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IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF FLORIDA

GAINESVILLE DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v. CASE NO. 1:03-cv-00090-MP-AK

JACK CARL RYALS,

Defendant.

___________________________/

O R D E R 

This matter is before the Court on Doc. 16, Plaintiff's motion for summary judgment. 

The parties do not dispute any significant material facts relating to Defendant's liability. Instead,

the parties debate whether the Plaintiff is entitled to bring this action. Such issues are a question

of law for this Court to decide, and therefore a matter properly disposed of on summary

judgment. For the reasons discussed below, the Court holds that summary judgment is

appropriate for the Government. Additionally, the Court holds that it is without jurisdiction to

ascertain the merits of Counts One through Eight of Defendant's counterclaims. Finally, the

Court grants the Government’s motion to dismiss Counts Nine and Ten of Defendant’s

counterclaims.

I. STATEMENT OF FACTS

Defendant failed to pay taxes to the United States (“the Government”) for the years 1977

and 1978, and was adjudicated to owe $526,465.43 in taxes, penalties, and interest by Order and

Decision on February 28, 1989. See Doc. 1. The taxes owed by Defendant were assessed on

June 22, 1989, see Doc. 1 & Doc. 5, but Defendant has failed to pay the assessments as of the

date of this opinion. The amount of tax liability has been agreed upon and is not disputed by

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either party. Doc. 21. Instead, the parties dispute, among other things, whether the statute of

limitations has run on the Government’s ability to pursue collection prior to the time of the

Government filing this claim against Defendant.

Defendant submitted an offer-in-compromise on August 18, 1997 pursuant to 26 U.S.C. 

§ 6331(k) relating to the 1977 and 1978 tax liabilities. See Doc. 17-1 at 1. Although there is

some discrepancy over the date of the rejection, it appears that Defendant appealed the initial

rejection of his offer-in-compromise, which was pending until either January 25, 2000 – at which

time the Government again rejected the offer – or January 7, 2000 – at which time Defendant

claimed to have rescinded the offer. Doc. 21.

Defendant again submitted an offer-in-compromise on June 14, 2000 to the Government

to settle the tax liabilities assessed against him. That offer was initially rejected by the

Government and again appealed by Defendant, until ultimately rejected by the Government on

March 12, 2002. Doc. 17-1 at 2.

Throughout the process by which Defendant submitted offers-in-compromise to the

Government, he worked closely with an IRS officer named Maureen Quinn. Id. at 4. Although

there is some dispute as to the extent of the communications between Quinn and Defendant,

Quinn served, at a minimum, as a middle-woman and resource for Defendant as he attempted to

satisfy the judgment entered against him in favor of the Government. 

During the pendency of the offers-in-compromise submitted by Defendant, Defendant

also filed a Form 1040X, Amended United States Individual Income Tax Return, on or around

May 26, 2000, seeking a refund for the years 1992-99. Defendant was seeking refund of

amounts allegedly unlawfully seized by the IRS and applied to Defendant’s earlier tax

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Case No: 1:03-cv-00090-MP-AK

deficiencies. As will be discussed infra, the parties dispute whether these forms were properly

submitted or rejected by the IRS. See infra pp. 10-16. Similarly, Defendant also filed a Form

1040X for the years 2000 & 2001 seeking a return of illegally seized earnings. 

II. STANDARD FOR SUMMARY JUDGMENT

Under federal rules, summary judgment shall be granted “if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the affidavits . . . show that

there is no genuine issue as to any material fact and that the moving party is entitled to judgment

as a matter of law.” FED. R. CIV. P. 56(c). The materiality of a fact is based on whether it is a

legal element of a claim that might affect the outcome of a case. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986). Moreover, an issue must be considered “genuine” where “the

evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

On a motion for summary judgment, the Court must consider whether there is such

disagreement that the fact-finding talents of a jury are required, or instead whether the facts as

proven by the parties allow only one outcome. See Anderson, 477 U.S. at 251-52. Of course,

the moving party “always bears the initial burden of informing the district court of the basis for

its motion . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When moving for

summary judgment, the moving party must demonstrate the absence of any genuine issue to any

material fact. Adickes v. S.H. Cress & Co., 398 U.S. 144, 157 (1970). “Only disputes over facts

that might affect the outcome of the suit under the governing law will properly preclude the entry

of summary judgment.” Anderson, 477 U.S. at 248. Any concerns secondary to the complaint

are to be disregarded in determining whether to grant a motion for summary judgment. 

