Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-19-02406/USCOURTS-ca13-19-02406-0/pdf.json

Parties Involved:
United States
Appellee
Sharon M. Walby
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________

SHARON M. WALBY,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________

2019-2406

______________________

Appeal from the United States Court of Federal Claims 

in No. 1:19-cv-00873-MMS, Chief Judge Margaret M. 

Sweeney.

______________________

Decided: April 29, 2020

______________________

SHARON M. WALBY, Palms, MI, pro se. 

 NATHANIEL POLLOCK, Tax Division, United States Department of Justice, Washington, DC, for defendant-appellee. Also represented by ARTHUR THOMAS CATTERALL, 

RICHARD E. ZUCKERMAN. 

 ______________________

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2 WALBY v. UNITED STATES

Before NEWMAN, O’MALLEY, and TARANTO, Circuit Judges.

O’MALLEY, Circuit Judge.

Sharon M. Walby (“Walby”) filed this action in the 

Court of Federal Claims (“Claims Court”) on June 13, 2019, 

seeking a refund of federal income taxes withheld from her 

wages for the years 2014, 2016, 2017, and 2018. The 

Claims Court dismissed Walby’s complaint sua sponte for 

failure to state a claim upon which relief can be granted, 

and, additionally, with respect to the 2014 taxes, for lack of 

subject matter jurisdiction. Walby v. United States, 144 

Fed. Cl. 1, 11 (2019). Walby appeals and the government 

moves for sanctions. For the reasons explained below, we 

affirm the Claims Court’s decision and deny the government’s motion for sanctions. 

BACKGROUND1

Walby was born in Michigan, and, for the relevant time 

period, lived and worked in Michigan. Walby, 144 Fed. Cl. 

at 4. For the 2014 taxable year, Walby’s employer, Baker 

College, withheld $9,751.60 in federal income taxes from

her wages. Id. In 2015, Walby claimed exemption from all 

withholdings and her employer did not withhold any federal income taxes from her paychecks for that year. Id. 

That same year, in January, Walby executed an “Affidavit 

of Citizenship” before a notary public and submitted it to 

the United States Department of State (“State Department”). Id. In this affidavit, Walby declared that she was 

a sovereign citizen of the state of Michigan and, “because 

she was not restricted by the 14th Amendment to the 

United States Constitution, she was not a United States 

citizen thereunder but rather a nonresident alien not subject to income taxes.” Id. (internal quotation marks 

1 Our discussion of the relevant factual background 

is based on the Claims Court’s recitation of the allegations 

in Walby’s complaint and the exhibits attached thereto.

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WALBY v. UNITED STATES 3

omitted). According to Walby, the act of submitting the affidavit made her a nonresident alien. Id.

In November 2016, at the direction of the Internal Revenue Service (“IRS”), Baker College again began to withhold federal income taxes from Walby’s paychecks. It

withheld income taxes in the amount of $1,882.36 for the 

year 2016, $13,032.52 for the year 2017, and $10,924.43 for 

the year 2018.

Based on her assertion that she was exempt from federal income taxes, Walby did not file federal income tax returns for the 2014–2018 tax years. Instead, she filed two 

separate Forms 843, Claim for Refund and Request for 

Abatement. She filed the first of these forms with the IRS

on December 22, 2017, claiming a refund of the federal income taxes withheld from her 2014 paychecks. Walby filed 

the second of these forms with the IRS on December 8, 

2018, claiming a refund of federal income taxes withheld 

from her 2016–2018 paychecks. Walby alleges that, despite her request for a hearing, the IRS did not respond to 

these refund claims. Walby therefore filed this tax refund 

lawsuit against the government on June 13, 2019. 

