and refunded that amount to Willson. Because 

neither an unpaid liability nor a pending levy action remained 

for the tax court to review, the IRS moved to dismiss the case 

as moot. 

Willson, appearing pro se, objected to dismissal. 

Although the IRS refunded the portion of the 2009 

overpayment set off ($2,206.55) sent more than two years after

the date of the erroneous refund, the IRS did not refund the 

$100 tax payment Willson sent in March 2010—within two 

years of the erroneous refund. Furthermore, the IRS retained 

the $5,000 repayment it claimed Willson had sent voluntarily 

in May 2011. Willson argued that the tax court had the power 

to order repayment of funds collected on a wrongful 

assessment; he therefore demanded repayment of the $5,100 

the IRS retained and filed a motion on the pleadings to that 

effect. The tax court rejected his arguments and, over 

Willson’s continuing objection, dismissed the case as moot. 

Willson timely appealed; our review is de novo. See Gaughf 

Props., L.P. v. Comm’r, 738 F.3d 415, 420 (D.C. Cir. 2013).

II.

If an actual case or controversy ceases to exist during the 

course of tax court proceedings, the tax court must dismiss the 

case as moot. Byers v. Comm’r, 740 F.3d 668, 679 (D.C. Cir. 

2014) (because “there was no actual case in controversy[,] . . . 

[t]here was no appropriate course of action for the Tax Court to 

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take but to dismiss as moot the dispute”). Furthermore, 

because the tax court possesses only “limited jurisdiction,” 

Comm’r v. McCoy, 484 U.S. 3, 7 (1987) (per curiam), and may 

exercise it “only to the extent expressly authorized by 

Congress,” Greene-Thapedi v. Comm’r, 126 T.C. 1, 6 (2006), 

the controversy must also fall within the court’s statutory grant 

of jurisdiction. Thus, if a case raises a question within the 

jurisdictional purview of the tax court, and that question is 

subsequently resolved, the case is moot notwithstanding the 

existence of other live controversies between the taxpayer and 

the IRS that do not fall within the tax court’s jurisdiction. See, 

e.g., Byers, 740 F.3d at 679 (affirming tax court’s dismissal of 

claims for particular tax year as moot after rejecting taxpayer’s

argument that tax year “remained relevant to resolving the 

case’s outcome”); Chocallo v. Comm’r, T.C.M. (RIA) 

2004-152, 2004 WL 1435478, at *2–3 (2004) (dismissing case 

as moot after IRS abated taxpayer’s liability notwithstanding 

taxpayer’s claims for damages and request that IRS employees 

who handled her case be criminally prosecuted).

At issue here is the tax court’s jurisdictional grant under 

26 U.S.C. § 6330(d)(1). Section 6330 grants a taxpayer

certain notice and hearing rights before his property becomes 

subject to levy; specifically, the IRS must provide the taxpayer 

thirty days’ notice of the proposed levy action and of his right 

to request a CDP hearing before a neutral IRS appeals officer. 

Id. § 6330(a)–(b). During the CDP hearing, the taxpayer 

“may raise . . . any relevant issue relating to the unpaid tax or 

the proposed levy” and may challenge his “underlying tax 

liability” if he did not receive statutory notice of deficiency or 

“otherwise have an opportunity to dispute such tax liability.” 

Id. § 6330(c)(2)(A)–(B). At the conclusion of the CDP 

hearing, the IRS appeals officer makes a “determination” 

regarding the legitimacy of the proposed levy and, if relevant, 

the amount and/or existence of the unpaid tax liability. See id. 

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§ 6330(c)(3). Section 6330(d)(1) allows the taxpayer to seek 

review of the IRS determination in the tax court. See id. 

§ 6330(d)(1). Specifically, the taxpayer may appeal a 

“determination [under section 6330] to the Tax Court (and the 

Tax Court shall have jurisdiction with respect to such matter).” 

Id.

Willson asserts that his case is well within the scope of this 

jurisdictional grant. He argues that the $5,100 the IRS 

collected was to satisfy what it now admits was an incorrectly

assessed “underlying tax liability,” see id. § 6330(c)(2)(B); 

accordingly, he believes that the tax court has the power to 

review that liability and to order the IRS to return those funds. 

