Court Opinion

ID: 4581682
Source: CourtListenerOpinion
Date Created: 2020-10-29 13:01:12.112864+00
Date Added: 2024-06-11T09:28:19.198095
License: Public Domain

In the United States Court of Federal Claims
                                           No. 19-53T

                                     (Filed: October 28, 2020)

                                                )
    GEORGE N. GAYNOR,                           )
                                                )
                        Plaintiff,              )   Tax refund claim; I.R.C. § 7422(a); I.R.C.
                                                )   § 6038; payment in full; penalties;
             v.                                 )   administrative refund claim; notice of
                                                )   disallowance; six-month waiting
    THE UNITED STATES,                          )   period; IRS Form 5471; RCFC 12(b)(1).
                                                )
                       Defendant.               )
                                                )

Michael Cavalier Durney, Law Offices of Michael C. Durney, Washington, DC,
for plaintiff.

Miranda Bureau, United States Department of Justice, Tax Division, Washington, DC,
for defendant. With her on the briefs were Richard E. Zuckerman, Principal Deputy
Assistant Attorney General, David I. Pincus, Chief, Court of Federal Claims Section,
G. Robson Stewart, Assistant Chief, Court of Federal Claims Section, Tax Division,
United States Department of Justice, Washington, DC.

                                     OPINION AND ORDER

SOLOMSON, Judge.

       Plaintiff, Mr. George N. Gaynor, seeks the refund of a portion of civil penalties
that the Internal Revenue Service (“IRS”) assessed against him for his failure to comply
with reporting obligations related to his interests in certain foreign corporations. Such
claims, when properly filed, are within this Court’s tax refund jurisdiction, pursuant to
the Tucker Act, 28 U.S.C. § 1491(a), and the Internal Revenue Code (“I.R.C.”) § 7422(a).1
See United States v. Clintwood Elkhorn Min. Co., 553 U.S. 1, 4 (2008) (“A taxpayer seeking
a refund of taxes erroneously or unlawfully assessed or collected may bring an action
against the Government . . . in the United States Court of Federal Claims.”).

1   The Internal Revenue Code is Title 26 of the United States Code.
        To date, Mr. Gaynor has never paid in full the penalties assessed against him for
the years 2002 through 2009, or for the years 2011 through 2015. Mr. Gaynor has paid in
full the penalties assessed against him for 2010 and has sought a refund from the IRS for
that full payment. But because Mr. Gaynor only paid his 2010 penalties after filing his
initial Complaint (“Compl.”), ECF No. 1 – albeit before filing his First Amended
Complaint (“FAC”), ECF No. 9-1 – Mr. Gaynor’s payment in full and accompanying
refund request for the 2010 penalties are insufficient to confer jurisdiction upon this
Court to consider Mr. Gaynor’s FAC even for to the 2010 sums at issue.

        Moreover, as the Court details infra, even with respect to the 2010 penalties,
Mr. Gaynor failed to satisfy yet additional jurisdictional prerequisites. In particular,
because Mr. Gaynor never received a notice of disallowance from the IRS for his
claimed 2010 refund, he was required to wait six months after filing a refund claim with
the IRS before initiating his suit. Thus, Mr. Gaynor first filed the instant action prior to
having satisfied any of the jurisdictional prerequisites for any year (including 2010), and
he may not circumvent the mandatory six-month waiting period for the 2010-related
claims via the FAC or by having that waiting period lapse while the FAC is pending.
Although more than six months had passed from the time Mr. Gaynor filed his initial
Complaint to the time Mr. Gaynor filed his FAC, such passage of time cannot be used to
satisfy a statutory waiting period. See Black v. Secretary of Health and Human Services, 93
F.3d 781, 790 (Fed. Cir. 1996); GAF Bldg. Materials Corp v. Elk Corp. of Dallas, 90 F.3d 479
(Fed. Cir. 1996). As such, even with respect to the 2010 penalties, Mr. Gaynor has not
satisfied this Court’s tax refund jurisdictional prerequisites.

       Accordingly, and for the additional reasons explained infra, the government’s
motion is GRANTED, and Mr. Gaynor’s FAC is DISMISSED pursuant to Rule 12(b)(1)
of the Rules of the United States Court of Federal Claims (“RCFC”).

I.       FACTUAL BACKGROUND2

         The IRS assessed $260,000 in civil penalties against Mr. Gaynor due to his failure
to file IRS Form 5471 (“Form 5471”). Mr. Gaynor specifically claims he is entitled to a
refund for $23,600 in such penalties paid to the IRS. Mr. Gaynor further seeks a
declaration that all penalties assessed against him were “unlawful,” and that the
penalties assessed for the years 2002–2005 were improper due to the applicable statute
of limitations contained in I.R.C. § 6038. FAC ¶ 20-32.

       Mr. Gaynor previously assisted in managing his father’s investments, which
included, among other assets, a Swiss investment account managed by Aquila & Co.,
AG, in Zurich, Switzerland (“Aquila”). FAC ¶¶ a-e. In the late 1990s, Mr. Gaynor’s
father requested that Mr. Gaynor begin to visit Zurich twice a year to check on the

2   The Court has derived this fact summary from the allegations in Mr. Gaynor’s FAC.

                                               -2-
Aquila investment account, as Mr. Gaynor’s father no longer felt up to traveling to
Switzerland himself due to his deteriorating health and advanced age. FAC ¶ h.
Mr. Gaynor agreed and began traveling to Zurich at his own expense. Id. ¶ i.

      In October of 2000 – to pay for Mr. Gaynor’s business trips to Switzerland –
Mr. Gaynor’s father created Sonoside Consulting, Inc. (“Sonoside”). FAC ¶¶ j-k.
Sonoside is a Panamanian corporation for which Mr. Gaynor was named as a beneficial
owner. Id. A few years later, in 2004, Sonoside transferred its control and management
to Centapriv Zurich, AG, (“Centapriv”) through a management agreement. Id.

       As alleged in the FAC, Mr. Gaynor was not aware of Sonoside’s transfer to
Centapriv or even Sonoside’s existence altogether until Aquila, the Swiss investment
manager of Sonoside, so informed Mr. Gaynor. Id. ¶ l. Mr. Gaynor alleges that Aquila
never advised him that he possessed any IRS reporting responsibilities with regard to
Sonoside. Id. Following Sonoside’s formation, Centrapriv formed a separate
corporation, owned and funded by Sonoside, called Runcar Limited (“Runcar”). Id.
¶ m. Centrapriv advised Mr. Gaynor that Runcar was created as a separate entity,
based in Zug, Switzerland, for the purpose of licensing an automobile which was to be
driven by Mr. Gaynor while he was in Switzerland tending to his father’s investments.
Id. ¶ m. Mr. Gaynor alleges that “[a]s was the case with Sonoside, Plaintiff was assured
by Centrapriv that Runcar was a Swiss corporation as to which Plaintiff had no [IRS]
reporting responsibilities. Id. ¶ n.

        Sometime in 2010, Mr. Gaynor learned that there likely were IRS filing
requirements for corporate-owned foreign bank accounts. FAC ¶ r. Following that, in
October of 2011, an employee of Centrapriv took Mr. Gaynor to meet with Steven Kraft,
an American certified public accountant (“CPA”) who worked in Zurich. Id. ¶ s.
Mr. Gaynor maintains that Mr. Kraft first advised Mr. Gaynor that he had IRS reporting
responsibilities for the Swiss bank accounts. Id. ¶ t. Mr. Gaynor alleges, however, that
at that point – even after learning of IRS reporting requirements for the Swiss bank
accounts – Mr. Gaynor still was unaware that he possessed separate reporting
responsibilities for both Sonoside and Runcar. Id.

        Several years later, Mr. Gaynor received a notice from the IRS captioned “Failure
to File Form 5471” for Sonoside (the “Sonoside Failure Notice”), dated May 8, 2017.3
FAC ¶ v. Mr. Gaynor maintains that it was not until he received the Sonoside Failure
Notice that he learned of a Form 5471 filing responsibility regarding Sonoside. Id.
Furthermore, because the IRS did not mention Runcar in the Sonoside Failure Notice,
Mr. Gaynor believed that he was not required to separately file a Form 5471 for Runcar.
FAC ¶ v.; see also id. ¶ ff (“At no time did Plaintiff ever knowingly or intentionally

3   The Form 5471 requirements and its significance are addressed in greater detail, infra IV.B.

                                                 -3-
disregard any legal obligation with respect to either Sonoside or Runcar.”).4 On July 26,
2017, Mr. Gaynor transmitted Form 5471 for Sonoside to the IRS for the years 2004
through 2015, accompanied by a Statement of Reasonable Cause, explaining his failure
to file the forms in a timely manner. Id. ¶ w.

        Mr. Gaynor then received a notice from the IRS which was entitled “Failure to
File Form 5471” for Runcar (“Runcar Failure Notice”), dated September 12, 2017. FAC
¶ x. Just as Mr. Gaynor maintains with regard to Sonoside, Mr. Gaynor alleges that he
first became aware that he also was required to file Form 5471 for Runcar when he
received the Runcar Failure Notice. Id. On December 5, 2017, Mr. Gaynor transmitted
Form 5471 for Runcar covering the years 2002 through 2015, once again accompanied
by a Statement of Reasonable Cause. Id. ¶ y.