On July 19, 2019, the Claims Court dismissed Walby’s 

complaint sua sponte. Walby, 144 Fed. Cl. at 1. Citing Internal Revenue Code (“I.R.C.”) § 7422(a), the trial court explained that filing a timely refund claim with the IRS is a 

jurisdictional prerequisite to filing a refund suit. The court 

further explained that: (1) a timely administrative refund 

claim must be filed within two years of the taxes being 

paid; and (2) withheld federal income taxes for each calendar year are deemed paid on April 15 of the following year. 

Walby, 144 Fed. Cl. at 7 (citing I.R.C. §§ 6511, 6513). Based 

on the foregoing, the court found that Walby’s 2014 administrative tax refund claim was untimely because it was filed

in December 2017, more than two years after April 15, 

2015—the date those taxes were deemed paid. Id. 

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4 WALBY v. UNITED STATES

Accordingly, the court held that it lacked jurisdiction over 

Walby’s 2014 refund claim. Id. at 8.

By contrast, the court found that Walby’s refund claims

for the years 2016–2018 were timely because they were 

filed on December 8, 2018, within two years of when those 

taxes were deemed paid. The court therefore found that it 

had jurisdiction over those refund claims. Id. The court 

nevertheless dismissed these claims as meritless for two 

separate reasons: (1) Walby was a Unites States born individual who could not meet “the burden of proof to establish ‘a loss of United States nationality,’” and (2) even if she 

were a nonresident alien, Walby qualified as a United 

States resident for tax purposes pursuant to I.R.C. § 7701 

by virtue of her substantial presence in the United States 

during the relevant time period. Id. at 8–9. Accordingly, 

the Claims Court dismissed Walby’s complaint. Walby 

timely appeals. We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(3). 

DISCUSSION

A. Walby’s Appeal

Whether the Claims Court properly dismissed a complaint for lack of subject matter jurisdiction, or for failure 

to state a claim upon which relief can be granted, are both

questions of law that we review de novo. Anaheim Gardens 

v. United States, 444 F.3d 1309, 1314 (Fed. Cir. 2006);

Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir. 

2004). We reverse the Claims Court’s legal conclusion only 

if it is incorrect as a matter of law. See Placeway Constr. 

Corp. v. United States, 920 F.2d 903, 906 (Fed. Cir. 1990). 

We address in turn the Claims Court’s determinations regarding the timeliness of Walby’s 2014 administrative refund claim and her failure to state a claim upon which 

relief can be granted.

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WALBY v. UNITED STATES 5

1. Timeliness 

Congress has waived sovereign immunity over tax refund suits pursuant to 28 U.S.C. § 1346(a)(1), which provides the Claims Court (and district courts) with the 

authority to hear “[a]ny civil action against the United 

States for the recovery of any internal-revenue tax alleged 

to have been erroneously or illegally assessed or collected.” 

28 U.S.C. § 1346(a). That waiver is limited, however, and 

certain preconditions must be met before a taxpayer is permitted to bring a tax refund suit. Specifically, the taxpayer 

must make full payment of the tax liability, bring a timely 

claim for refund with the IRS, and file a timely complaint 

after the refund claim is denied or deemed denied. I.R.C. 

§§ 7422(a), 6532(a); Shore v. United States, 9 F.3d 1524, 

1526 (Fed. Cir. 1993). 

On appeal, Walby does not challenge the Claims 

Court’s determination that her IRS refund claim for the 

2014 tax year was untimely. “Our law is well established 

that arguments not raised in the opening brief are waived.” 

SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 

1319 (Fed. Cir. 2006). Accordingly, we treat any argument 

regarding the Claims Court’s dismissal of Walby’s 2014 refund claim as waived. 

Even if these arguments were not waived, however, we 

see no error in the trial court’s determination that Walby’s 

2014 administrative refund claim was untimely. I.R.C. 

§ 7422(a) provides, “[n]o suit or proceeding shall be maintained in any court for the recovery of any internal revenue 

tax alleged to have been erroneously or illegally assessed 

or collected . . . until a claim for refund or credit has been 

duly filed with the Secretary, according to the provisions of 

law in that regard, and the regulations of the Secretary established in pursuance thereof.” And I.R.C. § 6511(a) provides that, for cases where no return was filed by the 

taxpayer, an administrative refund claim must be filed 

with the IRS within 2 years from the time the tax was paid. 

