Opinion

Peretz v. United States

Court: United States Court of Federal Claims
Filed: May 31, 2020
Status: Published
Cited by: 0 cases
Authority: More cited than 11.8%

plaintiff lacked subject-matter jurisdiction after failing to file refund suit within two years of the notice of disallowance

How later courts described this case

plaintiff lacked subject-matter jurisdiction after failing to file refund suit within two years of the notice of disallowance
“The filing of a tax return reporting overpayments constitutes a simultaneous filing of such a claim.”
finding that “[u]nder Treas. Reg. § 301.6402–3(a
“The cases have consistently held that a new claim founded on the same grounds does not extend the statute of limitations.” (citing B. Altman & Co. v. United States, 69 Ct. Cl. 721, 727, 40 F.2d 781, 784, cert. denied, 282 U.S. 863, 51 S. Ct. 36 (1930

Written by the judges who cited it.

The opinion

In the United States Court of Federal Claims

No. 18-1699T

Filed: May 31, 2020

* * * * * * * * * * * * * * * * * ** *

MEIR PERETZ, *

Plaintiff, Tax Refund; 26 U.S.C. § 6532

Statute of Limitations; 26 U.S.C.

v. § 7433; Motion to Dismiss;

Subject-Matter Jurisdiction;

UNITED STATES, *

Failure to State a Claim.

Defendant. *

* * * * * * * * * * * * * * * * * ** *

Lawrence R. Kulak, Law Office of Lawrence R. Kulak, New York, NY, for plaintiff.

Karen E. Servidea, Trial Attorney, Court of Federal Claims Section, Tax Division,

United States Department of Justice, Washington, D.C., for defendant. With her was Mary

M. Abate, Assistant Chief, Court of Federal Claims Section, David I. Pincus, Chief, Court

of Federal Claims Section, and Richard E. Zuckerman, Principal Deputy Assistant

Attorney General, Tax Division, Department of Justice.

OPINION

HORN, J.

On October 26, 2018, plaintiff, Meir Peretz, filed a complaint in the United States

Court of Federal Claims against the United States.1 Plaintiff’s complaint alleged

entitlement to a tax refund of $121,288.00 from the Internal Revenue Service (IRS), the

majority of which was withheld from the proceeds of two stock sales in 2005 as backup

withholding tax, due to the fact that plaintiff is a nonresident alien. The balance of the

monies were withheld due to stock dividends paid on plaintiff’s stocks. Plaintiff alleges

that such funds were wrongfully withheld because the stock transactions resulted in a net

loss, and that, in any event, he is not subject to backup withholding, because he is a

nonresident alien, who is “not required to file any income tax return.” According to plaintiff,

in order to recover the amount withheld, the IRS “demanded” that plaintiff file a tax return

and Form W-7, titled: “Application for IRS Individual Taxpayer Identification Number.”

Initially, plaintiff filed his complaint pro se. Subsequent filings for plaintiff were submitted

by plaintiff’s counsel of record, identified above.

Plaintiff ultimately submitted multiple versions of his 2005 Form 1040 tax return on

separate dates, all of which stated that the withholdings resulted in an alleged

$121,288.00 overpayment of his tax liability, which liability plaintiff stated was zero.

Plaintiff states that he first submitted a 2005 Form 1040 in 2009 and that it was “timely

filed on April 14, 2009.” Plaintiff also refers to his tax return as a claim for refund. Plaintiff

further argues that the IRS wrongfully remains in possession of the funds because the

“IRS did not process the 2005 1040 return timely filed on April 14, 2009,” and that, instead,

the IRS considered “only the untimely” returns that plaintiff had sent to the IRS in later

correspondences with the IRS. Plaintiff requests that the court “should direct Defendant

to return the $121,288 deposited with the IRS and misappropriated by the Defendant as

of December 27, 2005, plus 9% pre and post judgment interest compounded annually as

is applicable in New York State on a judgment for conversion, plus costs and attorney

fees.” Finally, plaintiff asserts in his complaint in this court that he “should also be awarded

damages pursuant to IRC 7433 [26 U.S.C. § 7433 (2018)] for the reckless and intentional

misconduct of the IRS in confiscating and retaining monies it illegally converted.”

In response to the complaint, defendant filed a motion to dismiss plaintiff’s

complaint in its entirety for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1)

(2018) of the Rules of the United States Court of Federal Claims (RCFC). Defendant

asserts (1) that plaintiff did not file this suit for refund within the time allowed in 26 U.S.C.

§ 6532(a) (2018); and (2) this court is barred from hearing plaintiff’s damages claim under

26 U.S.C. § 7433 for “reckless and intentional misconduct” by the IRS.

FINDINGS OF FACT

Plaintiff is a nonresident alien without a valid United States social security number.

Defendant’s motion to dismiss indicates, and the parties do not dispute, that “during the

time relevant to this suit, plaintiff Meir Peretz was a citizen of Israel and was not a United

States resident.” Along with his complaint, plaintiff included some documents related to

plaintiff’s Citicorp, Inc. (Citicorp) brokerage account. The Citicorp documents indicate that

on April 27, 2000, plaintiff purchased, using his Citicorp account, 10,000 shares of Intel

Corporation (Intel) at $115.50 per share and 10,000 shares of Microsoft Corporation

(Microsoft) at $66.125 per share for a total of $1,816,314.00.2

During the course of proceedings before this court, the parties produced multiple

documents pertaining to plaintiff’s account and dealings with Citicorp, although it is

unclear when any of the Citicorp documents were first sent by plaintiff to the IRS, as none

of the Citicorp documents produced by the parties are date-stamped as received by the

IRS. The Citicorp documents in the record include: (1) plaintiff’s trading activity as of April

30, 2000, showing that, on April 27, 2000, plaintiff purchased 10,000 shares of both