        The IRS responded to Mr. Gaynor in a letter dated June 6, 2018, advising
Mr. Gaynor that the IRS had rejected his Statement of Reasonable Cause concerning the
Sonoside Form 5471 filings. FAC ¶ z. As such, the IRS informed Mr. Gaynor that the
IRS would assess a $10,000 penalty against Mr. Gaynor for each of the years 2004
through 2015 for which he had failed to submit the required forms for Sonoside, for a
total of $120,000. Id. The IRS further advised Mr. Gaynor that if he disagreed with the
IRS’s decision, he could submit a reconsideration request to the IRS Office of Appeals.
Id. In turn, Mr. Gaynor transmitted a Protest of the Sonoside Form 5471 penalties to the
IRS, as well as a Request for Consideration by the Office of Appeals. Id. ¶ aa.

       Similarly, on June 6, 2018, the IRS sent a letter denying Mr. Gaynor’s Runcar
Statement of Reasonable Cause, as well. FAC ¶ cc. Accordingly, the IRS informed
Mr. Gaynor that the IRS would assess a $10,000 penalty against Mr. Gaynor for each of
the years 2002 through 2015 for which he had failed to submit the required forms for
Runcar, for a total of $140,000 (i.e., in addition to the $120,000 for Sonoside). Id. That
IRS letter further advised Mr. Gaynor that if he did not agree with the decision, he
could seek reconsideration. Id. ¶ cc. As Mr. Gaynor had done for Sonoside, he
transmitted to the IRS a Protest of the Runcar Form 5471 penalties, as well as a Request
for Consideration by the IRS Office of Appeals. Id. ¶ dd.5

       As highlighted supra, to date, Mr. Gaynor has paid $23,600 towards the penalties
assessed against him. See FAC ¶¶ 13-19. Mr. Gaynor did so through a number of
different lump-sum payments, of varying amounts, and at different times, related to

4Mr. Gaynor “assumed that, as Runcar was effectively a subsidiary of Sonoside, no Form 5471
was required to be filed for Runcar.” FAC ¶ v.
5 Mr. Gaynor noted that as of the date of filing of his FAC, he had not yet received a response
from the IRS Office of Appeals to either of his Requests for Consideration. FAC ¶¶ bb, ee.

                                               -4-
different tax years. These payments can be divided into two groups – those made prior
to Mr. Gaynor’s filing of his initial Complaint, and those made after Mr. Gaynor filed
his initial Complaint (but prior to Mr. Gaynor’s having filed his FAC).

        Before Mr. Gaynor filed his initial Complaint, he made three partial payments for
a total of $3,800. First, on June 19, 2018, he made a $1,200 partial payment to the IRS.
FAC ¶ 13. Mr. Gaynor’s $1,200 payment was accompanied by a letter indicating that he
wished for that lump-sum payment to be applied towards the penalties that were
assessed against him (based on his interest in Sonoside) for the years 2004-2015, in
allocations of $100 for each year, respectively. Id. Second, on November 21, 2018, still
before Mr. Gaynor filed his initial Complaint, he made an additional $1,400 partial
payment to the IRS. Id.¶ 14. Mr. Gaynor’s $1,400 payment was accompanied by a letter
asking for that lump-sum payment to be applied towards the penalties that were
assessed against him (based on his interest in Runcar) for the years 2002-2015, allocated
at $100 for each year. Id. Third, on December 18, 2018, the IRS informed Mr. Gaynor
that the IRS had “applied a Form 1040 overpayment for the year 2004 in the amount of
$1,200 to the civil penalty owed for December 31, 2004.” FAC ¶ 15. Thus, Mr. Gaynor
contends that he essentially made an additional $1,200 payment in December 2018, for
the penalties assessed against him in 2004. Id. ¶ 22.

       After Mr. Gaynor filed his initial Complaint – but before Mr. Gaynor filed his
FAC – he made two additional payments, for a total of $19,800. First, on or around
April 20, 2019, Mr. Gaynor paid $9,900 towards the penalty assessed against him for
2010 based on his interest in Sonoside. FAC ¶ 16. Second, on that same day,
Mr. Gaynor paid $9,900 towards the penalty assessed against him for 2010 based on his
interest in Runcar. Id. ¶ 17. Each of these partial 2019 payments represented the
remaining balance that was due for the 2010 penalties following Mr. Gaynor’s partial
2018 payments.6 Accordingly, following Mr. Gaynor’s April 20, 2019 payments, he had
paid in full the penalties assessed against Mr. Gaynor for the 2010 tax year.

       On April 20, 2019, the same day on which Mr. Gaynor fully paid the 2010
penalties assessed against him, he also sent letters to the IRS which included IRS Form
843 (Claims for Refund). FAC ¶¶ 18-19. Specifically, Mr. Gaynor sought a refund for
the $10,000 penalties the IRS assessed against him based on Mr. Gaynor’s interest in
Sonoside and Runcar, respectively, related to the year 2010 alone.7

6 This number is based on the full $20,000 that was assessed against Mr. Gaynor for 2010, minus
the $200 which Mr. Gaynor had paid previously (as part of the original 2018, $3,800 payment).
7Nevertheless, as the government points out and as the Court explains infra, at no time prior to
the filing of this suit did Mr. Gaynor file any refund claims with the IRS for the penalties
assessed against him for either of the entities for any tax years other than for 2010. Moreover,
Mr. Gaynor did not receive, and has not received, a notice of disallowance regarding any of his
claims for any year, including 2010.

                                              -5-
II.    PROCEDURAL HISTORY

       On January 10, 2019, Mr. Gaynor filed a Complaint in this Court seeking a refund
of $3,800 of the penalties assessed against him based on his interest in both Sonoside
and Runcar, for the years 2002 through 2015. See Compl. ¶¶ 20-22. On April 10, 2019,
the government filed a motion to dismiss for lack of subject-matter jurisdiction,
pursuant to RCFC 12(b)(1). See ECF No. 8.

        Prior to Mr. Gaynor’s filing of his response to the government’s motion, on
April 22, 2019, Mr. Gaynor moved for leave to file an amended complaint, which was
granted on September 6, 2019. See ECF No. 9; ECF No. 15.8 In Mr. Gaynor’s FAC – as
he previously had alleged in his initial Complaint – Mr. Gaynor asserted that until the
IRS notified him via the Sonoside and Runcar Failure Notices, he was unaware of any
Form 5471 filing responsibility for either Sonoside or Runcar. FAC ¶ v.; see also id. ¶ ff.
Mr. Gaynor thus maintains that he had reasonable cause for not filing such forms until
after he received the failure notices. Id. ¶¶ v-x. Accordingly, Mr. Gaynor claims that
“[t]he penalty assessed against [him] for failure to timely file Forms 5471 for Sonoside
with respect to the years 2004 through 2015, in the amount of $10,000 for a total of
$120,000, is without legal basis and therefore erroneous.” Id. ¶ ii. Mr. Gaynor likewise
contends that “[t]he penalty assessed against Plaintiff for failure to timely file Forms
5471 for Runcar with respect to the years 2002 through 2015, in the amount of $10,000
for a total of $140,000, is without legal basis and therefore erroneous.” Id. ¶ jj.

        Primarily, Mr. Gaynor’s FAC updates his initial Complaint through alleging that
he made additional payments to the IRS since the time he filed his initial Complaint.
FAC ¶¶ 16-19. Specifically, Mr. Gaynor contends that in the interim, between when he
filed his initial Complaint and his FAC, Mr. Gaynor fully paid the penalties arising from
his failure to file Form 5471 for both Sonoside and Runcar for the year 2010. See FAC ¶¶
16-19. Mr. Gaynor further alleged that he also had filed refund claims with the IRS for
each of the payments made pertaining to the penalties assessed against Mr. Gaynor
stemming from his interest in each of the foreign corporations (i.e., Sonoside and
Runcar). Id.9

8The Court notes that during the pendency of Mr. Gaynor’s motion to amend his Complaint,
the parties, in fact, fully briefed the previously pending motion to dismiss Mr. Gaynor’s initial
Complaint. See ECF No. 10; ECF No. 13. As the Court explains below, however, contrary to the
belief that Plaintiff’s counsel expressed at oral argument, the motion to dismiss the initial
Complaint was rendered moot when Mr. Gaynor filed his now-pending FAC. See ECF No. 15;
see infra n. 5.
9As the Court will explain infra, however, Mr. Gaynor alleges neither that he had received a
notice of disallowance of his refund claim from the IRS, nor that he had waited six months from
the time of filing the refund claim to the date on which he filed suit in this Court, as required.
See Clintwood Elkhorn Min., 553 U.S. at 4-5.

                                               -6-
       Following Mr. Gaynor’s filing of his FAC, on September 20, 2019, the
government filed a motion to dismiss Mr. Gaynor’s FAC for lack of subject-matter
jurisdiction, pursuant to RCFC 12(b)(1). See ECF No. 17-1 (“Def. Mot.”). On October 8,
2019, Mr. Gaynor filed a response in opposition to the government’s motion. See ECF
No. 19 (“Pl. Resp.”). On February 25, 2020, the government filed a reply brief to
Mr. Gaynor’s response, in further support of the motion to dismiss. See ECF No. 26
(“Def. Rep.”).

