The opinion
120 T.C. No. 2
UNITED STATES TAX COURT
BRUCE L. BROSI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6855-01. Filed January 13, 2003.
On Feb. 26, 2001, R issued P a notice of
deficiency for the taxable year 1996. On May 22, 2001,
P mailed his petition to the Court. On July 18, 2002,
P filed his 1996 Federal income tax return. P’s tax
withholdings for the taxable year 1996 exceeded his tax
liability. R moved for summary judgment on the sole
issue of whether P is entitled to a refund of overpaid
1996 taxes arguing that P did not claim the refund
within the period of limitations provided in sec. 6511,
I.R.C. P opposed the motion on the basis that the
running of the period of limitations was suspended
pursuant to sec. 6511(h), I.R.C., because he was under
an alleged “financial disability” during the period at
issue. P’s alleged “financial disability” is based
solely upon his alleged care-giving activities for his
mother and his simultaneous employment as a commercial
airline pilot.
Held: Sec. 6511(h), I.R.C., provides for the
suspension of the running of the periods of limitation
with respect to an individual during any period when
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such individual is “financially disabled”. Sec.
6511(h)(2), I.R.C., provides that an individual is
“financially disabled” if “such individual is unable to
manage his financial affairs by reason of a medically
determinable physical or mental impairment of the
individual which can be expected to result in death or
which has lasted or can be expected to last for a
continuous period of not less than 12 months.” Sec.
6511(h)(2), I.R.C., requires that the physical or
mental impairment be that of the individual taxpayer
rather than another individual. Accepting P’s factual
allegations as true for purposes of this pending
motion, sec. 6511(h), I.R.C., does not apply to suspend
the running of the periods of limitation.
Held, further, Because P did not file his 1996
income tax return prior to the notice of deficiency and
did not pay his 1996 income taxes within 2 years of the
mailing of the notice of deficiency, this Court lacks
jurisdiction to award a refund or credit. See
Commissioner v. Lundy, 516 U.S. 235, 240 (1996).
Bruce L. Brosi, pro se.
Frank A. Falvo, for respondent.
OPINION
RUWE, Judge: This matter is before the Court on
respondent’s motion for summary judgment filed pursuant to Rule
121.1 The only issue in this case is whether petitioner’s claim
for refund of an overpayment of his 1996 income tax is barred by
the applicable period of limitations. In opposition to
respondent’s motion, petitioner alleges facts that he argues
would have suspended the running of the period of limitations
1
Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
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pursuant to section 6511(h). Application of section 6511(h) is
an issue of first impression.
Background
During 1996, petitioner was employed as an airline pilot for
USAir, Inc. On or about February 26, 2001, respondent issued a
notice of deficiency to petitioner for the taxable year ended
December 31, 1996. At the time respondent issued the notice of
deficiency, petitioner had not filed an income tax return for
that year. On May 22, 2001, petitioner mailed his petition to
the Court seeking redetermination of those amounts determined by
respondent for 1996. On July 18, 2002, petitioner filed his 1996
Form 1040, U.S. Individual Income Tax Return, with respondent’s
Appeals Office. On line 22 of his 1996 return, petitioner listed
his gross income as $100,523. Petitioner’s income tax liability
for 1996 was $21,790. During the 1996 taxable year, petitioner
had Federal income tax withholdings totaling $30,050.
Petitioner’s income tax withholdings for 1996 exceeded his tax
liability by $8,260.
At the time he filed his petition, petitioner resided in
Moon Township, Pennsylvania.
Discussion
In his motion for summary judgment, respondent contends that
there are no genuine issues of material fact and that he is
entitled to judgment as a matter of law. According to
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respondent, this Court lacks jurisdiction to award a refund or
credit of the overpayment because the period of limitations has
expired. Petitioner opposes summary judgment on the ground that
there are alleged facts that will show that the running of the
period of limitations was suspended by section 6511(h). Section
6511(h) suspends the running of the periods of limitation for
filing refund and credit claims in certain cases of “financial
disability”. Petitioner bases his “financial disability” claim
on his care-giving responsibilities to his mother and his
simultaneous employment as an airline pilot. For the reasons
stated below, we disagree with petitioner and hold that
respondent is entitled to summary judgment.
