Opinion ID: 2778177
Heading Depth: 2
Heading Rank: 2

Heading: Tax Refund Claims for 2006-2011

Text: For the first time on appeal Appellants question whether the Court of Federal Claims had jurisdiction over their refund claims for the 2006-2011 tax years. They allege that this court’s decision in a case concerning Appellants’ 2005 tax return, Diamond v. United States, 530 F. App’x 943 (2013), deprived the Court of Federal Claims of jurisdiction over the Appellants’ 2006-2011 tax returns. In the prior case, the Court of Federal Claims 8 DIAMOND v. US determined that Appellants’ 2005 tax return did not contain sufficient information, did not evince an honest endeavor to satisfy the law, and therefore did not constitute a proper claim for a refund. Because it only has jurisdiction over a refund claim if “the taxpayers’ submissions to the IRS constitute a claim for refund,” the Court of Federal Claims dismissed Appellants’ refund claim for the 2005 tax year. Diamond, 530 F. App’x at 944 (quoting Waltner v. United States, 679 F.3d 1329, 1333 (Fed. Cir. 2009)). On appeal, this court affirmed, agreeing with the Court of Federal Claims’ determination that Appellants’ 2005 tax return was not a proper claim for a refund. Id. Here, Appellants allege that the same deficiencies found in their 2005 tax return are present in the returns at issue in this case. Therefore, Appellants contend that the Court of Federal Claims could not have exercised jurisdiction, because such returns were not valid claims for refunds. At the Court of Federal Claims, Appellants only contested the IRS’s decision to credit their overpayments to other outstanding liabilities. As a general principle, appellate courts do not consider issues that were not clearly raised in the proceeding below. Hormel v. Helvering, 312 U.S. 552, 556 (1941); see San Carlos Apache Tribe v. United States, 639 F.3d 1346, 1355 (Fed. Cir. 2011) (“Because the [litigant] did not raise this argument before the Court of Federal Claims, it is waived on appeal.”). “Only rarely will an appellate court entertain” a novel argument raised for the first time on appeal. Karuck Tribe v. Ammon, 209 F.3d 1366, 1379 (Fed. Cir. 2000); see Singleton v. Wulff, 428 U.S. 106, 121 (1976) (“The matter of what questions may be taken up and resolved for the first time on appeal is one left primarily to the discretion of the courts of appeals, to be exercised on the facts of individuals case.”). Because Appellants failed to raise this issue below, they have waived it. Even if Appellants had made this argument to the Court of Federal Claims, it is meritless. In the case DIAMOND v. US 9 concerning their 2005 tax return, the IRS never accepted a return from Appellants. See Diamond, 530 F. App’x at 944 (explaining that before Appellants filed suit against the government in the Court of Federal Claims for a refund, the IRS had asked Appellants twice to provide additional information so that the IRS could process the return, but Appellants had failed to do so). But, for the years in dispute in this case, the IRS eventually did accept all of Appellants’ tax returns, finding that any deficiencies in the original returns had been corrected in subsequent amended returns. Therefore, the concerns raised in the prior case are not at issue here. Regarding the legality of the IRS’s decision to apply Appellants’ overpayments to their outstanding tax liabilities for other years, the Court of Federal Claims correctly concluded that the IRS has the authority to do so. See 26 U.S.C. § 6402(a) (“In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment . . . .”); General Elec. Co. v. United States, 384 F.3d 1307, 1312 (Fed. Cir. 2004) (explaining that the IRS has the ability to credit overpayments “against the liability of the person who made the overpayment”). Because this was the only issue disputed by the parties below, the Court of Federal Claims properly determined that Appellants had “received the benefit of the refund they [sought]” and “[a]s such, the court can afford them no further relief.” Claims Decision, 115 Fed. Cl. at 528. As there were no other issues concerning the Appellants’ refund claims, the Court of Federal Claims did not err in granting summary judgment in favor of the government. 10 DIAMOND v. US