        After the government’s motion to dismiss was fully briefed, the Court held oral
argument on April 6, 2020. During oral argument, Plaintiff’s counsel assumed that the
Court somehow would consider Mr. Gaynor’s response not only to the government’s
pending motion to dismiss the FAC, but also his response brief opposing the
government’s motion to dismiss the initial Complaint, both of which the FAC had
rendered moot. In that regard, Plaintiff’s counsel repeatedly referenced arguments that
previously were advanced in plaintiff’s response to the government’s motion to dismiss
the initial Complaint (ECF No. 16), but which had not been restated – or even referenced
in any manner – in Mr. Gaynor’s response to the government’s motion to dismiss
plaintiff’s FAC (ECF No. 19).10

10 After Mr. Gaynor filed his FAC, the only relevant responsive pleadings are those which were
subsequently filed in response to the FAC because “’an amended pleading supersedes the
original.’” Viam Mfg., Inc. v. Iowa Export–Import Trading Co., 243 F.3d 558, 2000 WL 1234623, at
*5 (Fed. Cir. Aug. 31, 2000) (unpublished) (quoting Hal Roach Studios, Inc. v. Richard Feiner & Co.,
896 F.2d 1542, 1546 (9th Cir. 1990)); Gould, Inc. v. United States, 29 Fed. Cl. 758, 759 n.1 (1993)
(“An amended complaint entirely supersedes and replaces the original complaint.”), vacated on
other grounds, 67 F.3d 925 (Fed. Cir. 1995); see Pac. Bell Tel. Co. v. Linkline Commc’ns, Inc., 555 U.S.
438, 456 (2009) (“Normally, an amended complaint supersedes the original complaint.”); Fla.
Dep’t of State v. Treasure Salvors, Inc., 458 U.S. 670, 706 (1982) (“[O]nce accepted, an amended
complaint replaces the original.”). Therefore, “motions addressed to the original complaint are
generally regarded as moot upon the filing of an amended complaint.” Smith v. United States,
120 Fed. Cl. 455, 460 (2015); see JRS Mgmt. v. Lynch, 621 F. App’x 978, 982 (Fed. Cir. 2015)
(“[O]nce the Board authorized [plaintiff] to file an amended complaint, the motion to dismiss
the original complaint, which had been superseded, was rendered moot.”); Jet, Inc. v. Sewage
Aeration Sys., 223 F.3d 1360, 1365 (Fed. Cir. 2000) (“It is hornbook law that an amended
complaint complete in itself and making no reference to nor adopting any portion of a prior
complaint renders the latter functus officio.”). Arguments not renewed in response to the
government’s pending motion are waived. Jet Inc., 223 F.3d at 1365; see Boulware v. California
Dep’t of Ins. Com’r, 453 F. App’x 758, 759 (9th Cir. 2011) (“[Plaintiff] waived any argument
regarding the dismissal of his state law malicious prosecution claim by failing to reallege the
claim in his . . . amended complaints.”); Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010)
(“Failure to respond to an argument [in a motion to dismiss]–as the [plaintiffs] have done here–
results in waiver.”). The Court therefore holds, as further explained infra, that any arguments
Mr. Gaynor’s counsel did not re-raise in response to the government’s motion to dismiss the
FAC have been waived.

                                                  -7-
III.   STANDARD OF REVIEW

        The government moves to dismiss Mr. Gaynor’s FAC for lack of subject-matter
jurisdiction pursuant to RCFC 12(b)(1). Def. Mot. at 1. Accordingly, the Court accepts
“as true all undisputed facts asserted in the plaintiff’s complaint and draw[s] all
reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc. v. United States,
659 F.3d 1159, 1163 (Fed. Cir. 2011). Although the court is not limited to the pleadings
in determining whether we possess subject-matter jurisdiction, Pucciariello v. United
States, 116 Fed. Cl. 390, 400 (2014), the plaintiff “bears the burden of establishing the
court’s jurisdiction over its claims by a preponderance of the evidence.” Trusted
Integration, 659 F.3d at 1163. Thus, if the court finds that it lacks subject-matter
jurisdiction over a claim, RCFC 12(h)(3) requires the Court to dismiss that claim.

       Because the government’s motion makes a facial attack on the jurisdictional facts
contained in Mr. Gaynor’s FAC (rather than a factual one), see Crow Creek Sioux Tribe v.
United States, 900 F.3d 1350, 1355 (Fed. Cir. 2018), this decision assumes that such
allegations — but not legal conclusions — are true for the purposes of resolving the
pending motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[F]or the
purposes of a motion to dismiss we must take all of the factual allegations in the
complaint as true.” (emphasis added)).

IV.    THIS COURT LACKS JURISDICTION OVER MR. GAYNOR’S REFUND
       CLAIMS

       “Because of the Court of Federal Claims’ unique role in providing a forum for
litigants who could not otherwise seek a remedy for their injuries, some have called the
Court of Federal Claims ‘the People’s Court’ or ‘the conscience of the federal
government.’” Hadley Van Vactor, Shifting Sands of Claim Accrual: John R. Sand &
Gravel, Equitable Tolling, and the Suspension of Accrual in Tucker Act Cases, 62 How. L.J.
441, 442 (2019) (quoting Judge Loren A. Smith, Why a Court of Federal Claims?, 71 Geo.
Wash. L. Rev. 773, 773 (2003)). This Court thus “plays a vital role . . . in creating
government legal accountability in the government’s day-to-day dealings with
citizens.” 71 Geo. Wash. L. Rev. at 782-83. The bounds of this “vital role,” however, are
not limitless – and we necessarily are constrained by our procedural rules and binding
precedents in our ability to provide such “legal accountability.” Id. at 783.

       Any citizen who seeks relief from this Court for the government’s alleged actions
must demonstrate that jurisdiction is proper in this Court in the first place. Park Props.
Assocs., L.P. v. United States, 916 F.3d 998, 1002 (Fed. Cir. 2019) (“Plaintiff bears the
burden of establishing jurisdiction by a preponderance of the evidence.”). Where a
plaintiff fails to satisfy this Court’s jurisdictional prerequisites, the Court is precluded
from hearing the case at all. Colbert v. United States, 617 F. App’x 981, 983 (Fed. Cir.
2015) (“No plaintiff, pro se or otherwise, may be excused from the burden of meeting the
court’s jurisdictional requirements.”). Accordingly, the Court must ensure – even at

                                             -8-
times sua sponte – that it has jurisdiction over any claim presented. RCFC 12(h)(3) (“If
the court determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.”); see, e.g., St. Bernard Parish Gov’t v. United States, 916 F.3d 987, 992-
93 (Fed. Cir. 2019). This means that irrespective of the ultimate merits of a claim,
plaintiffs first must meet our jurisdictional and procedural prerequisites. Mone v. United
States, 138 Fed. Cl. 279, 282 (2018) (“While the court is sympathetic to the problems
recited in the complaint, . . . the court lacks jurisdiction to consider the claims in
plaintiff's complaint.”); Simmons v. United States, 71 Fed. Cl. 188, 194 (2006)
(emphasizing that although plaintiff “presents some sympathetic facts. . . [t]he Court
finds that it lacks jurisdiction”).

        In this case, the Court may not entertain Mr. Gaynor’s FAC unless and until he
satisfies this Court’s jurisdictional prerequisites. Because Mr. Gaynor has failed to
satisfy such prerequisites, his FAC is not within this Court’s jurisdiction, and the Court
must dismiss his FAC pursuant to RCFC 12(b)(1). For the reasons detailed below, the
Court thus GRANTS the government’s motion to dismiss.

       A. The Jurisdiction Of The United States Court Of Federal Claims

        We begin with the axiom that the United States government “cannot be sued
without its consent” (i.e., in the absence of a waiver of sovereign immunity). United
States v. Navajo Nation, 556 U.S. 287, 289 (2009); see Diversified Grp., Inc. v. United States,
123 Fed. Cl. 442, 447 (2015), aff’d, 841 F.3d 975 (Fed. Cir. 2016) (citing United States v.
King, 395 U.S. 1, 3 (1969), for the proposition that “[t]he scope of [the Claims] [C]ourt’s
jurisdiction to entertain claims and grant relief depends upon the extent to which the
United States has waived its sovereign immunity[]”). Accordingly, “except as Congress
has consented to a cause of action against the United States, ‘there is no jurisdiction in
the Court of [Federal] Claims more than in any other court to entertain suits against the
United States.’” United States v. Testan, 424 U.S. 392, 400 (1976) (quoting United States v.
Herwood, 312 U.S. 584, 587-588 (1941)). Generally, “the jurisdiction of the Court of
Federal Claims is defined by the Tucker Act, which gives the court authority to render
judgment on certain monetary claims against the United States.” RadioShack Corp. v.
United States, 566 F.3d 1358, 1360 (Fed. Cir. 2009). The bounds of the Court’s jurisdiction
under the Tucker Act are defined in 28 U.S.C. § 1491, which provides:

        The United States Court of Federal Claims shall have jurisdiction
        to render judgment upon any claim against the United States
        founded either upon the Constitution, or any Act of Congress or
        any regulation of an executive department, or upon any express or
        implied contract with the United States, or for liquidated or
        unliquidated damages in cases not sounding in tort.