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(a) and (b); see
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753,
754 (1988); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The
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moving party, here respondent, bears the burden of proving that
there is no genuine issue of material fact, and all factual
inferences will be read in the light most favorable to
petitioner, the nonmoving party. Dahlstrom v. Commissioner, 85
T.C. 812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344
(1982). However, the nonmoving party is required “to go beyond
the pleadings and by” his “own affidavits, or by the
‘depositions, answers to interrogatories, and admissions on
file,’ designate ‘specific facts showing that there is a genuine
issue for trial.’” Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986) (quoting Fed. R. Civ. P. 56(e)); see Rauenhorst v.
Commissioner, 119 T.C. 157, 175 (2002); FPL Group, Inc. & Subs.
v. Commissioner, 115 T.C. 554, 560 (2000). Of course, the
nonmoving party need not “produce evidence in a form admissible
at trial in order to avoid summary judgment.” Celotex Corp. v.
Catrett, supra at 324.
Section 6512 grants this Court limited jurisdiction to
determine and award overpayments of tax to taxpayers.2 However,
the amount of any refund which this Court can award is restricted
according to when the overpayment was made. Section 6512(b)(3)
2
Specifically, sec. 6512(b)(1) provides: “if the Tax Court
finds that there is no deficiency and further finds the taxpayer
has made an overpayment of income tax * * * the Tax Court shall
have jurisdiction to determine the amount of such overpayment,
and such amount shall, when the decision of the Tax Court has
become final, be credited or refunded to the taxpayer.”
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provides:
SEC. 6512(b)(3). Limit on amount of credit or
refund.--No such credit or refund shall be allowed or
made of any portion of the tax unless the Tax Court
determines as part of its decision that such portion
was paid--
* * * * * * *
(B) within the period which would be
applicable under section 6511(b)(2), (c), or (d),
if on the date of the mailing of the notice of
deficiency a claim had been filed (whether or not
filed)* * *
Although “not elegant,” the statutory scheme is straightforward.
Commissioner v. Lundy, 516 U.S. 235, 242 (1996). “[A]ll that
matters for the proper application of §6512(b)(3)(B) is that the
‘claim’ contemplated in that section be treated as the only
mechanism for determining whether a taxpayer can recover a
refund.” Id. at 242. Thus, the statute defines the limitation
relevant here, by incorporating the “look-back” provisions found
in section 6511(b) and “directs the Tax Court to determine the
applicable period by inquiring into the timeliness of a
hypothetical claim for refund filed ‘on the date of the mailing
of the notice of deficiency.’”3 Id. at 242. “[A] taxpayer who
3
Generally, sec. 6511 dictates the period in which a
taxpayer must claim a refund or credit for overpaid taxes. The
taxpayer must file a claim for refund “within 3 years from the
time the return was filed or 2 years from the time the tax was
paid, whichever of such periods expires the later, or if no
return was filed by the taxpayer, within 2 years from the time
the tax was paid.” Sec. 6511(a) and (b)(1); see Commissioner v.
Lundy, 516 U.S. 235, 240 (1996).
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seeks a refund in the Tax Court * * * does not need to actually
file a claim for refund with the IRS; the taxpayer need only show
that the tax to be refunded was paid during the applicable look-
back period.” Id. at 241.
