Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-05088/USCOURTS-ca13-14-05088-0/pdf.json

Parties Involved:
Zaida Golena Del Rosario
Not party
Norman Douglas Diamond
Appellant
United States
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

NORMAN DOUGLAS DIAMOND,

Plaintiff-Appellant

ZAIDA GOLENA DEL ROSARIO,

Plaintiff

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2014-5088

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 13-cv-0292-SGB, Judge Susan G. Braden.

______________________ 

Decided: February 10, 2015

______________________ 

 NORMAN DOUGLAS DIAMOND, Tokyo, Japan, pro se.

 JANET A. BRADLEY, Tax Division, United States Department of Justice, Washington, DC, for defendantappellee. Also represented by MICHAEL J. HAUNGS, 

TAMARA W. ASHFORD. 

______________________ 

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2 DIAMOND v. US

Before PROST, Chief Judge, MOORE, and O’MALLEY,

Circuit Judges.

PER CURIAM. 

Norman Douglas Diamond and his wife, Zaida Golena 

Del Rosario, (collectively, “Appellants”), acting pro se,

appeal a decision of the United States Court of Federal 

Claims dismissing their claim for abatement of a 2008 

Internal Revenue Service (“IRS”) fee for lack of subject 

matter jurisdiction, and granting the government’s motion for summary judgment that they were not entitled to 

a tax refund for 2006-2011 tax years. See Diamond v. 

United States, 115 Fed. Cl. 516 (2014) (“Claims Decision”). 

Because the Court of Federal Claims did not err in its 

decision, we affirm.

BACKGROUND

Norman Diamond and his wife have been in a protracted dispute with the IRS since the early 1990s, when 

the IRS sent documents to the Appellants’ residence in 

Japan with Mr. Diamond’s Social Security number on the 

outside of the envelopes. Following this incident, both 

Mr. Diamond and his wife applied for new Social Security 

numbers and individual taxpayer identification numbers 

(“ITINs”). The two have not been issued new Social 

Security numbers, but received ITINs finally in 2011. 

In the interim, Appellants have had several other issues with the IRS regarding their tax returns. For example, the IRS fined Appellants several times for filing 

frivolous tax returns under 26 U.S.C. § 6702, including a 

$5,000 fee for filing a frivolous income tax return in 2008. 

Appellants challenged this assessment in 2011, but the 

IRS denied the request to abate the fee because Appellants had failed to timely challenge it. Appellants then 

protested this penalty by filing a petition in the United 

States Tax Court (“Tax Court”), but the Tax Court dismissed their petition for lack of subject matter jurisdiction

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DIAMOND v. US 3

in 2012. Because they contest the propriety of these fines 

and have yet to pay the penalties in full, Appellants 

continue to have outstanding tax liabilities. 

Despite these troubles, for the 2006-2011 tax years, 

Appellants actually overpaid a total of $881.93 in federal 

taxes: $116.95 for 2006; $131.49 for 2007; $192.31 for 

2008; $274.44 for 2009; $157.50 for 2010; and $36.24 for 

2011. See Claims Decision, 115 Fed. Cl. at 522 n.10. 

Rather than issue a refund, however, the IRS applied 

these overpayments to Appellants’ outstanding liabilities.

In light of the Tax Court’s decision to dismiss their 

2008 abatement claim and the IRS’s decision not to issue 

a refund for their overpayments, Appellants filed a complaint in the Court of Federal Claims, seeking an abatement of the penalty assessed for the frivolous 2008 tax 

return and a refund for their 2006-2011 tax years. 

Appellants contended that they were entitled to $881.93 

in refunds for the 2006-2011 tax years and also argued 

that the government had incorrectly determined that the 

2008 tax return was frivolous and requested an abatement of the $5,000 penalty. The government filed a 

motion to dismiss, arguing that the Court of Federal 

Claims lacked jurisdiction over the 2008 abatement claim 

and that Appellants were not entitled to a refund because 

the overpayments had been properly applied to other 

outstanding IRS debts.

