NOTE: This disposition is nonprecedential. 

United States Court of Appeals 

for the Federal Circuit 

__________________________ 

ERNESTO BRACH, 

Plaintiff-Appellant, 

v. 

UNITED STATES, 

Defendant-Appellee. 

__________________________ 

2011-5088 

__________________________ 

Appeal from the United States Court of Federal 

Claims in case no. 10-CV-478, Judge Nancy B. Firestone.

 

__________________________ 

Decided: October 12, 2011 

__________________________ 

ERNESTO BRACH, of Brooklyn, New York, pro se. 

ROBERT J. BRANMAN, Attorney, Tax Division, United 

States Department of Justice, of Washington, DC, for 

defendant-appellee. With him on the brief were GILBERT 

S. ROTHENBERG, Acting Deputy Assistant Attorney General, MICHAEL J. HAUNGS and ROBERT J. BRANMAN, Attorneys. 

__________________________ 
BRACH v. US 2

Before NEWMAN, CLEVENGER, and O’MALLEY, Circuit 

Judges. 

CLEVENGER, Circuit Judge. 

This appeal, brought by taxpayer Ernesto Brach pro 

se, concerns his claim that the Internal Revenue Service 

(“the IRS”) promised to pay him a tax refund and his 

attempt to recover that amount on a contract theory. The 

Court of Federal Claims dismissed Mr. Brach’s case for 

lack of subject matter jurisdiction. Brach v. United 

States, 98 Fed. Cl. 60 (Mar. 9, 2011) [hereinafter Dismissal Opinion]. We disagree that the Court of Federal 

Claims lacked subject matter jurisdiction, but nevertheless affirm because Mr. Brach failed to state a claim upon 

which relief could be granted. 

I 

Mr. Brach claims he overpaid his taxes in 1999 and 

2000 and seeks to recover the balance allegedly owed him. 

He filed his 1999 return roughly five and a half years late. 

In that return, Mr. Brach claimed a 1999 tax overpayment of about $296,000. But he did not request a refund. 

Instead, Mr. Brach asked that his 1999 overpayment 

balance be applied to his tax liability for 2000—which 

return he had also not timely filed, but instead filed 

simultaneously with the 1999 return. Mr. Brach’s 2000 

return claimed further tax overpayment (bringing the 

total claimed overpayment to over $370,000), but again 

carried the balance forward to 2001. This same pattern 

repeated for tax years 2001, 2002, 2003, and 2004. While 

Mr. Brach did not claim overpayment in these later years, 

he asked that his tax liability be paid from the balance 

remaining from his claimed overpayments in 1999 and 

2000. None of the 1999–2004 returns was filed on time; 

all were filed on September 2, 2005. In the 2004 return, 

Mr. Brach asked the IRS to refund the remaining claimed 
3 BRACH v. US

balance, which was $354,514. See 1999–2004 Form 1040 

Docs., J.A. 39–50. 

In November 2005 the IRS denied Mr. Brach’s request. Because his claims for overpayments in 1999 and 

2000 were filed more than three years after the payments 

were allegedly made, the IRS deemed the claims timebarred. See I.R.C. § 6511(a) (2000). 

We move forward to mid-2008. At that time, Mr. 

Brach’s accountant, Herschel Friedman, was in communication with an IRS agent named Howard Mostovy and 

was continuing to press Mr. Brach’s refund claim. In 

August of that year, Mr. Friedman and Mr. Mostovy 

signed five Form 4549 documents, titled “Income Tax 

Examination Changes,” one for each of tax years 1999, 

2000, and 2002–2004. These forms laid out a tax accounting that essentially matched the claims Mr. Brach had 

made in his late-filed tax returns for those years (though 

they sought a slightly larger final refund). Form 4549 

Docs., J.A. 92–99. Shortly thereafter, Mr. Mostovy’s 

supervisor Machelle A. Smith wrote to Mr. Friedman and 

indicated that an extension of time was needed “to allow 

adequate time for processing of the reports that were 

signed and submitted to RA Howard Mostovy.” Ltr. to H. 

Friedman fr. M. Smith (Aug. 21, 2008), J.A. 34. With 

authority from Mr. Brach, Mr. Friedman signed the form 

consenting to an extension of time. Ms. Smith also 

signed. Form 872, J.A. 64. 

About a month later, Ms. Smith wrote back to Mr. 