McCormick v. City of Ft. Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003). Finally, the Court

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shall consider the movant’s motion and evidence in the light most favorable to the nonmoving

party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296 (11th Cir. 2002). Where reasonable

minds may draw different conclusions from accepted facts, a court has no choice but to deny

summary judgment. Hunt v. Cromartie, 526 U.S. 541, 553 (1999).

III. DEFENDANT’S AFFIRMATIVE DEFENSES

Defendant has raised three affirmative defenses in his answer to the Government’s

action: estoppel, laches, and statute of limitations. Each is discussed in turn below.

A. Estoppel

Defendant claims that the Internal Revenue Service enticed him into filing offers-incompromise, thereby extending unfairly the statute of limitations. See Doc. 5. Defendant,

however, cannot successfully raise the defense of estoppel against the government where an

agent of the Government has purported to advise the taxpayer. Even if Defendant’s claim in

regards to the advice given by Revenue Officer Maureen Quinn were accepted as true – namely

that Defendant’s offers-in-compromise would be given consideration and would likely be

accepted – Defendant cannot maintain that the Government is estopped from pursuing one of its

sovereign powers, the collection of taxes, because of the words of a special agent. Although

estoppel may be appropriate theoretically where there is an “affirmative conduct,” see INS v.

Hibsi, 414 U.S. 5, 8 (1973) (per curiam), the Eleventh Circuit has specifically disavowed such a

result where the government acts as a sovereign. See FDIC v. Harrison, 735 F. 2d 408, 411

(11th Cir. 1984) (“Activities undertaken by the government primarily for the commercial benefit

of the government or an individual agency are subject to estoppel while actions involving the

exercise of exclusively governmental or sovereign powers are not.”). Defendant’s claim to the

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1

Decisions rendered by the Fifth Circuit prior to the close of business on September 30,

1981 are binding precedent on the Eleventh Circuit. See Bonner v. City of Prichard, 661 F. 2d

1206, 1209 (11th Cir. 1981) (en banc).

Case No: 1:03-cv-00090-MP-AK

contrary is without merit. 

B. Laches

Defendant also claims that the Government is barred by the doctrine of laches from

pursuing claims against the Defendant. Doc. 5. Defendant claims that inequity would result

from allowing the Government to entice Defendant into extending the statute of limitations on

his debts. Doc. 5. Regardless of the veracity of Defendant’s claims regarding the Government’s

supposed enticement, this defense is also without merit. “It is well settled that the United States

is not . . . subject to the defense of laches in enforcing its rights.” United States v. Summerlin,

310 U.S. 414, 416 (1940); see also United States v. Nicholl, 25 U.S. (12 Wheat.) 505, 509 (1827)

(finding that “laches is not imputable to the government”); United States v. Delgado, 321 F.3d

1338, 1348-49 (11th Cir. 2003); Herman v. South Carolina Nat. Bank, 140 F.3d 1413, 1427

(11th Cir. 1988). Furthermore, in the context of sovereign powers, the Eleventh Circuit has

specifically recognized that laches cannot bar the enforcement of government tax claims. Lucia

v. United States, 474 F. 2d 565, 570 & n.13 (5th Cir. 1973)1. 

