Court Opinion

ID: 9371157
Source: CourtListenerOpinion
Date Created: 2023-02-15 17:01:44.444628+00
Date Added: 2024-06-11T17:16:25.872889
License: Public Domain

In the United States Court of Federal Claims
                                         No. 20-728T

                                  (E-Filed: February 15, 2023)

                                                )
VENSURE HR, INC.,                               )
                                                )        Motion to Dismiss; RCFC 12(b)(6);
                     Plaintiff,                 )        26 U.S.C. § 7422(a); Employment
                                                )        Tax-Related Penalties Refund
v.                                              )        Claim; Duly Filed; Form 843;
                                                )        Signature and Verification; Waiver;
THE UNITED STATES,                              )        Motion for Sanctions; Attorneys’
                                                )        Fees; 28 U.S.C. § 1927; 26 U.S.C.
                     Defendant.                 )        § 7430.
                                                )

Jason M. Silver, Scottsdale, AZ, for plaintiff.

Jennifer Dover Spriggs, Trial Attorney, with whom were David A. Hubbert, Deputy
Assistant Attorney General, David I. Pincus, Chief, G. Robson Stewart and Mary M.
Abate, Assistant Chiefs, Tax Division, Court of Federal Claims Section, Department of
Justice, Washington, DC, for defendant. G. Robson Stewart and Mary M. Abate, of
counsel.

                                           OPINION

CAMPBELL-SMITH, Judge.

       Before the court is defendant’s motion to dismiss for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal
Claims (RCFC). See ECF No. 64. Also before the court is plaintiff’s August 26, 2022
motion for sanctions. See ECF No. 66. In evaluating these motions, the court
considered: (1) plaintiff’s complaint, ECF No. 1; (2) defendant’s motion to dismiss, ECF
No. 64; (3) plaintiff’s response to the motion dismiss, ECF No. 65; (4) defendant’s reply
to the motion to dismiss, ECF No. 67; (5) plaintiff’s sur-reply to the motion to dismiss,
ECF No. 71; (6) defendant’s response to plaintiff’s sur-reply in support of its motion to
dismiss,1 ECF No. 75; (7) plaintiff’s motion for sanctions,2 ECF No. 66; (8) defendant’s
response to the motion for sanctions, ECF No. 68; and (9) plaintiff’s reply to the motion
for sanctions, ECF No. 74. The motions are fully briefed and ripe for decision. The
court deems oral argument unnecessary.

       The court has considered all of the parties’ arguments and addresses the issues that
are pertinent to the court’s ruling in this opinion. For the following reasons, defendant’s
motion to dismiss is GRANTED in part, and DENIED in part, and plaintiff’s motion
for sanctions is DENIED.

I.     Background

       A.      Factual Background

        Plaintiff filed its complaint in this court, seeking a refund of penalties assessed
under the Internal Revenue Code, on June 17, 2020. See ECF No. 1. In the complaint,
plaintiff states that it reports its employment tax liabilities quarterly to the Internal
Revenue Service (IRS) by filing Forms 941, “Employer’s Quarterly Federal Tax Return.”
Id. at 4. Plaintiff alleges that in the second quarter of 2014, plaintiff overreported and
overpaid its Form 941 employment taxes by including in its calculation the liabilities of a
client with which plaintiff did not “assume an Employer-Employee relationship,” but
instead agreed only to provide services related to “administrative payroll accounting, tax
reporting and workers compensation insurance.” Id. at 4-5, 9. Plaintiff alleges that “[i]n
total, [plaintiff] paid to the IRS almost $4 million of its client’s Form 941 liabilities in the
second quarter of tax year 2014.” Id. at 16. According to plaintiff, the client breached its

1
        By order dated September 28, 2022, the court directed defendant to file a “response to
plaintiff’s sur-reply in support of its motion to dismiss.” ECF No. 70 at 1. Defendant’s October
5, 2022 response to plaintiff’s sur-reply, however, is docketed in the court’s case
management/electronic case filing (CM/ECF) system as a “sur-reply” and titled as a “sur-sur-
reply.” See ECF No. 75. For clarity of the record, the court will deem defendant’s October 5,
2022 brief, ECF No. 75, as defendant’s response to plaintiff’s sur-reply and will direct the clerk’s
office to reflect this change on the docket in this case.
2
        Plaintiff’s motion for sanctions was docketed using the “motion for attorneys’ fees” event
in the court’s CM/ECF system. See ECF No. 66. Upon quality control review, the clerk’s office
corrected this error by editing the filing event as a “motion for sanctions pursuant to Rule 11.”
Id. (docket text modified on August 29, 2022 by the clerk to correct docket to properly reflect
filing). Plaintiff does not rely on Rule 11 as a basis for its motion for sanctions, nor does the
court in this opinion. Thus, for clarity of the record, the court directed the clerk’s office to delete
the phrase “pursuant to Rule 11” from the docket text associated with plaintiff’s motion for
sanctions. See ECF No. 66; ECF No. 68; ECF No. 74 (docket text modified on February 10,
2023, to remove reference that filing was made “pursuant to Rule 11”).
                                                   2
contract with plaintiff by failing to remit to plaintiff the taxes that plaintiff had paid on
the client’s behalf. See id. at 9, 16.

        On October 14, 2014, and June 2, 2015, plaintiff filed refund claims with the IRS
for the allegedly overpaid taxes using IRS Form 941X, “Adjusted Employer’s Quarterly
Federal Tax Return.” Id. at 3, 17. On December 15, 2016, the IRS agreed to refund only
“a fraction of the overpayment,” id. at 16, disallowing approximately $3 million of the
claimed refund, id. at 17.

       Plaintiff alleges that this overpayment of employment taxes in the second quarter
of 2014 led to a “financial crisis,” id. at 16, that caused “failure to pay” and “failure to
deposit” penalties to be assessed against plaintiff in later tax periods under 26 U.S.C.
§§ 6651(a)(2)3 and 6656(a),4 ECF No. 1 at 1, 15, 18. Specifically, the IRS assessed and
collected “failure to pay” and “failure to deposit” penalties from plaintiff related to its
Form 941 employment taxes for five quarterly periods ending in September of 2014;
December of 2014; March of 2015; June of 2015; and September of 2015. See id. at 1,
18. The IRS also assessed and collected these penalties from plaintiff related to its IRS
Form 940, “Employer’s Annual Federal Unemployment Tax Return,” for the 2014 tax
year. See id. Altogether, plaintiff paid $1,567,991.31 in penalties. Id.