Friedman. She stated that Mr. Brach had forfeited any 

refund that might otherwise be due him from the alleged 

1999 and 2000 overpayments by filing his returns for 

those years more than three years late. Ltr. to H. Friedman fr. M. Smith (Sept. 29, 2008), J.A. 36. 
BRACH v. US 4

At first, there was no response from either Mr. Brach 

or Mr. Friedman. Then, in January 2010, Mr. Friedman 

wrote back. Citing section 6511(h) of the Tax Code, Mr. 

Friedman argued that the three year limitations period 

for filing returns did not apply to Mr. Brach because until 

2005 Mr. Brach was suffering from mental illness that 

prevented him from managing his personal and financial 

affairs. Ltr. to M. Smith fr. H. Friedman (Jan. 19, 2010), 

J.A. 37. 

On July 23, 2010, Mr. Brach filed suit in the Court of 

Federal Claims for $354,514, the amount he computed as 

his refund on his 2004 return. 

The government moved to dismiss. It argued that irrespective of the provisions of section 6511(h), the claims 

to overpayment in 1999 and 2000 were time-barred by 

section 6532(a) of the Tax Code because Mr. Brach had 

failed to file suit within two years of the date the IRS 

mailed Mr. Brach notice that his claim had been disallowed (i.e., November 2005). It also argued that the 2001, 

2002, 2003, and 2004 claims should be dismissed because 

Mr. Brach had not fully paid his taxes for those years, 

which was a jurisdictional prerequisite to suing for a 

refund. See Flora v. United States, 352 U.S. 145, 150 

(1960) (articulating the “full payment rule”). 

In his response brief, Mr. Brach made various arguments that his refund claims should not be dismissed. 

Notably for this appeal, he also added a new argument: 

that the Form 4549 documents, signed by Mr. Friedman 

and Mr. Mostovoy, and referred to by Ms. Smith in her 

letter, created a contract by which the IRS agreed to pay 

Mr. Brach his entire requested refund. See Brach Opp. to 

Gov’t Mot. Dismiss, Dkt. #12, Brach v. United States, No. 

10-478, at 11–18 (Fed. Cl. Dec. 7, 2010) [hereinafter Brach 

December 7 Brief]. 
5 BRACH v. US

The Court of Federal Claims sided with the government and dismissed Mr. Brach’s action for lack of subject 

matter jurisdiction. It held Mr. Brach’s 1999 and 2000 

refund claims time-barred under I.R.C. § 6532(a)(1). 

Dismissal Op., 98 Fed. Cl. at 67–68. It held Mr. Brach’s 

claims concerning the later returns barred by the “full 

payment” rule. Id. at 68–69. And it rejected Mr. Brach’s 

attempt to style his case as a contract action (which would 

have had a longer limitations period). Id. at 69–70. Mr. 

Brach timely appealed. This court has jurisdiction over 

appeals from the Court of Federal Claims. 28 U.S.C. § 

1295(a)(3). 

II 

This court reviews the Court of Federal Claims’ dismissal for lack of subject matter jurisdiction without 

deference. Pixton v. B & B Plastics, Inc., 291 F.3d 1324, 

1326 (Fed. Cir. 2002). 

Mr. Brach argues that the Court of Federal Claims 

erred in holding that he failed to make out a basis for the 

court’s exercise of jurisdiction. He contends that the 

Form 4549 documents signed by his accountant and by 

Mr. Mostovy created an enforceable contract, and that the 

Court of Federal Claims has authority to adjudicate his 

claims arising under that contract.1

The Court of Federal Claims has jurisdiction under 

the Tucker Act to hear claims against the United States 

founded on an “express or implied contract.” Trauma 

Serv. Grp. v. United States, 104 F.3d 1321, 1324 (Fed. Cir. 

 1 Because Mr. Brach does not argue there was any 

error in the Court of Federal Claims’ conclusions that 

§ 6532(a)(1) of the Tax Code time-barred his 1999 and 

2000 tax refund requests, and that the full payment rule 

barred his other refund claims, we do not take up those 

portions of the court’s dismissal order. 
BRACH v. US 6

1997); see also 28 U.S.C. § 1491(a)(1) (2006). A plaintiff 

before the Court of Federal Claims bears the burden of 

establishing that the court has jurisdiction, but can meet 

this burden by careful pleading. “A well-pleaded allegation in the complaint is sufficient to overcome challenges 

to jurisdiction.” Trauma Serv. Grp., 104 F.3d at 1321. 

