Document: 494 U.S. 596 110 S.Ct. 1361 108 L.Ed.2d 548 UNITED STATES, Petitionerv.Frances L. DALM. No. 88-1951. Argued Jan. 10, 1990. Decided March 20, Rehearing Denied May 14, See 495 941, 2195. Syllabus In 1975, respondent Dalm was appointed administratrix of her deceased former employer's estate. 1976 and 1977, she received payments from the decedent's brother, who wanted to share in estate because years service decedent. December 1976, a federal gift tax return filed, paid, for that year's payment Dalm. The Internal Revenue Service (IRS) then assessed penalties interest with respect transfer, which were paid 1977. No filed 1977 payment. After auditing Dalm's income returns, IRS asserted deficiencies upon determining should have reported brother as administratrix. Arguing gifts, petitioned Tax Court redetermination but made no claim credit or recoupment paid. parties settled case, agreeing stipulated decision owed lesser than those both years. November 1984, an administrative refund tax, interest, even though 26 U.S.C. § 6511(a) required any be within three when filed. When failed act on claim, District action "overpaid tax," alleging court had jurisdiction under 28 1346(a)(1). dismissed suit lack light 6511(a), rejecting contention timely doctrine equitable set forth Bull v. United States, 295 247, 55 695, 79 L.Ed. 1421. Appeals reversed, finding satisfied all doctrine's requirements. Held: lacked over suit. Pp. 601-611. (a) Title 1346(a)(1)'s provision broad district civil suits must read conformity other statutory provisions conditioning right bring such suit, including 7422(a), requires prior filing provides applicable statute limitations claim. Since file specified time limits, barred entertaining 601-602. (b) long since having run, does not support distinguished ground that, there, sought undisputed jurisdiction, only issue whether court, interests equity, could adjust take account error petitioner recover separate, time-barred action. Here, seek invoke liability; has already litigated liability without raising is foreclosed litigating it now. She seeks separate there authorization by reason bar. Stone White, 301 532, 57 851, 81 1265 stand proposition party proceeding may, proceeding, related, inconsistent, now relating same transaction. They do allow sole basis jurisdiction. 602-608. (c) comply limitations, Government immune principles sovereign immunity. See, e.g., States Mottaz, 476 834, 841, 106 2224, 2229, 90 841. Because come exceptions period prescribed §§ 7422 allowing maintain this would effectively override Congress' judgment equity exception. Both may still consider earlier inconsistent theory 608-610. (d) Appeals' reasoning permitted case effected, single transaction, recovery based later mistakes threshold requirement Although Court's precedents pertain cases where transaction subject taxation, bar unlike here, uncontested adjudicate one taxes question and, therefore, power examine entire Rothensies Electric Storage Battery Co., 329 296, 299, 67 271, 272, 91 296. 610-611. 867 F.2d 305 (CA 6 1989) reversed. KENNEDY, J., delivered opinion Court, REHNQUIST, C.J., WHITE, BLACKMUN, O'CONNOR, SCALIA, JJ., joined. STEVENS, dissenting opinion, BRENNAN MARSHALL, joined, post, p. 612. Christine Desan Husson, petitioner, pro hac vice, special leave Court. Robert B. Pierce, Birmingham, Mich., respondent. Justice KENNEDY 1 Single transactions, well known, susceptible different, theories taxation. before us, taxpayer treated moneys derived transfer. Some later, contended money income. disagreed, Government's assertion deficiency proceedings presented whether, supports after agreed pay We hold not. 2 * taxpayer, Frances Dalm, here. administratix Harold Schrier at request Schrier's surviving Clarence. It appears been loyal secretary many Clarence charge affairs receive some otherwise belong him. 3 fees estate, approved probate $30,000 $7,000 also two payments, $180,000 $133,813 his wife reporting month $18,675. additional $1,587 Schriers reimbursed But $133,813. 4 determined represented services $91,471 $70,639 along additions 6653(a) Code 1954 (IRC), (1982 ed.).1 5 deficiencies, 6213(a). petition, argued gifts carry out wish decedent days trial, $10,416 raised proceedings, although dispute factors considered arriving terms settlement. n. 2, infra. Immediately settlement, $20,262 transfer 1976. IRC 1979. 6511(a). six months, Western Michigan, seeking what complaint denominated tax." Her alleged 1346(a)(1) ed.). 