        On March 11, 2016, plaintiff filed six claims for refund of these penalties (one
claim for each of the six tax periods for which penalties were assessed) using IRS Form
843, “Claim for Refund and Request for Abatement.” Id. at 2; ECF No. 64-2 at 75-80
(plaintiff’s six Forms 843). Plaintiff did not sign the Forms 843 using the authorized
signature of a corporate officer, as required by the form. See ECF No. 64-2 at 75-80.
Instead, plaintiff’s attorney, Chris J. Sheldon, signed the forms on the line designated for
the taxpayer’s sworn signature as well as on the line designated for a paid preparer’s
signature. See id. On two of the six Forms 843, plaintiff’s attorney included the letters
“POA,” for “power of attorney,” when he signed on the line designated for the taxpayer.
Id. at 75, 76.

       Plaintiff did not attach power of attorney forms to the six refund claims. Plaintiff

3
        Section 6651(a)(2) of Title 26 provides for a penalty for “failure . . . to pay the amount
shown as tax on” certain tax returns “on or before the date prescribed for payment of such tax . . .
unless it is shown that such failure is due to reasonable cause.”
4
          Section 6656(a) of Title 26 provides for a penalty for “failure by any person to deposit
. . . on the date prescribed therefor any amount of tax imposed . . . unless it is shown that such
failure is due to reasonable cause.”

                                                  3
had, however, earlier submitted to the IRS’s Central Authorization File (CAF) system5
two IRS Forms 2848, “Power of Attorney and Declaration of Representative,” dated June
2, 2015, and July 9, 2015. ECF No. 65-3 at 2-3 (June 2, 2015 Form 2848); ECF No. 65-4
at 2-3 (July 9, 2015 Form 2848).

        On June 19, 2018, the IRS sent to plaintiff, through Mr. Sheldon, two letters (one
letter for the penalties associated with the Forms 941, the other for penalties associated
with Form 940) denying plaintiff’s refund claims. ECF No. 1 at 18; ECF No. 64-2 at
106-12. The letters informed plaintiff that the claims were disallowed because plaintiff
did not “meet the reasonable cause exception” for an abatement or refund of penalties.
ECF No. 64-2 at 107, 111. The letters also disallowed the claims because “[plaintiff’s]
Form[s] 843 did not specify a dollar amount” but instead stated “100% of assessed
penalties.” Id. The letters informed Mr. Sheldon that the IRS was sending the letters to
him “under the provisions of your power of attorney or other authorization we have on
file.” Id. at 106, 109.

       B.     Procedural History

      On June 17, 2020, plaintiff filed the complaint in this case, seeking a refund of the
$1,567,991.31 for the “failure to pay” and “failure to deposit” penalties. ECF No. 1 at 1,
18. Plaintiff did not attach its claims for refund to its complaint, as required by RCFC
9(m). After several unopposed extensions of time, defendant filed its answer to the
complaint on December 23, 2020. See ECF No. 11.

       On February 17, 2021, plaintiff filed its first motion for sanctions, arguing that
defendant’s answer violated RCFC 8 and 11. See ECF No. 14 at 6. On May 6, 2021, the
court denied the motion for sanctions. See ECF No. 33 at 3, 4.

        On September 30, 2021, defendant filed a motion to dismiss for lack of subject
matter jurisdiction pursuant to RCFC 12(b)(1), arguing that plaintiff had failed to “duly
file” its refund claims before bringing this lawsuit as required by 26 U.S.C. § 7422(a).
See ECF No. 38 at 12-18. In its February 11, 2022 reply in support of this motion to
dismiss, however, defendant noted that the asserted grounds for dismissal may have to be
changed based on intervening caselaw. See ECF No. 50 at 3-4. In Brown v. United
States, 22 F.4th 1008, 1012 (Fed. Cir. 2022), the United States Court of Appeals for the
Federal Circuit concluded that “the ‘duly filed’ requirement in § 7422(a) is more akin to a
claims-processing rule than a jurisdictional requirement,” and affirmed the lower court’s

5
        The CAF “is a computerized system of records maintained by the IRS which lists
authorization information from” power of attorney forms and other forms. ECF No. 64 at 17
(citing 26 C.F.R. § 601.506(d)).

                                              4
dismissal based on the taxpayers’ failure to “duly file” their refund claims under RCFC
12(b)(6) rather than RCFC 12(b)(1). Defendant thus argued in its reply that “[i]n light of
Brown, the [c]ourt may convert defendant’s motion to dismiss the complaint in this
action, filed under RCFC 12(b)(1), to a motion to dismiss under RCFC 12(b)(6).” ECF
No. 50 at 4.

       On March 11, 2022, the court denied defendant’s RCFC 12(b)(1) motion to
dismiss because the “basis for defendant’s motion to dismiss has evolved during the
course of briefing.” ECF No. 53 at 2. The court directed the parties to submit a briefing
schedule for a new motion to dismiss. See id.

        On May 6, 2022, defendant filed a second motion to dismiss, now for failure to
state a claim upon which relief can be granted under RCFC 12(b)(6). See ECF No. 56.
On June 27, 2022, however, defendant filed a “Motion to Renew Defendant’s 12(b)(1)
Motion,” combined with its reply in support of this second motion to dismiss. See ECF
No. 62. The combined reply and motion to renew argued, in part, that defendant now
believed that “the Brown decision is not binding on this [c]ourt to the extent that the
[Brown] panel opinion deviates from existing Federal Circuit and [United States]
Supreme Court precedent.” ECF No. 62 at 2. For this reason, defendant moved to
“renew[ ] its original motion to dismiss the complaint for lack of subject matter
jurisdiction.” Id.

       On June 28, 2022, the court denied defendant’s second motion to dismiss and
defendant’s motion to renew, directing defendant to file a third motion to dismiss and to
“make a complete and cohesive presentation of its arguments” in that motion. ECF No.
63 at 2.

        On August 26, 2022, plaintiff filed its second motion for sanctions. See ECF No.
66. Plaintiff argues that it is entitled to attorneys’ fees and costs because plaintiff
incurred “substantial expenses” related to defendant’s “failure to prosecute either” of its
first two motions to dismiss “to completion.” Id. at 1. The motion for sanctions was
fully briefed on October 3, 2022, ECF No. 74 (reply to the motion for sanctions), and is
now pending before the court.

      On July 29, 2022, defendant filed its third motion to dismiss the complaint
pursuant to RCFC 12(b)(1). See ECF No. 64 at 1. Briefing was completed on the third
motion to dismiss on October 5, 2022, ECF No. 75 (reply to defendant’s third motion to
dismiss), and this motion is now ripe for decision.

