### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT J une 7, 20 04 THO MAS K. KAH N CL ERK

Honora ble B . Avant Ede nfield, Unit ed S tates Dist rict J udg e for the S outhern District of Georg ia, * sitti ng by desig nation. [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 03- 1386 8

____ ____ ____ ____ ____ ____ D. C. Docket N o. 02-00010 -CV -G ET -1 W ILLIAMS-RUSSELL & JOHNSON, INC., Pl ai nti ff -Appe llant,
ve rs us UNITED STAT ES OF AMERIC A, De fendant-Appellee.

____ ____ ____ ____ ____ ___ A ppe al f ro m the U nit ed

S ta te s D istri ct

Co urt fo r the N orthe rnD istri ct

of G eo rg ia

____ ____ ____ ____ ____ ___ (J un e 7, 200 4) Befo re EDMONDSON, Ch ie f Ju dg e, HULL, Circ ui t J ud ge , and EDENFIELD , * District Judge. ED EN FIE LD , D istrict Judg e:2 I. In tr od uc ti on A ppe llant W ill ia m s- Ru sse ll & J ohn so n, Inc
. ( “ W RJ ”) , br ough t this a ct ionto
recover from the Internal Revenue Service (“ IRS” ) an “ overpaym ent” tax ref und th at W RJc la im s it

is due und er

26 U. S. C. § 74 22. T he dis tr ic t c ourt di sm iss ed the
ca se f or la ck of sub j ec t- m at te r j ur isd ic tio n, f

ind ing tha t t

h e r e w as no o ve rp ay

m en t and in any e ve nt the c la im

w as ti m e- ba rr ed
. W RJappe al s. Intha t the ta x c ode c anbe dif ficu lt to fo llow , w e fi rs t pa use to ex pla in the general fr am ew ork that applies t o t h i s situatio n. Com panies like W RJ m

ust pay
em plo ym en t t ax es ove r tim e. T he IR S is suppo se d to ke ep tr ac k of the se pa ym en ts and p er i odically

m ake “ assessm ents” which determ ine and inform taxpay ers w hat they actually owe (ideally

for both sides, this am ount refle cts what the taxpay er has paid, or thinks he sho uld have paid). Bu t, the I RS m ak es m ist akes , a nd so it doe s no t a lw ay s ge t aro und to t im el y
as se ssi ng l ia

bil ity
. T he que sti on f

or us, the n, is w ha t effect s uc h am ist ak e (a la te
as se ssm en t) ha s onata xpa y er ’ s li ab ili tie s a nd r igh ts. II. Back ground D u r i n g 1 9 9 3
- 1 9 9 5 WR J f i l e dmo n t h l y, r a t h e r

t h a n t h e u s u a l q u a rt e r l y,
em plo ym en t t ax re tur

ns. Si m ilarl y , it de posi te d its e m plo ym en t t ax es on a

m onthly ba sis
. T his r equir ed

the I RS to, on a

quart er ly ba sis , c onso lid at e the r et

ur ns and m ak e26 U.S.C. § 6513(c) (1) provides that any return f iled befor e 4/15 shall be c onsidered a s filed on 1 4/1 5. Ac c or din g ly , the la st of WRJ’s r e tur ns wa s “ fi le d” on

4/1 5/9 6. Un de r § 65 01 , th e n, the I RS had until 4/15/99 to assess taxes for 1995, a nd one and two year s ear lier, re spectively for 1994 a

nd 1993. 3 pr ope r as se ssm en t of

W RJ ’ s ta x liabi lity . B ut the I RS f ai le d to dis ch ar ge tho se dut ie s. Inf ac t, it did not a sse ss l ia bil ity f or tho se y ears unt il 6/9 9. I t c onc ed es , the n, tha t tho se 199 3- 1995 a sse ssm en ts we re m ade b ey ond 26 U. S. C. § 650 1's three- y ear sta tut e of li m ita tio ns p erio d fo r co lle ct iona nd a sse ssm en t. S o, the I RS a dm its , it 1
cannot c oll ec t any