In this case, Mr. Brach’s complaint does not expressly 

describe any contract claim, but his brief opposing dismissal does. See Brach Dec. 7 Br. at 11–18. The Court of 

Federal Claims, in light of Mr. Brach’s pro se status, 

consented to consider the claims in Mr. Brach’s response 

brief as a possible basis for jurisdiction, and we will do the 

same. See Dismissal Op., 98 Fed. Cl. at 69 n.15; see also

Hughes v. Rowe, 449 U.S. 5, 9 (1980); McZeal v. Sprint 

Nextel Corp., 501 F.3d 1354, 1356 (Fed. Cir. 2007) 

(“Where, as here, a party appeared pro se before the trial 

court, the reviewing court may grant the pro se litigant 

leeway on procedural matters, such as pleading requirements.”). 

Reviewing the Brach December 7 Brief, we disagree 

that the contract allegations therein do not invoke the 

Court of Federal Claims’ subject matter jurisdiction. To 

invoke the court’s jurisdiction, all that was required of 

Mr. Brach was to allege the existence of a contract as a 

basis for relief. Gould, Inc. v. United States, 67 F.3d 925, 

929 (Fed. Cir. 1995). He met that test. His response brief 

alleged the existence of an agreement between himself 

and the IRS “that Ernesto Brach was entitled to and was 

going to receive his claimed tax refunds.” Brach Dec. 7 

Br., at 16. In these circumstances, that allegation was 

sufficient to bring his contract claim within the Court of 

Federal Claims’ adjudicatory power. 

This case invokes the distinction between dismissal 

for lack of subject matter jurisdiction and dismissal for 
7 BRACH v. US

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

See Gould, 67 F.3d at 929; Spruill v. Merit Sys. Prot Bd., 

978 F.2d 679, 686–87 (Fed. Cir. 1992); also compare Fed. 

Cl. Rule 12(b)(1) with Fed. Cl. Rule 12(b)(6). As we have 

stated before, a lack of subject matter jurisdiction means 

the trial court lacks authority to take up a case’s legal and 

factual questions, in any manner. This is distinct from a 

dismissal for failure to state a claim, in which the court 

exercises its jurisdiction to look at the plaintiff’s legal and 

factual assertions and concludes that the plaintiff has not 

made the sort of assertions that could lead to relief. See

Engage Learning, Inc. v. Salazar, No. 2011-1007, slip op. 

at 11–12 (Fed. Cir. October 5, 2011) (discussing Bell v. 

Hood, 327 U.S. 678 (1946)); see also Gould, 67 F.3d at 929 

(quoting Do-Well Mach. Shop, Inc. v. United States, 870 

F.2d 637, 639–40 (Fed. Cir. 1989)). In our view, the 

record here demonstrates that the Court of Federal 

Claims did have subject matter jurisdiction over Mr. 

Brach’s contract claim. 

We read the Dismissal Opinion’s analysis of Mr. 

Brach’s contract claim as more closely resembling an 

inquiry into whether a claim upon which relief can be 

granted has been made than an assessment of whether 

subject matter jurisdiction exists. Of course, the Court of 

Federal Claims has both the power and the obligation to 

dismiss cases in which no claim has been properly stated. 

We therefore will review the trial court’s order to see if it 

can be affirmed as a dismissal for failure to state a claim. 

If, as the trial court apparently believed, Mr. Brach has 

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

then the error in assessing subject matter jurisdiction is 

harmless. 

In reviewing a dismissal for failure to state a claim, 

this court must “accept as true the complaint’s undisputed 

factual allegations and should construe them in a light 
BRACH v. US 8

most favorable to the plaintiff.” Cambridge v. United 

States, 558 F.3d 1331, 1335 (Fed. Cir. 2009). “However, a 

plaintiff must plead factual allegations that support a 

facially ‘plausible’ claim to relief in order to avoid dismissal for failure to state a claim.” Id. (citing Bell Atl. 

Corp. v Twombly, 550 U.S. 544, 545–46 (2007)). In a 

contract case, this means alleging the elements of contract 

formation as well as authority to contract: 

The party alleging a contract must show a 

mutual intent to contract including an offer, an acceptance, and consideration. A 

contract with the United States also requires that the Government representative had actual authority to bind the 

United States. Anyone entering into an 

agreement with the Government takes the 

risk of accurately ascertaining the authority of the agents who purport to act for the 

Government, and this risk remains with 

the contractor even when the Government 

agents themselves may have been unaware of the limitations on their authority. 

