Opinion ID: 765233
Heading Depth: 2
Heading Rank: 1

Heading: The Government's Abandonment of the Ground on Which the District Court Relied

Text: 11 On appeal, the government has expressly abandoned its argument below, on which the district court relied, that it was entitled to recover the unpaid taxes based on the September 1984 assessment of income tax. Consistent decisions by six Courts of Appeals 4 have rejected such a theory. See United States v. Wilkes, 946 F.2d 1143, 1152 (5th Cir. 1991) ([a]s a taxpayer makes payment against a tax assessment, the assessment is extinguished in the amount paid and cannot be revived by the IRS' giving the taxpayer an unsolicited, erroneous refund . . . .The refund sent by the IRS as a result of a posting error did not revive the extinguished portion of the assessment.); O'Bryant v. United States, 49 F.3d 340, 347 (7th Cir. 1995) ([w]hen a taxpayer mails the IRS a check in the full amount of his assessed tax liability, and the IRS cashes it, the taxpayer's liability is satisfied, and unless a new assessment is made later on, any erroneous, unsolicited refund that the IRS happens to send the taxpayer must be handled on its own terms, not under the rubric of the assessed liability.); Clark v. United States, 63 F.3d 83, 87 (1st Cir. 1995) (when a taxpayer tenders payment on a tax assessment, that payment extinguishes the assessment to the extent of the payment . . . [a]n erroneous refund does not revive an extinguished assessment.); Bilzerian v. United States, 86 F.3d 1067, 1069 (11th Cir. 1996) (today we join these circuits and hold that once a tax liability is paid, no erroneous refund . . . can revive it.); Singleton v. United States, 128 F.3d 833, 837 (4th Cir. 1997) (our sister circuits uniformly held that the IRS had acted improperly by failing to follow the statutory methods for reclaiming an erroneous refund); Stanley v. United States, 140 F.3d 1023, 1027-28 (Fed. Cir. 1998) (the Government argued before the Court of Federal Claims that the erroneous refund could nevertheless be recovered on the basis of that [previous] assessment. . . .[T]he Government on appeal wisely does not pursue this argument.). 12 Meanwhile, in response to these uniform decisions, on May 4, 1998, the IRS issued an Action on Decision determining that in situations comparable to the one in the instant case, the assessment does not survive the payment, but must be considered extinguished by the payment, and therefore the collection of unpaid taxes after subsequent erroneous refunds cannot be based on the original assessment. See 1998-18 I.R.B. 4. The government has abandoned the argument on which the district court relied and does not ask us to affirm on that basis. We, therefore, need not consider the argument. Instead, the government asks that we affirm on a different basis -- that the 1972-79 Cotler returns were fraudulent and that the amounts due may therefore be assessed or collected at any time. We turn to that argument.