C. Statute of Limitations

The final defense raised by Defendant is one related to the statute of limitations for the

Government's claim. The statutes of limitations period for the Plaintiff's claim was altered three

times by Congress in order to modify the authority of the Internal Revenue Service to extend the

ability to collect assessed taxes. The relevant statutes were passed by Congress in 1998, 2000,

and 2002, respectively. The issue in this case is the effect of each statute on the Plaintiff's right

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to bring this collection action.

The first relevant Act, the Internal Revenue Service Restructuring and Reform Act of

1998, Public Law 105-206, 112 Stat. 685, (“Reform Act”) was passed by Congress and took

effect on January 1, 2000. The Reform Act amended 26 U.S.C. § 6502(a)(2). Due to the

amendment, the Internal Revenue Service (“IRS”) could no longer obtain a waiver of the statute

of limitations period to be applied in exchange for consideration of an offer-in-compromise, but

could, to a certain extent, continue to rely on previous agreements to suspend the limitations

period. Prior to that time, the IRS was free to negotiate with each individual taxpayer to extend

the ten-year limitations period. Under the Reform Act, where a taxpayer has agreed before

December 31, 1999, to extend the ten-year period, such extension automatically expires on the

latest of: (1) the last day of the 10-year period, (2) December 31, 2002, or (3) the 90th day after

the end of an extension in connection with an installment agreement. See Reform Act, 112 Stat.

685. The Reform Act was intended to work in conjunction with Treas. Reg. § 301.7122 to

provide that the levying of an assessment was suspended during the consideration of an offer-incompromise.

Subsequent to the passage of the Reform Act, Congress passed another act affecting the

statutes of limitations period applicable to collection actions such as the one at hand. The

Community Renewal Tax Relief Act of 2000, Public Law 106-5543, 114 Stat. 2763, (“Renewal

Tax Act”) eliminated the ability of the IRS to contractually suspend the statute of limitations as

of the date of the Act’s enactment, December 20, 2000.

Finally, Congress passed the Job Creation and Worker Assistance Act of 2002, Public

Law 107-147, 116 Stat. 21, (“Worker Assistance Act”) which restored the IRS’ ability to

suspend the statute of limitations during the pendency of the consideration of an offer-inCase 1:03-cv-00090-MP-AK Document 43 Filed 12/08/05 Page 6 of 18
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compromise.

It is the interplay of the Reform Act, the Renewal Tax Act, and the Worker Assistance

Act which is in question here. Each statute was intended by Congress to somehow affect the

calculation of the statute of limitations period applicable to IRS tax collection suits. In the

absence of these three Acts, the ordinary statute of limitations period for the Government’s claim

against Defendant would have lapsed ten years after entry of the Government’s assessment on

June 22, 1989; in other words, on June 22, 1999.

This Court was unable to discover similar cases where the interplay between the three

statutes was specifically at issue. Defendant's claim that these congressional changes prevent the

Government from timely filing its claim has more merit than Defendant’s two other affirmative

defenses, but results in a similar holding from this Court. The Government’s position that it

complied with the literal meaning of the statutes in question comports more directly with the

“plain meaning” intended by Congress; a plain meaning that even Defendant does not wholly

dispute. See Doc. 32. 

As a threshold matter, it is worth noting that:

limitation statutes barring the collection of taxes otherwise due and unpaid are

strictly construed in favor of the Government. In effect, a period of limitations

runs against the collection of taxes only because the Government, through

Congressional action, has consented to such a defense. Absent Government

consent, no limitation defense exists. 

Lucia, 474 F. 2d at 570 (citation omitted); see also Chase Sec. Corp. v. Donaldson, 325 U.S. 304

(1945) (holding that no fundamental right to shelter via statute of limitations exists); accord

McDonald v. United States, 315 F.2d 796 (6th Cir. 1963); Pacific Coast Steel Co. v.

McLaughlin, 61 F.2d 73 (9th Cir. 1932); Loewer Realty Co. v. Anderson, 31 F.2d 268 (2d Cir.