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6 WALBY v. UNITED STATES

“[T]he plain language of 26 U.S.C. §§ 7422(a) and 6511 requires a taxpayer seeking a refund for . . . unlawfully assessed tax[es], to file a timely administrative refund claim 

before bringing suit against the Government.” United 

States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 14 

(2008). 

In Walby’s case, her 2014 claims were deemed paid on 

April 15, 2015 because withheld income taxes are deemed 

to have been paid on April 15th of the following year. I.R.C. 

§ 6513(b). To be timely, her administrative refund claim 

should have been filed with the IRS by April 15, 2017. But 

Walby did not file her refund claim until December 22, 

2017. Walby’s 2014 refund claim was, therefore, untimely

and the Claims Court properly dismissed that claim. 

There is one aspect of the court’s conclusion regarding 

this claim, however, that warrants additional examination. 

The Claims Court concluded that, because Walby’s 2014 

administrative refund claim was untimely, pursuant to 26 

U.S.C. § 7422(a), it lacked subject matter jurisdiction over 

that claim. Although this conclusion is correct under our 

existing case law, see, e.g., Stephens v. United States, 884 

F.3d 1151, 1156 (Fed. Cir. 2018), it may be time to reexamine that case law in light of the Supreme Court’s clarification that so-called “statutory standing” defects—i.e., 

whether a party can sue under a given statute—do not implicate a court’s subject matter jurisdiction. Lexmark Int’l, 

Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 

n.4 (2014); see also Lone Star Silicon Innovations LLC v. 

Nanya Tech. Corp., 925 F.3d 1225, 1235 (Fed. Cir. 2019)

(recognizing that, following Lexmark, it is incorrect to classify “so-called” statutory-standing defects as jurisdictional).

The Tucker Act grants the Claims Court jurisdiction to 

render judgment “upon any claim against the United 

States founded either upon the Constitution, or any Act of 

Congress . . . in cases not sounding in tort.” 28 U.S.C. 

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WALBY v. UNITED STATES 7

§ 1491(a)(1). Additionally, 28 U.S.C. § 1346(a) provides 

that the Claims Court shall have original jurisdiction (concurrent with the district courts) of “[a]ny civil action 

against the United States for the recovery of any internalrevenue tax alleged to have been erroneously or illegally 

assessed or collected.” As such, Walby’s failure to meet the 

§ 7422(a) statutory requirement of a timely administrative 

claim for her 2014 tax claim would not seem to implicate 

the Claims Court’s subject matter jurisdiction; rather, it 

appears to be a simple failure to meet the statutory precondition to maintain a suit against the government with respect to those taxes. 

The Supreme Court has not addressed § 7422(a) following Lexmark. We note, however, that the Court’s most recent discussion of § 7422(a) does not describe it as 

“jurisdictional.” See Clintwood Elkhorn Mining Co., 553 

U.S. 1 at 4–5, 11–12. And, although our court has continued to refer to this statute as jurisdictional following 

Lexmark, we have not yet addressed the implications of 

that case and the many Supreme Court cases applying it.2 

In view of the Supreme Court’s guidance in Lexmark, 

it may be improper to continue to refer to the administrative exhaustion requirements of § 7422(a) and § 6511 as 

“jurisdictional pre-requisites.” That these provisions concern the United States’ consent to be sued would not seem 

to change this conclusion. The Supreme Court has “made 

plain that most time bars are nonjurisdictional.” United 

States v. Kwai Fun Wong, 575 U.S. 402, 410 (2015). In 

Kwai Fun, the Court held that the time bar in the Federal 

Tort Claims Act is nonjurisdictional. In doing so, it rejected

the Government’s argument that, because that time bar is 

2 See, e.g., Stephens v. United States, 884 F.3d 1151, 

1156 (Fed. Cir. 2018); see also Ellis v. United States, 796 F. 

