Court Opinion

ID: 3151649
Source: CourtListenerOpinion
Date Created: 2015-11-03 18:00:27.061046+00
Date Added: 2024-06-11T11:55:35.264875
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT

                                      __________

                                      No. 14-2028
                                      __________

                       ROLLOCK COMPANY, A Corporation;
                        ANTHONY KORDELL, an individual;
                      CHRISTOPHER KORDELL, an individual,
                                 Appellants,

                                           v.

                           UNITED STATES OF AMERICA
                                   __________

                    On Appeal from the United States District Court
                       for the Western District of Pennsylvania
                            (D.C. Civil No. 3-12-cv-00162)
                       District Judge: Honorable Cathy Bissoon

                      Submitted Under Third Circuit LAR 34.1(a)
                                  October 5, 2015

            BEFORE: FUENTES, SMITH, and NYGAARD, Circuit Judges

                               (Filed November 3, 2015)

                                      __________

                                       OPINION*
FUENTES, Circuit Judge.

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
      Plaintiffs-Appellants, Anthony Kordell, Chris Kordell, and the Rollock Company,

appeal the District Court’s dismissal of their claims asserted against the United States

seeking recovery of taxes, penalties, and interest, which Appellants allege were wrongly

assessed against them. The District Court dismissed the complaint for lack of subject

matter jurisdiction.1 For the following reasons, we affirm.

                                            I.

      Anthony and Christopher Kordell (the “Kordells”), shareholders and officers of

Rollock Company (“Rollock”), owned a tract of land in Somerset, Pennsylvania, which

was leased to Rollock for the operation of its scrap metal business. On September 11,

2001, the crash of Flight 93 occurred approximately three hundred yards from Rollock’s

principal place of business. After the incidents of September 11th, the Kordells claim

that they received a notice from the IRS in early 2002, designating the Rollock property

as a “September 11th case.”      Based on this notice, Plaintiffs claim that they were

exempted from filing federal tax returns and depositing employee withholdings on behalf

of Rollock and its employees from January 1, 2002 through September 30, 2009.

Plaintiffs further contend that a safe containing the 2002 written notice was stolen from

the Rollock property in 2005. Thus, they claim that no formal proof of this alleged notice

from the IRS exists. Plaintiffs also contend that they received no further communication

1
  Prior to the District Court’s dismissal of the complaint for lack of subject matter
jurisdiction, Plaintiffs asserted jurisdiction below pursuant to 28 U.S.C. §§ 1346(a)(1)
and 1367(a). This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
                                            2
from the IRS until 2009, when the agency called to inquire about the status of their tax

returns.

       After receiving the IRS’s inquiry, Rollock filed its employment tax returns and

paid the IRS $550,000 in September 2009. Rollock also requested that the IRS credit this

amount toward its outstanding tax liabilities. However, the IRS later notified Rollock

that it still owed over $600,000 in outstanding tax liability.      Shortly after, Rollock

submitted an IRS Form 843, requesting an abatement of interest and penalties. Then, in

October of 2010, Rollock filed an IRS Form 656 Offer in Compromise (“OIC”). In the

OIC, Rollock offered a proposed monthly payment plan of $10,000 to satisfy its

outstanding tax obligations. Around the same time, the Kordells settled a Trust Fund

Recovery Penalty Assessment with the IRS for $219,000. This Assessment encompassed

certain liabilities incurred by the Kordells as responsible persons of Rollock for unpaid

taxes that Rollock owed from 2007 through 2009.

       Eventually, the IRS rejected Rollock’s proposed 2010 OIC.             Rollock then

submitted yet another OIC in 2011, which the IRS also rejected. Although Plaintiffs

argue that Rollock continued to make payments to satisfy its outstanding liability, the IRS

issued a notice, stating that Rollock still owed the IRS approximately $876,000. The IRS

also notified Plaintiffs that their 2011 federal income tax refund would be applied to their

default for the 2003 tax year. With their tax dispute unresolved, Plaintiffs filed the

instant complaint against the government, primarily seeking “recovery of taxes, penalties

                                             3
and interest erroneously, improperly, and illegally assessed and collected.” 2 At the time

that the complaint was filed, Plaintiffs claim to have paid the IRS approximately

$1,057,000 toward any outstanding tax liability.

                                              II.

       In relevant part, I.R.C. § 7422(a) provides that no suit or proceeding shall be

maintained in any court for the recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed “until a claim for refund or credit has been duly filed

with the Secretary.” In granting the government’s motion to dismiss for lack of subject

matter jurisdiction, the District Court held that Plaintiffs failed to file a timely tax refund

claim with the IRS, as required under I.R.C. § 7422, prior to bringing suit. Although the

District Court concluded that it is feasible for a party to file an informal administrative

refund claim to satisfy the claim-filing prerequisite, the Court held that Plaintiffs failed to

establish communications with the IRS sufficient to demonstrate the existence of such an

informal claim.3

2
 In addition, Appellants brought a claim seeking relief under the Declaratory Judgment
Act, which the District Court also dismissed for lack of subject matter jurisdiction. The
dismissal of that claim, however, is not raised in this appeal.
3
  As the District Court noted below, the parties do not dispute that Appellants did not file
a formal refund claim using the designated IRS form.

                                              4
         We, too, find that Plaintiffs have failed to show that any “minimum amount of

communication” with the IRS took place to establish an informal claim.4 As the District

Court noted, the Form 843 simply indicates that Plaintiffs were seeking a tax abatement,

not a refund. Moreover, the two letters from the IRS to Rollock informed the company

that the IRS was denying its request for penalty adjustment. Those letters did not,

however, mention any potential claim for a tax refund. Additionally, the OICs were

proposed plans for future payments and not requests for refunds. Similarly, neither the

requests for accounting nor the appeal of the IRS’s treatment of Plaintiffs’ 2011 tax

refund contain any communication sufficient to place the IRS on notice that Plaintiffs

were seeking a tax refund. In sum, nothing in the record suggests that Plaintiffs satisfied

the IRC’s claim-filing prerequisite before bringing suit in federal court. The District

Court thus properly concluded that it lacked subject matter jurisdiction over Plaintiffs’

claims.

                                             III.

         We have carefully reviewed Plaintiffs’ remaining arguments and find that they

have no merit. We therefore affirm the District Court’s order for substantially the same

reasons set forth in the thorough and persuasive opinion below.

4
    See D’Amelio v. United States, 679 F.2d 313, 315 (3d Cir. 1982).
                                              5