28 U.S.C. § 1491(a)(1).

                                             -9-
        In addition to providing this Court with jurisdiction, the Tucker Act waives the
sovereign immunity of the United States “[f]or actions pursuant to contracts with the
United States, actions to recover illegal exactions of money by the United States, and
actions brought pursuant to money-mandating statutes, regulations, executive orders,
or constitutional provisions[.]” Roth v. United States, 378 F.3d 1371, 1384 (Fed. Cir. 2004);
see Maine Cmty. Health Options v. United States, 140 S. Ct. 1308, 1327 (2020). The Tucker
Act, however, “does not create a substantive cause of action” Fisher v. United States, 402
F.3d 1167, 1172 (Fed. Cir. 2005), and “[n]ot every claim invoking the Constitution, a
federal statute, or a regulation is cognizable under the Tucker Act.” United States v.
Mitchell, 463 U.S. 206, 216 (1983). Instead, this Court may only exercise subject-matter
jurisdiction over claims defined in the Tucker Act or which invoke specific statutory
allegations within this Court’s jurisdiction. See United States v. White Mountain Apache
Tribe, 537 U.S. 465, 472 (2003).

       Particularly relevant in the instant case, I.R.C. § 7422(a) provides this Court with
jurisdiction (pursuant to the Tucker Act) to decide claims seeking a refund of taxes or
penalties the IRS collected. See Clintwood Elkhorn Min. Co., 553 U.S. at 5. The
requirements of I.R.C. § 7422 “impose[ ] . . . jurisdictional prerequisite[s] to a refund
suit” which all tax refund plaintiffs in this Court must satisfy prior to initiating suit.
Chi. Milwaukee Corp. v. United States, 40 F.3d 373, 374 (Fed. Cir. 1994); see also Roberts v.
United States, 242 F.3d 1065, 1067 (Fed. Cir. 2001) (explaining that I.R.C. § 7422 imposes
“jurisdictional prerequisites to filing a refund suit”).

       Satisfaction of this Court’s jurisdiction prerequisites, however, must ordinarily
occur at the time the initial complaint is filed. Mendez-Cardenas v. United States, 88 F.
Cl. 162, 166–67 (2009) (“[T]he Response cannot serve to amend plaintiff’s Complaint.”);
McGrath v. United States, 85 Fed. Cl. 769, 772 (2009) (“This court does not possess
jurisdiction to hear claims presented for the first time in responsive briefing.”).11 Thus,
an amended complaint cannot create jurisdiction where none existed in the first place.
See GAF, 90 F.3d at 483 (affirming dismissal for lack of jurisdiction because, although
plaintiff amended its complaint, “there was no jurisdiction when [plaintiff] filed its
original complaint”); Walton v. United States, 80 Fed. Cl. 251, 264 (2008) (“[I]t appears
that binding Federal Circuit case law has not departed from the established rule that
jurisdiction is determined on the basis of the facts that exist at the time the complaint
was filed.”(emphasis added)), aff’d, 551 F.3d 1367 (Fed. Cir. 2009).

       Despite this rule, an amended or supplemental pleading may be permitted to
cure a jurisdictional defect in limited circumstances. Walton, 80 Fed. Cl. at 265. For
example, in Black, the United States Court of Appeals for the Federal Circuit held that a

11 This Court consistently has reaffirmed this principle, as have other courts. See e.g., Kortlander
v. United States, 107 Fed. Cl. 357, 374 (2012); Hufford v. United States, 87 Fed. Cl. 696, 701 (2009);
Michels v. United States, 72 Fed. Cl. 426, 432 (2006); Fischer v. Minneapolis Pub. Sch., 792 F.3d 985,
990 (8th Cir. 2015); Bissessur v. Indiana Univ. Bd. of Trustees, 581 F.3d 599, 603 (7th Cir. 2009).

                                                - 10 -
Vaccine Act petitioner could cure a jurisdictional defect through a supplemental
pleading. 93 F.3d at 790. Nevertheless, the Federal Circuit stressed that the
determination of whether a supplemental pleading can be used to establish jurisdiction
depends on a careful reading of the substantive provision at issue. Id. Thus, if the
statute in question contained, “for example, an express prohibition against filing a
complaint before the expiration of a statutory waiting period,” allowing a supplemental
pleading to evade such waiting period would be improper. Id. at 790.

       In this case, even accepting all of the factual allegations in the FAC as true, this
Court remains without subject-matter jurisdiction to hear Mr. Gaynor’s claims. Because
Mr. Gaynor failed to satisfy this Court’s jurisdictional prerequisites prior to initiating a
tax refund suit, the Court must dismiss his FAC pursuant to RCFC 12(b)(1).

       B.     IRS Form 5471

       Mr. Gaynor seeks a refund for tax penalties assessed against him due to his
failure to file IRS Form 5471 in a timely manner. FAC ¶ 1. Pursuant to the I.R.C. and
the Treasury Regulations (“Treas. Reg.”), Title 26 of the Code of Federal Regulations
(“C.F.R.”), a United States citizen must file a Form 5471, “Information Return of U.S.
Persons With Respect to Certain Foreign Corporations,” for each year that such
individual “maintains control of a foreign corporation.” See I.R.C. § 6038(a); 26 C.F.R.
§ 1.6038-2(a), (b). “A person shall be deemed to be in control of a foreign corporation if
at any time during that person’s taxable year it owns stock possessing more than 50
percent of the total combined voting power of all classes of stock entitled to vote, or
more than 50 percent of the total value of shares of all classes of stock of the foreign
corporation.” Treas. Reg. § 1.6038-2(b). Pursuant to the I.R.C. and Treasury
Regulations, IRS Form 5471 must be filed with the U.S. individual’s federal income tax
return by the date the tax return is due, including any extensions granted. Treas. Reg.
§ 1.6038-2(i). For each year that a taxpayer fails to file Form 5471 in a timely fashion, the
taxpayer must pay a $10,000 civil penalty. Id.; I.R.C. § 6038(b). However, the I.R.C.
provides that the $10,000 penalty for failure to file Form 5471 in a timely manner will
not be imposed if there is a reasonable cause for such failure. § 6038(c)(4).

       Mr. Gaynor concedes that he failed to file Forms 5471 in a timely manner, as
required by I.R.C. § 6038(b) and Treas. Reg. § 1.6038-2(i), for both Runcar and Sonoside,
for every year in question. Thus, the only merits issues in dispute in the instant case are
whether Mr. Gaynor had “reasonable cause” for his failure to file the forms, and
consequently, whether he may seek relief from this Court for those penalties which he
did pay. But, as explained in more detail infra, Mr. Gaynor failed to comply with
statutory prerequisites prior to filing his initial Complaint in this Court. As such, the
Court may not consider the merits of Mr. Gaynor’s tax refund claim for any year.

                                            - 11 -
       C.     The Court Lacks Subject-Matter Jurisdiction Over Any Of Mr. Gaynor’s
              Tax Refund Claims

        Because Mr. Gaynor, through his FAC, seeks relief pursuant to this Court’s tax
refund jurisdiction, the Court must examine whether Mr. Gaynor has satisfied the
statutory requirements for initiating a tax refund suit. See I.R.C. § 7422(a); Clintwood
Elkhorn Min. Co., 553 U.S. at 5. As highlighted, supra, if the jurisdictional requirements
of § 7422 have not been satisfied, this Court cannot exercise subject-matter jurisdiction
over the tax refund action, and the case must be dismissed. See, e.g., Shore v. United
States, 9 F.3d 1524, 1526 (Fed. Cir. 1993).

        Ultimately, the government is correct: Mr. Gaynor has not satisfied the Court’s
tax refund jurisdictional prerequisites for any year. Accordingly, this Court quite
clearly lacks subject-matter jurisdiction to entertain any of Mr. Gaynor’s claims,
pursuant to RCFC 12(b)(1). The Court first addresses why Mr. Gaynor has failed to
satisfy the Court’s tax refund jurisdictional prerequisites regarding his 2018, partial
payments for the penalties assessed against him for tax years 2002-2009 and 2011-2015.
The Court next explains why, even with regard to the “full” payments made in 2019 for
the 2010 penalties, Mr. Gaynor still failed to satisfy this Court’s tax refund jurisdictional
prerequisites.