Microsoft and Intel for a total cost of $1,816,314.00; (2) plaintiff’s Client Statement for the

month of December 2005, showing that, on December 21, 2005, plaintiff sold 3,658

shares of Microsoft and 12,735 shares of Intel for a total of $427,912.18, and that

$119,815.40 was withheld from the sales as “Back-up tax;” (3) plaintiff’s 2005 Form 1099-

B, showing that the $119,815.40 withheld from the above two stock sales was the total

federal income tax withheld from stock sales in 2005; (4) plaintiff’s Form 1099-DIV,

Based on the record before the court, it appears that on December 21, 2005,

plaintiff sold 12,735 shares of Intel at a price of $25.92 per share, and 3,658 shares of

Microsoft at a price of $26.76 per share, for a total credit to plaintiff’s account of

$427,912.18. On December 27, 2005, Citicorp withheld, as backup withholding tax, a total

of $119,815.40 from the proceeds of the sales. Plaintiff’s 2005 Year End Summary from

Citicorp indicates that a total of $121,287.57 was withheld as backup withholding tax for

the year of 2005. As noted above, the additional withholding of $1,472.17 occurred as a

result of plaintiff’s receipt of dividends.

Plaintiff seeks to receive a refund of $121,288.00 with the IRS for the 2005 tax

year. Attached to plaintiff’s complaint in this court is a 2005 Form 1040 tax return, signed

by plaintiff, and which, in Line 73a, requests a refund of $121,288.00. Plaintiff does not

state a date on which he first sent a 2005 Form 1040 to the IRS, but alleges that it was

sent along with his Form W-7, “Application for Individual Taxpayer Identification Number.”

Plaintiff’s Form W-7, also attached to plaintiff’s complaint, is date-stamped received by

the IRS on April 14, 2009, but the 2005 Form 1040 attached to plaintiff’s complaint in this

court does not contain an IRS date-stamp. As will be discussed below, when plaintiff

appealed the July 29, 2015 Notice of Disallowance for plaintiff’s 2005 refund, the IRS

Appeals Office took the position in a July 13, 2016 correspondence with plaintiff leading

up to the denial of plaintiff’s appeal on October 27, 2016, that the IRS did not first receive

plaintiff’s 2005 Form 1040 until August 30, 2010. Furthermore, although it appears that a

number of versions of plaintiff’s 2005 Form 1040 were submitted to the IRS by plaintiff on

separate occasions,3 none of the 2005 Form 1040s which have been produced by the

showing that an additional $1,472.17 was withheld from dividend distributions in 2005;

and (5) plaintiff’s 2005 Year End Summary, showing that the total federal tax withholdings

from plaintiff’s Citicorp account in 2005 was $121,287.57, the sum of the above

withholdings from stock ($119,815.40) and dividend ($1,472.17) transactions.

Additionally, in one of the versions of plaintiff’s 2005 Form 1040 submitted to the IRS by

plaintiff, the Schedule D portion of the 2005 Form 1040 indicates that plaintiff

subsequently purchased additional shares of both stocks on July 1, 2003.

Plaintiff’s complaint in this court states that his “Citicorp account statements listed an

obviously fictitious social security number, to wit: [Redacted]-4444 for the account of

Plaintiff, despite Plaintiff, as a foreigner not having or needing a social security number.”

Plaintiff attaches to his complaint a set of Citicorp documents titled: “Client Statement

Forms 1099 and 2001 Year End Summary,” which states: “SS # [Redacted]-4444.”

(capitalization in original). The remainder of the Citicorp documents do not list any social

security number, for plaintiff, “fictitious” or otherwise.

Among other documents, the IRS produced multiple versions of plaintiff’s 2005 Form

1040, each which appear to have been submitted to the IRS by plaintiff at different times

throughout plaintiff’s correspondence with the IRS, as indicated by the date-stamp of

receipt by the IRS on August 30, 2010, March 9, 2015, and September 24, 2015, and

September 30, 2019, respectively. In addition to the date-stamps, the versions of

plaintiff’s 2005 Form 1040 produced by the IRS are distinguishable from one another by

defendant in connection with the above-captioned case are date-stamped as received by

the IRS on April 14, 2009. The 2005 Form 1040 with the earliest date-stamp in the record

before the court indicates receipt by the IRS on August 30, 2010. There is, however, one

version of plaintiff’s 2005 Form 1040, produced by the defendant, that contains no date-

stamp, and is identical to the 2005 Form 1040 attached to plaintiff’s complaint, except

that it is unsigned by the plaintiff. Nevertheless, all versions of plaintiff’s 2005 Form 1040

in the record before the court, as well as the one attached to plaintiff’s complaint, show

the input of “[$]0” for taxable income (Line 43) and for total tax liability (Line 63) as well

as show “[$]121,288” for “Federal Income tax withheld from Forms W-2 and 1099” (Line

64), for total payments (Line 71), for the amount of overpayment (Line 72), and for the

refund requested (Line 73a).

On October 1, 2009, the IRS sent plaintiff Letter 685C, rejecting his Form W-7. The

October 1, 2009 Letter 685C states:

Because your Form W-7/W-7SP, Application for IRS Individual Taxpayer

Identification Number [ITIN], was rejected, we have assigned you

[Redacted]6665* as your Internal Revenue Service Number (IRSN) to

expedite the processing of the 1040 tax return you submitted with your ITIN

application.

- The IRSN we assigned is neither a social security number nor an IRS

Individual Taxpayer Number (ITIN).

- Therefore, no refund will be issued until you are assigned a valid ITIN or

a social security number.