1929) (statutes of limitations dealing with payment of taxes must be construed strictly in favor of

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2

 The parties dispute whether the end of the limitations period fell on November 29,

2002, as the Plaintiff alleges, or November 28, 2002, as the Defendant claims. The discrepancy,

however, is irrelevant for purposes of this order, as the same holding would be reached

regardless of which date is chosen. Nevertheless, according to this Court's calculations, adding

twenty-nine months and seven days (the period the first offer-in-compromise was pending) to the

June 22, 1989 original statute of limitations date, plus one year, would bring the statute of

limitations ending date to November 29, 2002. 

Additionally, Defendant claims that the offer-in-compromise was effectively rejected on

January 7, 2000. Again, even taking this for true, it would not effect the Court's holding.

Case No: 1:03-cv-00090-MP-AK

government). 

The first offer-in-compromise was submitted by Ryals under the original IRS rules which

provided that the statue of limitations period is tolled from the date the offer is submitted through

the date the offer is rejected, plus one year. The original assessment against Ryals was made on

June 22, 1989. Defendant then submitted his first offer-in-compromise on August 18, 1997. 

Doc. 17-1 at 1. This offer was rejected on January 25, 2000. Id. at 2. Thus, by adding the

period of time in which the offer was pending, plus one year, to the end of the ordinary ten year

limitation period ending June 22, 1999, the limitations period for the Government's collection

action was extended to November 29, 2002.2

 

By the time the IRS rejected Defendant's offer-in-compromise, the Reform Act had taken

effect. Thus, since November 29, 2002 is before December 31, 2002, it would appear that the

Reform Act extended the statute of limitations period to December 31, 2002. Nevertheless,

Defendant claims that the Reform Act was not intended to extend the statute of limitations

beyond the extended period expiring on November 29, 2002. The Act, however, clearly states

that extensions of the limitations period obtained prior to December 31, 1999:

shall expire on the latest of -

(A) the last day of such 10-year [collection] period;

(B) December 31, 2002; or

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3

 Defendant claims that the provisions in the Renewal Tax Act eliminating the ability of

the IRS to toll or suspend the collections period during the pendency of an offer-in-compromise

were to be retroactively applied. See Doc. 21 at 4. The Act, however, clearly states that the

effective date of this specific change was to be December 20, 2000 - the effective date of the

Renewal Tax Act - while other changes in that section of the Act were to "take effect as if

included in the provisions of the Internal Revenue Service Restructuring and Reform Act of

1998 to which they relate." Renewal Tax Act § 313(f), 114 Stat. 2763; see id. § 313(b)

(provision removing the reference to subsection (i)(5) of 26 U.S.C. § 6331(k)(3), thus effectively

eliminating the ability of the IRS to toll or suspend the collections period during the pendency of

an offer-in-compromise). This Court views such text as indicative of Congress' intent on this

issue; namely, that application of this provision was to be prospective only. Defendant himself

acknowledges the reasonableness of this view. See Doc. 32 at 8.

Case No: 1:03-cv-00090-MP-AK

(C) in the case of an extension in connection with an installment agreement, the

90th day after the end of the period of such extension.

IRS Restructuring and Reform Act of 1998, Public Law 105-206, 112 Stat. 685. Thus, going

from the face of the statute, it appears clear to this Court that, as a result of the Reform Act, the

collections period was extended in this case to December 31, 2002. Had Congress intended the

Act to do otherwise, they could have stated that the collections period expires on the earliest of

the three dates, not the latest. This Court was able to find one other district court case in which

this issue was addressed – a similar conclusion was reached in that case. See United States v.

Cook, No. 02-CV-09475, 2004 WL 690804, at *7 (E.D. Pa. 2004). 

Ryals submitted a second offer-in-compromise on June 14, 2000. Doc. 17-1 at 2. This

offer was rejected on March 12, 2002. Id. The time between the submission of this offer-incompromise and its subsequent rejection falls between the effective dates of all three statutes. 