Trauma Serv. Grp., 104 F.3d at 1325 (internal citations 

omitted). 

In this case we agree with the Court of Federal 

Claims that, even being lenient in analyzing his complaint and his briefing, Mr. Brach has not carried his 

burden to allege facts plausibly showing the existence of a 

contract between himself and the IRS, obliging the IRS to 

pay out the claimed refund. 

The burden for a taxpayer to show that the IRS has 

agreed to settle his tax liability and promised to make a 

payment is a difficult one. See United States v. A.S. 
9 BRACH v. US

Kreider Co., 313 U.S. 443, 448–49 (1941); see also West 

Publ’g Co. Emps.’ Preferred Stock Assoc. v. United States, 

198 Ct. Cl. 668, 676 (1972) (“The Supreme Court has been 

very strict in insisting that, before the concept of an 

account stated can be used, it must be shown beyond 

peradventure that the Government has in fact agreed 

with, and communicated to, the taxpayer its intention to 

pay a stated sum.”). Reviewing the Form 4549 documents 

here, we see no indication of such an agreement. The 

documents recite Mr. Brach’s claims as to his refund 

computations, but include no express agreement to pay. 

Indeed, the documents expressly state that the figures 

included therein are subject to subsequent review by the 

IRS. But even absent that notation, there is simply no 

express commitment in these papers that the IRS would 

take any action at all. 

Even if such an agreement were in the Form 4549 

documents, the government points out that the documents 

(1) are insufficient to meet the IRS’s requirements for 

agreements of this type, and so are void, and (2) were 

never approved by a person authorized to bind the IRS to 

make such a payment. Mr. Brach cannot plausibly overcome these arguments. 

The IRS’s authority to settle disputed tax liabilities 

(including refund claims) is described in Tax Code sections 7121 and 7122 and in the Treasury Department’s 

implementing regulations. Purported agreements that do 

not meet these requirements are not enforceable as contracts binding the IRS. Botany Worsted Mills v. United 

States, 278 U.S. 282, 288–89 (1929) (“We think that 

Congress intended by the statute to prescribe the exclusive method by which tax cases could be compromised, . . . 

and did not intend to intrust the final settlement of such 

matters to the informal action of subordinate officials in 

the Bureau [of Internal Revenue].”) (emphasis added). 
BRACH v. US 10

Mr. Brach alleges that the Form 4549 documents 

memorialize a binding contract. But these documents do 

not satisfy the regulations under which the IRS may 

settle a disputed tax liability. To begin with, they are not 

on the forms identified for such agreements. See Treas. 

Reg. 301.7121-1(d)(1) (2010) (“All closing agreements 

shall be executed on forms prescribed by the Internal 

Revenue Service.”); Rev. Proc. 68-16, Sec. 6 (identifying 

Form 866 (Agreement As to Final Determination of Tax 

Liability) and Form 906 (Closing Agreement As to Final 

Determination Covering Specific Matters) as the appropriate forms). Neither do the Form 4549 documents 

include the formal legal language indicating the IRS’s 

intent to settle that the IRS has prescribed for use in such 

agreements. See Rev. Proc. 68-16, Ex. F. What text is 

present in the Form 4549 documents cannot, as discussed 

above, plausibly be construed as creating an affirmative 

obligation for the IRS to pay. 

Even putting aside all these objections, Mr. Brach can 

make no plausible showing that either Mr. Mostovy or 

Ms. Smith was authorized to commit the agency in the 

manner he suggests. The IRS’s rules expressly describe 

the extent to which authority to enter into closing agreements may be delegated and redelegated among the IRS’s 

employees. Delegation Order 97 (Rev. 34) (August 18, 

1997), 1997 WL 33479266. Those rules do not permit 

delegation of such authority to revenue agents, such as 

Mr. Mostovy, or to supervisory revenue agents, such as 

Ms. Smith. The straightforward application of those rules 

to this case makes it beyond Mr. Brach’s capacity to 

demonstrate that either Mr. Mostovy or Ms. Smith was 

authorized to enter into such an agreement—an issue on 

which he bears the burden of pleading and of proof. See

Trauma Serv. Group, 104 F.2d at 1325. 
11 BRACH v. US

For these reasons, Mr. Brach’s case must be dismissed 

as failing to state a claim under which relief could be 

granted. We thus find the Court of Federal Claims’ error 

in analyzing subject matter jurisdiction harmless, and 

affirm its dismissal of the case. 

AFFIRMED. 

COSTS

No costs.