Robert Polsky v. United States

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 15-2232

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ROBERT POLSKY; LISA POLSKY,

Appellants

v.

UNITED STATES OF AMERICA

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On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Action No. 2:14-cv-00655)

District Judge: Honorable Timothy J. Savage

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Submitted Pursuant to Third Circuit LAR 34.1(a)

November 25, 2016

Before: SHWARTZ, COWEN, and FUENTES, Circuit

Judges

(Opinion Filed: December 15, 2016)

Robert Polsky

Lisa Polsky

9 Jody Drive

Plymouth Meeting, PA 19462

Pro Se

Karen G. Gregory, Esq.

John A. Nolet, Esq.

Joan I. Oppenheimer, Esq.

United States Department of Justice

Tax Division

950 Pennsylvania Avenue, N.W.

P.O. Box 502

Washington, DC 20044

Beatriz T. Saiz, Esq.

E. Christopher Lambert, Esq.

United States Department of Justice

Tax Division

P.O. Box 227

Ben Franklin Station

Washington, DC 20044

Counsel for Appellee United States of America

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OPINION OF THE COURT

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PER CURIAM.

2

Robert and Lisa Polsky, the parents of a permanently

disabled daughter, claimed a child tax credit on their 2010

and 2011 income taxes. However, the Internal Revenue

Service (IRS) disallowed the credit because the Polskys’

daughter was too old to qualify for it.

After a few false starts, the Polskys challenged the

disallowance of the credit by bringing suit in the United

States District Court for the Eastern District of Pennsylvania.

They argued that the tax credit’s definition of “qualifying

child,” which has an age cap, incorporates by reference a

different section of the Internal Revenue Code that has no age

cap at all for a person who is permanently disabled. The

Polskys contended that this second definition of “qualifying

child” overrides the age cap in the child tax credit.

In granting the IRS’s motion to dismiss, the District

Court held that the plain language of the Code supported the

IRS’s position: the age cap of the child tax credit section of

the Code controlled, and the credit was therefore properly

denied. Having reviewed the interplay between the two

sections of the Code, we agree with the District Court and, for

the reasons set forth below, will affirm its judgment.

I.

After the Polskys attempted to claim the child tax

credit for the 2010 and 2011 tax years, the IRS issued them a

notice of a “mathematical or clerical error” 1 disallowing the

credit because their daughter was older than 17. In response,

the Polskys submitted amended returns, specifically

requesting that the IRS review whether their daughter

1

See 26 U.S.C. § 6213(g)(2).

3

qualified for the tax credit. According to the Polskys, the IRS

refused to rule on the amended returns because they were

substantially the same as the original returns. The Polskys

next filed a petition in the Tax Court. The Tax Court

dismissed the petition, however, because the IRS had not

issued a notice of deficiency. See United States v. Mellon

Bank, N.A., 545 F.2d 869, 873 n.10 (3d Cir. 1976) (“[A]

notice of deficiency is a jurisdictional prerequisite for a

taxpayer’s suit in the Tax Court.”).

In 2014, the Polskys, who have been pro se

throughout, filed an action in the District Court, alleging that

the IRS erroneously disallowed the child tax credit and

violated their due process rights by preventing them from

challenging the disallowance in Tax Court. 2 The United

2

The Polskys labeled their filing as a “class action”

complaint and named Daniel I. Werfel, the IRS’s Acting

Commissioner, as the sole defendant. They also moved for

class certification. Contrary to the Polskys’ argument on

appeal, the District Court permissibly evaluated the United

States’ motion to dismiss before ruling on class certification.

See Greenlee Cty., Ariz. v. United States, 487 F.3d 871, 880

(Fed. Cir. 2007) (recognizing that courts can grant a motion

to dismiss without addressing class certification); Searles v.

Se. Pa. Transp. Auth., 990 F.2d 789, 790 n.1, 794 (3d Cir.

1993) (affirming order granting motion to dismiss for failure

to state a claim, while noting that the “district court did not

rule on the class certification because it ultimately concluded

that plaintiff failed to state a claim”); see also 3 William B.

Rubenstein, Newberg on Class Actions § 7:9 (5th ed. 2013)

(“Given the early nature of most motions to dismiss, courts

will often handle them prior to deciding a motion for class

certification.”). We note that courts have questioned whether

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States filed a motion to dismiss, which the District Court

granted. In particular, the District Court held that the tax

credit is unavailable when the child has attained age 17 and

that the Polskys failed to state a constitutional due process

claim. Polsky v. Werfel, 87 F. Supp. 3d 748, 758-60, 763-66

(E.D. Pa. 2015). The Polskys appealed.

laymen pro se litigants may represent a class. See Fymbo v.

State Farm Fire & Cas. Co., 213 F.3d 1320, 1321 (10th Cir.

2000) (holding that the district court did not abuse its

discretion by deciding that an unincarcerated pro se litigant

was not an adequate class representative). The District Court

also properly substituted the United States for Acting

Commissioner Werfel. See 26 U.S.C. § 7422(f)(1)-(2)

(providing that a suit seeking a tax refund must be brought

against only the United States, not its officers or employees,

while allowing party substitution via court-ordered

amendment of the pleadings); Polsky v. Werfel, 87 F. Supp.

3d 748, 756-57 (E.D. Pa. 2015) (treating the action as a

refund suit “[b]ecause the jurisdictional and procedural

requirements for filing a refund suit are satisfied”).