(capitalization and redaction in original). The October 1, 2009 Letter 685C does not

specifically indicate why plaintiff’s Form W-7 was rejected. Additionally, plaintiff uses this

October 1, 2009 Letter 685C to support that a 2005 Form 1040 was submitted to the IRS

on April 14, 2009, because the October 1, 2009 Letter 685C references “the 1040 tax

return you submitted with your ITIN application.” As discussed above, plaintiff alleges that

he submitted his 2005 Form 1040 with his Form W-7 to the IRS, and the Form W-7 in the

record before the court is date-stamped received by the IRS on April 14, 2009.4 Defendant

has agreed that, “for purposes of defendant’s motion to dismiss, defendant has assumed

inputs or omissions in the preparer’s date and time headers, the preparer’s signature

dates, taxpayer signature boxes and social security number boxes, and inputs in the

Schedule D portion of the Form 1040 for stock bases, dates of acquired stock, and

gain/loss dispositions of stock.

In further support that a 2005 Form 1040 was received on the IRS by April 14, 2009,

plaintiff has produced a letter from the IRS, dated December 23, 2009, in which the IRS

contemplated assessing a $5,000.00 penalty because the IRS had “determined that the

information you filed as a return of tax, or purported return of tax, on Apr. 14, 2009, is

frivolous and there is no basis in the law for your position.”

to be true that, on April 14, 2009, plaintiff filed with the IRS a Form 1040 for 2005,

requesting a refund of $121,288.”

The record before the court also contains a letter dated August 25, 2010, from

plaintiff’s now-deceased accountant, Menachem David, to the IRS. Mr. David’s August

25, 2010 letter states:

Your enclosed letter indicates that Mr. Peretz’s W7 was rejected because it

was incomplete. I contacted the IRS, which indicated that the item missing

was 6d.

We are now enclosing a corrected Form W7, with Item 6d completed.

Form W7 accompanied a timely filed tax return, requesting a tax refund.

Please process Form W7, issue an ITIN, and expedite the refund.

Along with Mr. David’s August 25, 2010 letter and the resubmitted Form W-7 with Item 6d

completed, Mr. David also submitted a version of plaintiff’s 2005 Form 1040, also

requesting a refund of $121,288.00, and which is date-stamped received by the IRS on

August 30, 2010. As noted above, it is this 2005 Form 1040, date-stamped on August 30,

2010 by the IRS, that, on July 13, 2016, the IRS Appeals Office assumed was plaintiff’s

first filing of his 2005 Form 1040.

On November 22, 2010, the IRS sent plaintiff Notice No. CP567, informing him

that the IRS was again rejecting his Form W-7 because he “did not respond within 45

days to Notice CP-566, We Received Your Application for an IRS Individual Taxpayer

Identification Number (ITIN), requesting additional information or supporting identification

or exception documentation, to process your Form W-7.” (emphasis in original). Although

the record before the court contains the above-quoted Notice No. CP567 dated November

22, 2010, which referenced Notice CP-566, neither party has produced any document

which is labeled Notice CP-566, and the date on which Notice CP-566 was issued is not

evident from the record before the court.5 The November 22, 2010 Notice No. CP567

further states:

If you still require an ITIN, you will need to complete a new Form W-7 and

submit it with valid and unexpired supporting identification or exception

documentation, if applicable. Please attach it to a copy of your original tax

return. Clearly indicate that the tax return is a copy, and submit it to the

address shown at the top of this notice. Please refer to the Form W-7

instructions for assistance. You may also visit a local IRS Taxpayer

The IRS’ website explains that a CP566 Notice is sent to taxpayers when “[w]e need

more information to process your application for an Individual Taxpayer Identification

Number (ITIN). You may have sent us an incomplete form. You may have sent us the

wrong documents.” Understanding Your CP566 Notice, available at https://www.irs.gov/

individuals/understanding-your-cp566-notice (last visited May 31, 2020).

Assistance Center for help with completing the Form W-7 or reviewing your

supporting identification or exception documentation for acceptability[.]

(capitalization and emphasis in original). It does not appear from the record before the

court that plaintiff ever sent “a new Form W-7” in response to the November 22, 2010

Notice No. CP567. Moreover, based on the record before the court, it does not appear

that the IRS ever assigned plaintiff an ITIN.

The IRS also sent a letter to plaintiff on January 18, 2011, which requested

additional information from plaintiff relating to the withholding entries included in his tax

return. The January 18, 2011 IRS letter states:

Please provide a form with information that supports the wage or

withholding entry of $121,288.00 on line 64, Form 1040. It could be Form

W-2, Form W-2G (for gambling winnings), or Form 1099-R (for pension

income). If you don’t have the form you need, please contact the issuer of

the income statement for a copy and send it with the copy of this letter.

Otherwise, send us the information in some substitute form. For example,

one substitute for Form W-2 could be an earnings statement from your

employer which shows year-to-date totals. If you don’t have an earnings

statement, ask your employer for a copy.

As discussed above, the parties have produced documents sent from plaintiff to

the IRS pertaining to plaintiff’s Citicorp brokerage account, indicating that $121,287.57

was withheld by Citicorp for the 2005 tax year. The Citicorp documents, however, are not

date-stamped received by the IRS, and the date on which the Citicorp documents were

initially sent by plaintiff to the IRS is not evident from the record before the court. The

January 18, 2011 IRS letter also states that plaintiff’s “Form 1040 doesn’t show your

original signature(s). Please sign the declaration at the end of this letter.”6 The January

18, 2011 IRS letter further states: “Please send us this letter with your reply in the

enclosed envelope within 20 days from the date of this letter.” Finally, the January 18,

2011 IRS letter states:

We will issue any refund due to you in about 6 to 8 weeks from the time we

receive your response. We can give you credit for items only if you give us

the information. Therefore, if we do not hear from you, we may have to

increase the tax you owe or reduce your refund.

(capitalization in original).

The declaration at the end of the January 18, 2011 letter states: “Under penalties of

perjury, I declare that I have examined the return (including any accompanying schedules

and statements) referred to in this letter and, to the best of my knowledge and belief, it is

true, correct, and complete.”