After carefully reviewing the matter, the Court finds that the second offer-in-compromise

extended the statute of limitations period six months and six days, which is the time from the

submission of the offer-in-compromise to the December 20, 2000, the effective date of the

Renewal Tax Act.3

 The statute of limitations period then ceased being tolled during the duration

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of the Renewal Tax Act, which spanned from December 20, 2000, to March 9, 2002. On March

9, 2002, the Worker Assistance Act took effect, which reinstated the suspension of the statute of

limitations period during the pendency of an offer-in-compromise. See supra p. 6. Thus, the

statute of limitations was again tolled for an additional three days, which is the time from the

effective date of the Worker Assistance Act to the second offer's ultimate rejection.

As a result, the statute of limitations on this claim was extended an extra six months and

nine days from December 31, 2002, the extended collections date created by the first offer-incompromise. Thus, the collection period was extended until July 9, 2003. As this action was

commenced on May 20, 2003, the court finds that this action was timely commenced.

IV. DEFENDANT’S COUNTERCLAIMS

Defendant has brought multiple counterclaims against the United States alleging that the

Government wrongfully seized Defendant’s property. Due to distinguishing characteristics,

Counts One through Eight of Defendant’s Counterclaims will be analyzed separately from

Counts Nine and Ten.

A. Counts One through Eight

Defendant filed his alleged refund claims for the years 1992 through 1999 with the

Internal Revenue Service on May 26, 2000. Defendant subsequently brought these

counterclaims on June 25, 2003. Counts One through Eight of Defendant’s counterclaims are

essentially refund actions. For example, in Count One of his complaint, Defendant claims to be

“entitled to a refund of $15,400 which was erroneously and illegally taken from him.” Doc. 5 at

5-6. Each of Defendant’s counterclaims requests similar relief for supposed illegal levies. 

Defendant’s claims rest on the belief that he filed valid refund claims with the Internal

Revenue Service that were ultimately rejected by the Atlanta Service Center. Doc. 21 at 14. 

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Defendant’s refund claims were based on the belief that 26 U.S.C. § 6334(a)(9) prevented the

Government from levying his wages during the aforementioned time periods. The refund claims

allegedly filed by Ryals were entered into evidence by Defendant as exhibits to his counterclaim. 

See Doc. 5. Those exhibits demonstrate that the refund claims had been stamped as “received,”

although the stamp was later crossed out. As such, Plaintiff claims that he is due a refund for the

inappropriate seizure of his wages. 

The Government, however, contends that this Court should dismiss Counts One through

Eight of Defendant’s counterclaim for lack of subject matter jurisdiction. Contending that the

alleged refund claims “only contained the signature of Ryals and were filed under his social

security number notwithstanding that the original returns were signed by both him and his wife

and filed under her social security number,” Doc. 16 at 12, the Government argues that this

Court is without jurisdiction to decide the case where Defendant’s refund claims were

improperly filed with the Internal Revenue Service. Essentially the crux of the Government’s

argument is that in failing to correctly sign the refund claims for 1992-1999, Defendant failed to

put the IRS on notice of his claim. As such, the argument goes, this Court is without jurisdiction

to hear Defendant’s action since Defendant did not properly comply with administrative

requirements.

Since IRS assessments are presumptively correct unless the taxpayer alleges fraud, the

burden is upon the taxpayer to “prove the facts establishing the invalidity of the tax.” United

States v. Anderson, 269 U.S. 422, 433 (1926). Thus, the taxpayer has the burden of proving that

the assessment was incorrect as well as the correct amount that the assessment should have been. 

See Helvering v. Taylor, 293 U.S. 507, 515 (1935); Mays v. United States, 763 F.2d 1295, 1297

(11th Cir. 1985) (per curiam). 

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4

26 U.S.C. § 7422(a) provides:

No 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, or of any

penalty claimed to have been collected without authority, or of any sum alleged to have

been excessive or in any manner wrongfully 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.