              1.     The Court Lacks Subject-Matter Jurisdiction Over Mr. Gaynor’s
                     Claim Seeking A Refund For The 2018 Payments

      As the government correctly observes, Def. Mot. at 7, Mr. Gaynor in 2018 only
made partial payments for the tax penalties assessed against him for years 2002-2009
and 2011-2015. Additionally, as the government also highlights, Def. Mot. at 7-8,
Mr. Gaynor did not file a refund claim with the IRS for the tax penalties assessed
against him with respect to years 2002-2009 and 2011-2015. Accordingly, this Court
does not possess subject-matter jurisdiction to consider Mr. Gaynor’s claims seeking a
refund for the partial payments he made in 2018 (towards the penalties assessed in
2002-2009 and 2011-2015).

                     a. Mr. Gaynor Did Not Satisfy The “Full Payment Rule” For The
                        2018 Payments

       For a plaintiff to maintain a tax refund suit in the Court of Federal Claims, the
taxpayer must first pay the contested tax assessment “in full.” I.R.C. § 7422; see
Diversified Grp., Inc. v. United States, 841 F.3d 975, 981 (Fed. Cir. 2016) (citing Flora v.
United States, 362 U.S. 145, 177 (1960), and discussing Flora’s “full payment rule”).
Generally, to satisfy the “full payment rule” or “Flora Rule,” a plaintiff must have paid
the full amount of the tax (as well as any interest or penalties) which the taxpayer seeks
to recover, prior to initiating a tax refund suit. See, e.g., Rocovich v. United States, 933
F.2d 991, 994 (Fed. Cir. 1991); Thomas v. United States, 56 Fed. Cl. 112, 115-16 (2003);

                                            - 12 -
Lambropoulos v. United States, 18 Cl. Ct. 235, 237 (1989). This means that “[w]here the
principal tax deficiency has not been paid in full, such tax refund claims are dismissed,
regardless of any interest or penalty payments.” Shore, 9 F.3d at 1526 (citing Tonasket v.
United States, 218 Ct. Cl. 709, 711 (1978)).

       In the present case, Mr. Gaynor does not allege that he has satisfied the “full
payment rule” in its ordinary sense. Indeed, Mr. Gaynor did not seek a refund for the
entire amount of civil penalties assessed against him. Instead, as noted, before
Mr. Gaynor filed his January 2019 Complaint, Mr. Gaynor made only partial payments,
including two separate payments of $1,200 and $1,400, in June and November of 2018,
respectively. FAC ¶12. These payments made in 2018 were to be applied to the
penalties owed for years 2002 through 2015. Id. Specifically, as explained supra, these
payments were to be divided into $100 increments for each year and were to be credited
to the penalties assessed against Mr. Gaynor concerning his interest in each of Runcar
and Sonoside, respectively. Id. ¶¶ 13-14. In addition, Mr. Gaynor also made a $1,200
payment towards the penalties assessed in 2004.

       In turn, with the exception of the further payments that Mr. Gaynor made in
2019 towards the 2010 penalties (as the Court will discuss infra), Mr. Gaynor only seeks
the refund of part of the penalties owed for the years 2002 through 2015 (i.e., $3,800).
FAC ¶ 20-21. This then begs the question whether Mr. Gaynor satisfied the “full
payment rule” at least with respect to the partial refunds he seeks (i.e., for the amounts
which he did pay “in full”). The Court answers that question in the negative and holds
that Mr. Gaynor has not satisfied the full payment rule. Thus, the Court lacks
jurisdiction even over Mr. Gaynor’s partial refund claims.

        The precedents of this Court and the Federal Circuit suggest that in some cases, if
a plaintiff does not contest the full amount of an assessed penalty– and instead only
seeks a refund for a portion of it – the plaintiff need not have paid the entire
outstanding penalty to satisfy this Court’s “full payment” jurisdictional prerequisite.
See, e.g., Shore, 9 F.3d at 1526; Diversified Grp., 123 Fed. Cl. at 450-51; Magee v. United
States, 24 Cl. Ct. 511, 512 (1991). In other words, at times, a tax refund plaintiff, such as
Mr. Gaynor, may successfully satisfy the “full payment rule” even if outstanding
amounts of taxes or penalties remain owed – provided that the plaintiff only seeks
recovery of that portion actually paid “in full.” Shore, 9 F.3d at 1526. Notably, however,
such partial payments suffice in a limited subset of cases, having “been recognized by
the courts” as an exception to the ordinary full payment rule only “where an
assessment covers divisible taxes.” Rocovich, 933 F.2d at 995; see Cencast Serv., L.P. v.
United States, 729 F.3d 1352, 1366 (Fed. Cir. 2013) (holding that “where a tax is divisible,
the taxpayer may pay the full amount on one transaction, sue for a refund for that
transaction, and have the outcome of this suit determine his liability for all the other,
similar transactions” (citation and internal quotation marks omitted)).

                                           - 13 -
       For a partial payment to be deemed payment “in full,” the payment or various
payments made towards the assessment must themselves be viewed as separate “full”
payments. See Rocovich, 933 F.2d at 995. This Court helpfully distilled that idea in
Diversified Group:

              Stated otherwise, divisible “taxes or penalties . . . are seen as
              merely the sum of several independent assessments triggered
              by separate transactions. In such cases, the taxpayer may pay
              the full amount on one transaction, sue for a refund for that
              transaction, and have the outcome of this suit determine his
              liability for all the other, similar transactions.” Korobkin v.
              United States, 988 F.2d 975, 976 (9th Cir. 1993) (per curiam).
              Thus, if a tax or penalty is considered divisible, partial
              payment is sufficient to confer jurisdiction on the court over
              the refund claim.
123 Fed. Cl. at 451. Thus, if a portion of a tax assessment was paid, and that partial
payment could be deemed divisible from the outstanding balance, the “full payment
rule” would not bar recovery of the partial payment simply because some other
outstanding amount remained. See, e.g., Katz v. United States, 22 Cl. Ct. 714, 715 (1991).

       Generally, a tax assessment is only divisible if “it represents the aggregate of
taxes due on multiple transactions.” Rocovich, 933 F.2d at 995. This Court has
emphasized, however, that “[t]here are limited circumstances in which a tax [or
penalty] can be considered divisible and thus qualify as an exception to the full
payment rule.” Diversified Grp., 123 Fed. Cl. at 451 (observing that “if a tax or penalty is
considered divisible, partial payment is sufficient to confer jurisdiction on the court
over the refund claim[]”(emphasis added)). For example, although this Court observed
in Diversified Group that an excise tax imposed on goods (i.e., on their manufacture, sale,
or use), on an occupation, or on an activity “may be divisible into a tax on each
transaction or event[,]” this Court found that because “plaintiffs were assessed [a] $24.9
million penalty for failure to register their tax shelter—a single act [—] . . . the [tax
shelter] penalty [was] not divisible for any reason[.]” 123 Fed. Cl. at 451 (citing Flora,
362 U.S. at 175 n.37) (emphasis added).

        Another kind of tax assessment which falls under the partial payment exception
are payroll taxes paid by employers, which are considered divisible “because they [are]
assessed separately for each employee.” Korobkin, 988 F.2d at 976; see Kaplan v. United
States, 115 Fed. Cl. 491, 494 (2014). Specifically, because the penalties imposed upon
employers for failing to pay such taxes are “’considered a cumulation of separable
assessments for each of the employees involved . . . after payment of one or more
employee’s taxes[,]’” an employer may seek a refund for each of such penalties.
Diversified Grp., 123 Fed. Cl. at 451 (quoting Fid. Bank, N.A. v. United States, 616 F.2d
1181, 1182 n.1(10th Cir. 1980)).

                                           - 14 -
        With regard to Mr. Gaynor’s 2018 payments, the Court holds that he has not
satisfied the “full payment rule.” Indeed, Mr. Gaynor only sought a refund of the
$3,800 which he actually paid — rather than for the total amount of civil penalties he
owed but did not pay “in full” ($260,000). Had the penalties assessed against
Mr. Gaynor been divisible, the Court may have been able to treat his initial refund
claims as related to amounts that had been paid “in full” (i.e., his $3,800 payment could
have been deemed separate “full payments” of divisible penalties). There is no basis,
however, upon which the Court can conclude that penalties owed pursuant to IRS Form
5471 are divisible.

        As I.R.C. § 6038(b) requires, the penalty assessed for a failure to file a form 5471
is $10,000 per year. This means that unlike, for example, excise taxes, a penalty imposed
against a taxpayer pursuant to § 6038(b) for a particular year cannot be considered a
collection of separate “transaction[s] or event[s]” and is instead merely a “single act[]”
which is “not divisible for any reason[.]” Diversified Grp., 123 Fed. Cl. at 451.

        The Court’s conclusion comports with precedent establishing that the partial
payment and divisible assessment exceptions to the “full payment rule” remain limited.
Kaplan, 115 Fed. Cl. at 494 (limiting its divisible assessment holding to “the
circumstances of th[at] case”); Vir v. United States, 125 Fed. Cl. 293, 302-03 (2016)
(emphasizing the limited scope of the divisible assessment exception to the “full
payment rule,” and thus rejecting plaintiff’s reliance on Kaplan); see also Larson v. United
States, 2016 WL 7471338 at *5 (S.D.N.Y. Dec. 28, 2016) (discussing limited nature of the
divisible assessment exception), aff’d, 888 F.3d 578 (2d Cir. 2018).