App’x 749, 750 (Fed. Cir. 2020); Langley v. United States, 

716 F. App’x 960, 963 (Fed. Cir. 2017). 

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8 WALBY v. UNITED STATES

a precondition to the FTCA’s waiver of sovereign immunity, the time bar must be jurisdictional. As it had in 

Lexmark, the Court distinguished jurisdictional statutes 

from “quintessential claim-processing rules which seek to 

promote the orderly progress of litigation, but do not deprive a court of authority to hear a case.” Id. (internal quotation marks omitted). It did not except statutes that 

implicate the government’s waiver of sovereign immunity 

from that distinction. 

In reaching this conclusion, the Court relied on Arbaugh v. Y&H Corp., where, finding Title VII’s numerical 

employee threshold nonjurisdictional, the Supreme Court 

stated: 

If the Legislature clearly states that a threshold 

limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the 

issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts 

should treat the restriction as nonjurisdictional in 

character.

546 U.S. 500, 515–16 (2006). This “clear statement” rule 

“does not mean Congress must incant magic words. But 

traditional tools of statutory construction must plainly 

show that Congress imbued a procedural bar with jurisdictional consequences.” Kwai Fun, 575 U.S. at 410 (internal 

quotation marks omitted). There is no such clear statement apparent in the statutes at issue here, 28 U.S.C. §

7422(a) and § 6511(a).3 Other courts also have begun to 

3 We are mindful of the Supreme Court’s preLexmark jurisprudence concerning § 7422(a). In United 

States v. Dalm, the Court held that the district court lacked 

jurisdiction over gift tax refund suit because “[d]espite its 

spacious terms, § 1346(a)(1) must be read in conformity 

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WALBY v. UNITED STATES 9

question whether the time limits and administrative exhaustion requirements in these and other tax provisions 

should continue to be deemed jurisdictional. See Gillespie 

v. United States, 670 F. App’x 393, 394–95 (7th Cir. 2016)

(whether § 7422(a) is jurisdictional); Bullock v. I.R.S, 602 

F. App’x 58, 60 n.3 (3d Cir. 2015) (whether I.R.C. § 7433 is 

jurisdictional). As to at least one administrative exhaustion requirement, one court has held that it should not be

deemed jurisdictional. See Gray v. United States, 723 F.3d 

795, 798 (7th Cir. 2013) (I.R.C. § 7433 “contains no language suggesting that Congress intended to strip federal 

courts of jurisdiction when plaintiffs do not exhaust administrative remedies”); cf. Duggan v. Comm’r of Internal Revenue, 879 F.3d 1029, 1034 (9th Cir. 2018) (I.R.C. §

6630(d)(1)’s 30-day filing deadline “expressly contemplates 

the Tax Court’s jurisdiction . . . the filing deadline is given 

in the same breath as the grant of jurisdiction.”).

Accordingly, although the Claims Court properly dismissed Walby’s 2014 refund claim because she did not meet 

the prerequisite for bringing such a claim, we think that, 

under Lexmark, Arbaugh, and their progeny, the court

likely did not lack subject matter jurisdiction over this 

claim. 

with [§ 7422(a) and § 6511(a)] which qualify a taxpayer’s 

right to bring a refund suit upon compliance with certain 

conditions.” 494 U.S. 596, 601 (1990). The Court referred 

to the statutes as “controlling jurisdictional statutes.” Id.

at 611. But this view was a departure from the Court’s 

prior commentary on a predecessor to § 7422(a), recognizing that it “was not a jurisdictional statute at all; it simply 

specified that suits for recovery of taxes, penalties, or sums 

could not be maintained until after a claim for refund had 

been submitted.” Flora v. United States, 362 U.S. 145 

(1960).