7 moved dismiss summary judgment, arguing untimely limitations. granted motions, our 1421 (1935), we shall discuss. held did authorize exercise "an independent lawsuit, . maintained year expired." App. Pet. Cert. 19a. 8 On appeal, Sixth Circuit (1989). found requirements expressed cases. rejected characterization lawsuit legal theory. Id., 311-312 (citing Kolom 791 762 (CA9 1986)).2 9 approach taken Ninth Circuits conflict adopted Seventh Circuit, see O'Brien 766 1038 (1985), certiorari, 493 807, 46, 107 15 (1989), reverse. II 10 ultimate A. 11 complaint, invoked ed.), "civil against internal-revenue erroneously illegally collected, penalty claimed collected authority sum excessive manner wrongfully laws." Despite its spacious terms, qualify taxpayer's compliance certain conditions. first which, tracking language 1346(a)(1), limits providing 12 "[n]o internal revenue authority, until duly Secretary, according law regard, regulations Secretary established pursuance thereof." 13 Second, if whichever expires later. Read together, import these sections clear: unless imposed refund, regardless "erroneously," "illegally," "wrongfully collected," court. Kales, 314 186, 193, 62 214, 217, 86 132 (1941). 14 There doubt their expired. Under plain tax. B contest analysis; indeed, recognized "[t]here permitting overpayment F.2d, 308. recovery, concluded permits overpaid disagree. 16 addressed us supra. There, centered partnership distributions death audit, executor included sums 1920 1921. 1925, Commissioner notified estate's year, contending Commissioner, however, give value distributions. 17 That Board deficiency.3 sustained Commissioner's determination, September 1930, sued Claims tax.4 petition Claims, (1) amount taxed income, so entitled paid; (2) alternatively, due plus attributable inclusion taxable arguments. 18 holding interest. U.S., 263, S.Ct., 701. began acknowledging period, barred. 259, 260-261, 699, 699-700. "If nothing further occurred Congressional avenue redress." 261, 700. 19 What occur, event, became litigation between Government. reasoned assessment essence owes debt it; "taxes are life-blood government," necessary adjudication erroneous unlawful. As result, 20 "the usual procedure debts reversed field Payment precedes defense, burden proof, normally claimant, shifted taxpayer. reversals normal process collecting cannot obscure fact being accomplished just sovereign." 260, 699. 21 reasoning, substance attempt owed, Had followed "usual procedure" recovering instituting able defend "demanding mistakenly retained." 700 State Bank, 96 30, 24 647 (1878)). 22 counter demand way defense obtained notwithstanding therefor. This nature arising feature plaintiff's grounded. Such never main itself timely." 262, 23 immaterial rather sue collect refund. "This procedural obliterate substantial rely cross-demand him he recouped score." 701.5 contends distinction "meaningless distinction" deficiency, while part A central concept meaningless. Bull, 4, All relitigating 6512(a). statute. 25 instructive facts correct identical material respects. liability, recoupment, and/or winning each forum. Then, exhausted avenues asserting untimely. At point, brought run. facts, faced here: can say assurance it. Even raised, suggests argument hand. 699 ("The relied believed force, avail toll forbade bringing 1930 1921"). upheld premised consistent analysis today. (1937), trust corpus beneficiary governing beneficiary, trust, liable given identity assert now-barred trust's 537-539, 853-54. allowed underlying action: 27 sum, decisions cases, courts actions To date, C immunity, sovereign, 'is save consents consent define court's entertain suit.' " Testan, 424 392, 399, 948, 953, 47 114 (1976) (quoting Sherwood, 312 584, 586, 61 767, 769, 85 1058 (1941)). requiring terms. 841 (1986); Block North Dakota, ex rel. Bd. Univ. School Lands, 461 273, 287, 103 1811, 1819, 75 840 (1983). "[A]lthough construe time-bar unduly restrictively, careful interpret 'extend waiver beyond Congress intended.' Ibid. Kubrick, 444 111, 117-118, 100 352, 356-57, 259 (1979)); Library Shaw, 478 310, 318, 2957, 2963, 92 250 King, 395 1, 89 1501, 1502, 52 (1969) (waivers immunity "cannot implied unequivocally expressed"). 29 determined, previous suspended rules deviated principles. likewise refuse invitation For 7422(a).6 so.7 Having statutoryrequire ments asks go If principle understanding reserved Congress. 