Johnston

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

KRYSTAL M. JOHNSTON,

Plaintiff, 5:25-cv-917

(ECC/MJK)

v.

UNITED STATES OF AMERICA,

Defendant.

Appearances:

Robert G. Nassau, Esq., for Plaintiff

Hon. Elizabeth C. Coombe, United States District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiff Krystal Johnston filed this tax refund action under the Internal Revenue Code for

the recovery of federal income taxes she paid for the calendar year 2019. Complaint (Compl.) ¶

1, Dkt. No. 1. This matter was referred to Magistrate Judge Mitchell J. Katz who, on September

22, 2025, granted Plaintiff’s application to proceed IFP and issued a Report-Recommendation,

recommending that Plaintiff’s Complaint be dismissed without prejudice. Dkt. No. 4. Plaintiff

filed objections to the Report-Recommendation. Dkt. No. 8.

For the reasons set forth below, the Court declines to adopt Magistrate Judge Katz’s

recommendation to dismiss the Complaint with prejudice, and orders that this case proceed to

service on the Defendant in accordance with the federal and local rules.

II. STANDARD OF REVIEW

This Court reviews de novo those portions of the Magistrate Judge’s findings and

recommendations that have been properly preserved with a specific objection. Petersen v. Astrue,

2 F. Supp. 3d 223, 228 (N.D.N.Y. 2012); 28 U.S.C. § 636(b)(1)(C). “A proper objection is one

that identifies the specific portions of the [report-recommendation] that the objector asserts are

erroneous and provides a basis for this assertion.” Kruger v. Virgin Atl. Airways, Ltd., 976 F. Supp.

2d 290, 296 (E.D.N.Y. 2013) (citation omitted). Properly raised objections “must be specific and

clearly aimed at particular findings in the” report. Molefe v. KLM Royal Dutch Airlines, 602 F.

Supp. 2d 485, 487 (S.D.N.Y. 2009) (citation omitted). “[E]ven a pro se party’s objections to a

Report and Recommendation must be specific and clearly aimed at particular findings in the

magistrate’s proposal.” Machicote v. Ercole, No. 6-cv-13320, 2011 WL 3809920 at *2 (Aug. 25,

2011) (citation omitted). Findings and recommendations as to which there was no properly

preserved objection are reviewed for clear error. Kruger, 976 F. Supp. 2d at 296 (citation omitted).

III. DISCUSSION

A. Complaint

Plaintiff timely filed her Federal income tax return (Form 1040) for calendar year 2019

(2019 Return). Compl. ¶ 6. Plaintiff’s 2019 Return claimed a total refund of $6,477. Id. at ¶ 12.

The Internal Revenue Service (IRS) subsequently audited Plaintiff’s 2019 Return, and proposed

to (a) reduce Plaintiff’s income tax withholding by $864; (b) disallow Plaintiff’s claimed earned

income credit and additional child tax credit; and (c) change Plaintiff’s filing status to “single.”

Id. at ¶ 13. “Plaintiff did not properly contest the audit, nor file a Petition in the United States Tax

Court.” Id. at ¶ 14. On approximately May 31, 2021, the IRS (a) adjusted Plaintiff’s income tax

withholding; (b) disallowed Plaintiff’s claimed earned income credit and additional child tax

credit; (c) changed Plaintiff’s filing status to single; and (d) assessed her $69 of income tax. Id.

As a consequence, the IRS issued Plaintiff a total refund of $640.91. Id. at ¶ 15.

Plaintiff alleges that “[b]ecause six months have expired since the filing of Plaintiff’s

refund claim (her 2019 Return), Plaintiff may begin this suit under 26 U.S.C. § 7422(a), pursuant

to 26 U.S.C. § 6532(a)(1).” Compl. ¶ 23.

B. The Report-Recommendation

In his Report-Recommendation, Magistrate Judge Katz recommended dismissal without

prejudice and with leave to amend. Dkt. No. 4 at 4. Specifically, Magistrate Judge Katz concluded

that Plaintiff’s federal claim is untimely because she failed to file an administrative claim for her

refund. Id. at 6-7. Magistrate Judge Katz further concluded that because Plaintiff’s federal claim

was untimely, the United States has not waived its sovereign immunity, and the district court does

not have subject matter jurisdiction over Plaintiff’s action. Id. at 7. Magistrate Judge Katz

therefore recommended dismissal without prejudice to determine whether equitable tolling applied

to Plaintiff’s action. Id. at 7-8.

C. Plaintiff’s Objections

Plaintiff objects to Magistrate Judge Katz’s determination that she was required to file a

new “administrative claim,” beyond her 2019 Return, prior to commencing this federal action.