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2. Walby’s Failure to State a Claim 

As to her refund claims for the 2016–2018 tax years, 

the Claims Court found these claims were meritless because Walby is a United States citizen.4 The Claims Court 

explained that, under the Fourteenth Amendment, all persons born in the United States, and subject to its jurisdiction, are citizens of the United States as well as of the state 

in which they reside. The Claims Court found that Walby, 

a Michigan-born individual, was born in the United States. 

It also found that the exception to birthright citizenship for 

individuals not subject to the jurisdiction of the United 

4 With respect to Walby’s 2018 refund claim, in its 

jurisdictional statement, the government states that the 

Claims Court lacked jurisdiction over this claim because 

Walby filed her administration refund claim with the IRS 

before the tax was deemed paid on April 15, 2019 and, as 

such, the claim was not “duly filed” within the meaning of 

I.R.C. § 7422(a). Appellee Br. vii. Again, it appears that

the government confuses a plaintiff’s need to satisfy certain 

statutory requirements before being entitled to recover on 

an asserted claim with the court’s jurisdiction to consider 

or adjudicate that claim. “‘[T]he absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the court’s statutory or 

constitutional power to adjudicate the case.’” Verizon Md. 

Inc. v. Public Serv. Comm’n of Md., 535 U.S. 635, 642–43 

(2002) (quoting Steel Co. v. Citizens for Better Env’t, 523 

U.S. 83, 89 (1998)). We need not address whether Walby’s 

claim was “duly filed,” however, because we agree with the 

Claims Court that Walby’s claim is meritless on other 

grounds. See Morrison v. Nat’l Australia Bank Ltd., 561 

U.S. 247, 254 (2010) (declining to remand because “nothing 

in the analysis of the court[] below turned on the mistake, 

a remand would only require a new Rule 12(b)(6) label for 

the same Rule 12(b)(1) conclusion.”)

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WALBY v. UNITED STATES 11

States did not apply to Walby, noting that her parents were 

not foreign diplomats at the time of her birth but, like her, 

were born in Michigan. Thus, the court held that Walby is

a citizen of the United States. The court also held that, 

even if Walby were a non-citizen, she meets the “substantial presence” test for the relevant tax years, making her a 

United States resident for tax purposes. Walby, 144 Fed. 

Cl. at 10. 

On appeal, Walby does not meaningfully challenge the 

Claims Court’s substantial presence determination. Instead, she argues, as she did before the Claims Court, that

she is not a citizen of the United States pursuant to the 

14th Amendment of the Constitution. Appellant’s Br. 5, 

21. She argues that she has never been a slave and should 

never have been classified as a 14th Amendment Citizen 

because “14th Amendment citizenship was for freed slaves 

only—none of which exist today.” Id. at 4, 8. She further 

insists that she has not renounced her United States citizenship, “nor is she required to do so.” Id. at 21. She explains that she has, instead, “simply reclaimed the State 

citizenship available since 1787, by submitting an ‘Affidavit of Citizenship.’” Id. Walby contends that, pursuant to 

this affidavit, she has abandoned the default 14th Amendment Citizenship, which was “wrongfully imposed on a 

free-born State Citizen.” Id.

Walby also appears to argue that her “Affidavit of Citizenship” established her “non-citizen National” status because the U.S. Secretary of State accepted it in the course 

of her passport renewal “without rebuttal or resistance.” 

Id. at 5. Finally, Walby appears to argue that another notarized affidavit, her December 7, 2016 “Revocation of 

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12 WALBY v. UNITED STATES

Election,” establishes her non-citizen status pursuant to 26 

U.S.C. § 6013(g).5 Id. at 12. 

Walby’s arguments are unavailing. Under the 14th 

Amendment, “[a]ll persons born or naturalized in the 

United States, and subject to the jurisdiction thereof, are 

citizens of the United States and of the state wherein they 

reside.” U.S. Const. amend. XIV, § 1. Walby, born in Michigan to parents who were not foreign diplomats and themselves were born in the United States, provides no basis on 

which she falls outside that language. Walby does not argue, moreover, that she has renounced her United States 

citizenship pursuant to 8 U.S.C. § 1481(a). In fact, she 

states that she is not required to do so. 