Section 6511(b) limits the amount of tax to be refunded to
two “look-back” periods: (1) If the claim is filed within 3
years from the time the return was filed, then the taxpayer is
entitled to a refund of the portion of the tax paid within the 3
years immediately preceding the filing of the claim (plus the
period of any extensions of time for filing the return); or (2)
if the claim is not filed within that 3-year period, then the
taxpayer is entitled to a refund of only that “portion of the tax
paid during the 2 years immediately preceding the filing of the
claim.” Sec. 6511(b)(2)(A) and (B); see Commissioner v. Lundy,
supra at 240. The U.S. Supreme Court held that where the
taxpayer does not file a return or claim for refund before the
Commissioner issues the notice of deficiency, the 2-year look-
back period applies, measured from the date of the mailing of the
notice of deficiency.4 Commissioner v. Lundy, supra at 253.
4
In Commissioner v. Lundy, supra, the taxpayers had income
tax withholdings greater than their liability for the taxable
year 1987. The Lundys failed to file timely their 1987 return.
In September of 1990, the Commissioner issued a notice of
deficiency. In December of 1990, the Lundys filed their 1987
income tax return and therein claimed a refund. Immediately
thereafter, the Lundys filed a petition with this Court. The
Commissioner argued that this Court lacked jurisdiction to award
(continued...)
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Shortly after the Supreme Court decided Commissioner v.
Lundy, supra, Congress amended section 6512(b)(3). This
amendment essentially overturned Lundy, making the look-back
period in such cases 3 years. See sec. 6512(b)(3). However,
this amendment has no application to petitioner’s 1996 tax
liability because Congress made the amendment effective for
taxable years that ended after August 5, 1997.5 See Taxpayer
Relief Act of 1997, Pub. L. 105-34, sec. 1282(b), 111 Stat. 1038.
Petitioner is deemed to have paid his taxes withheld during
1996 on April 15, 1997. See sec. 6513(b)(1). The notice of
deficiency was mailed on February 26, 2001, before petitioner
filed his 1996 return. Based upon the undisputed facts in this
case, petitioner is not entitled to a refund of his overpaid 1996
income tax unless the running of the period of limitations in
section 6511 was suspended.
Section 6511(h)6 provides equitable relief for taxpayers
4
(...continued)
a refund to the Lundys. The Supreme Court agreed with the
Commissioner and denied the Lundys’ refund claim holding that if
the taxpayer has not filed a return or refund claim by the time
the notice of deficiency is mailed, and the notice is mailed more
than 2 years after the date on which the taxes were paid, the
look-back period is 2 years and we lack jurisdiction to award a
refund.
5
Even if the amendment were applicable, it would not benefit
petitioner since the deficiency notice was issued more than 3
years after the due date of the return.
6
Sec. 6511(h) was added to the Code by the Internal Revenue
(continued...)
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seeking a refund or credit for overpaid taxes. That provision
provides:
SEC. 6511(h). Running of Periods of Limitation
Suspended While Taxpayer Is Unable to Manage Financial
Affairs Due to Disability.--
(1) In general.--In the case of an
individual, the running of the periods specified
in subsections (a), (b), and (c) shall be
suspended during any period of such individual’s
life that such individual is financially disabled.
(2) Financially disabled.--
(A) In general.--For purposes of
paragraph (1), an individual is financially
disabled if such individual is unable to
manage his financial affairs by reason of a
medically determinable physical or mental
impairment of the individual which can be
expected to result in death or which has
lasted or can be expected to last for a
continuous period of not less than 12 months.
An individual shall not be considered to have
such an impairment unless proof of the
existence thereof is furnished in such form
6
(...continued)
Service Restructuring and Reform Act of 1998 (RRA 1998), Pub. L.
105-206, sec. 3202(a), 112 Stat. 740. Congress added sec.
6511(h) to the Code in response to the U.S. Supreme Court’s
opinion in United States v. Brockamp, 519 U.S. 347 (1997), where
the Court concluded that Congress did not intend to allow
equitable considerations to affect sec. 6511's time limitations.
See Staff of Joint Comm. on Taxation, General Explanation of Tax
Legislation Enacted in 1998, at 72 (J. Comm. Print 1998), 1998-4
C.B. 543, 630.