        Defendant again argues in this third motion to dismiss that plaintiff failed to “duly
file” its refund claims as required by 26 U.S.C. § 7422(a), but that, contrary to the
Federal Circuit’s decision in Brown, the court should dismiss the complaint for lack of
                                              5
subject matter jurisdiction under RCFC 12(b)(1). ECF No. 64 at 27-32. Defendant
further contends, in a footnote on the last page of its motion, that if the court determines
that “Brown is controlling,” the court should dismiss plaintiff’s complaint with prejudice
“for failure to state a claim upon which relief can be granted.” Id. at 33 n.18. The court
understands defendant to be arguing that, for the same reasons defendant sets forth in
support of its motion to dismiss for lack of subject matter jurisdiction under RCFC
12(b)(1), the court may dismiss plaintiff’s complaint under RCFC 12(b)(6). In its
response, plaintiff addresses defendant’s arguments and contends that Brown is
controlling. See generally ECF No. 65. As discussed in more detail below, the court
finds that Brown is controlling, and therefore evaluates defendant’s motion to dismiss
under RCFC 12(b)(6).

II.    Legal Standards

       A.      Motion to Dismiss Under RCFC 12(b)(6)

        When considering a motion to dismiss brought under RCFC 12(b)(6), the court
“must presume that the facts are as alleged in the complaint, and make all reasonable
inferences in favor of the plaintiff.” Cary v. United States, 552 F.3d 1373, 1376 (Fed.
Cir. 2009) (citing Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)). It
is well-settled that a complaint should be dismissed under RCFC 12(b)(6) “when the facts
asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United States,
295 F.3d 1252, 1257 (Fed. Cir. 2002). “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requires “more than a sheer
possibility that a defendant has acted unlawfully,” and “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements do not suffice.”
Id.; see also Am. Bankers Ass’n v. United States, 932 F.3d 1375, 1380 (Fed. Cir. 2019)
(the court is “not required to accept the asserted legal conclusions” in a plaintiff’s
complaint when assessing a motion to dismiss).

       In evaluating a motion to dismiss for failure to state a claim, the court “primarily
consider[s] the allegations in the complaint,” but is “not limited to the four corners of the
complaint,” and may also look to the “matters incorporated by reference or integral to the
claim.” 6 Dimare Fresh, Inc. v. United States, 808 F.3d 1301, 1306 (Fed. Cir. 2015)
6
        In the case at bar, plaintiff did not attach its refund claims or any other tax forms,
instructions, or correspondence with the IRS to its complaint. Rather, both plaintiff and
defendant attach these materials to their motion to dismiss briefing. Because all of the tax
records, forms, and instructions relied upon by the court in this opinion are integral to plaintiff’s
claims or are matters of public record, the court’s consideration of these materials does not
convert defendant’s motion to dismiss into one for summary judgment. See Dimare Fresh, Inc.
                                                    6
(citations omitted); see also Terry v. United States, 103 Fed. Cl. 645, 652 (2012) (finding
that the court may consider the allegations contained in the complaint, exhibits attached
to the complaint, public records of which the court may take judicial notice, and
documents appended to the motion to dismiss that are central to plaintiff’s complaint).

       B.      Motion for Sanctions Under 28 U.S.C. § 1927

        Plaintiff has also moved for sanctions against the United States in the form of
attorneys’ fees under 28 U.S.C. § 1927. See generally ECF No. 66. Section 1927
provides that “[a]ny attorney or other person admitted to conduct cases in any court of the
United States . . . who so multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally the excess costs, expenses,
and attorneys’ fees reasonably incurred because of such conduct.” This court and others
have held that § 1927 “is not a waiver of sovereign immunity.” Cockerham v. United
States, 140 Fed. Cl. 121, 127 (2018) (citing cases). Ultimately, “[t]he party seeking the
sanction bears the burden of establishing that the prerequisites to the imposition of
sanctions have been satisfied.” K-Con Bldg. Sys., Inc. v. United States, 106 Fed. Cl. 652,
664 (2012) (in the context of spoliation sanctions).

III.   Analysis

       A.      The Court Evaluates Defendant’s Motion to Dismiss Pursuant to RCFC
               12(b)(6) Under Brown v. United States

       Defendant’s motion to dismiss centers on whether plaintiff failed to “duly file” its
refund claims prior to bringing this lawsuit, as required by 26 U.S.C. § 7422(a).7 ECF
No. 64 at 11. As an initial matter, the parties dispute whether the court must evaluate
defendant’s motion as a motion to dismiss for lack of subject matter jurisdiction under

v. United States, 808 F.3d 1301, 1306 (Fed. Cir. 2015); Terry v. United States, 103 Fed. Cl. 645,
652 (2012).
7
        To bring a refund suit in this court, plaintiff must also demonstrate that it has made a full
payment of its penalties and that it has timely filed a complaint in this court. See Diversified
Grp. Inc. v. United States, 841 F.3d 975, 981 (Fed. Cir. 2016); RHI Holdings, Inc. v. United
States, 142 F.3d 1459, 1461-63 (Fed. Cir. 1998); 26 U.S.C. § 6532(a)(1). The parties agree that
plaintiff has fully paid the penalties owed. See ECF No. 1 at 1; ECF No. 64 at 15 (stating that
plaintiff’s accounts have a “zero balance for each of the periods in issue”); ECF No. 65 at 10
(stating that “the penalties have already been paid in this case” (emphasis removed)). Plaintiff’s
June 17, 2020 complaint in this court is timely because it was filed within two years of the IRS’s
June 19, 2018 disallowance of plaintiff’s administrative refund claims. See 26 U.S.C.
§ 6532(a)(1); ECF No. 1 at 2. Defendant does not dispute the timeliness of the complaint. See
generally ECF No. 11 (answer); ECF No. 64 (motion to dismiss).
                                                   7
RCFC 12(b)(1) or as a motion to dismiss for failure to state a claim under RCFC
12(b)(6), in light of the Federal Circuit’s decision in Brown. See ECF No. 64 at 27-32;
ECF No. 65 at 24-25.