a ddi tio na l em

plo ym en t t ax es f

ro m W RJe ve n th ough W RJha d, in fact , un de rp ai d i ts tax es forth e su bjec t years. Se e E wi ng v . U nit ed Sta tes, 914 F
. 2d 499, 503-04 (4th Cir. 1990 ). Not content with its good fortune, however, W RJ wants m ore. Rea sonin g that it wo u l d h ave gotten away without pay ing any thing had it sim ply not paid it s taxes (b ec au se the I RS fa ile d to tim el y m ak e as se ssm en ts f or 199 3- 1995 ), it

a rg ue s th at

la te
as se ssm en t a lso “ en tit le s” it to re co ve r tho se ta xe s it ha d al re ady pa id and o the rw ise
ow ed dur ing tho se y ears . In fa ct , it la be ls the m “ ove rp ay m en ts” w ith in the m eanin g of 26 U .S .C. § 6402 (a). In supp ort, W RJ cites 26 U .S .C. § 6401 (a), which provides that

“ ove rp ay

m en t” inc lud es tha t part of the a m ount

of the paym ent of an y internal revenue tax w hich is assessed or4 collected after t h e e x p i r a t i o n o f t h e p e r i o do f

l i m i t at ion pr ope rl y appl ic ab le the re to. A cc or din gly , W RJappl ie d f or ar ef und

-- f ir st o n 1/ 27/ 00 and the n a ga in o n 5/30 /00. But, the IR S d en ied those claim s on statu te of lim itations grounds -- that
s i n c e W R J p a i dt h o s e t a x e s f r o m 1 9 9 4
- 1 9 9 6, se e inf

ra not e 2, it

sim ply w ai te d to o lon g to tr y a nd g et the m ba ck e ven if it is oth er w ise e nti tle d to the m

be ca use of the l a t e a s s e s s me n t
. I n s o d o i n g , t h e I R S r e l i e d o n 2 6 U
. S
. C
. § 6 5 1 1 , u n d e r w h i c h c l a i ms fo r c r e d i t o r r e f

u n d o f a n o v e r

p a ym e n t o f a n y t a x . . . in respect of w hich tax the taxpay er is required to file a r eturn s h a l l b e f i l e db y t h e t a x p a ye r w i t h i n 3 ye a r s f r o m t h e t i me the return w as filed o r 2 years fr om the tim e the tax w as pa id , whi ch ev er o f su ch pe rio ds ex pi res th e la te r. W RJ ’ s y ear 2000 re fu nd ap pli ca tio ns, the n, pla ce d it be y ond the 2- 3 y ear lim it for re covering any

1993 -95 “ overpaym ents.” Unsatisfied, W RJ brought this refund action, ar g uing that, in light of § 6401 (a )’ s definiti on o f “ ove rp ay m en t, ” § 65 11' s st at

ute of li m ita tio n di d no t bar its
re co ve ry be ca use the I RS did

not a sse ss i ts 1 993- 1995 e m

plo ym en t t ax es unt il 6/9 9. Inoth er w or ds, no “ over pa ym en t” oc cu rr ed unt il the I RS m ad e its a sse ssm en t i n 1999 , so it w ould be unfair to app ly the 2-3 y ear lim itations statute. T herefor e, W RJ argues , the c ourt sh oul d de em § 65 11' s st at

ute of li m ita tio ns t oll ed

unt il 1999 , thu s mak i n g i t s 2 0 0 0 r e f

u n dc l a i m t i mel y.5 III . A na lys is W e rev ie w de nov o subject- m atter j urisdictio n dism issals su ch as that which
oc cu rred he re. B row ard G arde ns T en ant s A ssoc. v. U

