If the claim is filed late, the taxpayer is out of luck, for the IRS won't consider the claim. And no federal court will entertain a suit for the refund because Section 6511 makes the timely filing of a refund claim a jurisdictional prerequisite to such a suit. Harsh rules like these inevitably produce harsh results. In Scott, a companion case decided the same day, the taxpayer suffered from alcoholism, paid too much tax and failed to timely file a claim for refund. When the IRS denied the refund claims for failing to file the claims within the limitations period, the representatives sued in federal court for a refund.
Courts try to do the just thing.
Especially in District Court, a taxpayer my expect the judge to temper the rigors of the Internal Revenue Code with a sense of equity and fairness in the particular circumstances. Faced with the government reaping a potential windfall in a setting where the taxpayer was not at fault, the judges in the Brockamp and Scott cases turned to a doctrine known as equitable tolling - under which the clock on the statute of limitations is deemed to stop during the period of disability. Equitable tolling is common in civil suits between private parties, and in some settings even against the government, although no case had recognized its validity in federal tax suits against the government. The taxpayers in these two cases took heart from a 1990 Supreme Court decision in which the Court allowed the use of equitable tolling to mitigate the effects of noncompliance with the statute of limitations for the commencement of a lawsuit against the government for employment discrimination. Taxes are different, the Supreme Court ruled.