        In Brown, 22 F.4th at 1010, a panel of the Federal Circuit affirmed this court’s
dismissal of a refund suit where the underlying refund claims were not properly signed
and therefore not “duly filed” under 26 U.S.C. § 7422(a). This court had dismissed the
refund suit pursuant to RCFC 12(b)(1) because, under prior Federal Circuit precedent, the
“duly filed” requirement of § 7422(a) was a jurisdictional prerequisite to bringing a
refund claim in this court. Brown v. United States, 151 Fed. Cl. 530, 533-34 (2020)
(citing Waltner v. United States, 679 F.3d 1329, 1333 (Fed. Cir. 2012)). The Brown
panel, however, held that the dismissal should have been “pursuant to RCFC 12(b)(6) for
failure to state a claim upon which relief can be granted rather than RCFC 12(b)(1) for
lack of subject matter jurisdiction.” Brown, 22 F.4th at 1012. The panel acknowledged
that previous Federal Circuit decisions have held that § 7422(a)’s requirements are
jurisdictional. Id. at 1011. But the Brown panel went on to hold that this “jurisdictional
characterization cannot be reconciled with the Supreme Court’s [2014] decision in
Lexmark International, Inc. v. Static Control Components, Inc., where the Supreme Court
clarified that ‘statutory standing’ defects . . . do not implicate a court’s subject matter
jurisdiction.” Brown, 22 F.4th at 1011 (citing Lexmark, 572 U.S. 118, 128 & n.4
(2014)). Applying Lexmark, the Brown panel “conclude[d] that the ‘duly filed’
requirement in § 7422(a) is more akin to a claims-processing rule than a jurisdictional
requirement,” and that dismissal based on a failure to “duly file” a refund claim should be
pursuant to RCFC 12(b)(6). Brown, 22 F.4th at 1011.

       In this case, defendant contends that the Brown decision is not binding on this
court because the Brown panel improperly overruled prior Federal Circuit decisions
holding that the requirements of § 7422(a) are jurisdictional. See ECF No. 64 at 27-32.
According to defendant, these prior decisions may only be overruled by an en banc court
or by supervening statutory or Supreme Court authority that expressly addresses the
issue. See id. at 31. Because “[t]here has been no statutory change to § 7422(a)” and
“[n]either the Supreme Court nor the Federal Circuit en banc has held” that § 7422(a) is
not jurisdictional, defendant argues that Brown is not controlling. Id. Therefore,
defendant contends, § 7422(a)’s “duly filed” requirement remains jurisdictional and its
motion to dismiss is properly brought pursuant to RCFC 12(b)(1). Id. at 32. Defendant
does, however, alternatively argue that its motion to dismiss may be granted pursuant to
RCFC 12(b)(6). See id. at 33 n.18.

        Plaintiff argues that the Federal Circuit’s decision in Brown is controlling, and
that, under Brown, the “duly filed” requirement is not jurisdictional and must be
considered under RCFC 12(b)(6). ECF No. 65 at 24.

                                              8
        The court agrees with plaintiff that Brown is controlling. The Federal Circuit
“applies the rule that earlier decisions prevail unless overruled by the court en banc, or by
other controlling authority such as intervening statutory change or Supreme Court
decision.” Tex. Am. Oil Corp. v. U.S. Dep’t of Energy, 44 F.3d 1557, 1561 (Fed. Cir.
1995). Under this rule, “supervening Supreme Court authority is an established basis for
treating an earlier panel opinion as no longer binding.” Elbit Sys. Land & C4I Ltd. v.
Hughes Network Sys., LLC, 927 F.3d 1292, 1305 (Fed. Cir. 2019). In accordance with
this rule, the Federal Circuit in Brown relied on the Supreme Court’s Lexmark decision
to treat earlier Federal Circuit decisions regarding the jurisdictional nature of the “duly
filed” requirement as no longer binding. See Brown, 22 F.4th at 1011. The panel’s
reliance on Lexmark is a permissible basis on which to overrule prior panel opinions.
See Elbit, 927 F.3d at 1305.

       The court rejects defendant’s arguments to the contrary. Defendant recognizes
that supervening Supreme Court decisions, such as Lexmark, serve as grounds for
overruling prior precedent. See ECF No. 64 at 31. Nevertheless, defendant argues that
because Lexmark does not expressly address § 7422(a)’s jurisdictional nature, the Brown
panel’s reliance on Lexmark is insufficient. See id. at 31 & n.17. The Brown panel,
however, has already determined that the Supreme Court’s decision in Lexmark
sufficiently contradicts prior Federal Circuit precedent regarding the jurisdictional nature
of the “duly filed” requirement, holding that, under Lexmark, the “requirement is more
akin to a claims-processing rule” and should be considered under RCFC 12(b)(6).
Brown, 22 F.4th at 1011. Regardless of defendant’s disagreement with this reasoning,
the court is bound by that holding. See Crowley v. United States, 398 F.3d 1329, 1335
(Fed. Cir. 2005) (holding that “the Court of Federal Claims may not deviate from the
precedent of the United States Court of Appeals for the Federal Circuit”).

        The court therefore in its discretion converts defendant’s jurisdictional motion into
a motion to dismiss pursuant to RCFC 12(b)(6), despite the fact that defendant did not
move on this alternative ground in the body of its motion and docketed its motion as only
a motion to dismiss pursuant to RCFC 12(b)(1).8 See generally ECF No. 64. Both
parties have had the opportunity to be heard regarding defendant’s alternative request for
dismissal under RCFC 12(b)(6) and converting the motion will not prejudice either party.
See Brown, 22 F.4th at 1011-12 (affirming dismissal for failure to meet § 7422(a)’s “duly
filed” requirement under 12(b)(6) rather than 12(b)(1)); Roberson v. United States, 115
Fed. Cl. 234, 240-41 (2014) (“In its discretion, the court may convert defendant’s motion

8
       Another judge of this court has, in light of Brown, since vacated a jurisdictional dismissal
based on the “duly filed” requirement and dismissed the complaint sua sponte under RCFC
12(b)(6). See Ruebsamen v. United States, No. 19-1834, 2022 WL 2315722, at *3-4 (Fed. Cl.
Apr. 15, 2022).

                                                 9
into a RCFC 12(b)(6) motion to dismiss for failure to state a claim upon which relief can
be granted” so long as both parties had the opportunity to be heard regarding dismissal on
this ground); Peninsula Grp. Cap. Corp. v. United States, 93 Fed. Cl. 720, 727 (2010)
(holding that although defendant had “only brought a motion to dismiss for lack of
jurisdiction,” the court may “construe[ ] [the motion] as one for failure to state a claim
upon which relief can be granted,” where the “critical issue . . . remains the same and has
been fully briefed by the parties”). Accordingly, applying Brown, the court will evaluate
defendant’s motion to dismiss based on plaintiff’s failure to “duly file” its refund claims
under RCFC 12(b)(6).9

       B.      The Court Dismisses Plaintiff’s Complaint Under RCFC 12(b)(6)

               1.      Requirements for Bringing a Refund Claim

        To maintain a refund suit, a taxpayer “must comply with tax refund procedures set
forth in the [Internal Revenue] Code.” United States v. Clintwood Elkhorn Mining Co.,
553 U.S. 1, 4 (2008). Under 26 U.S.C. § 7422(a):

       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 or collected, or of any penalty claimed to have been collected
       without authority, or of any sum alleged to have been excessive or in any
       manner wrongfully collected, until a claim for refund or credit has been duly
       filed with the Secretary, according to the provisions of law in that regard, and
       the regulations of the Secretary established in pursuance thereof.