nit ed Sta tes E nv ’t P rot ec tio n Agency , 3 1 1 F. 3d 10 66, 1072 (11t h Cir. 2002 ); Ochr an v. Uni te d S ta te s, 273 F. 3d 1315 , 1317 (11th Cir. 2001). W e m ust f ir st d ec ide w he the r § 6401( a) ope ra te d to c re at e an“ ove rp ay m en t” of ta xe s. A lit er al re ad ing of tha t st at ute sup por

ts W RJ ’ s c la im

tha t an “ ove rp ay

m en t”
oc cu rr ed
. I t pr ovi de s th at “ ‘ ove rp ay

m en t’ inc lud es tha t part

of the a m ount of

the pa ym en t of an y int er

na l r ev enue ta x w hic h is ass es se d
... aft er the e xpi ra tio n of the pe ri od o f lim ita tio n, ” 26 U
. S. C. § 64 01( a) ( em pha sis a dde d) , w hic h inthi s c as e is § 6501
. A ga in, the I RS did not a sse ss W RJ ’ s 19 93- 1995 ta x li ab ili ty unt il 1999
. Bu t W RJpa id the ta xe s it now se ek s to re co ve r as the li ab ili tie s a cc ru ed ( on a
m onthly ba sis f ro m 199 3- 1995 ) w el l be fo re the r unni ng o f § 65 01' s li m ita tio n pe ri od. So the que sti on, the n, is w he the r thos e pay m en ts, pr ope rl y ow ed an d paid w ith in the lim ita tio ns p er iod , som eh owbe ca m e “ ove rp ay m en ts” m er el y be ca

use the I RS did

not ge t aro und to a sse ssi ng l ia bil ity f or the m unt il af te r the li m ita tio ns p er iod

e xpi re d. Whil e thi s is a fi rs t im

pr es sio n ques tio n for

our c ir cu it, oth er s ha ve c onsi ste ntl y
an swe red it in th e ne ga ti ve . Se e Ewi ng , 914 F. 2d a t 50 0- 04 ( 4th Ci r. 199 0) ; M oran
v. Uni te d S ta te s, 63 F.3d 66 3, 6 66 (7t h C ir. 1 99 5) , ov errul ed in part by Malachinski6

v. Co mm ’r , 268 F
. 3d 4 97 ( 7th Ci r. 200 1) ; C ro m pt on & K

no w l e s L oo m W

or ks v. W hit e , 65 F. 2d 132, 133-34 (1st Cir. 1933 ) (interpreting § 6401 's p redece ssor statute). W e j oin th ose circu i ts by holdi ng that, notwithstand ing § 6 401(a)’ s language, an untim ely assessm ent of taxes otherwise proper ly owed and paid within the statutory pe ri od f or a sse ssm en t and c oll ec tio n do es not cr ea te a n “ ove rp ay m en t” e nti tli ng the

“ la te -a sse sse d” ta xpa y er

to a re fu nd. U nd er the pr inc ipl es e sta bli she d in Le wi

s v . R ey nolds , 284 U
. S. 281 , 282 (1932), “ a taxpay er' s claim for r efund m

ust be reduced by

the am ount of the corr ect ta x li ab ili ty fo r the ta xable y ear, r eg ar dle ss o f the f ac t tha t the Co m

m iss ion er c anno long er as s es s any

deficiency

for the taxable y ear. ” B ac hne r v . Co m m ’r of In te rnal R ev en ue , 10 9 T.C. 1 25 , 13 0 (1 99 7) , aff’d , 1 72 F.3 d 85 9 (3 rd Ci r. 19 98 ) (Tab le )). To
ac ce pt W RJ ’ s pr opos iti on - - that it can re co ve r undi sput ab ly ow ed ta xe s th at

ha ve alrea d y b ee n ri g h tly

and tim ely

paid -- w ould directly

fly in the face of that tax j urisprudence. Pu t anothe r w ay , W RJ“ ow ed ta xe s, an d th e gove rn m en t’ s f ai lur e to a sse ss them tim ely does not chang e that fac t.” M oran , 63 F.3d at 6 66
. W e ha ve be en sh own
no c onvi nc ing le ga l re as on wh y W RJ shou ld be al low ed to r ec ove r w ha t i t ow ed a nd ha s a lr ea dy