More than four years later, a representative for plaintiff, Mr. Abraham Dan, sent

the IRS the following letter, dated March 4, 2015:

Dear IRS Official:

Enclosed is a letter sent to my client, Meir Peretz, stating that his $121,288

refund will be sent after proof of withholding is sent to the IRS. Enclosed is

the Bank Statement from Citicorp clearing [sic] showing the $121,288

withheld from his account. Enclosed also is a copy of his 2005 tax return

showing the $121,288 refund, and the power of attorney. Please send him

his refund plus interest.

(first three emphases in original, final emphasis added). The March 4, 2015 letter is date-

stamped received by the IRS on March 9, 2015. Also date-stamped on March 9, 2015 is

a copy of the January 18, 2011 letter from the IRS, discussed above; another version of

plaintiff’s 2005 Form 1040; and documents relating to a power of attorney for Mr. Dan.7

On July 29, 2015, the IRS sent plaintiff its first Notice of Disallowance of plaintiff’s

claim (the July 29, 2015 Notice of Disallowance), which is included in the record, and

which stated:

CERTIFIED MAIL

Taxpayer identification number[8]: [Redacted]-6665*

Among the documents produced by the IRS are (1) a power of attorney affidavit for

plaintiff with respect to Mr. Dan, dated February 19, 1987, and date-stamped received by

the IRS on March 9, 2015; and (2) a Form 2848, “Power of Attorney and Declaration of

Representative,” also date-stamped received by the IRS on March 9, 2015. The Form

2848 appears to be signed by Mr. Dan, but is unsigned by plaintiff. The Form 2848 also

indicates that Mr. Dan is a family member of plaintiff. Plaintiff states that “Abraham Dan

is not an accountant or attorney.” Furthermore, in plaintiff’s briefings to the court, it

appears that plaintiff now questions whether Mr. Dan had authority to act on behalf of

plaintiff before the IRS. Plaintiff states in supplemental briefing to the court that “[t]he

documents that Defendant received from the IRS in connection with the March 4, 2015

letter do not include any evidence of a valid power of attorney to Abraham Dan signed by

Plaintiff, authorizing Mr. Dan to represent Plaintiff before the IRS, having been in effect at

the time Abraham Dan wrote the March 4, 2015 letter.”

The court notes that although the above-quoted July 29, 2015 Notice of Disallowance

references a “Taxpayer identification number,” the record before the court indicates that

the IRS never issued plaintiff an Individual Taxpayer Identification Number (ITIN) because

he did not respond to the November 22, 2010 Notice No. CP-567, requiring plaintiff to

submit a “new Form W-7.” The “Taxpayer identification number” referenced above in the

July 29, 2015 Notice of Disallowance instead matches the Internal Revenue Service

Number (IRSN) which was issued to plaintiff in the IRS’ October 1, 2009 letter, but which

Kind of tax: Income

Amount of claim: $121,288.00

Date of claim(s) received: Mar. 09, 2015

Tax period: Dec. 31, 2005

Dear Taxpayer:

WE COULDN’T ALLOW YOUR CLAIM

WHY WE’RE SENDING YOU THIS LETTER

We disallowed your claim for credit for the period shown above.

WHY WE CAN’T ALLOW YOUR CLAIM

You filed your claim for credit or refund more than 3 years after the tax return

due date. A claim must be filed within 3 years from the time the return was

filed. In addition, the amount of the tax that can be credited or refunded is

limited to the tax paid during the three years immediately preceding the filing

of the claim (plus the period of any extension of time to file the tax return).

Withheld tax and estimated tax payments are deemed to be paid on the last

day prescribed (i.e., April 15) for filing your tax return. The excess of any

amount allowable for the earned income credit over the actual income tax

is treated in a similar manner to these prepaid credits.

(capitalization and redaction in original; emphasis added). The July 29, 2015 Notice of

Disallowance also states:

IF YOU DISAGREE

You can appeal our decision with the Appeals Office (which is independent

of our office) if we disallowed your claim because our records show that you

filed your claim late. . . .

If you do not agree with our decision, you can file suit to recover tax,

penalties, or other amounts, with the United States District Court having

jurisdiction or with the United States Court of Federal Claims. These courts

are part of the judiciary branch of the federal government and have no

connection with the IRS.

letter stated that the IRSN was “neither a social security number nor an IRS Individual

Taxpayer Number (ITIN),” and that “no refund will be issued until you are assigned a valid

ITIN or a social security number.”

The law permits you to do this within 2 years from the date of this letter. If

you decide to appeal our decision first, the 2-year period still begins from

the date of this letter. However, if you signed an agreement that waived your

right to the notice of disallowance (Form 2297), the period for filing suit

begins on the date you filed the waiver.[9]

(capitalization in original).

In a September 21, 2015 letter to the IRS from Raphael Grossman, Certified Public

Accountant, plaintiff appealed the July 29, 2015 Notice of Disallowance. Mr. Grossman’s

September 21, 2015 letter to the IRS states:

FACTS OF CASE SUPPORTING APPEAL:

1. The 2005 return for Meir Peretz was timely filed. Please see Exhibit 1

which shows a copy of the return and a letter from the CPA to the IRS

requesting that the refund be processed.

2. Please see letter from the IRS dated January 18, 2011, requesting that

Meir Peretz provide documentation supporting the $121.288 [sic] amount

withheld and shown on line 64 of his tax return.

3. Please see Exhibit 3 showing the $1372 withheld by Citibank on dividend

income and the $119,815 withheld on stock sales.

4. Please send my client his refund due plus interest.

(capitalization and emphasis in original). The September 21, 2015 letter from Mr.

Grossman is date-stamped received by the IRS on September 24, 2015. The record

before the court does not contain any documents labeled as exhibits to Mr. Grossman’s

September 21, 2015 letter, although the letter appears to refer to some of the documents

which were discussed above, namely: (1) the August 25, 2010 letter from Menachem

David, plaintiff’s now-deceased accountant; (2) the January 18, 2011 letter from the IRS;

and (3) certain of plaintiff’s Citicorp documents.