(emphasis added).

        Section 301.6402-2 of Title 26 of the Code of Federal Regulations governs claims
for refund under 26 U.S.C. § 7422(a). See Brown, 22 F.4th at 1012; Dixon v. United
States, 147 Fed. Cl. 469, 474 (2020) (referring to 26 C.F.R. § 301.6402-2 as the
“governing regulation”). For a refund claim to be “duly filed,” this regulation requires
that the claim’s “statement of the grounds and facts must be verified by a written
declaration that is made under the penalties of perjury. A claim which does not comply
with this paragraph will not be considered for any purpose as a claim for refund or
credit.” 26 C.F.R. § 301.6402-2(b)(1) (emphasis added); see Brown, 22 F.4th at 1012.

9
         As discussed below, the court concludes in this opinion that plaintiff has failed to “duly
file” its refund claims under § 7422(a). Regardless of whether this error is jurisdictional or fails
to comply with a claims-processing requirement, the result is the same, and plaintiff’s complaint
must be dismissed.

                                                 10
        In other words, a taxpayer must sign a refund claim under penalty of perjury for
that refund claim to be valid. See Brown, 22 F.4th at 1012 (referring to the “tax-payer
signature requirement” in 26 C.F.R. § 301.6402-2(b)(1)); see also Dixon, 147 Fed. Cl. at
476 (holding that “the regulation [26 C.F.R. § 301.6402-2] is clear” that a taxpayer must
“submit a claim on a specific form and in accordance with that form’s requirements” and
that the “form must be signed under penalties of perjury”); Gregory v. United States, 149
Fed. Cl. 719, 723 (2020) (noting that to comply with 26 C.F.R. § 301.6402-2(b) a claim
for refund must be “signed by the taxpayers”). This requirement is important because it
“enables the IRS to enforce directly against a rogue taxpayer.” Dixon, 147 Fed. Cl. at
476 n.5; see also Hall v. United States, 148 Fed. Cl. 371, 377 (2020) (noting that the
signature requirement is not “trivial . . . , as ‘[t]he perjury charge based on a false return
has been deemed one of the principal sanctions available to assure that honest returns are
filed’” (quoting Borgeson v. United States, 757 F.2d 1071, 1073 (10th Cir. 1985)).

        As the Federal Circuit in Brown has explained, however, the “tax-payer signature
requirement emphasized above may be excepted ‘when a legal representative certifies the
claim and attaches evidence of a valid power of attorney.’” 22 F.4th at 1012 (quoting
Gregory, 149 Fed. Cl. at 723). Specifically, under 26 C.F.R. § 301.6402-2(e), “[a] claim
[for refund] may be executed by an agent of the person assessed, but in such case a power
of attorney must accompany the claim.” Under the regulations governing powers of
attorney, “[a] properly completed [IRS] [F]orm 2848 satisfies the requirements for . . . a
power of attorney.” 26 C.F.R. § 601.503(b).

        In addition, 26 C.F.R. § 301.6402-2(a)(2) states that “if a taxpayer is required to
file a claim for credit or refund using a particular form, then the claim, together with
appropriate supporting evidence, shall be filed in a manner consistent with such form,
form instructions, publications, or other guidance found on the IRS.gov Web site.” As
relevant to this case, 26 C.F.R. § 301.6402-2(c) provides that “[a]ll claims by taxpayers
for the refund of . . . penalties . . . that are not otherwise provided for”—like the penalties
at issue here—“must be made on Form 843, ‘Claim for Refund and Request for
Abatement.’” The instructions to Form 843 explain that an authorized representative can
file Form 843 on a taxpayer’s behalf, but “the original or copy of Form 2848, Power of
Attorney and Declaration of Representative, must be attached,” and the taxpayer “must
sign Form 2848 and authorize the representative to act on [the taxpayer’s] behalf for the
purposes of the request.” ECF No. 64-2 at 129.

              2.      Plaintiff’s Claims for Refund Were Not “Duly Filed”

        Plaintiff’s claims for refund turn on whether plaintiff complied with the
regulations discussed above. Defendant argues that plaintiff fails to state a claim upon
which relief can be granted because plaintiff’s refund claims were neither signed by
plaintiff nor accompanied by a power of attorney clearly authorizing Mr. Sheldon to sign
                                              11
the refund claims.10 See ECF No. 64 at 18-19, 33 n.18. In addition, defendant argues,
even if plaintiff’s refund claims were accompanied by the June 2, 2015 or the July 9,
2015 Forms 2848 that plaintiff submitted to the CAF system, those Forms 2848 did not
clearly give Mr. Sheldon the authority to sign refund claims on plaintiff’s behalf. Id.;
ECF No. 67 at 7-10.

       Plaintiff contends that it “substantially complied” with the regulatory requirements
“with respect to ‘powers of attorney’ authorizing Attorney Sheldon to sign the Forms
843, as well as those for signing and submitting of Forms 843 themselves.” ECF No. 65
at 12. Plaintiff acknowledges that no Forms 2848 or other powers of attorney were
attached to its Form 843 claims for refund. See id. at 6-7 (stating that “[n]o other
documents,” including Forms 2848, “were included in the submission package.”).
Plaintiff argues, however, that its June 2, 2015 and July 9, 2015 Forms 2848, on file with
the IRS at the time plaintiff submitted its refund claims, were sufficient to comply with
the applicable regulations, even though those forms were not physically attached to the
refund claims.11 See id. at 6, 24 (arguing that a “copy” of “Form 2848 or a power of
attorney” must “accompany the Form 843” only “if the power of attorney is not on file
with the IRS”). In addition, plaintiff contends that the “broad language” in the June 2,
2015 and July 9, 2015 Forms 2848 authorized Mr. Sheldon “to perform any and all acts
with respect to [plaintiff’s] employment taxes for all 2014 and 2015 periods, including
penalties payments and interest related thereto.” Id. at 15. According to plaintiff, this
authorization includes filing and signing claims for refunds of penalties using Form 843.
See id. at 15, 17 (arguing that the “plain language of Form 2848 . . . clearly provides for a
general power of attorney that includes authority to sign documents on behalf of
taxpayers, and that authority . . . extends to Forms 843”).