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Refund suits to recover overpaid federal taxes are properly brought only in the Claims

Court or in federal district court. 28 U.S.C. § 1346. Therefore, a refund suit is appropriate before

this Court. In order for this court to have subject-matter jurisdiction over the action, however, an

administrative refund claim must have been duly filed and rejected (or otherwise not acted upon)

by the Internal Revenue Service. 26 U.S.C. § 7422(a)4; Mutual Assurance, Inc. v. United States,

56 F.3d 1353, 1354 (11th Cir. 1995). 

 Defendant claims to have submitted 1040X forms in 2000 for years 1992 through 1999. 

Defendant states, for instance, that “[a] form 1040X was used since . . . [Treasury Regulations

provide] that a 1040X is the appropriate form for claiming a refund relating to federal income

taxes.” Doc. 5 at 6; accord 26 C.F.R. § 301.6402-3(a)(4). Defendant further asserts that the

“Form[s] 1040X along with the narrative and exhibits were adequate and sufficient to place

Internal Revenue Service on notice of the basis for the claim.” Doc. 5 at 6-7; Doc. 21 at 10

(“[T]he Internal Revenue Service was more than apprised as to scope and nature of the claim, the

underlying facts giving rise to the claim, the applicable law involved, and the relief requested.”). 

In other words, Defendant’s position is that his filings amounted to informal rather than formal

claims. See Doc. 21 at 8-10. 

Although such informal filings are permissible, Vintilla v. United States, 931 F.2d 1444,

1446 (11th Cir. 1991), the federal circuits have developed varying guidelines for the allowance

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of such filings. While the formality of the requirements varies across the circuits, the United

States Supreme Court has held that tax forms must comply with prescribed requirements in order

to be considered validly filed. See, e.g., Florsheim Bros. Drygoods Co. v. United States, 280

U.S. 453, 459-60 (1930); Lucas v. Pilliod Lumber Co., 281 U.S. 245, 249 (1930). In particular,

the Court has stated that inclusion of the taxpayer’s signature is a prerequisite to the validity of a

tax return. Badarocco v. Commissioner, 464 U.S. 386, 396-97 (1984); Zellerback Paper Co. v.

Helvering, 293 U.S. 172, 180 (1934); Doll v. Commissioner, 358 F.2d 713 (3d Cir. 1966) (per

curiam). 

The Internal Revenue Code itself states that “a claim which does not comply [with formal

requirements] . . . will not be considered for any purpose as a claim for refund.” 26 C.F.R. §

301.6402-2(b)(1) (2005). The formalism of the Code is predicated on the belief that the Internal

Revenue Service must receive actual notice of a taxpayer’s claim, and that a claimant’s failure to

conform with published procedures may not serve to later exculpate that claimant. Some courts,

however, have occasionally liberalized this requirement by finding that sufficient notice was

given to the IRS even where formal requirements were not satisfied. C.I.R. v. Lundy, 516 U.S.

235, 248-49 (1996). The question before this Court is whether Defendant has shown that the

IRS was on notice as to his refund claims. If Defendant is unable to make such a showing, this

Court must dismiss these counterclaims for lack for subject matter jurisdiction.

Although the Eleventh Circuit has yet to determine whether a signature is required in

determining the validity of a refund action, other circuits have held such a requirement to be

indispensable. The Sixth Circuit, for example, has held that refund letters must fully comply

with IRS requirements of a signature. Tobin v. Tomlinson, 310 F.2d 648 (1962). In Tobin, the

court noted that the supposed refund letter filed by the taxpayer lacked a signature attesting to its

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accuracy. Quoting the Supreme Court in Angelus Mining Co. v. Commissioner, 325 U.S. 293,

299 (1943), the Sixth Circuit stated:

[I]t is not enough that somewhere under the Commissioner’s roof is the information

which might enable him to pass on a claim for refund. The protection of the revenue

authorizes the Commissioner to demand information in a particular form, and he is

entitled to insist that the form be observed so as to advise him expeditiously and

accurately of the true nature of the claim. 

