Opinion ID: 705226
Heading Depth: 3
Heading Rank: 1

Heading: Tax Refund Claims are Subject to Equitable Tolling

Text: 7 I.R.C. Sec. 6511(a) provides that a claim for refund of an overpayment must be filed within three years from the time the return was filed, or, if no return was filed, within two years from the date the tax was paid. The court lacks jurisdiction over a claim that does not satisfy Sec. 6511. United States v. Dalm, 494 U.S. 596, 602, 110 S.Ct. 1361, 1365, 108 L.Ed.2d 548 (1989). Mrs. Brockamp obviously cannot meet the two year deadline, as the tax was paid in April 1984, and she did not file her refund claim until March 1991. Nor can she meet the three year deadline, because taxpayers who file returns more than two years after their taxes are paid cannot take advantage of the three year period following the filing of a return. Miller v. United States, 38 F.3d 473, 475 (9th Cir.1994). Therefore, Sec. 6511 bars Mrs. Brockamp's claim unless equitable tolling applies to lift that bar. 8 The government relies on United States v. Dalm to support its position that the principles of equitable tolling cannot be applied to Sec. 6511. In Dalm, the Supreme Court considered whether equitable recoupment could serve as an independent basis for federal jurisdiction where the statutory requirements of Sec. 6511 were not satisfied. The Court held that the doctrine could not be applied to toll Sec. 6511. Dalm, 494 U.S. at 611, 110 S.Ct. at 1369-70. 9 Nine months later, however, in Irwin v. Department of Veterans Affairs, 498 U.S. 89, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990), the Supreme Court declared a new, general rule holding that the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States. Congress, of course, may provide otherwise if it wishes to do so. Id. at 95-96, 111 S.Ct. at 457 (Title VII action). In Irwin, the court changed its method of evaluating the availability of equitable tolling. Specifically, the court stated: 10 The continuing effort on our part to decide each case on an ad hoc basis, as we appear to have done in the past, would have the disadvantage of continuing unpredictability without the corresponding advantage of greater fidelity to the intent of Congress. We think that this case affords us an opportunity to adopt a more general rule to govern the applicability of equitable tolling in suits against the government. 11 Id. at 95, 111 S.Ct. at 457 (emphasis added). We believe that this language effectively limited the Dalm decision described above. Irwin requires that, in the absence of congressional action, statutes of limitations are, as a general rule, presumed to be subject to equitable tolling in suits against the United States. 12 Congress has never expressed any intention that equitable tolling should not apply to Sec. 6511. The specific language of the statute does not speak to the application of equitable tolling principles. Additionally, since the Supreme Court decided Irwin four years ago, Congress has done nothing to indicate that equitable tolling does not apply to Sec. 6511. Furthermore, as the court in Johnsen v. United States noted, the legislative history of Sec. 6511 is absolutely devoid of any indication that Congress intended to preclude such equitable tolling in tax refund actions. 758 F.Supp. 834, 835-36 (E.D.N.Y.1991), quoted in Scott v. United States, 795 F.Supp. 1028 (D.Haw.1992). We hold that in the absence of congressional action that indicates to the contrary, the statute of limitations provided in Sec. 6511 may be equitably tolled. 1 13 We think that the facts as alleged by Mrs. Brockamp demonstrate why equitable tolling should apply in some tax cases. In this instance, it would be unconscionable to allow the government to retain money that it concedes it was not owed, and may have only received due to a 93 year-old man's senility. We find Irwin to be controlling and hold that, in the absence of congressional action, the principle of equitable tolling applies to tax refund claims. 14