Upon review of the motions, the Court of Federal 

Claims found in favor of the government on both issues. 

Claims Decision, 115 Fed. Cl. at 526, 530. It first explained that it only has jurisdiction over tax refund cases 

where a party pays the entire disputed assessment. 

Because Appellants had failed to pay the entire penalty 

before bringing suit, it could not exercise jurisdiction over 

the 2008 abatement claim. Id. at 526. Regarding the 

refund claim, because the parties heavily relied on matters outside the pleadings, the Court of Federal Claims 

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4 DIAMOND v. US

construed the government’s motion to dismiss as a motion 

for summary judgment, and granted the motion, finding 

that Appellants were not entitled to a refund. Id. at 522, 

530. The court explained that because it was within the 

IRS’s authority to apply overpayments to other outstanding liabilities, the IRS’s decision to apply $881.93 to 

Appellants’ unpaid penalties was permissible. Accordingly, the court concluded that Appellants were not entitled 

to any relief and entered judgment in favor of the government. 

Appellants timely appealed the Court of Federal 

Claims’ decision to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

On appeal, Appellants seek clarification as to whether 

any court has jurisdiction over their 2008 abatement 

claim. Appellants also contest the Court of Federal 

Claims’ decision to exercise jurisdiction over their 2006-

2011 refund claims, even though neither party questioned 

the court’s ability to consider these claims below. 

We review a Court of Federal Claims’ dismissal for 

lack of jurisdiction de novo. Banks v. United States, 741 

F.3d 1268, 1275 (Fed. Cir. 2014). We also review a grant 

of summary judgment de novo. Century Exploration New 

Orleans, LLC v. United States, 745 F.3d 1168, 1171 (Fed. 

Cir. 2014). Summary judgment is appropriate when there 

is no genuine issue of material fact and the moving party 

is entitled to judgment as a matter of law. Fed. R. Civ. P. 

56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986).

A. 2008 Abatement Claim

The Court of Federal Claims, concurrently with the 

United States District Courts, has jurisdiction over tax 

refund suits. See 28 U.S.C. §§ 1346(a)(1), 1491(a)(1). But 

a prerequisite to bringing such a claim in the Court of 

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DIAMOND v. US 5

Federal Claims is full payment of the assessed taxes. 

Flora v. United States, 362 U.S. 145, 177 (1960) (finding 

that the proper construction of 28 U.S.C. §1346(a)(1) 

“require[d] full payment of an assessment before an 

income tax refund suit [could] be maintained”); Ledford v. 

United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002) (affirming a dismissal of a tax refund case because the 

assessed tax had not been paid). This rule also applies 

when a taxpayer is protesting a penalty imposed under 26 

U.S.C. § 6702 by the IRS.1 Accordingly, the Court of 

Federal Claims lacks jurisdiction to consider a refund 

claim for an assessment made pursuant to § 6702, if the 

taxpayer does not pay the entire amount of the assessment. 

On appeal, Appellants question whether any court can 

consider its 2008 abatement claim, given that both the 

Court of Federal Claims and the Tax Court dismissed

claims relating to that question for lack of subject matter 

jurisdiction. See Claims Decision, 115 Fed. Cl. at 522. 

Typically, a taxpayer can challenge an assessment in 

one of two ways. The first is to file a petition with the Tax 

1 Unlike Section 6702 penalties, penalties assessed 

under Section 6700 or 6701 do not require full payment. 

Rather, a taxpayer can contest a penalty assessment 

under these sections by paying only 15% of the fine. 26 

U.S.C. § 6703(c) (requiring the taxpayer to pay at least 

15% of any penalty imposed under sections 6700 or 6701, 

and to file a claim seeking a refund of the amounts paid, 

before filing a suit in district court); see Nielsen v. United 

States, 976 F.2d 951, 954 n.7 (5th Cir. 1992) (“Section 

6703 provides an exception to the general rule that the 

entire amount of the assessment must be paid up front. 