        After careful consideration of the parties’ submissions, the court agrees with
defendant that plaintiff failed to comply with the applicable regulations, and therefore
failed to “duly file” its refund claims. Plaintiff did not sign its refund claims under

10
        In its motion to dismiss, defendant also argues, see ECF No. 64 at 13 n.6, and plaintiff
does not dispute, see ECF No. 65 at 7 n.10, that because the penalty assessments related to
plaintiff’s Forms 941 for the tax quarters ending September 30, 2014, and December 31, 2014,
have been fully abated by the IRS, plaintiff’s claims for refund of those penalties are no longer at
issue and should be dismissed. Because the court dismisses plaintiff’s entire complaint as
discussed below, the court does not address this basis for dismissal.
11
        Defendant, in a footnote and without an accompanying citation, states that “[p]laintiff
offers no support for its contention that the Forms 2848 it relies upon were recorded on the IRS’s
CAF system (nor has defendant located any documentation confirming that assertion).” ECF
No. 67 at 19 n.9. Because the court determines below that plaintiff was required to attach a
Form 2848 or other power of attorney to its refund claims to “duly file” those claims, the court
does not address this contention.
                                                 12
penalties of perjury, as required by 26 C.F.R. § 301.6402-2(b)(1). See ECF No. 64-2 at
75-80. Instead, Mr. Sheldon, purportedly acting as plaintiff’s representative, signed the
claims on plaintiff’s behalf. Id. Under 26 C.F.R. § 301.6402-2(e), a valid power of
attorney must “accompany” a refund claim executed by a representative on behalf of a
taxpayer. Plaintiff failed to attach to its refund claims any power of attorney forms, and
therefore failed to comply with this regulation.12

        Plaintiff argues that the June 2, 2015 and July 9, 2015 Forms 2848 on file with the
IRS satisfy this requirement. See ECF No. 65 at 5-6 (describing the forms), 23 (noting
that plaintiff relies “on the fact the powers of attorney were on file with the IRS CAF
rather than physically attaching a copy to Forms 843”). Yet, the Federal Circuit and this
court have interpreted this regulation to require that evidence of a valid power of attorney
be attached to a refund claim. See Brown, 22 F.4th at 1011 (noting that a representative
may sign a refund claim “when a legal representative certifies the claim and attaches
evidence of a valid power of attorney” (quoting Gregory, 149 Fed. Cl. at 723)); Gregory,
149 Fed. Cl. at 723 (“[T]he Form 2848 was not physically attached to the amended return
as required by [26 C.F.R.] § 301.6402-2(e).”); Dixon, 147 Fed. Cl. at 475 (“Any return or
refund claim submitted by a fiduciary, however, must have attached a valid power of
attorney, such as a Form 2848.”); Hall, 148 Fed. Cl. at 377 (“The only exception to this
requirement is when a legal representative certifies the claim and attaches evidence of a
valid power of attorney.”).

        This interpretation is supported by the plain language of the regulation requiring
that a power of attorney “accompany” a refund claim. 26 C.F.R. § 301.6402-2(e); see
Roberto v. Dep’t of the Navy, 440 F.3d 1341, 1350 (Fed. Cir. 2006) (“When construing a
regulation or statute, it is appropriate first to examine the regulatory language itself to
determine its plain meaning . . . [and] if the regulatory language is clear and
unambiguous, the inquiry ends with the plain meaning.”). Webster’s Third New
International Dictionary defines “accompany” to mean “to exist or occur in conjunction
or association with,” as in the phrase “the text which accompanies these pictures.”

12
         For this reason, this case is distinguishable from Warnement v. United States, No. 21-
2165T, where this court on February 8, 2023 denied defendant’s motion to dismiss a penalties
refund suit. See id., ECF No. 34 at 1 (order denying motion to dismiss and denying as moot
motion for discovery); id., ECF No. 36 at 91-95 (February 8, 2023 oral argument transcript). As
in this case, defendant in Warnement argued that the plaintiff had failed to “duly file” his Form
843 refund claims. See id., ECF No. 12 at 11 (motion to dismiss). In contrast to this case,
however, the plaintiff in Warnement had attached a Form 2848 to each of his Form 843 claims
for refund. See id., ECF No. 12 at 14 (“Each of the Form 843 refund claims was accompanied
by a Form 2848.”); id., ECF No. 17 at 3 (supplemental brief clarifying that the Form 2848 was
properly signed by the plaintiff). The court in Warnement held that the attached Form 2848 in
that case broadly authorized the plaintiff’s attorney to sign Form 843 claims for refund. See id.,
ECF No. 36 at 91-95.
                                                   13
Accompany, Webster’s Third New Int’l Dictionary (2002). Similarly, the New Oxford
American Dictionary defines accompany as “to be present or occur at the same time as
(something else)” as in the phrase “the accompanying documentation.” Accompany,
New Oxford Am. Dictionary (3d ed. 2010).

        These definitions, consistent with the Federal Circuit’s and this court’s precedent,
indicate that a valid power of attorney must be submitted together with a refund claim
under 26 C.F.R. § 301.6402-2(e) in order for a representative to sign and verify a refund
claim on a taxpayer’s behalf. Thus, in order for its refund claims to be “duly filed,”
plaintiff should have submitted with its refund claims a valid Form 2848 or other power
of attorney document, but did not. 26 C.F.R. § 301.6402-2(e); see Brown, 22 F.4th at
1012 (holding that the plaintiffs did not “duly file” their refund claims because the
plaintiffs “neither signed their refund claims nor tendered powers of attorney to permit
their tax preparer to sign claims on their behalf”); Gregory, 149 Fed. Cl. at 723 (holding
that where a plaintiff’s Form 2848 was not attached to the tax return, the refund claim
was not “duly filed”); Dixon, 147 Fed. Cl. at 475 (dismissing a refund suit because the
tax return preparer signed the amended returns on the line designated for the taxpayer but
failed to submit a power of attorney with the amended return).

       In sum, plaintiff’s refund claims did not comply with the IRS’s requirements that
every refund claim be signed under penalties of perjury by either the taxpayer or the
taxpayer’s agent authorized by a valid power of attorney that accompanies the refund
claim to which it applies. Plaintiff’s claims for refund, therefore, were not “duly filed” in
accordance with 26 U.S.C. § 7422(a).