       We see no reason to depart from the ordinary “full payment rule” in this case. 12
Accordingly, the Court agrees with the government that the payments that
Mr. Gaynor’s made in 2018 towards the penalties assessed against Mr. Gaynor
stemming from his interest in Sonoside and Runcar for tax years 2002-2015 did not
constitute payment “in full,” and the Court therefore lacks subject-matter jurisdiction
over Mr. Gaynor’s claims in this case.

12In addition to the divisible assessment exception to the “full payment rule,” Congress also has
allowed for some tax refund suits to proceed after a plaintiff has made partial payment of
certain penalties. Diversified Grp., 123 Fed. Cl. at 451 (citing 26 U.S.C. §§ 6694(c), 6700, 6701).
The absence of any such allowance by Congress with regard to I.R.C. § 6038 would suggest that
partial payments do not suffice to establish this Court’s jurisdiction. Cf. Renda Marine, Inc. v.
United States, 71 Fed. Cl. 782, 796 (2006) (“Indeed[,] . . . Congress knows how to draft exceptions
to [] rules when it wishes to do so[.]”); see also Paul Marcotte, Jr., Pain Relief From Undisclosed
Offshore Holdings: IRS International Penalty Procedure And Strategy, 25 J. Int’l Tax’n 26, 29 n.18
(2014) (discussing § 6038 penalties for failure to file IRS Form 5471 and implicitly rejecting the
notion that such penalties are divisible).

                                              - 15 -
                      b. Mr. Gaynor Failed To File Refund Claims For The 2018
                         Payments Towards The 2002-2009 And 2011-2015 Penalties

        Even if Mr. Gaynor had satisfied the full payment rule – or even if his partial
payments were for divisible penalties – dismissal of Mr. Gaynor’s FAC pursuant to
RCFC 12(b)(1) still would be required (for all tax years at issue except for 2010) based on
his failure to file the requisite administrative refund claims prior to initiating this tax
refund suit. I.R.C. § 7422. Although Mr. Gaynor filed a proper refund claim for the
2010 penalties, he failed to file administrative refund claims for the civil penalties
assessed against him for any of the other years at issue (i.e., 2002-2009 and 2011-2015).

       For a taxpayer to maintain a refund suit in this Court, a plaintiff who has paid
the contested tax assessment in full also must demonstrate that a written claim for
refund was filed, in a timely manner, with the Secretary of the Treasury. See, e.g.,
Clintwood Elkhorn Mining Co., 553 U.S. at 7-8; Schiff v. United States, 24 Cl. Ct. 249, 251
(1991) (“It is well settled that the timely filing of an administrative refund claim with
the IRS is a condition precedent for tax refund jurisdiction in the Claims Court.”
(internal citations omitted)); see also United States v. Williams, 514 U.S. 527, 533 (1995).

        A taxpayer seeking a refund from the IRS may file either a formal or an informal
claim, provided that the form of the claim puts the IRS sufficiently on notice of the fact
that the taxpayer is claiming a refund. See Computervision Corp. v. United States, 445 F.3d
1355, 1363-64 (Fed. Cir. 2006) (noting that this requirement “is designed both to prevent
surprise and to give adequate notice to the [IRS] of the nature of the claim and the
specific facts upon which it is predicated, thereby permitting an administrative
investigation and determination”), cert. denied, 549 U.S. 1338 (2007); First Nat. Bank of
Fayetteville, Ark. v. United States, 727 F.2d 741, 744 (Fed. Cir. 1984) (“[T]he claim [must]
set forth in detail each ground upon which a refund is claimed and facts sufficient to
apprise the Commissioner of the exact basis thereof.”).

        Because the IRS must be apprised sufficiently of a refund claim for it to be
deemed valid for jurisdictional purposes, “new claims or theories raised subsequent to
the initial refund claim are not permitted where they substantially vary from the
theories initially raised in the original claim for refund.” Cencast Servs., 729 F.3d at 1367;
see Ottawa Silica Co. v. United States, 699 F.2d 1124, 1138 (Fed. Cir. 1983). The applicable
regulations provide that a taxpayer must file a claim for refund “on the form so
prescribed” and “set forth in detail each ground upon which a credit or refund is
claimed and facts sufficient to apprise the Commissioner of the exact basis thereof.”
Treas. Reg. § 301.6402-2(b)(1), (2)(c).

                                             - 16 -
        Specifically, the IRS form that is generally used to claim a refund of a penalty is
Form 843, entitled “Claim for Refund and Request for Abatement.”13 Thus, a taxpayer
ordinarily must submit Form 843 to the IRS prior to filing a tax refund suit. Id. Where a
plaintiff has failed to satisfy this requirement, we are without jurisdiction to hear the
case, as the “’the provisions governing refund suits in . . . the United States Court of
Federal Claims . . . make timely filing of a refund claim a jurisdictional prerequisite to
bringing suit[.]’” Dumont v. United States, 345 F. App’x 586, 590 (Fed. Cir. 2009) (quoting
Commn’r v. Lundy, 516 U.S. 235, 239–40 (1996)); accord Martti v. United States, 121 Fed. Cl.
87, 98 (2015); Schroerlucke v. United States, 100 Fed. Cl. 584, 591 (2011).

        In this case, the government is correct that Mr. Gaynor did not properly seek a
refund for any of his 2018 “partial payments” of the penalties at issue. Neither
Mr. Gaynor’s FAC nor his response to the motion to dismiss the FAC contest this
conclusion. That being the case, Mr. Gaynor has failed not only to put the IRS “on
notice” of his claimed refund for the penalties assessed against him for 2002 through
2009 or for those assessed against him from 2011 through 2015, but also to comply with
a jurisdictional prerequisite to maintaining a tax refund claim in this Court.

       During oral argument, Mr. Gaynor’s counsel directed the Court to his response
to the government’s motion to dismiss the initial Complaint, in which Mr. Gaynor
advanced arguments rooted in the so-called “informal claims doctrine.” See ECF No.
14. The Court already has concluded, however, that because Mr. Gaynor did not
include those prior arguments in his response to the pending motion to dismiss, such
arguments, regardless of their merit, have been waived. Nevertheless, the Court has
reviewed the almost eighty-year-old case that Plaintiff’s counsel cited during oral
argument, United States v. Kales, 314 U.S. 186 (1941). Specifically, Plaintiff’s counsel
argued that although Mr. Gaynor never submitted a formal claim for refund to the IRS,
Mr. Gaynor’s informal correspondence with the IRS – through which Mr. Gaynor
putatively protested the IRS’s assessments – constituted an “informal claim” for refund.
As such, Plaintiff’s counsel contended that Mr. Gaynor did, in fact, satisfy the second
jurisdictional prerequisite, via an “informal claim.” Kales, however, does not stand for
the proposition that any kind of statement made to the IRS can be deemed an “informal
claim.” Rather, Kales holds that certain informal claims can meet the jurisdictional
prerequisite if they are followed by a formal claim, or if there is some other unique
component of the “informal claim” which allows it to satisfy the usual requirement that
one must file formal claim. 314 U.S. at 194. In other words, although informal claims
may, at times satisfy § 7422, the correspondence with the IRS upon which Mr. Gaynor
relies with respect to years 2002-2009 and 2011-2015, see FAC ¶¶ aa-dd, do not meet
even the lower threshold of being considered “informal claims.”

13See Internal Revenue Service, About Form 843, Claim for Refund and Request for Abatement,
available at https://www.irs.gov/forms-pubs/about-form-843.

                                              - 17 -
      The government, during oral argument, directed the Court to a number of cases
which are further instructive on this point. For example, in Ertle v. United States, the
Court of Claims (the Federal Circuit’s predecessor) held that a “protest and claim for
abatement made prior to the payment of the tax” did not comply “with the plain
wording of the statute which requires the filing of a claim for a refund within a stated
period after payment” 93 F. Supp. 619, 620 (Ct. Cl. 1950). Accordingly, the Court of
Claims concluded that such a claim was not “sufficient to confer jurisdiction upon this
Court which it does not otherwise possess.” Id.

        The government’s view in this case is consistent with more recent jurisprudence:
an “informal claim” may be valid, but for such a claim to satisfy this Court’s tax refund
jurisdictional prerequisites, it must sufficiently apprise the IRS of the dispute, such as
through “written protests prior to payment.” Computervision Corp., 445 F.3d at 1365
(citing Newton v. United States, 163 F. Supp. 614, 619-20 (Ct. Cl. 1958)); see, e.g., Bibbs v.
United States, 230 F.3d 1378 (Fed. Cir. 2000) (unpublished) (citing Arch Eng’g Co., Inc. v.
United States, 783 F.2d 190, 192 (Fed. Cir. 1986), for the proposition that minimum
requirements for an “informal” refund claim include written request for sums paid for a
particular tax year). However, as the Court of Claims held in Newton – another case the
government referenced – “[n]o hard and fast rules can be applied because it is a
combination of facts and circumstances which must ultimately determine whether or
not an informal claim constituting notice to the Commissioner has been made.” 163 F.
Supp. at 619. Instead, “each case must be decided on its own peculiar set of facts with a
view towards determining whether under those facts the Commissioner knew, or
should have known, that a claim was being made.” Id.