Under Section 6703 the taxpayer may contest § 6700 and 

6701 penalties by paying only 15% of the assessment and 

filing a refund suit in federal district court.”).

 

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Court without paying the assessment, and the second is to 

pay the assessment, request a refund from the IRS, and 

then file a refund suit in the Court of Federal Claims or in 

the district court. See 26 U.S.C. § 7422(a); Smith v. 

United States, 495 F. App’x 44, 48 (Fed. Cir. 2012) (explaining how a taxpayer can dispute an income tax assessment in the Tax Court or the Court of Federal 

Claims). 

In this case, Appellants first filed a petition in the Tax 

Court regarding their 2008 fee, and then subsequently 

filed a complaint in the Court of Federal Claims after the 

Tax Court dismissed their petition. Appellants are correct that both courts dismissed their claim for lack of 

subject matter jurisdiction, but neither court stated it 

could never consider the claim. Rather, in both instances, 

Appellants failed to comply with certain prerequisites to 

the exercise of jurisdiction in those courts. The Tax Court 

dismissed Appellants’ 2008 abatement claim because 

Appellants failed to provide an IRS notice sufficient to 

confer jurisdiction upon the court and the Court of Federal Claims dismissed this same claim because Appellants 

did not pay the disputed penalty in full. 2 See Diamond v. 

Comm’r, No. 13878-12S (T.C. Aug. 28, 2012); Claims 

Decision, 115 Fed. Cl. at 526. 

In order to bring a claim in either venue, Appellants 

had to comply with all governing prerequisites to doing 

so. See Rochelle v. Comm’r, 116 T.C. 356, 358 (2001) 

(“There are two prerequisites to this Court’s jurisdiction 

to redetermine a deficiency: (1) The issuance of a valid 

notice of deficiency by the Commissioner; and (2) the 

timely filing of a petition with the Court by the taxpayer.”); Shore v. United States, 9 F.3d 1524, 1526 (Fed. Cir. 

1993) (holding that a tax refund claim must be dismissed 

2 The propriety of the dismissal by the Tax Court is 

not before us.

 

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DIAMOND v. US 7

if the “principal tax deficiency has not been paid in full”);

see also Brach v. United States, 443 F. App’x. 543, 545

(Fed. Cir. 2011) (explaining that full payment of an assessment was a “jurisdictional prerequisite to suing for a 

refund suit.”); Chi. Milwaukee Corp. v. United States, 40 

F.3d 373, 374 (Fed. Cir. 1994) (finding that 26 U.S.C. 

§ 7422(a) “imposes, as a jurisdictional prerequisite to a 

refund suit, filing a refund claim with the IRS that complies with IRS regulations”). In the case of the Court of 

Federal Claims, this includes full payment of the challenged assessment.

In the present case, the Court of Federal Claims found 

that there was no allegation and no proof that Appellants 

had paid the entire 2008 penalty assessment. See Claims 

Decision, 115 Fed. Cl. at 525–26. Because Appellants 

failed to pay the full 2008 assessment, the Court of Federal Claims concluded it did not have jurisdiction to 

consider this claim. See Schell v. United States, 589 F.3d 

1378, 1381 (Fed. Cir. 2009) (“As the party seeking the 

exercise of jurisdiction, the Taxpayers have the burden of 

establishing that jurisdiction exists.”). As there was no 

evidence that Appellants paid the entire fee, the Court of 

Federal Claims correctly determined that it lacked jurisdiction to consider the Appellants’ 2008 abatement claim. 

Accordingly, the Court of Federal Claims did not err when 

it dismissed this portion of Appellants’ complaint for lack 

of jurisdiction.