30 Our conclusion reinforced legislated 1938, known mitigation provisions, codified 1311-1314. These statutes, circumstances, permit 7422(a) provisions; doing little more overriding exception 31 today taxpayers position powerless recoupment. level, Rev.Rul. 71-56, 1971-1 Cum.Bull. 404 (revoking 55-226, 1955-1 469), III 32 mistake rationale. true subjected question. transaction: 33 "The stated case: 'recoupment grounded.' 262 [55 700]. thought offset another, plaintiff examined aspects, rendered justice view whole." 296 (1946). 34 Here paying chose litigate raise claim.8 choose consequences reopen matter purpose controlling jurisdictional statutes so. 35 therefore 36 ordered. whom MARSHALL join, dissenting. 37 will much celebrated often cited. Few affected, brief amicus curiae reserves footnote render obsolete holding. casts shadow Executive—and Court—but apparent importance. 38 Indeed, remarkable says leaves unsaid. majority's passing masks us: barring tolled conduct censured "immoral" tantamount "a fraud rights." 700, (1935). offers apology could—and should—follow rule case. 39 remarkably similar 55-year-old precursor. involved partner. assumption they constituted corpus. contended, first, transactions constitute thus second, argument, characterized follows retain second pursuant theory: held, cannot, innocent party, gone into treasury means agent. [24 647]. While here through element fraud, unjust retention immoral amounts 40 involves equally previously retaining assumes, record requires, compromised Thus, critical present event mutually theories.1 41 parallel clearly mind, most readers wonder how ever came why majority recite decide According majority, her, choice, "then recoupment." Ante, 611. seem fair enough, enough: might usually preclusion. settlement agreement surely can—without help Court—avoid problems future drafting agreements carefully. accordingly justification certiorari discretionary done useful deprive twice-taxed remedy wrong Government.2 42 Two explain preclusion this: Government, not, Court: "respondent's choice forum precluded claiming deficiency." Reply Brief 6. acknowledges sound insists pursue "paid Court." 3-4. 43 affluent less fortunate one, so, recovered notice 1983, One infer posture case—as respondent's counsel Court—that limited relief her. challenged 44 not: addressing simple res judicata. clear exist apparently obtain hear tax—an agree 1983. 45 determination made—that say, settled—respondent promptly available. consummated. character remained none policy reasons application implicated 46 nevertheless denies devised Ignoring policies confronts majestic voices "jurisdiction" "sovereign immunity"—voices haunting charm current majority. decided obeisance siren-like reliable guidance bright star jurisprudence: presumption every remedy. Marbury Madison, (1 Cranch) 137, 162-163, 60 (1803). Without sacrifice technical propriety, lapse divested easily avoided relying features collection procedures impose burdens ordinary litigants. net effect multiple taxation defendant actually plaintiff.4 48 I adopt course By initiating payment, waived count action, timely. proper treat issues sufficient put justify treating defendant, plaintiff. too late "A different result [is] reproach jurisprudence." 36, (1878). IV 49 reasonably said disposition unusually flexible treatment categories. rights construed reference status permit, effect, tolling period. doctrinal innovation imaginative expression generally appropriate definition. particular deserves virtue Bull. retreat direction precedent 50 is, moreover, especially sober unflinching about Quite contrary true. depends showing constrained tightly drawn boundaries, but, concedes, relevant speaks "spacious terms." 601. confers "any ed.).5 51 correctly recognizes blanket converted straitjacket recourse spelled elsewhere. find Code. stipulates "shall ed.).6 establishes stamp. ed.).7 latter gives shackles seeks: restricts capacity suits. Denominating declares "no doubt" combined operation strips accorded ed.) 6511 prescribes section least argument. technically meaning gravamen overpaid, unjustly retained. "[w]hile my fraudulently retained laws grant expressly distinguishes simply "excessive," "erroneously collected." phrases appear cover better "sum Likewise, express applies "overpayment tax" odd speak ordinarily order defrauded—even malefactor. conclude speaking, retained, overpaid. accords divest it.8 affection seems end devotion begins.9 53 complete inventing small, blatant, fiction: minor fiction conscripted strategy serve vainest fictions, origin ancient myth "[K]ing wrong." W. Blackstone, Commentaries *238. Whatever favor polite falsehood English law, anomalous own. Nevada Hall, 440 410, 414-415, 99 1182, 1185, 59 416 (1979); Will Michigan Dept. Police, 491 58, 87, 109 2304, 2321, 105 (1989) (STEVENS, dissenting). Its persistence denied ought celebrated. Nor fictive forgotten. cause expand doctrine, regard practicalities discussed 54 useful, concepts accommodate disputes dissonance accompanying blended categories, flexibility demands surprising stressed citizen twice subjects among competing fora, half unsurprising, encouraging, occur rarely explicit them.10 believes need correction. import, undone rendering neither spirit nor letter American law. takes grave declaration "distinction meaningless." 