On July 13, 2016, during the course of plaintiff’s appeal of the July 29, 2015 Notice

of Disallowance to the IRS Appeals Office, Tina Tew, an IRS Appeals Officer, wrote the

following letter to plaintiff:

The parties do not dispute, and there is no indication in the record before the court, that

plaintiff ever signed an agreement waiving his right to a notice of disallowance.

Dear Taxpayer:

As you know, I have been assigned the case involving your claim for

abatement and/or refund of taxes assessed against you. The function of the

Appeals Office is to resolve tax disputes within the framework of the facts

and law, including court decisions.

My preliminary review of the information previously submitted by you

indicates your claim should be denied as it was filed more than 3 years after

the return due date. Internal Revenue Code Section 6511(a) stipulates that

a claim for credit or refund of an overpayment of any tax imposed by this

title in respect of which tax the taxpayer is required to file a return shall be

filed by the taxpayer 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. The 2005 tax return was due on April 17, 2006 and was received on

August 30, 2010. Since the claim was received more than 3 years after the

due date, it must be denied.

The documentation that you submitted fails to substantiate that the claim

was filed timely. I am willing to consider any other documentation that you

may have to support your position. Please contact me within 30 days from

the date of this letter. If I do not hear from you within this period, I will make

my determination based on the available information. All written statements

submitted should be signed under the penalties of perjury.

As discussed above, although defendant now takes the position that “for purposes

of defendant’s motion to dismiss, defendant has assumed to be true that, on April 14,

2009, plaintiff filed with the IRS a Form 1040 for 2005, requesting a refund of $121,288,"

the letter from Ms. Tew indicates that the IRS Appeals Office did not acknowledge that

plaintiff had submitted a 2005 tax return on April 14, 2009. Instead, Ms. Tew appears to

have considered the 2005 Form 1040 which was enclosed with Mr. David’s August 25,

2010 letter to the IRS, and date-stamped received by the IRS on August 30, 2010, as

plaintiff’s first filing of his 2005 Form 1040 claiming a refund of $121,288.00, and reasoned

that such submission was filed untimely.

Subsequently, in a letter dated October 27, 2016, the IRS informed plaintiff that his

appeal was denied. The October 27, 2016 letter from the IRS states:

Dear Taxpayer:

Our Office has completed its review of your claim for abatement and/or

refund of taxes that we have charged you. Based on the information

submitted, there is no basis to allow any part of your claim as it was filed

more than 3 years after the tax return due date.

You may pursue this matter further by filing suit in either the United States

District Court or the United States Court of Federal Claims. If you decide to

do this, you must file the suit within two-years from the date on the letter

denying your claim, which the Holtsville NY [office] mailed to you on July

29, 2015.

On October 26, 2018, plaintiff filed the above-captioned complaint with this court.

Plaintiff’s current counsel of record in the above-captioned case also continued to

correspond with the IRS, inquiring about plaintiff’s claimed refund and requesting

documents relating to plaintiff’s request for refund, while also enclosing additional copies

of plaintiff’s 2005 Form 1040. A letter dated September 25, 2019 from plaintiff’s counsel

of record to the IRS states:

Please be advised that Mr. Peretz is a non-resident who never had a Social

Security number. In 2005, the non-resident had a brokerage account in

Citibank. Following a loss in the brokerage account in excess of $1,000,000,

Citibank incorrectly withheld $150,000[10] of net proceeds after loss and

forwarded the $150,000 to the IRS. The Form 1040 request for refund of

the $150,000 erroneous withholding was filed with the IRS under Social

Security number: [Redacted]-4444. Please see attachment showing

Citibank’s assigned [Redacted]-4444. Please see attached Form 1040 for

2005. Subsequently, the IRS assigned a Temporary Taxpayer Identification

Number [Redacted]-6665. Please see attached IRS letter dated October 1,

2009. The non-resident, Meir Peretz never requested a social security

number from the Social Security Administration or an IRS Individual

Taxpayer Identification Number.

We are seeking documents that were filed and accepted by the IRS under

these identification numbers, [Redacted]-4444 or [Redacted]-6665.

(redactions in original).

Based on a review of the record, it appears that the 2005 Form 1040 which is date-

stamped received by the IRS on September 30, 2019 is the 2005 Form 1040 that plaintiff’s

counsel of record enclosed with his letter dated September 25, 2019, quoted above. The

2005 Form 1040 date-stamped as received by the IRS on September 30, 2019 is identical

to the 2005 Form 1040 attached to plaintiff’s complaint. Indeed, it appears to have been

taken directly from the court’s Electronic Case File (ECF) in the above-captioned matter

when it was sent to the IRS, as it contains the ECF docket information that is associated

with the above-captioned matter, and the specific ECF docket number that is associated

There is no evidence in the record before the court that substantiates plaintiff’s counsel

of record’s assertion in the above-quoted letter dated September 25, 2019, that

$150,000.00 was withheld from plaintiff for the 2005 tax year. All of the Citicorp brokerage

documents, discussed above, substantiate only that $121,287.57 was withheld from

plaintiff for the 2005 tax year.

with the 2005 Form 1040 exhibit to plaintiff’s complaint in the above-captioned matter.

The only difference is that, as stated by plaintiff in his supplemental briefing, “the IRS, on

its own initiative, annotated the copy of the 2005 Form 1040 that it stamped as received

on September 30, 2019 as an Exhibit from Plaintiff’s attorney. The IRS called it a 1040X

and wrote the word ‘Amended’ on it.”

