Opinion ID: 40585
Heading Depth: 3
Heading Rank: 2

Heading: Fifth Circuit Law Post-Rosenman

Text: 14 Our Circuit first applied Rosenman in Thomas v. Mercantile National Bank, 204 F.2d 943 (5th Cir.1953). The Mercantile National Bank panel read the Rosenman decision as establishing a rule that any amount remitted to the IRS prior to a formal assessment of tax is, as a matter of law, a deposit. Id. at 944. Citing Rosenman, the Court held a claim for refund timely because 15 [u]ntil the Commissioner certified the assessment list . . . there was no deficiency assessment, and no liability on the part of the taxpayer, and consequently nothing to pay. The sum deposited with the Collector . . . was merely an advance deposit to cover additional tax liability expected to arise thereafter. Neither the estate's liability, nor the fact that there was an overpayment could be determined until the deficiency assessment was entered. It would be illogical to hold, as the United States contends, that the statute of limitation began to run against a claim for refund before the deficiency itself came into existence, and before the fact that there was an overpayment, and if so the amount thereof, became ascertainable. 16 Id. Mercantile National Bank thus took Rosenman beyond its narrow facts and circumstances, which the Supreme Court had specifically emphasized in reaching its decision, and adopted a per se rule that pre-assessment remittances are deposits. 17 Almost thirty years after Mercantile National Bank was decided, a panel of this Court begrudgingly applied its per se rule in Ford v. United States, 618 F.2d 357 (5th Cir.1980), but not without making clear its disagreement with Mercantile National Bank 's holding: Despite our view of Supreme Court precedent, the course taken by our sister circuits, and appropriate tax policy, we are constrained . . . by the bonds of Thomas v. Mercantile National Bank at Dallas.  Id. at 358. After thoroughly discussing the reasons for abandoning the rule and inviting the Court to reconsider it en banc, the panel nevertheless applied Mercantile National Bank as binding circuit precedent. Id. at 358-61. The motion for rehearing en banc was denied. Ford v. United States, 625 F.2d 1016 (5th Cir.1980). 18 Fifteen years later, the Fifth Circuit again addressed Mercantile National Bank in Harden v. United States, 74 F.3d 1237 (5th Cir.1995) (unpublished). 8 The facts of Harden are virtually identical to those of the instant case. The Hardens filed Form 4868 for both the 1984 and 1985 tax years, and they submitted remittances with each filing. Harden, 74 F.3d at 1237. Several years later, they filed their tax returns for those years, indicating substantially lower tax liabilities than the amounts previously remitted. Id. Like the Deatons, the Hardens sought to apply the overpayments as credits for subsequent tax years, but the IRS denied their request as time-barred. Id. 19 The government argued in Harden that Mercantile National Bank and Ford were distinguishable because they did not address taxpayer remittances accompanying Form 4868. According to the government, 26 U.S.C. § 6513 expressly defined such remittances as payments of tax for purposes of the statute of limitations, so the remittances were payments, not deposits, as a matter of law. Although the Harden panel appreciated the government's rational and forceful argument, it concluded that it was bound to the decisions of this court in [ Mercantile National Bank ] and Ford. In those cases we held that as a matter of law a remittance forwarded to the IRS before an assessment of tax is to be considered a deposit rather than a payment. Id.