        In this case, “none of the documentary evidence relied on by [Plaintiff] shows
that [Plaintiff] was making a present assertion of entitlement to a refund which would
constitute a ‘claim’ requiring final determination by the IRS.” Mobil Oil Corp. v. United
States, 991 F.2d 811 (Fed. Cir. 1993) (unpublished) (citing Arch Eng’g Co., 783 F.2d at 192,
for the proposition that “documents which are merely a normal part of the process and
which do not apprise the IRS that taxpayer is presently seeking a refund do not
constitute an informal refund request”); see also Miller v. United States, 949 F.2d 708, 711
(4th Cir. 1991) (“[A]n informal claim must afford the IRS clear notice of a demand for
refund in order to enable to administration of that office to conduct its affairs[.]”).
Looking to the “peculiar set of facts” at issue here, Newton, 163 F. Supp at 619, the Court
concludes that Mr. Gaynor did not file an “informal refund claim.” Instead, Mr. Gaynor
simply informed the IRS of his desire to avoid payment of the tax assessment at issue by
explaining why he did not know about his filing obligations. Mr. Gaynor’s explanation
to the IRS (characterized in the FAC as a “protest”), however, does not suggest that “the
Commissioner knew, or should have known, that a claim was being made.” Newton,
163 F. Supp at 619. To the contrary, if anything, Mr. Gaynor’s “protest” informed the
IRS that he had no intention of paying the penalties assessed against him, not that he had
paid or would pay them and then seek a refund.

                                            - 18 -
       Accordingly, even under this new theory that Plaintiff’s counsel first raised
during oral argument, no administrative refund claims – whether formal or informal –
have been made for the years 2002-2009 or 2011-2015. In any event, as the Court held,
supra, Mr. Gaynor’s “informal claim” argument, ECF No. 13 at 6, re-raised for the first
time on the day of argument, has been waived.14

        Mr. Gaynor argues in his response to the government’s motion to dismiss that
“[d]efendant’s sole argument for the dismissal of the Amended Complaint is that six
months had not elapsed from the filing of Forms 843-Claim for Refund before the
Amended Complaint was filed, as required by I.R.C. § 6532(a)(1).” Pl. Resp. at 3. As
the foregoing demonstrates, however, that contention is simply wrong. Indeed, the
government is correct that the $3,800 claimed refund is barred, as Mr. Gaynor did not
file an administrative claim for such a refund with the IRS. Thus, for this further
reason, Mr. Gaynor’s FAC is DISMISSED pursuant to RCFC 12(b)(1).

               2.      The Court Lacks Subject-Matter Jurisdiction Over Mr. Gaynor’s
                       Claim Seeking A Refund For The Full Payment Made In 2019
                       Towards The 2010 Penalty Assessment

        The government further argues that even for the penalties assessed against
Mr. Gaynor in 2010 – for which he may have both satisfied the “full payment rule” and
filed a proper refund claim with the IRS – Mr. Gaynor still failed to satisfy yet other tax
refund claim jurisdictional prerequisites. Def. Mot. at 1-2. The government is correct.
Even assuming that Mr. Gaynor has paid the 2010 penalties “in full” and that
Mr. Gaynor also filed refund claims for such penalties in a timely manner, Mr. Gaynor
did not receive a notice of disallowance, nor did Mr. Gaynor wait six months after filing
his refund claim for the 2010 penalties before initiating this suit. Accordingly, this
Court lacks subject-matter jurisdiction to entertain any of Mr. Gaynor’s claims, pursuant
to RCFC 12(b)(1).

       Mr. Gaynor alleged in his FAC that, between filing his initial Complaint and his
FAC, he had paid the full penalties that were assessed against him for 2010, and that he
also had filed a formal refund claim for such penalties with the IRS. See FAC ¶16-19;
FAC ¶ 29-30 (seeking $20,000 refund for 2010 penalties).15 The government is correct

14See, e.g., Arakaki v. United States, 62 Fed. Cl. 244, 246 n.9 (2004) (citing Novosteel SA v. United
States, 284 F.3d 1261, 1274 (Fed. Cir. 2002), for the proposition that “[t]he court will not consider
arguments that were presented for the first time . . . after briefing was complete[]”); Res.
Recycling Corp. v. United States, 56 Fed. Cl. 612, 618 (2003) (“Courts are rightfully loathe to allow
a party to raise an issue at oral argument for the first time because there is a lack of notice to the
court and adversary.” (citation and quotations omitted)).
15This figure stems from the two $100 payments that were made in 2018, prior to the filing of
the initial Complaint, as well as the $19,800 payment that was made in 2019, after the initial
Complaint was filed, but prior to the FAC – all of which were paid towards the 2010 penalties.

                                                - 19 -
that Mr. Gaynor’s 2019 payment – made after he filed his initial Complaint, but before
he filed his FAC – is insufficient to vest this Court with subject-matter jurisdiction. Def.
Mot. at 1, 3 (noting that “plaintiff alleges that he paid $9,900 towards each penalty
assessed for the 2010 year on or around April 20, 2019” – just two days before filing his
FAC). In other words, because payment “in full” is a jurisdictional requirement, it must
be satisfied at the time at which the tax refund suit is filed. Katz, 22 Cl. Ct. at 715.
Similarly, the requirement that a plaintiff file a refund claim with the IRS prior to
initiating a tax refund suit is also a jurisdictional prerequisite. See, e.g., Clintwood
Elkhorn Mining Co., 553 U.S. at 7; Schiff, 24 Cl. Ct. at 251.

        In turn, a tax refund plaintiff’s pleadings may not be amended in order to create
an additional claim for the “full” amount paid for any assessment which had not yet
been paid, and for which no corresponding administrative tax refund claim had been
submitted to the IRS at the time the initial Complaint was filed. See GAF, 90 F.3d at 481
(affirming lower court’s dismissal for lack of subject-matter jurisdiction because “there
was no jurisdiction when [plaintiff] filed its original complaint”); Walton, 80 Fed. Cl. at
262 (“Plaintiffs are permitted to amend their complaints to cure defective allegations of
jurisdiction . . . but events that occur subsequent to the filing of a complaint cannot alter
the jurisdictional facts that existed at the time plaintiff filed the initial complaint.”
(citation and quotations omitted)). In sum, “since jurisdiction attaches at the
commencement of an action, [Mr. Gaynor’s] failure to pay the penalties before filing
suit deprive[s] the Claims Court of jurisdiction.” Katz, 22 Cl. Ct. at 715; see also Garrett v.
United States, 132 F.3d 50 (Fed. Cir. 1997) (unpublished) (“Under this section, a claim for
a refund must be filed with the Internal Revenue Service before an action may be filed
in the Court of Federal Claims. Mr. Garrett filed his claims for a refund of taxes for 1993,
1994, and 1995 with the Internal Revenue Service approximately two months after he
filed his complaint. Therefore, the Court of Federal Claims correctly found that it had
no jurisdiction to entertain the suit.”).

       Even were this Court to assume that Mr. Gaynor satisfied the full payment and
administrative tax refund jurisdictional prerequisites (with respect to the 2010 penalties
at issue), this Court still would lack jurisdiction over Mr. Gaynor’s FAC because he
neither received a notice of administrative claim disallowance nor waited six months
from the time he submitted a claim before initiating his suit. In that regard, Mr. Gaynor
has not alleged that he received notice of a “claim disallowance” from the IRS regarding
any claimed refunds for any years that civil penalties were assessed against him (i.e.,
2002-2015). Section 6532(a)(1) of the IRC provides that “no suit or proceeding under
section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall
be begun before the expiration of 6 months from the date of filing the claim required
under such section unless the Secretary renders a decision thereon within that time[.]”
This requirement – similar to the “full payment rule” and the administrative refund
claim requirements – is a jurisdictional prerequisite. See, e.g., Strategic Housing Finance
Corp. of Travis County v. United States, 608 F.3d 1317, 1329 (Fed. Cir. 2010).

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        Moreover, a taxpayer must receive a formal claim disallowance from the IRS,
and mere knowledge of the IRS’s intent to issue a formal decision at a later point is
insufficient. See Harper International Corp. v. United States, 120 Fed. Cl. 66, 71-73 (2015);
see also I.R.C. § 1313(a)(3)(A) (explaining that “a final disposition by the Secretary of a
claim for refund [may be] finally disposed” through the IRS “mailing [a] notice of
disallowance”); Mobil Corp. v. United States, 52 Fed. Cl. 327, 336 (2002) (defining a
“formal notice of disallowance” as one which is a “[f]inal action on plaintiff’s original
claim”); cf. Byrne v. United States, 127 Fed. Cl. 284, 294 (2016) (noting that a “[p]laintiff’s
participation in the [IRS] appeals process is not relevant to the validity of the IRS’s
[formal] notice of disallowance . . . issued . . . in accordance with standard IRS practices
and procedures”).