Tobin, 310 F.2d at 652; see also Prussner v. United States, 896 F.2d 218 (7th Cir. 1990) (finding

substantial compliance was not achieved where tax form lacked a signature). But cf. BCS

Financial Corp. v. United States, 118 F.3d 522. 524 (7th Cir. 1997) (holding opposite).

Similar to the Sixth Circuit’s finding, the Fifth Circuit has held that a district court is

stripped of jurisdiction where the taxpayer failed to comply with filing requirements. Gustin v.

United States, 876 F.2d 485 (5th Cir. 1989). In Gustin, the claimant sought to file a Form 843

but had mistakenly placed an incorrect date on the form. Under those circumstances, the Fifth

Circuit held that no formal claim for refund was filed. The court recognized that a refund claim

“should not be given a crabbed or literal reading, ignoring all surrounding circumstances which

give it body and content.” Gustin, 876 F.2d at 489 (quoting American Radiator & Standard

Sanitary Corp. v. United States, 318 F.2d 915, 920 (1963)). Nevertheless, the court held that the

taxpayer in that case had failed to meet his burden of proving that his informal claim was

sufficient to put the IRS on notice of his claim. Gustin, 876 F.2d at 489. 

According to the Internal Revenue Service, “the computer records of the Internal

Revenue Service show that Ryals has filed no administrative claims for refund for the years 1992

through 1999.” Doc. 16 at 12. As was stated above, such records are presumptively valid unless

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shown otherwise by the taxpayer. Helvering v. Taylor, 293 U.S. 507 (1935). Where the

taxpayer introduces sufficient evidence to show that the Commissioner’s determinations were

incorrect, however, the presumption vanishes. Bone v. Comm’r of Internal Revenue, 324 F.3d

1289, 1293 (11th Cir. 2003) (citing Welch v. Helvering, 290 U.S. 111, 115 (1933)). 

Defendant Ryals has failed to introduce evidence sufficient to overcome the IRS’s

presumption of validity. Although the 1040X forms were likely received by the Internal

Revenue Service, such receipt is not sufficient to ameliorate the shortcomings inherent in a

flawed claim for refund. Aside from the fact that the refund claims had “received” stamps

placed on them at some point, Defendant has failed to demonstrate that the IRS indeed received

those refund claims. For example, Defendant has not explained the paradox between the

supposed reception of his informal refund claims and the crossing out of the received stamps. 

The burden is on Defendant to demonstrate that the Internal Revenue Service was incorrect in

not considering his refund claims, and Defendant has not provided any evidence to overcome the

IRS’s presumption of validity under Helvering. 

Therefore, in keeping with its sister circuits, this Court holds that Defendant’s refund

claims for the years 1992 through 1999 were improperly filed. As such, this Court is without

jurisdiction to adjudicate any claims relating to those actions. Therefore, Counts One through

Eight of Defendant’s counterclaims are dismissed.

B. Counts Nine Through Ten

The Plaintiff admits that Ryals filed a refund claim on April 28, 2003 for the years 2000

and 2001. Doc. 16 at 12. Moreover, as the Government further admits, “where Ryals

established an overpayment of tax or [] the Government has not established that he has other

income, this court has subject matter jurisdiction over years 2000 and 2001.” Doc. 16 at 12-13. 

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Therefore, neither party disputes the Court’s jurisdiction over Counts Nine and Ten of

Defendant’s counterclaim. Nonetheless, subject matter jurisdiction in a case must be

determined by the Court. Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1331, 1331 n.6

(11th Cir. 2001). Accordingly, the Court holds that Defendant’s properly filed refund claims for

2000 and 2001 give this Court subject matter jurisdiction over these claims. 