606. am sure solemn truism means, know 56 unable discover distinguishing respectfully dissent. Unless noted, references (26 U.S.C.), amended. granting suggested alternative plausible explanation allocation reflected erred issue, giving opportunity show parties' intent effecting Accordingly, remanded issue. 312. Appeals, forerunner Act 1924 agency executive branch Government." 1924, Pub.L. 176, 900(k), Stat. 338. Act, challenge Board. id., 274, 900; Old Colony Trust Co. 279 716, 721, 499, 501, 73 918 (1929). Before enactment 1926, direct review decisions. lost deficiency. nominally mechanism supra, 721-722, 501; Ferguson, Jurisdictional Problems Federal Controversies, Iowa L.Rev. 312, 350-351 (1963). 1926 circuitous process. First, provided judicial appeals. ch. 27, 1001(a), 109. once Board, institute new another 284(d), 67. 725-728, 502-03, apply where, issued 1926. Andrews, Modern-Day Equitable Recoupment "Two Effect:" Avoidance Statutes Limitation Ariz.L.Rev. 595, 599, (1986). emphasized lie item, theories. 299-300, (1946); cf. (1937) (permitting barred). STEVENS calls cast He creates instead funds 620-621. Neither authorities distinction. Section claims "overpayment." commonsense interpretation pays whatever all. dissent relies fraudulent, described 258, word encompasses "wrongfully" taxes, used 7422(a). point. language, conditions erroneously, illegally, If, concede, 620, term "overpayment" illegal collection, encompass wrongful collection. final matter, note misled thinks fiction. "refund" taxes"; "recovery overpayment." Complaint, 2-3; 305, 308 (CA6 1989). characterizations correct. statute, argues purposes So, asserts, arise time. sensible tenders IRS, discovers erroneous. very context passed, meritorious. learn run error, operate lift occasion pass Arguably outrageous took perfectly sound. aggregating $313,813 compensation total $37,000 services. place reliance aspect abstains suggesting harshness mitigated unresolved factual ante, 600-601, 2. states resolve Courts Appeals. importance merit attention, exists. observes agrees (CA7 1985). generated O'Brien, against, by, itself. available 1050-1051. believe spoke 1050, 15, extent remarks obviously dicta. endorses adopted. 404, 405 ("[T]he lacks plea recoupment"); Estate Schneider 93 T.C. 568 303, (1946), cited Gooch Milling & Elevator 320 418, 64 184, 88 139 (1943), reading dispute. commend reservation 611, 8. assume deciding Of course, eventually today's become dead letter. separately, subsequent stands hearing. afforded hearing redress restitution. sovereign. retains violation own withholding wrongful. Restitution Nevertheless think "In palpable to. Retention morality conscience. instituted restitution fixed redress. "To objection respond answer accrued actionable 1925 proceeded pleading 699-700, 701, reads: original concurrent of: Any quotes entirety. "Claim title periods Claim stamp paid." June 1985. 2-year borrowed applied "wrongful collection" resulting Respondent's identifies from" respondent, alleges taxes" owing Respondent understand details pleadings. handling makes clear, understood evident face that: "4. inequitable Defendant fund exclusive gift. "5. Refund [sic ] 1984. "7. Defendant, agents, assessing referred Paragraph [alleging 1977] hereof improper, erroneous." Nowhere allege calculations, mistaken misinterpreted recognizing "inequitable." indeed premise strict pleading, becomes trivial absurd. certainly "jurisdiction concept," logic 'meaningless distinction.' Cf. 194, 218, (1941) ("This fairly advising reject general formal regulations, defects specificity remedied amendment period"). supposes "conclusion period" "permit barred." 610. enacted decided. Unlike persuaded steps ensure citizens equitably intended gut judicially created doctrines ensured circumstances. inference plausible. 619-623

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