Dkt. No. 6 at 3. Plaintiff contends that her 2019 Return constituted her required refund claim, and

under the facts of her case she was not required to submit a second “administrative claim.” Id. at

3-4. Plaintiff further contends that the district case relied on by Magistrate Judge Katz for the

proposition that she was required to file a second administrative claim prior to bringing suit,

Houghmaster v. U.S., No. 5:17-cv-1328 (FJS/ATB), 2020 WL 224956 (N.D.N.Y. Jan. 15, 2020),

is factually distinct and does not warrant a dismissal based on a jurisdictional defect in this case.

Id. at 4-6.

D. Analysis

The federal government cannot be sued absent a waiver of sovereign immunity. Federal

Deposit Insurance Corp. v. Meyer, 510 U.S. 471, 475 (1994) (“Absent a waiver, sovereign

immunity shields the Federal Government and its agencies from suit.”); Kirsh v. United States,

131 F. Supp. 2d 389, 391 (S.D.N.Y.2000) (“It is well established that under the doctrine of

sovereign immunity, no person may sue the federal government absent its consent to be sued.”).

“[A] waiver of sovereign immunity must be ‘unequivocally expressed’ in statutory text” and its

scope is construed strictly in favor of immunity. Federal Aviation Administration v. Cooper, 566

U.S. 284, 290 (2012); see Exxon Mobile Corp. & Affiliated Cos. v. Comm’r of Internal Revenue,

689 F.3d 191, 201 (2d Cir. 2012). “The terms of [the United States’] consent to be sued in any

court defines that court’s jurisdiction to entertain that suit.” Meyer, 510 U.S. at 475 (alteration in

original) (internal quotation marks omitted); Kirsh, 131 F.Supp.2d at 391 (“If the delineated terms

[of the waiver] are not met, a court does not have jurisdiction over the action.”).

“Through 28 U.S.C. § 1346, Congress has broadly consented to suits [seeking a refund of

taxes allegedly erroneously assessed or collected] against the U.S. in district courts.” Kirsh, 131

F. Supp. 2d at 391 (alteration in original) (quoting United States v. Forma, 42 F.3d 759, 763 (2d

Cir. 1994)); see Clavizzao v. United States, 706 F. Supp. 2d 342, 348 (S.D.N.Y. 2009). However,

“[d]espite its spacious terms, § 1346(a)(1) must be read in conformity with other statutory

provisions which qualify a taxpayer’s right to bring a refund suit upon compliance with certain

conditions.” United States v. Dalm, 494 U.S. 596, 601 (1990). First, prior to bringing suit in federal

court, “26 U.S.C. § 7422(a) requires that a claim be ‘duly filed’ with the IRS,” meaning a claim

must be filed within the statute of limitations prescribed by 26 U.S.C. § 6511. Kirsh, 131 F. Supp.

2d at 391 (internal footnote omitted); see United States v. Clintwood Elkhorn Mining Co., 553 U.S.

1, 14 (2008). Further, 26 U.S.C. § 6532(a)(1) provides

No suit . . . under section 7422(a) for the recovery of any internal

revenue tax . . . 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, nor after

the expiration of 2 years from the date of mailing by certified mail

or registered mail by the Secretary to the taxpayer of a notice of

disallowance of the part of the claim to which the suit . . . relates.

See also Clavizzao, 706 F. Supp. 2d at 348 (noting that plaintiff suing for tax refund must bring

suit in federal court within two years of receiving notice from IRS that it denied refund). Because

the United States’s waiver of sovereign immunity is predicated on timely filing of suit, the statute

of limitations requirement is jurisdictional. See Dalm, 494 U.S. at 608 (“A statute of limitations

requiring that a suit against the Government be brought within a certain time period is one of [the]

terms [of its waiver].”); Harriman v. Internal Revenue Service, 233 F. Supp. 2d 451, 457–58

(E.D.N.Y. 2002) (noting that “statutes of limitation are jurisdictional in tax cases” and “if a statute

of limitation has not been complied with, Congress has not given consent to suit, accordingly,

absent compliance with such statute of limitations, this Court lacks jurisdiction”); Costa v. Internal

Revenue Service, No. 97-cv-2688, 1999 WL 691899, at *3 (E.D.N.Y. Aug.2, 1999) (“[T]he well-

established rule is that ‘the filing of a timely refund claim is a jurisdictional requirement, which

cannot be waived.’” (quoting Rosenbluth Trading, Inc. v. United States, 736 F.2d 4, 47 (2d Cir.

1984)).