On December 2, 2019, the IRS issued a second Notice of Disallowance, this time

referencing a claim received on September 30, 2019. The December 2, 2019 Notice of

Disallowance states:

CERTIFIED MAIL

Taxpayer identification number: [Redacted]-6665*

Kind of tax: Individual Tax

Amount of claim: $121,288.00

Date of claims received: Sep. 30, 2019[11]

Tax period: Dec. 31, 2005

Dear Taxpayer:

WE CAN’T ALLOW YOUR CLAIM

We disallowed your claim for credit for the tax period listed at the top of this

letter.

WHY WE CAN’T ALLOW YOUR CLAIM

The number listed above is a temporary number that was assigned to you

to process your return. It is not an ITIN, the previous 685C letter dated Oct.

1, 2009 mentioned that you need a valid taxpayer identification number, if

you are unable to get a Social Security Number (SSN) then an Individual

Taxpayer Identification Number (ITIN) is required.

The withholding credit of $121,288.00 was removed in 2011 even though

the refund expiration date expired Apr. 15, 2009. The account was not

adjusted, [sic] until then to allow you time to apply for an ITIN. Our records

show there were two attempts with both ending in rejection in April 2009

and August 2010.

As discussed above, the first Notice of Disallowance of plaintiff’s claim for refund of

$121,288.00 for the 2005 tax period was issued on July 29, 2015, responding to a

“claim(s) received” on March 9, 2015.

(capitalization and redaction in original; emphasis added). The December 2, 2019 Notice

of Disallowance further informs plaintiff, as did the first one, of plaintiff’s opportunity to

appeal the decision with the IRS Appeals Office, but the December 2, 2019 Notice of

Disallowance did not state that plaintiff could file suit and did not provide a time limitation

for plaintiff to file suit.12

The final correspondence between the IRS and plaintiff included in the record is a

letter from an accountant for plaintiff, dated December 24, 2019, appealing the December

2, 2019 Notice of Disallowance. The December 24, 2019 letter includes plaintiff’s version

of the relevant chronology of events, and states:

1. Please be advised that Meir Peretz seeks to appeal to the Office of

Appeals the December 2, 2019 disallowance of a claim for refund filed on

April 14, 2009. (Exhibit A)

2. The tax periods and disallowed items Meir Peretz disagrees with are as

follows: The IRS improperly $121,288.00 withheld [sic] from the remaining

proceeds of stock sales at a loss in 2005.

3. Meir Peretz

245 East 54th Street, Apt. 5M

New York, NY 10022-4717

4. Meir Peretz sold shares of Microsoft and Intel suffering a loss of over

$1million [sic]. A timely claim for refund was filed and submitted at the IRS

office located in Garden City, New York 11530 on April 14, 2009. The claim

for refund timely filed with a Request for taxpayer identification number ID

# [sic] was date stamped April 14, 2009 (Exhibit B)

The request for a taxpayer identification number was rejected by IRS letter

dated October 1, 2009 for an insignificant item the IRS asked to be

completed; specifically, the entry date into the United State [sic] listed on

Mr. Peretz’s passport. (Exhibit C) The request for identification number was

resubmitted by Mr. Peretz’s accountant and received by the IRS on August

25, 2010 with this insignificant item, entry date listed on passport was added

to the form and an unsigned copy of the initial Form 1040 was enclosed.

The court notes that included in the unusual collection of entries and documents in the

IRS record are several IRS transcripts with entries related to plaintiff’s attempt to secure

a refund with the IRS. The IRS transcripts indicate that plaintiff’s claim for refund was

apparently internally disallowed on a number of additional occasions to those described

above, namely, the July 29, 2015 and the December 2, 2019 Notices of Disallowance, for

which there are copies in the record before the court. The most recent IRS transcript,

dated December 23, 2019, also contains “CLAIM DISALLOWED” entries on May 2, 2011,

August 10, 2015 and December 30, 2019, for which there are no copies in the court

record. (capitalization in original).

The IRS in subsequent communications was apparently erroneously

processing the unsigned copy of the 1040 as a new untimely claim for

refund. (Exhibit D)

The claim itself that was filed on April 14, 2009 was acknowledged to have

been received by the IRS on April 14, 2005. However, the IRS egregiously

concluded that the claim for refund was a frivolous tax protest and the IRS

went so far as to impose a $5,000 penalty for tiling what the IRS

mischaracterized as a frivolous claim and refused to process the claim. See

IRS letter dated December 23, 2009 (Exhibit E). The letter dated December

20, 2009 does not state any disallowance of the claim filed on April 14, 2009.

The first disallowance received from the IRS is the disallowance dated

December 2, 2019.[13] This disallowance shockingly states that the April 14,

2009 claim for refund was first received by the IRS on September 30, 2019.

There was no separate claim for refund, that would have been untimely,

made on or about September 30, 2019.

5. There is no constitutional basis to misappropriate monies, in the form of

withholding from a foreign individual who suffered losses and not income

on the sale of publicly traded stock. Nor is there any notice that the IRS did

not accept a request for ID number. Nor is there any statutory or other basis

to misappropriate monies merely because the IRS, without explanation, did

not assign the foreign individual a permanent tax identification number.

(emphasis in original). The record before the court contains no action as having been

taken by the IRS on plaintiff’s second appeal, and the defendant has informed the court

that as of May 27, 2020, no further action has been taken to date on plaintiff’s second

appeal.

DISCUSSION

Plaintiff filed a complaint in this court alleging entitlement to a tax refund of

$121,288.00 from the IRS. As discussed above, the record before the court is filled with

multiple documents of the same forms and records, but a number of them are just slightly

inconsistent and bear no date to clearly identify the times they were submitted to the IRS.