Sec. 6511(h) “shall apply to periods of disability before,
on, or after the date of the enactment of this Act [July 22,
1998] but shall not apply to any claim for credit or refund which
(without regard to such amendment) is barred by the operation of
any law or rule of law (including res judicata) as of the date of
the enactment of this Act.” RRA 1998 sec. 3202(b), 112 Stat. 741.
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and manner as the Secretary may require.
(B) Exception where individual has
guardian, etc.--An individual shall not be
treated as financially disabled during any
period that such individual’s spouse or any
other person is authorized to act on behalf
of such individual in financial matters.
A plain reading of section 6511(h) demonstrates that the
physical or mental impairment must be that of the taxpayer, not
of some third person. See United States v. Ron Pair Enters.,
Inc., 489 U.S. 235, 241 (1989) (“The task of resolving the
dispute over the meaning of * * * [a statute] begins where all
such inquiries must begin: with the language of the statute
itself * * * In this case it is also where the inquiry should
end, for where, as here, the statute’s language is plain, ‘the
sole function of the courts is to enforce it according to its
terms.’”). In defining “financially disabled”, section
6511(h)(2)(A) refers to “a medically determinable physical or
mental impairment of the individual” to whom the statute of
limitations applies. (Emphasis added.) To have any logical
meaning, the statute must equate “the individual” with the
taxpayer claiming the benefits of section 6511(h). Furthermore,
Congress clearly intended that the physical or mental impairment
of the taxpayer be substantial. First, the impairment must be
one that is “expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than
12 months.” Sec. 6511(h)(2)(A). Secondly, to claim these
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extraordinary benefits, the taxpayer must present proof of a
qualifying impairment in the form and manner specified by the
Secretary. See sec. 6511(h)(2)(A). The Secretary has
established such form and manner in Rev. Proc. 99-21, 1999-1 C.B.
960. According to the revenue procedure, the taxpayer must
provide a physician’s written statement setting forth inter alia:
(1) A description of the taxpayer’s physical or mental
impairment; (2) the physician’s medical opinion that the
taxpayer’s physical or mental impairment prevented him from
managing his financial affairs; (3) the physician’s medical
opinion that the impairment was or could be expected to result in
death or lasted (or could be expected to last) for a continuous
period of not less than 12 months, etc.
In this case, petitioner does not contend that he suffered
from the type of physical or mental impairment contemplated by
section 6511(h)(2). Instead, petitioner explains that his
failure to timely file a return or claim a refund is a result of
his care-giving responsibilities provided to his mother and his
contemporaneous employment as an airline pilot. Petitioner
explains that he
functioned as his maternal parent’s primary health
care provider for some four years commencing in
1996. Responsibilities included weekly round
[sic] travel from Pennsylvania to the parental
homestead in Illinois, four days a week of
virtually constant care-giving, and during the
remaining three days a week, maintaining his
employment as a pilot with US Airways traveling at
all times and remaining away from his domicile.
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Petitioner does not articulate any physical or mental impairment
from which he suffered during any period at issue here. Instead,
petitioner contends that his care-giving responsibilities
provided to another while simultaneously earning a living somehow
afford him the extraordinary benefits of section 6511(h). We
disagree. While we sympathize with petitioner regarding his
mother’s condition and the demands of his employment, those are
the types of problems confronted by many taxpayers and are not
the conditions contemplated in section 6511(h). Viewing the
record in the light most favorable to petitioner, he cannot
sustain his claim to the benefits articulated in section 6511(h).
As the period of limitations articulated in section 6511 is
not suspended by virtue of section 6511(h), we therefore lack
jurisdiction to award petitioner a refund or credit. See secs.
6511 and 6512; Commissioner v. Lundy, 512 U.S. at 252; United
States v. Brockamp, 519 U.S. 347 (1997). Accordingly, we grant
respondent’s motion for summary judgment.
An appropriate order and
decision will be entered.