B. Tax Refund Claims for 2006-2011

For the first time on appeal Appellants question 

whether the Court of Federal Claims had jurisdiction over 

their refund claims for the 2006-2011 tax years. They

allege that this court’s decision in a case concerning 

Appellants’ 2005 tax return, Diamond v. United States, 

530 F. App’x 943 (2013), deprived the Court of Federal 

Claims of jurisdiction over the Appellants’ 2006-2011 tax 

returns. In the prior case, the Court of Federal Claims 

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8 DIAMOND v. US

determined that Appellants’ 2005 tax return did not 

contain sufficient information, did not evince an honest 

endeavor to satisfy the law, and therefore did not constitute a proper claim for a refund. Because it only has 

jurisdiction over a refund claim if “the taxpayers’ submissions to the IRS constitute a claim for refund,” the Court 

of Federal Claims dismissed Appellants’ refund claim for 

the 2005 tax year. Diamond, 530 F. App’x at 944 (quoting 

Waltner v. United States, 679 F.3d 1329, 1333 (Fed. Cir. 

2009)). On appeal, this court affirmed, agreeing with the 

Court of Federal Claims’ determination that Appellants’ 

2005 tax return was not a proper claim for a refund. Id. 

Here, Appellants allege that the same deficiencies 

found in their 2005 tax return are present in the returns 

at issue in this case. Therefore, Appellants contend that 

the Court of Federal Claims could not have exercised 

jurisdiction, because such returns were not valid claims 

for refunds. At the Court of Federal Claims, Appellants 

only contested the IRS’s decision to credit their overpayments to other outstanding liabilities. As a general 

principle, appellate courts do not consider issues that 

were not clearly raised in the proceeding below. Hormel 

v. Helvering, 312 U.S. 552, 556 (1941); see San Carlos 

Apache Tribe v. United States, 639 F.3d 1346, 1355 (Fed. 

Cir. 2011) (“Because the [litigant] did not raise this argument before the Court of Federal Claims, it is waived on 

appeal.”). “Only rarely will an appellate court entertain” 

a novel argument raised for the first time on appeal. 

Karuck Tribe v. Ammon, 209 F.3d 1366, 1379 (Fed. Cir. 

2000); see Singleton v. Wulff, 428 U.S. 106, 121 (1976) 

(“The matter of what questions may be taken up and

resolved for the first time on appeal is one left primarily 

to the discretion of the courts of appeals, to be exercised 

on the facts of individuals case.”). Because Appellants 

failed to raise this issue below, they have waived it.

Even if Appellants had made this argument to the 

Court of Federal Claims, it is meritless. In the case 

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DIAMOND v. US 9

concerning their 2005 tax return, the IRS never accepted 

a return from Appellants. See Diamond, 530 F. App’x at 

944 (explaining that before Appellants filed suit against 

the government in the Court of Federal Claims for a 

refund, the IRS had asked Appellants twice to provide 

additional information so that the IRS could process the 

return, but Appellants had failed to do so). But, for the 

years in dispute in this case, the IRS eventually did 

accept all of Appellants’ tax returns, finding that any 

deficiencies in the original returns had been corrected in 

subsequent amended returns. Therefore, the concerns 

raised in the prior case are not at issue here.

Regarding the legality of the IRS’s decision to apply 

Appellants’ overpayments to their outstanding tax liabilities for other years, the Court of Federal Claims correctly 

concluded that the IRS has the authority to do so. See 26 

U.S.C. § 6402(a) (“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 . . . .”); General Elec. Co. v. United 

States, 384 F.3d 1307, 1312 (Fed. Cir. 2004) (explaining 

that the IRS has the ability to credit overpayments 

“against the liability of the person who made the overpayment”). Because this was the only issue disputed by 

the parties below, the Court of Federal Claims properly 

determined that Appellants had “received the benefit of 

the refund they [sought]” and “[a]s such, the court can 

afford them no further relief.” Claims Decision, 115 Fed. 

Cl. at 528. As there were no other issues concerning the 

Appellants’ refund claims, the Court of Federal Claims 

did not err in granting summary judgment in favor of the 

government. 

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10 DIAMOND v. US

CONCLUSION

Accordingly, we affirm the Court of Federal Claims’ 

decision dismissing Appellants’ 2008 abatement claim for 

lack of jurisdiction, and granting the government’s motion 

for summary judgment that Appellants were not entitled 

to a refund for the tax years 2006-2011.

AFFIRMED

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