Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-05017/USCOURTS-ca10-90-05017-0/pdf.json

Parties Involved:
Recovery Resources Corporation
Appellant
United States of America
Appellee

Document Text:

PUBLISH 

FILED 

United States Court of Appeals 

Tenth C!rr::-11it 

UNITED STATES COURT OF APPEALS 

APR 12 1991 

ROBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

RECOVERY RESOURCES CORPORATION, ) 

an Oklahoma corporation, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

No. 90-5017 

UNITED STATES OF AMERICA, ) 

) 

Defendant-Appellee. ) 

Appeal from the United States District Court 

For the Northern District of Oklahoma 

D.C. No. 88-C-1651-E 

Philip S. Haney (R. Scott 

Moyers, Martin, Santee, 

Plaintiff-Appellant. 

Savage with him 

Imel & Tetrick, 

on the briefs) of 

Tulsa, Oklahoma, for 

Janet Kay Jones (Tony M. Graham, United States Attorney; Shirley 

D. Peterson, Assistant Attorney General; Gary R. Allen; and 

Kenneth L. Greene, with her on the brief) of the Department of 

Justice, Washington, D.C., for Defendant-Appellee. 

Before MOORE and EBEL, Circuit Judges, and BROWN, District Judge.* 

MOORE, Circuit Judge. 

*Honorable Wesley E. Brown, Senior United States District Judge 

for the District of Kansas, sitting by designation. 

Appellate Case: 90-5017 Document: 01019298978 Date Filed: 04/12/1991 Page: 1 
Recovery Resources Corporation appeals from the dismissal of 

its tax refund claims by the United States District Court for the 

Northern District of Oklahoma. The District Court held it had no 

jurisdiction because the claims were filed after the expiration of 

the statute of limitations. Recovery Resources disputes the 

starting date of the limitations period for its refund claims. We 

affirm. 

I. Background 

As a producer of domestic crude oil, Recovery Resources was 

subject to the windfall profit tax. I.R.C. §§ 4986 - 4998 (1982) 

(repealed 1988). Section 65ll(a) defined the statute of 

limitations for claiming re-funds: 

Claim for credit or refund of an overpayment of any tax 

imposed by this title in respect of which tax the 

taxpayer is required to file a return shall be filed by 

the taxpayers within 3 years from the time the return 

was filed . . . . 

The focus of this dispute is what event constituted the "return" 

filing triggering the start of the limitations period. 

The statute required excise tax returns to be filed for each 

quarter of a calendar year. I.R.C. §§ 4986(a) and 4996(b)(7); 

Treas. Reg. § 51.4997-1 (1982). Each return could be filed any 

time before the end of the second month following the quarter. 

Treas. Reg. § 51.6076-1. Accordingly, Recovery Resources filed1 

1In general, the windfall profit tax was collected through a withholding scheme, in which the first purchaser of the oil withheld 

the tax from the price to be paid to the producer and filed the 

tax returns. Recovery Resources, a producer, elected to become a 

"qualified disburser" under Treas. Reg. § 51.4995-5, which meant 

it filed its own tax returns. 

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Appellate Case: 90-5017 Document: 01019298978 Date Filed: 04/12/1991 Page: 2 
returns for the first three quarters of 1982 on May 31, August 31 

and November 30, 1982, respectively; and for the first quarter of 

1983 on May 31, 1983. 2 

Recovery Resources filed for its 1982 refund on February 28, 

1986, and its 1983 refund on July 26, 1986. The basis for its 

claims was the net income limitation (NIL), which capped the tax 

at 90% of net income. I.R.C. § 4988. By definition, the NIL 

could not be calculated until the end of the year, so taxpayers 

could not file an NIL refund claim until the end of each federal 

income tax year. Treas. Reg.§ 51.6402-1(b)(2). 

II. Statute of Limitations 

Because the NIL refund claim dates are indisputably more than 

three years after the quarterly tax return filings for the first 

three quarters of 1982 and the first quarter of 1983, the sole 

issue before us is whether those filings triggered the statute of 

limitations. The plain language of § 6511(a) establishes that the 

filing of a quarterly excise tax return starts the limitations 

period, whatever the basis for the refund claim. The section 

defines the return to which a refund claim applies as the one 

filed for the "tax imposed by this title." Thus, it is 

inescapable that the "return" to which § 6511(a) applies cannot be 

the taxpayer's annual income tax return as Recovery Resources 

contends. 3 

2Refunds for the final quarter of 1982 and the last three quarters 

of 1983 are not disputed here. 

3

compare § 6511(h) which specifically defines the annual income 

(Continued to next page.) 

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Appellate Case: 90-5017 Document: 01019298978 Date Filed: 04/12/1991 Page: 3 
Recovery Resources complains that the statute of limitations 

should not begin running before it can calculate the NIL, but that 

is the restriction provided by Congress. When the terms of a 

statute are unambiguous, we do not create exceptions or 

modifications. See Demarest v. Manspeaker, 111 S. Ct. 599, 604 

(1991). We hold that Recovery Resources' refund claims are barred 

by the statute of limitations. 

AFFIRMED. 

(Continued from prior page.) 

tax return as the applicable return for oil subject to 

withholding, for which the producer does not file excise tax 

returns. As described in footnote 1, Recovery Resources' oil is 

not subject to withholding. 

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Appellate Case: 90-5017 Document: 01019298978 Date Filed: 04/12/1991 Page: 4