              3.     The Signature and Verification Requirements Cannot Be Waived

       Plaintiff also argues that even if its refund claims were not “duly filed,” the IRS
waived its ability to object to the failure to comply with the applicable regulations when
the IRS rejected plaintiff’s refund claims on the merits. See ECF No. 65 at 26-27. The
court disagrees.

       In Angelus Milling Co. v. Commissioner, 325 U.S. 293, 296-97 (1945), the
Supreme Court held that the IRS cannot waive “explicit statutory requirements,” but may
choose to waive regulatory requirements. The IRS may waive regulatory compliance by
“investigat[ing] the merits of a claim and tak[ing] action upon it.” Id. at 297. The
Federal Circuit has held that the Angelus Milling waiver doctrine applies to regulatory
requirements when “(1) there is clear evidence that the Commissioner understood the
claim that was made, even though there was a departure in form in the submission, (2) it
is unmistakable that the Commissioner dispensed with the formal requirements and
examined the claim, and (3) the Commissioner took action upon the claim.” Brown, 22
F.4th at 1013 (citing Angelus Milling, 325 U.S. at 297-98).
                                             14
        Plaintiff argues that the signature requirements for Form 843 claims for refund are
not statutory and may be waived. See ECF No. 65 at 28 (arguing that “unlike Brown,
which involved statutory requirements applicable to tax returns, no such statutory
requirements exist here”). Plaintiff further contends that the Angelus Milling waiver
doctrine applies here because the IRS adjudicated plaintiff’s Form 843 refund claims on
the merits. See ECF No. 65 at 26-28. According to plaintiff, in doing so, “the IRS
reviewed the Forms 843 in detail and . . . knew or should have known whether the Forms
843 were in compliance with any applicable rules or regulations.” Id. at 27. Therefore,
plaintiff contends, the IRS has waived any objection as to any non-compliance by
plaintiff. See id.; see also ECF No. 71 at 12-15.

       Defendant argues that waiver does not apply here “because the taxpayer signature
and verification requirements are statutory.” ECF No. 67 at 15. Even if the requirements
were regulatory and thus waivable, defendant contends that because there “is no
‘unmistakable’ evidence that the IRS was aware that [Mr.] Sheldon was not authorized to
sign the refund claims on plaintiff’s behalf,” the signature and verification requirements
have not been waived. Id. at 18.

       The court agrees with defendant that the signature and verification requirements
for Form 843 claims for refund are statutory. The Internal Revenue Code addresses
signature requirements in 26 U.S.C. § 6061 and 26 U.S.C. § 6065. Under 26 U.S.C. §
6061(a), “any return, statement, or other document required to be made under any
provision of the internal revenue laws or regulations shall be signed in accordance with
forms or regulations prescribed by the Secretary.” (emphasis added). Under 26 U.S.C. §
6065, “[e]xcept as otherwise provided by the Secretary, any return, declaration,
statement, or other document required to be made under any provision of the internal
revenue laws or regulations shall contain or be verified by a written declaration that it is
made under the penalties of perjury.” (emphasis added).

       In Brown, the Federal Circuit held that a claim for refund made on an amended
income tax return “triggers these statutory commands because it is simultaneously a
‘return’ and a ‘document required to be made . . . under the internal revenue laws or
regulations.’” 22 F.4th at 1012. “Sections 6061(a) and 6065 thus impose a default rule
that individual taxpayers must personally sign and verify their income tax refund claims.”
Id. The Federal Circuit also held that 26 U.S.C. §§ 6061’s and 6065’s “implementing
regulations” require that “taxpayers . . . execute their own refund claims” and that “the
person who signs a return or other document must verify it.” Id. at 1013 (citing inter alia
26 C.F.R. § 301.6402). Therefore, the Federal Circuit concluded that “the taxpayer
signature and verification requirements” for refund claims made on income tax returns
“derive from statute” and cannot be waived. Id.

       As plaintiff points out, plaintiff’s refund claims were not made through the filing
                                             15
of amended income tax returns, as was the case in Brown. See ECF No. 71 at 1-2, 12-15.
The court concludes, however, that the reasoning in Brown applies equally to claims for
refund of penalties made on Form 843. A Form 843 refund claim is a “document
required to be made” under a “provision of the internal revenue laws or regulations.” 26
U.S.C. §§ 6061, 6065. Section 7422(a) of Title 26 requires that taxpayers, before filing
suit, file a claim for refund with the IRS in accordance with the applicable regulations. In
addition, 26 C.F.R. § 301.6402-2(a)(1) requires that a claim for refund be “filed by the
taxpayer,” and 26 C.F.R. § 301.6402-2(c) provides that “[a]ll claims by taxpayers for the
refund of . . . penalties . . . that are not otherwise provided for”—like the penalties at
issue here—“must be made on Form 843.” Claims for refund on Form 843 are therefore
“documents required to be made” under “internal revenue laws or regulations” and
“trigger the[] statutory commands” of 26 U.S.C. §§ 6061(a) and 6065. Brown, 22 F.4th
at 1012.

        In addition, as in Brown, the regulations applicable to refund claims “echo the
statutory default rule,” 22 F.4th at 1013, that a “document required to be made . . .
contain or be verified by a written declaration that it is made under the penalties of
perjury,” 26 U.S.C. § 6065. Under 26 C.F.R. § 301.6402-2(b)(1), claims for refund must
be signed under penalty of perjury, and any claim for refund not so verified “will not be
considered for any purpose as a claim for refund.” Although the regulations create an
exception to this default rule by allowing a taxpayer to designate an agent to sign a refund
claim, 26 C.F.R. § 301.6402-2(e), these regulations, as in Brown, “presumptively require
individual taxpayers to execute their own refund claims,” 22 F.4th at 1013, and provide
that the claims are invalid if they do not, 26 C.F.R. § 301.6402-2(b)(1). The court
therefore concludes that the signature and verification requirements for the Form 843
claims for refund in this case derive from the statutory requirements in §§ 6061(a) and
6065 and cannot be waived.