       Thus, even assuming all of the nonconclusory facts asserted in the FAC are true,
as the Court must at this stage, the FAC does not demonstrate or even suggest that the
IRS ever provided Mr. Gaynor with a formal notice of disallowance of any refund, even
for the 2010 penalties. In fact, Mr. Gaynor expressly acknowledges that he had a
September 26, 2019 phone call with an IRS appeals officer, in which the latter stated that
the IRS “would not agree with Mr. Gaynor’s position” and that “written confirmation of
this decision of IRS Appeals would probably not be issued until the end of this year.” Pl.
Resp. at 4 n.3 (emphasis added). Thus, as of the filing of the FAC, the required “formal”
claim disallowance had not yet been issued by the IRS for refund claims relating to the
2010 penalties. Harper International Corp., 120 Fed. Cl. at 71-73. Moreover, Mr. Gaynor
does not dispute that when he filed his initial Complaint in January of 2019, he had not
yet waited six months from the time at which he had filed a refund claim with the IRS.
Instead, the only issue is whether through the filing of the FAC – in April of 2019 –
Mr. Gaynor somehow satisfied the six-month waiting requirement. The Court
concludes that he did not.

       Again, the requirements contained in I.R.C. § 6532(a)(1) – including the six-
month waiting period – are jurisdictional. See Williams, 514 U.S. at 533; Roberts, 242 F.3d
at 1067 (holding that the requirement that an “administrative claim must be either
disallowed or not acted upon within six months after it was filed with the IRS” is
deemed “[a] jurisdictional prerequisite[] to filing a tax refund suit”); Thomas, 56 Fed. Cl.
120 (dismissing sua sponte plaintiff’s claim for refund where plaintiff filed his complaint
fewer than six months after making a claim for refund). In this case, Mr. Gaynor did not
wait six months from the date upon which he paid the 2010 penalties and sought a
refund prior to filing his FAC. In fact, as the government highlighted, a mere three days
elapsed from when Mr. Gaynor paid the $19,800 for the 2010 penalties and sought a
refund using IRS Form 843, until the date on which he filed his FAC. See Def. Mot. at 7.

       Mr. Gaynor argues, however, that his FAC should, in a sense, “relate back” to the
date of his initial Complaint to allow him to satisfy the six-month waiting period
retroactively. In other words, Mr. Gaynor seeks for this Court to somehow view the
payments he made in April of 2019 as a satisfaction of the “full payment” that

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Mr. Gaynor was required to have made before filing his initial Complaint months earlier
in January of 2019. The Court rejects such an approach to the jurisdictional
prerequisites at issue.

        As the government correctly argued, Def. Mot. at 7-9, this case, like Black,
concerns an “express prohibition against filing a complaint before the expiration of a
statutory waiting period,” which cannot be cured through an amended pleading. 93
F.3d at 790. This Court agrees. Walton, 80 Fed. Cl. at 264, aff’d, 551 F.3d at 1367; Gerami
v. Sec’y of HHS, 127 Fed. Cl. 299, 304-05 (2014). Accordingly, the Court does not have
jurisdiction over Mr. Gaynor’s claims because the requisite waiting period had not yet
elapsed when he filed his initial Complaint, and he may not use the FAC to circumvent
the six-month jurisdictional requirement. Furthermore, the fact that during the
pendency of this litigation the waiting period elapsed is immaterial. As the Court
emphasized supra, our jurisdiction is assessed at the time at which a complaint is filed –
not subsequently, after a plaintiff already has filed an action. Concluding otherwise
would render the statutory waiting period a dead letter.

       Accordingly, this Court lacks subject-matter jurisdiction to decide Mr. Gaynor’s
2010 refund claim. Despite the fact that Mr. Gaynor arguably paid the 2010 penalty “in
full” and filed an administrative refund claim for such payment, he never received a
notice of disallowance and the six-month waiting period had not yet elapsed when
Mr. Gaynor filed his initial Complaint.16

16Mr. Gaynor, in response to the government’s motion to dismiss, also relies upon a non-
binding district court opinion from the 1960s to argue that the six-month waiting period can be
excused if the IRS is “on notice” of a refund claim. See Pl. Resp. at 3-4 (citing Stephens v. United
States, 216 F. Supp. 854, 855-856 (E.D. Ark. 1963)). We note that this Court is not bound by a
decision of the United States District Court for the District of Arkansas. Moreover, this Court
surely is not bound by that court’s interpretation, long-ago, of a jurisdictional requirement
interpreted by this Court and the Federal Circuit on many occasions to prescribe a six-month
waiting period; the latter court’s decisions, of course, are binding here. Strategic Housing Finance
Corp., 608 F.3d at 1329; Roberts, 242 F.3d at 1067. Furthermore, as the government correctly
points out, there are key differences between the facts in Stephens and those at issue here. Most
notably, in Stephens, although the taxpayer never received a formal notice of disallowance and
the six-month statutory waiting period never elapsed, the IRS had sent the plaintiff a letter
which the district court construed as a claim denial “by necessary implication when read in
connection with the accompanying Internal Revenue Agent’s report.” 216 F. Supp. at 856.
Here, Mr. Gaynor did not receive any notice of disallowance of his 2010 claim. In fact, the IRS
specifically informed him that it had not yet reached a formal decision on his claim. Pl. Resp. at
4 n.3; see Byrne, 127 Fed. Cl. at 294 (“Plaintiff’s participation in the [IRS] appeals process is not
relevant to the validity of the IRS’s [formal] notice of disallowance[.]”). As such, the Court finds
that this key distinction between the present case and Stephens is dispositive, even if this Court
were to follow Stephens. See Tidewater, Inc. v. United States, 2007 WL 3046167, at *3 (E.D. La.
Oct.17, 2007) (holding that a communication from the IRS that is unresponsive to the precise
claim at issue is not a denial); Block–Southland Sportswear Co. v. United States, 1972 WL 455, at *2–

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       Mr. Gaynor thus has not satisfied the requirements of I.R.C. §§ 6532(a)(1) and
7422(a) for any of the tax refunds he seeks. As such, the Court DISMISSES
Mr. Gaynor’s FAC pursuant to RCFC 12(b)(1).

       D. The Court Lacks Subject-Matter Jurisdiction Over Mr. Gaynor’s “Arbitrary
          And Capricious” Claim

        Mr. Gaynor asserts that the civil penalties assessed against him are “arbitrary
and capricious.” FAC ¶ 25. To the extent that this claim is intended to be independent
of a tax refund claim – and is instead a challenge to the legality of the IRS’s authority to
assess the penalties at issue in the first place – such a claim is not within the subject-
matter jurisdiction of this Court and also must be dismissed pursuant to RCFC 12(b)(1).

        Both this Court and the United States Supreme Court have emphasized that the
“‘result [of I.R.C. § 7422] is a system in which there is one tribunal for prepayment
litigation and another for post-payment litigation, with no room contemplated for a
hybrid’” court in which both kinds of claims are heard. Skillo v. United States, 68 F.
Cl. 734, 741 (2005) (quoting Flora, 362 U.S. at 163). This means that this Court exclusively
presides over claims which seek refunds of taxes that have been paid, and this Court
does not possess jurisdiction over claims for damages flowing from the allegedly
“unlawful” collection activities of the IRS. Ledford v. United States, 297 F.3d 1378, 1382
(Fed. Cir. 2002) (discussing I.R.C. § 7433(a)); see Zolman v. United States, 2018 WL
1664690, at *2 (Fed. Cl. April 6, 2018) (relying upon Ledford, 297 F.3d at 1382, and
holding that the Court of Federal Claims does not possess subject-matter jurisdiction to
consider damages claims resulting from allegedly unauthorized collection actions of the
IRS). If Mr. Gaynor’s claims belong anywhere, in that regard, they must be filed in a
United States district court. See, e.g., I.R.C. §§ 7426(a)(1) (wrongful levy), 7432(a) (civil
damages for failure to release lien), and 7433(a) (civil damages for certain unauthorized
collection actions); Ledford, 297 F.3d at 1382. We therefore lack subject-matter
jurisdiction, pursuant to RCFC 12(b)(1), to consider this claim, as well.17

3 (E.D.N.C. Nov. 24, 1972) (ambiguous communication from the IRS regarding refund claim
cannot be construed as a denial); see also Western Intern. Hotels Co. v. United States, 185 Ct. Cl.
188, 399 F.2d 209, 213 (1968) (concluding that the IRS’s statement that refund claim had “been
given full consideration” did not constitute a disallowance or allowance because it “fail[ed] to
indicate the determination of that consideration”).
17
  Mr. Gaynor also urges this Court to hold that the penalties assessed against him for the years
2002 through 2005 are “barred by the statute of limitations[.]” FAC ¶¶ 23-28. Even assuming
this Court generally has jurisdiction over such a claim, Mr. Gaynor has not met the
jurisdictional prerequisites to challenge the penalty assessments against him for all of the
reasons explained herein. Accordingly, this Court may not consider this final claim in
Mr. Gaynor’s FAC.

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                                    CONCLUSION

      For the foregoing reasons, the government’s motion to dismiss Mr. Gaynor’s
FAC for lack of subject-matter jurisdiction, pursuant to RCFC 12(b)(1), is GRANTED
and Mr. Gaynor’s case, hereby, is DISMISSED. The Clerk is directed to enter judgment
accordingly.

      It is so ORDERED.

                                                s/Matthew H. Solomson
                                                Matthew H. Solomson
                                                Judge

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