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II. 3

The child tax credit, 26 U.S.C. § 24, allows certain

taxpayers to claim a credit against tax liability for each

qualifying child. A “qualifying child” means “a qualifying

child of the taxpayer (as defined in section 152(c)) who has

not attained age 17.” 26 U.S.C. § 24(c)(1) (emphasis added).

The Polskys did not dispute that their daughter was

over 17 in 2010 and 2011. Instead, they argued that they are

entitled to the child tax credit regardless of their daughter’s

age because she meets the requirements of 26 U.S.C.

§ 152(c), which § 24(c)(1) incorporates by reference.

Section 152(c) defines “qualifying child” for purposes of a

taxpayer’s dependency deductions and provides an exception

to its own age requirements 4 for an individual

who is “permanently and totally disabled.” 26 U.S.C.

§ 152(c)(3)(B).

3

We have appellate jurisdiction under 28 U.S.C. § 1291 and

exercise plenary review over the order granting the United

States’ motion to dismiss. See Cooper v. Comm’r, 718 F.3d

216, 220 n.5 (3d Cir. 2013). “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) (internal

quotation marks omitted).

4

Generally, with respect to the dependency deduction, a

qualifying child must be under the age of 19 or a student

under the age of 24. See 26 U.S.C. § 152(c)(3)(A). In

addition, § 152(c)(1) includes requirements pertaining to the

child’s relationship with the taxpayer, principal place of

abode, percentage of self-support, and joint filing status.

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III.

We agree with the District Court that the Polskys are

not entitled to a child tax credit for their disabled daughter.

The age-cap exception in § 152(c)(3) does not supplant the

separate age limitation in § 24(c)(1). See Cushman v. Trans

Union Corp., 115 F.3d 220, 225 (3d Cir. 1997) (stating that,

as a general rule of statutory construction, “[w]e strive to

avoid a result that would render statutory language

superfluous, meaningless, or irrelevant”). To the contrary,

under the plain and unambiguous language of the Internal

Revenue Code, the age limitation for the child tax credit in

§ 24(c)(1) effectively overrides the age requirements and

exception for claiming a child as a dependent that are found

in § 152(c)(3). As the District Court correctly explained:

Section 24 imports the basic qualifications from

§ 152(c), and adds an age limitation of

seventeen years. . . . The age restriction in

§ 24(c)(1) is intended to end the tax credit when

the child reaches seventeen years of age. In

contrast, the special rule applicable to

permanently and totally disabled dependents in

§ 152(c)(3)(B) is calculated to extend the tax

deduction as long as the child is disabled.

Therefore, the taxpayer can take a dependent

deduction regardless of the child’s age as long

as the child is permanently and totally disabled,

but cannot receive a tax credit for a disabled

child who, by the close of the taxable year, was

seventeen years of age.

Polsky, 87 F. Supp. 3d at 759. In other words, the child tax

credit is available only when the “qualifying child” meets the

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non-age-related requirements of § 152(c) and “has not

attained age 17.” 26 U.S.C. § 24(c)(1). Because the Polskys’

daughter was over 17 during the relevant tax years, they are

not entitled to the child tax credit.

The Polskys also argued that the IRS violated their due

process rights by failing to issue a notice of deficiency, which

would have allowed them to seek redress in the Tax Court.

As a basis for this claim, the Polskys relied on 42 U.S.C.

§ 1983. That provision, however, does not apply to federal

actors, such as IRS employees. Brown v. Philip Morris Inc.,

250 F.3d 789, 800 (3d Cir. 2001) (“It is well established that

liability under § 1983 will not attach for actions taken under

color of federal law.”). In addition, neither the IRS nor the

United States can be sued under § 1983. See Accardi v.

United States, 435 F.2d 1239, 1241 (3d Cir. 1970) (holding

that “[t]he United States and other governmental entities are

not ‘persons’ within the meaning of Section 1983”). We have

also held that an action under Bivens v. Six Unknown Named

Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971),

“which is the federal equivalent of the § 1983 cause of action

against state actors,” Brown, 250 F.3d at 800, “should not be

inferred to permit suits against IRS agents accused of

violating a taxpayer’s constitutional rights.” Shreiber v.

Mastrogiovanni, 214 F.3d 148, 152 (3d Cir. 2000).

In any event, we agree with the District Court that the

Polskys’ due process rights were not violated. Although they

could not bring their claims in the Tax Court, see 26 U.S.C.

§ 6213(b)(1) (providing that when a return contains a

mathematical error, the taxpayer has no right to file a petition

with the Tax Court), the Polskys’ due process rights were

protected by their ability under 26 U.S.C. § 7422 to sue for a

refund. See Zernial v. United States, 714 F.2d 431, 435 (5th

8

Cir. 1983) (per curiam) (“The refund claim procedure

provided in section 7422 adequately protects . . . due process

rights.”).

IV.

For the foregoing reasons, we will affirm the order of

the District Court. 5

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We deny the Polskys’ motions “to consider new evidence”

and “to consider additional new evidence.” Our review is

limited to whether the dismissal of the complaint “was correct

in light of the facts pleaded in the complaint.” Maio v. Aetna,

Inc., 221 F.3d 472, 482 (3d Cir. 2000); see also Harris v. City

of Phila., 35 F.3d 840, 845 (3d Cir. 1994) (noting that issues

raised for the first time on appeal will not be considered).

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