Opinion ID: 4241112
Heading Depth: 2
Heading Rank: 1

Heading: The Informal Claim Doctrine

Text: We consider first the plaintiffs’ claims for refunds under § 7422. Taxpayers fearing that the IRS will reject their other‐ wise timely refund claims for failure to dot an i need not worry that the statutory time limit will expire before they can cure any defects. The informal claim doctrine allows a tax‐ payer’s claim for a refund to survive so long as the taxpayer files some “notice fairly advising the Commissioner of the na‐ ture of the taxpayer’s claim” within the limitations period and later makes sure that all “formal defects and lack of specificity have been remedied” by a fully compliant refund claim. United States v. Kales, 314 U.S. 186, 194 (1941); accord, Kikalos v. United States, 479 F.3d 522, 526 (7th Cir. 2007). In this case, however, even taking at face value plaintiffs’ allegation that the IRS had sufficient informal notice to apprise the agency of their claim, plaintiffs have failed to perfect their claim. In applying the informal claim doctrine, we have empha‐ sized the importance of the requirement that a taxpayer per‐ fect an informal administrative claim by remedying the for‐ mal defects. In Greene‐Thapedi v. United States, 549 F.3d 530, 533 (7th Cir. 2008), we wrote that the “informal claim doctrine is predicated on the expectation that any formal deficiency will at some point be corrected.” The plaintiffs have conceded here their failure to perfect. In their complaint, they offered for the first time to file formal refund claims if the court de‐ termined they were necessary: “If the Court requires service 6 No. 16‐3032 to the IRS of formal, written notices pursuant to 26 U.S.C. § 7422(a) in addition to th[e] earlier notice, [plaintiffs] will serve the requisite notices. [Plaintiffs] understand that the law does not require this service once the earlier notice to the IRS is established.” Cmplt. ¶ 39. Plaintiffs have provided no legal authority to support this understanding. Nor have they of‐ fered any independent reason to abandon the perfection re‐ quirement. We see no such reason. The perfection requirement en‐ sures that the pragmatic judicial doctrine of informal notice does not disrupt unduly the regulatory regime created by Congress and the IRS for resolving tax disputes. If unhappy taxpayers could get around the administrative exhaustion re‐ quirement of § 7422 by sending deficient claims to the IRS and never following up, then § 7422 and the regulations govern‐ ing the refund process at the IRS would be more difficult to administer. The district court properly dismissed plaintiffs’ refund claims under § 7422 because they failed to exhaust ad‐ ministrative remedies.