pr ope rl y pa id s im ply be ca use the I RS was la x init r es pons ibi lit ie s. Section 6501 sim

ply strips “ the United States .
.. [of] authority to collect [further ] taxWe oth e rw ise wo uld fi nd little me ri t to that argume nt. WRJ w ou ld have us eq uat e th e phra se 2 “f rom the time the tax as paid” in § 6511(a ) to § 6401(a) ’s time of asse ssment or collec tion. A simil ar a rg ument, howeve r, wa s rejec ted in Un ite d S tates v . D alm , 494 U.S. 596, 609 n. 7 (1990) (the 7 forcibly after the applicable period for assessm ent has expired.” E wi ng, 914 F.2d at 503-04
. It does not m ean t h at a t axpay er c an rec over taxes alrea dy corre ctly owed
an d pa id. Moreover, “ an assessm ent is not a prerequisite to tax liabil ity
.. . onl y a form al de te rm ina tio n th at a ta xpa y er ow es m one y . . . . I t i s m or e or le ss a boo kke ep ing procedure .
.. . but it is neither the beginni ng no r the end of tax liability .” M oran , 63 F. 3d a t 66 6 ( int er

na l c ita tio n om itt ed ). T ha t the a sse ssm en t he re w as m ade la te the re fo re doe s no t c ha nge the fact th at th e ta xe s w er e j ust ly ow ed a nd p ai d, so i t
wou ld be no ns en si cal to all ow a t ax pa y er t o re co ve r th os e ta xe s n ow. A lso , W RJ ’ s att em

pt t o di sti ngui sh Le wi

s, M oran , a nd o the r au tho ri ty is
un av ai lin g. T he te ch nic al f ac tua l di sti nc tio ns p oin te d ou t by W RJdo n ot a lte r or render inapplicable the legal propositi ons on which we re ly here, for they

are based on p oli cy c onsi de ra tio ns, not

f ac ts s pe ci fi c to those c as es . Fi na lly , our

c onc lus iontha t W RJis not e nti tle d to ar ef

und by the ope ra tio n of § 64 01( a) obv ia te s th e ne ed f or us t o r ule on i ts arg um en t tha t § 6511 , the sta tut e of lim ita tio ns f

or the br ing ing ar ef

und cl ai m , s ho uld

be tol le d un til the I RS m ad e its
as se ssm en t. 2limit ations clock runs f rom when a

tax pay ment is tendere d, not when it is deter mined that the tax is owed, i.e., assessed) . I ndeed, [t ]he most sensible i nterpre tation of § 6511(a) is that a tax is paid when the ta x pay er tender s pay

ment of the tax to the I RS, not when the tax pay er disco v ers that the pay ment was e rrone ous. That a taxpay er doe s not learn until afte r the limitations period ha s run that a tax was paid in er ror, a nd that he or she has a g round upon which to claim a r efund, doe s not operate to lift the statutory bar. Id. at 609-10 n. 7. 8 IV . C on cl us ion To summ arize , if a taxpay er duly pay s its taxes (even if in an am o u n t l at ter de te rm ine d to be de fi ci en t) but is not ti m el y a sse sse d f

or the sa m e, the n th e IR S is ba rr ed f ro m co lle ct ing an y ta x def ic ie nc ie s. H ow ev er , tha t sam e unti m el y a sse ssm en t does not also entitle the taxpay er to a refund, unless, of course, it actually paid m ore t h a n i to w e d( a s i n d i c a t e db y t h e a s s e s s me n t ) a n dt i me l y f i l e s ar e f u n dc l a i m. A cc or din gly , the j udgm en t of the dis tr ic t c ourt i s AFFIRME D
.