        Plaintiff’s arguments to the contrary are without merit. Plaintiff argues that Form
843 refund claims cannot be “documents required to be made” under 26 U.S.C.
§§ 6061(a) and 6065 because such an “expansive[ ]” interpretation would “include any
document required to be used by the IRS to accomplish something.” ECF No. 71 at 13.
The court disagrees. Contrary to plaintiff’s argument, §§ 6061 and 6065 cannot be read
to apply to every document processed by the IRS. As noted in Brown, § 6061 “gives the
Secretary the authority to prescribe how individual taxpayers may satisfy the statute’s
requirement,” and “§ 6065 gives the Secretary discretion to suspend the verification
requirement.” 22 F.4th at 1013. Thus, as defendant points out, not every document
submitted to the IRS is “signed under penalties of perjury.” ECF No. 67 at 9 (explaining
that “an agreement, consent, or waiver” related to tax matters is not “signed under
penalties of perjury”). The implementing regulations for refund claims do, however,
reflect the “default rule” in §§ 6061(a) and 6065 that claims for refund be signed and
verified by the taxpayer. Brown, 22 F.4th at 1013. In such a case, “a taxpayer must
                                            16
satisfy the statutory default rule or else comply strictly with the implementing
regulations. If they do neither, the document is effectively unsigned and unverified under
§§ 6061(a) and 6065 and the taxpayer has not ‘duly filed’ the refund claim.” Id.

        For these reasons, the court concludes that the requirements that a taxpayer sign
and verify under penalty of perjury a Form 843 claim for refund derive from statute, and
the IRS cannot waive those requirements. Plaintiff did not sign its claims for refund or
attach a valid power of attorney to its refund claims authorizing a representative to sign
the claims. Plaintiff has therefore failed to comply with either the statutory default rule
or the implementing regulations and has thus not “duly filed” its refund claims. See
Brown, 22 F.4th at 1013. Because compliance with the law and regulations governing
refund claims is required before plaintiff may bring a refund suit in this court, plaintiff
has failed to state a claim upon which relief can be granted, and the court must dismiss
plaintiff’s complaint under RCFC 12(b)(6).

       C.     The Court Denies Plaintiff’s Motion for Sanctions

        The court finally turns to plaintiff’s motion for sanctions. See ECF No. 66.
Plaintiff contends in its motion that it is entitled to an award of attorneys’ fees under 28
U.S.C. § 1927 based on defendant’s “unreasonabl[e] multiplication of these proceedings
by its filing of two separate motions to dismiss and failing to prosecute either of them to
completion.” Id. at 1, 10. Plaintiff seeks $58,025 in attorneys’ fees. See id. at 1.

        Defendant argues that plaintiff is not entitled to sanctions for three reasons. First,
defendant contends that 28 U.S.C. § 1927 does not support plaintiff’s motion. That
statute provides that “[a]ny attorney or other person admitted to conduct cases in any
court of the United States . . . who so multiplies the proceedings in any case unreasonably
and vexatiously may be required by the court to satisfy personally the excess costs,
expenses, and attorneys’ fees reasonably incurred because of such conduct.” Defendant
argues that 28 U.S.C. § 1927 provides for sanctions against attorneys, not parties, and,
even if the statute did apply to parties, it is not a waiver of sovereign immunity against
the United States. See ECF No. 68 at 5, 7.

        Second, defendant notes that 26 U.S.C. § 7430 does allow for attorneys’ fees in
refund cases such as this one. That statute provides that a “prevailing party” may be
awarded “reasonable litigation costs,” including “fees paid or incurred for the services of
attorneys,” in “any . . . court proceeding which is brought by or against the United States
in connection with the . . . refund of any tax, interest, or penalty.” Id. § 7430(a),
(c)(1)(iii). Defendant contends, however, that plaintiff has not demonstrated, among
other requirements, that it is a “prevailing party” eligible for an award under § 7430. See
ECF No. 68 at 6, 8-10.

                                             17
        Third, defendant argues that even if the court were to decide to award attorneys’
fees in this case, plaintiff’s request is “excessive and unsubstantiated.” Id. at 10-11.

        The court concludes that plaintiff’s motion for sanctions lacks merit. Plaintiff has
failed to articulate any basis for its motion. Plaintiff seeks sanctions under 28 U.S.C. §
1927, which applies to “[a]ny attorney or other person . . . who multiplies the proceedings
in any case unreasonably and vexatiously.” Yet, plaintiff’s motion does not seek
sanctions against an attorney or a person. Instead, plaintiff seeks sanctions against the
United States as a party. See ECF No. 66 at 1. This court has held, however, that § 1927
“is not a waiver of sovereign immunity” against the United States. Cockerham, 140 Fed.
Cl. at 127 (citing In re Graham, 981 F.2d 1135, 1140 (10th Cir. 1992) (“Even if we were
to read the statute as encompassing awards against the party. . . we would still require
some independent waiver of sovereign immunity in order to apply it against the United
States.”) (internal citations omitted); Alexander v. FBI, 541 F. Supp. 2d 274, 300-01
(D.D.C. 2008) (holding that sanctions under § 1927 cannot be made against the United
States because such sanctions are only available against attorneys, not parties)).

        Defendant acknowledges that 26 U.S.C. § 7430 could govern an award for
attorneys’ fees in this case, but among other requirements, § 7430 directs that plaintiff
demonstrate that it is a “prevailing party.” Id. § 7430(c)(4). Plaintiff, however, has not
in its motion for sanctions demonstrated that it has prevailed with respect to any issues in
this case, such that it is entitled to an award of attorneys’ fees under § 7430.

       In its reply, plaintiff does not attempt to address the above issues raised by
defendant or to ground its motion for sanctions in any other statute or rule of this court.
See ECF No. 74 at 3. Instead, plaintiff “leave[s] to the [c]ourt the propriety of sanctions
and under which Section or Rule such sanctions are permissible.” Id. Because plaintiff
as the moving party has failed to articulate any grounds that would entitle it to sanctions,
the motion for sanctions is denied. Cf. K-Con Bldg. Sys., 106 Fed. Cl. at 664 (“The party
seeking the sanction bears the burden of establishing that the prerequisites to the
imposition of sanctions have been satisfied.”).

IV.    Conclusion

       Accordingly, for the foregoing reasons:

       (1)    Defendant’s motion to dismiss, ECF No. 64, is DENIED in part, as to
              defendant’s request for dismissal under RCFC 12(b)(1), and GRANTED in
              part, as to defendant’s request for dismissal under RCFC 12(b)(6);

       (2)    Plaintiff’s motion for sanctions, ECF No. 66, is DENIED; and

                                             18
(3)   The clerk’s office is directed to ENTER final judgment DISMISSING
      plaintiff’s complaint under RCFC 12(b)(6), in favor of defendant, with
      prejudice.

IT IS SO ORDERED.

                                 s/Patricia E. Campbell-Smith
                                 PATRICIA E. CAMPBELL-SMITH
                                 Judge

                                   19