Walby’s other arguments in support of her claim of 

non-citizen status also fail. To the extent Walby relies on 

the renewal of her passport as proof of her “non-citizen National” status, no such legal status exists. Further, the excerpted March 11, 2014 letter from the State Department 

that Walby submitted in support of this argument clearly 

stated that “a U.S. passport will be issued [to Walby] stating that [she is] a U.S. citizen.” See Appellant Br. 5; Excerpted March 11, 2014 Letter (document bearing number 

00173227-0672).6 Walby’s “Revocation of Election” pursuant to 26 U.S.C. § 6013(g) fares no better. This statute 

5 This “Revocation of Election” was included in 

Walby’s Informal Appendix, and, unlike the other documents at issue in this appeal, does not appear to have been 

included as an exhibit to Walby’s complaint. The government does not object to the submission of this document in 

Walby’s appellate submissions. 

6 Walby’s Informal Appendix does not contain any 

Bates numbering or consecutive pagination, so we have 

identified this document through the document number 

stamped on the first page, as Walby did in her opening 

brief. 

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WALBY v. UNITED STATES 13

relates to joint returns filed by married individuals where 

a nonresident alien is married to a citizen or resident of the 

United States. It does not provide an avenue for Walby to 

renounce her citizenship or unilaterally declare herself a 

non-citizen.

As such, Walby has failed to demonstrate that she is 

not a United States citizen. She is therefore subject to federal income taxes and the Claims Court properly dismissed 

her complaint for failure to state a claim upon which relief 

can be granted.

B. The Government’s Motion

On December 20, 2019, the government filed a motion 

seeking sanctions against Walby in the amount of $8,000 

for maintaining a frivolous appeal, pursuant to I.R.C. 

§ 7482(c)(4), 28 U.S.C. § 1912, and Rule 38 of the Federal 

Rules of Appellate Procedure. According to the government, the Claims Court rejected Walby’s citizenship argument as “patently frivolous,” but Walby again presented 

these arguments on appeal. Appellee’s Mot. for Sanctions 

at 3–5 (citing, inter alia, Zuger v. United States, 834 F.2d 

1009, 1010 (Fed. Cir. 1987)). The government contends 

that this warrants an imposition of sanctions on Walby. 

On January 27, 2020, Walby filed a response to the government’s motion. In her response, Walby states that her 

case is not frivolous because, prior to filing this case, she 

searched the Court of Claim’s website and did not find any 

cases discussing a “Revocation of Election.” Appellant’s 

Resp. at 6. According to Walby, her case is therefore “the 

first of its kind.” Id. 

Under Rule 38, sanctions may be imposed for frivolous 

appeals even if the litigant is proceeding pro se. See Finch 

v. Hughes Aircraft Co., 926 F.2d 1574, 1582 (Fed. Cir. 

1991). At the same time, we must exercise caution before 

“imposing sanctions on a pro se litigant, whose improper 

conduct may be attributed to ignorance of the law and 

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14 WALBY v. UNITED STATES

proper procedures.” Id. We agree with the Claims Court 

that Walby’s arguments in support of her non-citizen status are “patently frivolous.” Walby, 144 Fed. Cl. at 9. We 

decline to impose sanctions on Walby in this instance, however, because her filing of this frivolous appeal may be attributable to her ignorance of the law.7 Accordingly, we 

deny the government’s motion for sanctions. The government may, however, seek sanctions against Walby should 

she continue to bring similar claims in future. 

CONCLUSION

For the foregoing reasons, we affirm the Claims Court’s 

decision and deny the government’s motion. 

AFFIRMED

7 To be clear, we do not suggest that Walby’s subjective belief in the merits of her appeal is in any way relevant 

to whether her appeal is frivolous as filed.

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