Counts Nine and Ten of Plaintiff’s counterclaim state that the IRS levy of wages from

2000 and 2001 were “erroneous, illegal, and a violation of Ryals’ due process rights.” Doc. 5 at

18, 20. According to Defendant, the IRS levy was illegal because of an improper calculation by

the IRS. Doc. 21 at 12. Defendant contends that the dividend income he and his wife received

as tenants by the entirety was improperly construed as constituting wages, salary, or other

income as contemplated by 26 U.S.C. § 6334(d). Doc. 21 at 12. Defendant argues that Florida

law prevents such a levy of tenancy by the entirety property. In support of his claim, Defendant

cites cases such as Winters v. Parks, 91 So.2d 649 (Fla. 1956), and United States v. Am. Nat’l

Bank, 255 F.2d 504 (5th Cir. 1958). 

The cases cited by Defendant, however, are undermined by United States v. Craft, 553

U.S. 274 (2002), and its progeny. In Craft, the issue before the Court was whether state law

would trump the ability of the IRS to attach a lien to a taxpayer’s tenancy by the entirety

property. Noting that “the statutory language authorizing the tax lien ‘is broad and reveals on its

face that Congress meant to reach every interest in property that a taxpayer may have,’” the

Court found that federal law in this instance overcomes state law. Craft, 535 U.S. at 283

(quoting United States v. Nat’l Bank, 472 U.S. 713, 719-20 (1985)). As stated by the Court in

Craft:

“We therefore conclude that respondent’s [ ] interest in the entireties property constituted

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Case No: 1:03-cv-00090-MP-AK

‘property’ or ‘rights to property’ for the purposes of the federal tax lien statute. We

recognize that Michigan makes a different choice with respect to state law creditors . . . . 

But that by no means dictates our choice.”

Craft, 535 U.S. at 288. 

Defendant argues, however, that the Craft Court “merely ruled that a taxpayer spouse has

an interest in property which is encumbered by a federal tax lien.” Doc. 21 at 14. Defendant

further states that Craft ruled “the existing Notice of Levy was legally ineffective to reach

tenancy by the entirety property.” Doc. 21 at 14. Accordingly, Defendant would have this Court

interpret Craft so as to exclude that Court’s determination with respect to tenancy by the entirety

pproperty. Such an argument abuses the very essence of Craft. 

While Florida, like Michigan, may prevent a levy on tenancy by the entirety property by

a creditor to satisfy the individual debt of a spouse, Doc. 21 at 13, 26 U.S.C. § 6334 recognizes

no such limitations. Additionally, the Eleventh Circuit recently held that “the Internal Revenue

Service has the authority to divide tenancy by the entirety property to satisfy the tax obligation

of one spouse.” In re Sinnreich, 391 F.3d 1295, 1297 (11th Cir. 2004). The Sinnreich court

noted that Craft “announced the rule that the IRS’s federal statutory powers to tax and attach

liens to property trumped any state property rights afforded to a taxpayer who holds property by

the entireties with her spouse.” Id. at 1298. This Court is bound by such precedent and finds

Craft directly applicable to the instant case. Defendant’s argument that tenancy by the entirety

property may not be levied by the IRS is therefore without merit. Therefore, summary judgment

is appropriate for the Government as to Counts Nine and Ten of Defendant’s counterclaims.

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Accordingly, it is hereby

ORDERED AND ADJUDGED:

1. Plaintiff's motion for summary judgement, Doc. 16, is granted. The Defendant is

ordered to pay the United States $1,678,065.01, plus fees and interest as provided

by law.

2. Counts One through Eight of Defendant's counterclaims are dismissed for lack of

subject matter jurisdiction.

3. Summary judgment is granted for the Plaintiff with respect to Counts Nine and

Ten of Defendant’s counterclaims.

4. The Clerk is directed to close this case.

DONE AND ORDERED this 8th day of December, 2005

 s/Maurice M. Paul 

 Maurice M. Paul, Senior District Judge

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