Here, Magistrate Judge Katz’s dismissal of the Complaint relies on two separate, but

related, purported deficiencies in Plaintiff’s filing of this action. First, Magistrate Judge Katz

concluded that Plaintiff did not “duly file a claim” within the meaning of 26 U.S.C. § 7422(a) prior

to bringing suit, because she did not file a new administrative claim after the IRS audited her 2019

return and issued Plaintiff an adjusted tax refund. Dkt. No. 4 at 5. In support of his conclusion,

Magistrate Judge Katz relied on the Houghmaster case, which states, in relevant part, that “after a

taxpayer is denied a claim for a refund made on his 1040 tax return form, he must file a new claim,

called an ‘administrative claim,’ with the Treasury Secretary before filing suit.” 2020 WL 224956,

at *3. Plaintiff suggests that Houghmaster, in addition to being factually distinct from this action,

improperly interpreted the prerequisite requirement as it relates to claims for refunds from

individual original income tax returns. In support for her position, Plaintiff points to 26 C.F.R. §

301.6402-3(a)(5), which provides in relevant part:

A properly executed individual . . . original income tax return or an amended return

. . . shall constitute a claim for refund or credit within the meaning of section 6402

and section 6511 for the amount of the overpayment disclosed by such return (or

amended return). For purposes of section 6511, such claim shall be considered as

filed on the date on which such return (or amended return) is considered as filed . .

. . A return or amended return shall constitute a claim for refund or credit if it

contains a statement setting forth the amount determined as an overpayment and

advising whether such amount shall be refunded to the taxpayer or shall be applied

as a credit against the taxpayer’s estimated income tax for the taxable year

immediately succeeding the taxable year for which such return (or amended return)

is filed.

Notably, the Defendant in Houghmaster did not advance the argument that Plaintiff’s original

income tax return was not a proper claim for refund in seeking dismissal. Moreover, at least one

other court in this Circuit has relied on § 301.6402-3(a)(5) for the premise that an individual

original income tax return does constitute a proper claim for refund in the context of a civil action

for wrongfully denied income tax return refunds. See Suvak v. United States, No. 12 Civ. 6004,

2013 WL 2217171, at *2 (S.D.N.Y. May 21, 2013), adhered to on reconsideration, 2013 WL

2460192 (S.D.N.Y. June 7, 2013).

The second purported deficiency noted by Magistrate Judge Katz relates to the timeliness

of Plaintiff’s filing of this civil action in federal court. Magistrate Judge Katz notes that Plaintiff

filed the Complaint on July 14, 2025 – “four years after the IRS disallowed the tax credits—

without ever filing an administrative claim.” Dkt. No. 4 at 7. As previously noted, Plaintiff

challenges any finding that she was required to file a second “administrative claim” under the

specific circumstances of her case. Moreover, it is likely that the timeliness of Plaintiff’s civil

action is dependent on additional information that is not presently before the Court, including, for

example, whether Plaintiff ever received a notice of disallowance, and when. See Breland v. United

States, No. 5:10-cv-0007 (GTS/GHL), 2011 WL 4345300, at *6 (N.D.N.Y. Sept. 15, 2011)

(recognizing application of six-year general statute of limitations set forth in 28 U.S.C. § 2401(a)

under circumstances where a plaintiff never received a notice of disallowance).

As Magistrate Judge Katz noted, statutes of limitations are jurisdictional in tax cases.

Harriman v. I.R.S., 233 F. Supp. 2d 451, 457 (E.D.N.Y. 2002) (citing United States v. Dalm, 494

U.S. 596 (1990)). Here, where Plaintiff has an arguably colorable claim as to whether this Court

has jurisdiction over her tax refund action, and there is nothing on the face of the Complaint

vitiating this Court’s jurisdiction, the case may proceed to service. Of course, the issue of

jurisdiction may be revisited upon an appropriate motion by the Defendant, or the Court’s sua

sponte review of a more complete record. See, e.g., APWU v. Potter, 343 F.3d 619, 627 (2d

Cir.2003) ( “[A] court should take care to give the plaintiff ample opportunity to secure and present

evidence relevant to the existence of jurisdiction.” (internal quotation marks omitted)).

IV. CONCLUSION

For these reasons, it is hereby

ORDERED that Magistrate Judge Katz’s Report-Recommendation, Dkt. No. 4, is

REJECTED, and it is further

ORDERED that the Clerk of the Court issue the summonses submitted by Plaintiff and

that this case proceed to service in accordance with the federal and local rules.!

IT ISSO ORDERED.

Dated: November 24, 2025

Elizabeth C. Coombe

U.S. District Judge

' Plaintiff sought and was granted IFP status for the limited purpose of waiving the filing fee. See

Dkt. Nos. 1-1, 4. Plaintiff acknowledges responsibility for serving the summons and complaint

on Defendant in accordance with the local and federal rules. Dkt. No. 1-1.