Moreover, there are large chronological gaps between actions taken by the plaintiff and

the IRS and correspondence between the parties. Regardless, plaintiff alleges that funds

were wrongfully withheld from him because the stock transactions in which he engaged

resulted in a net loss, and also that plaintiff is not subject to backup withholding tax in the

first instance, because he is a nonresident alien who is “not required to file any income

tax return.” Plaintiff alleges that he nevertheless did file a 2005 Form 1040 requesting a

refund of $121,288.00, which he states in his complaint was initially received by the IRS

on April 14, 2009, along with his initially submitted Form W-7. Plaintiff further argues that

Plaintiff ignores the July 29, 2015 disallowance letter from the IRS sent to plaintiff.

the IRS wrongfully remains in possession of his funds because the IRS incorrectly

determined that he did not timely submit his tax return, which, according to plaintiff, should

have operated also as a claim for refund. Plaintiff requests that the court “should direct

Defendant to return the $121,288 deposited with the IRS and misappropriated by the

Defendant as of December 27, 2005, plus 9% pre and post judgment interest

compounded annually as is applicable in New York State on a judgment for conversion,

plus costs and attorney fees.” Finally, plaintiff asserts that he “should also be awarded

damages pursuant to IRC 7433 [26 U.S.C. § 7433] for the reckless and intentional

misconduct of the IRS in confiscating and retaining monies it illegally converted.”14

As also indicated above, defendant filed a motion to dismiss plaintiff’s complaint in

its entirety for lack of subject-matter jurisdiction pursuant to RCFC 12(b)(1). Defendant

asserts (1) that plaintiff did not file suit for the recovery of his overpayment within the time

allowed for by 26 U.S.C. § 6532(a); and (2) this court is barred from hearing plaintiff’s

damages claim under 26 U.S.C. § 7433 for “reckless and intentional misconduct” by the

IRS.

“Subject-matter jurisdiction may be challenged at any time by the parties or by the

court sua sponte.” Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir. 2004) (citing

Fanning, Phillips & Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998)); see also Int’l

Elec. Tech. Corp. v. Hughes Aircraft Co., 476 F.3d 1329, 1330 (Fed. Cir. 2007). The

Tucker Act, 28 U.S.C. § 1491 (2018), grants jurisdiction to this court as follows:

The United States Court of Federal Claims shall have jurisdiction to render

judgment upon any claim against the United States founded either upon the

Constitution, or any Act of Congress or any regulation of an executive

department, or upon any express or implied contract with the United States,

or for liquidated or unliquidated damages in cases not sounding in tort.

28 U.S.C. § 1491(a)(1). As interpreted by the United States Supreme Court, the Tucker

Act waives sovereign immunity to allow jurisdiction over claims against the United States

(1) founded on an express or implied contract with the United States, (2) seeking a refund

from a prior payment made to the government, or (3) based on federal constitutional,

statutory, or regulatory law mandating compensation by the federal government for

damages sustained. See United States v. Navajo Nation, 556 U.S. 287, 289-90 (2009);

On January 22, 2020, plaintiff’s counsel of record requested the court “to grant a default

judgment to Plaintiff on its Complaint and to impose additional sanctions against

Defendant for its contempt of Court and its purging of spoliation of crucial documents from

its files.” (capitalization in original). During the course of proceedings in this case,

plaintiff’s counsel of record has accused both the IRS and defendant’s counsel of record

of concealing documents and other similar misconduct on several occasions. Although

the IRS administrative record is hardly a model of best practices, the lengthy gaps

between plaintiff’s correspondences with the IRS also compounded the confusion in the

case. Based on a review of the record before the court, the court finds insufficient

evidence to support plaintiff’s counsel of record’s allegations of sanctionable activity.

see also United States v. Mitchell, 463 U.S. 206, 216 (1983); Alvarado Hosp., LLC v.

Price, 868 F.3d 983, 991 (Fed. Cir. 2017); Greenlee Cnty., Ariz. v. United States, 487

F.3d 871, 875 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2007), cert. denied,

552 U.S. 1142 (2008); Palmer v. United States, 168 F.3d 1310, 1314 (Fed. Cir. 1999).

“Not every claim invoking the Constitution, a federal statute, or a regulation is cognizable

under the Tucker Act. The claim must be one for money damages against the United

States . . . .” United States v. Mitchell, 463 U.S. at 216; see also United States v. White

Mountain Apache Tribe, 537 U.S. 465, 472 (2003); N.Y. & Presbyterian Hosp. v. United

States, 881 F.3d 877, 881 (Fed. Cir. 2018); Smith v. United States, 709 F.3d 1114, 1116

(Fed. Cir.), cert. denied, 571 U.S. 945 (2013); RadioShack Corp. v. United States, 566

F.3d 1358, 1360 (Fed. Cir. 2009); Rick’s Mushroom Serv., Inc. v. United States, 521 F.3d

1338, 1343 (Fed. Cir. 2008) (“[P]laintiff must . . . identify a substantive source of law that

creates the right to recovery of money damages against the United States.”); Golden v.

United States, 118 Fed. Cl. 764, 768 (2014). In Ontario Power Generation, Inc. v. United

States, the United States Court of Appeals for the Federal Circuit identified three types of

monetary claims for which jurisdiction is lodged in the United States Court of Federal

Claims. The Ontario Power Generation, Inc. court wrote:

The underlying monetary claims are of three types. . . . First, claims alleging

the existence of a contract between the plaintiff and the government fall

within the Tucker Act’s waiver. . . . Second, the Tucker Act’s waiver

encompasses claims where “the plaintiff has paid money over to the

Government, directly or in effect, and seeks return of all or part of that sum.”

Eastport S.S. [Corp. v. United States, 178 Ct. Cl. 599, 605-06,] 372 F.2d

[1002,] 1007-08 [(1967)] (describing illegal exaction claims as claims “in

which ‘the Government has the citizen’s money in its pocket’” (quoting

Clapp v. United States, 127 Ct. Cl. 505, 117 F. Supp. 576, 580 (1954)) . . . .

Third, the Court of Federal Claims has jurisdiction over those claims where

“money has not been paid but the plaintiff asserts that he is nevertheless

entitled to a payment from the treasury.” Eastport S.S., 372 F.2d at 1007.