In his view, this live controversy precludes dismissal on 

mootness grounds.

We disagree. The IRS retained the $5,100 not to satisfy a 

tax liability but to recover an erroneous refund sent as a result 

of a clerical error.

1

 The debt created by such an erroneous 

refund is not a tax liability. See, e.g., O’Bryant v. United 

States, 49 F.3d 340, 347 (7th Cir. 1995) (“[E]rroneous refunds 

and tax liabilities are simply not of the same ilk.”); Pac. Gas & 

Elec. Co. v. United States, 417 F.3d 1375, 1383 (Fed. Cir. 

2005) (refunds sent due to clerical error “are owed to the 

government by reason of unjust enrichment” instead of 

“statutory obligation under the tax code to pay the 

government”). As for Willson’s “underlying tax liability,” 

there is none. The IRS has entirely abated the 2006 liability it 

improperly assessed, returned the $2,206.55 it collected in 

satisfaction of that improper liability and abandoned its levy. 

 1

 Willson himself was well aware of this. Indeed, he was 

adamant that his $5,000 payment not be characterized as a tax 

payment but as a return of an erroneous refund. See Ltr. from 

Geoffrey K. Willson to Joy Wannamaker, supra, at 2. 

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We encountered a similar case in Byers, 740 F.3d 668. 

There, a taxpayer sought tax court review of an IRS levy action 

covering several tax years. Id. at 674. In tax court, the IRS 

admitted that it had unlawfully entered an assessment for the 

tax year 2003 due to its failure to provide the taxpayer adequate 

notice of deficiency. Id. To correct its mistake, the IRS 

abated the assessment and abandoned the levy action for 2003. 

Id. As a result, the tax court granted the IRS’s motion to 

dismiss the 2003 claim as moot. Id. We affirmed the 

dismissal, reasoning that the absence of a pending levy meant 

that no case or controversy remained as to the 2003 tax year. 

See id. at 679.

The same reasoning applies here. No unpaid tax liability 

remains on Willson’s 2006 tax account. The IRS no longer 

seeks to levy on his property. This is, in fact, the very relief 

Willson ostensibly sought when he requested a CDP hearing to 

challenge the proposed levy in the first place. Willson has 

received all the relief that section 6330 authorizes the tax court 

to grant him; if he is entitled to any other relief—with regard to 

the disputed $5,100 or otherwise—he must seek it in district 

court or in the Court of Federal Claims. 2

 See 28 U.S.C. 

 2

 The same is true of Willson’s claims that the IRS violated his 

constitutional rights, the Ex Post Facto Clause and the constitutional 

principle of separation of powers in pursuing a levy against him; 

because the tax court has granted him all the relief to which he is 

entitled under section 6330, those claims likewise belong in district 

court or in the Court of Federal Claims.

 Willson also contends that the case is not moot because he 

has a claim for costs and attorney’s fees, but a plaintiff’s attorney’s 

fees claim cannot of its own accord keep alive any merits claim that 

would otherwise be moot. See Lewis v. Cont’l Bank Corp., 494 

U.S. 472, 480 (1990); accord Johansen v. United States, 506 F.3d 

65, 70 (1st Cir. 2007).

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§ 1346(a)(1) (granting federal district court and Court of 

Federal Claims original jurisdiction over actions for “recovery 

of any internal-revenue tax”); 26 U.S.C. § 7422 (setting out 

procedure for taxpayer refund suits); id. § 7433(a)–(b) 

(granting right to bring suit against government for damages if

IRS collection action is unlawful). “With no levy being 

placed upon [Willson’s] property[,] . . . there was no actual 

case in controversy regarding [his] appeal of such a levy 

action.” See Byers, 740 F.3d at 679. Accordingly, “[t]here 

was no appropriate course of action for the Tax Court to take 

but to dismiss as moot” Willson’s case. See id. 

For the foregoing reasons, the judgment of the tax court is 

affirmed.

So ordered.

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