Claims in this third category, where no payment has been made to the

government, either directly or in effect, require that the “particular provision

of law relied upon grants the claimant, expressly or by implication, a right to

be paid a certain sum.” Id.; see also [United States v. ]Testan, 424 U.S.

[392,] 401-02 [1976] (“Where the United States is the defendant and the

plaintiff is not suing for money improperly exacted or retained, the basis of

the federal claim-whether it be the Constitution, a statute, or a regulation-

does not create a cause of action for money damages unless, as the Court

of Claims has stated, that basis ‘in itself . . . can fairly be interpreted as

mandating compensation by the Federal Government for the damage

sustained.’” (quoting Eastport S.S., 372 F.2d at 1009)). This category is

commonly referred to as claims brought under a “money-mandating”

statute.

Ont. Power Generation, Inc. v. United States, 369 F.3d 1298, 1301 (Fed. Cir. 2004); see

also Samish Indian Nation v. United States, 419 F.3d 1355, 1364 (Fed. Cir. 2005); Twp.

of Saddle Brook v. United States, 104 Fed. Cl. 101, 106 (2012).

To prove that a statute or regulation is money-mandating, a plaintiff must

demonstrate that an independent source of substantive law relied upon “‘can fairly be

interpreted as mandating compensation by the Federal Government.’” United States v.

Navajo Nation, 556 U.S. at 290 (quoting United States v. Testan, 424 U.S. at 400); see

also United States v. White Mountain Apache Tribe, 537 U.S. at 472; United States v.

Mitchell, 463 U.S. at 217; Blueport Co., LLC v. United States, 533 F.3d 1374, 1383 (Fed.

Cir. 2008), cert. denied, 555 U.S. 1153 (2009). The source of law granting monetary relief

must be distinct from the Tucker Act itself. See United States v. Navajo Nation, 556 U.S.

at 290 (The Tucker Act does not create “substantive rights; [it is simply a] jurisdictional

provision[] that operate[s] to waive sovereign immunity for claims premised on other

sources of law (e.g., statutes or contracts).”). “‘If the statute is not money-mandating, the

Court of Federal Claims lacks jurisdiction, and the dismissal should be for lack of subject

matter jurisdiction.’” Jan’s Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299,

1308 (Fed. Cir. 2008) (quoting Greenlee Cnty., Ariz. v. United States, 487 F.3d at 876);

see also N.Y. & Presbyterian Hosp., 881 F.3d at 881; Fisher v. United States, 402 F.3d

1167, 1173 (Fed. Cir. 2005) (noting that the absence of a money-mandating source is

“fatal to the court’s jurisdiction under the Tucker Act”); Price v. United States, 133 Fed.

Cl. 128, 130 (2017); Peoples v. United States, 87 Fed. Cl. 553, 565-66 (2009).

Recently, in Maine Community Health Options v. United States, 140 S. Ct. 1308

(2020), the United States Supreme Court described the test for determining whether a

statute waives sovereign immunity, as follows:

To determine whether a statutory claim falls within the Tucker Act’s

immunity waiver, we typically employ a “fair interpretation” test. A statute

creates a “right capable of grounding a claim within the waiver of sovereign

immunity if, but only if, it ‘can fairly be interpreted as mandating

compensation by the Federal Government for the damage sustained.’”

United States v. White Mountain Apache Tribe, 537 U.S. 475, 472, 123 S.

Ct. 1126, 155 L. Ed. 2d 40 (2003) (quoting Mitchell, 463 U.S. at 217, 103 S.

Ct. 2961); see also Navajo Nation, 556 U.S. at 290, 129 S. Ct. 1547 (“The

other source of law need not explicitly provide that the right or duty it creates

is enforceable through a suit for damages”). Satisfying this rubric is

generally both necessary and sufficient to permit a Tucker Act suit for

damages in the Court of Federal Claims. White Mountain Apache, 537 U.S.

at 472–473, 123 S. Ct. 1126.

Maine Cmty. Health Options v. United States, 140 S. Ct. at 1328 (emphasis in original;

footnote omitted).

When deciding a case based on a lack of subject-matter jurisdiction or for failure

to state a claim, this court must assume that all undisputed facts alleged in the complaint

are true and must draw all reasonable inferences in the non-movant’s favor. See Erickson

v. Pardus, 551 U.S. at 94 (“[W]hen ruling on a defendant’s motion to dismiss, a judge

must accept as true all of the factual allegations contained in the complaint.” (citing Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (citing Swierkiewicz v. Sorema N. A.,

534 U.S. 506, 508 n.1 (2002)))); see also Frankel v. United States, 842 F.3d 1246, 1249

(Fed. Cir. 2016) (“In deciding a motion to dismiss, a court is required to accept as true all

factual allegations pleaded.” (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009))); Fid. &

Guar. Ins. Underwriters, Inc. v. United States, 805 F.3d 1082, 1084 (Fed. Cir. 2015);

Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011).

“Determination of jurisdiction starts with the complaint, which must be well-pleaded

in that it must state the necessary elements of the plaintiff’s claim, independent of any

defense that may be interposed.” Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir.)

(citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1 (1983)), reh’g

denied (Fed. Cir. 1997); see also Klamath Tribe Claims Comm. v. United States, 97 Fed.

Cl. 203, 208 (2011); Gonzalez-McCaulley Inv. Grp., Inc. v. United States, 93 Fed. Cl. 710,

713 (2010). A plaintiff need only state in the complaint “a short and plain statement of the

grounds for the court’s jurisdiction,” and “a short and plain statement of the claim showing

that the pleader is entitled to relief.” RCFC 8(a)(1), (2) (2018); Fed. R. Civ. P. 8(a)(1), (2)

(2019); see also Ashcroft v. Iqbal, 556 U.S. at 677-78 (citing Bell Atl. Corp. v. Twombly,

550 U.S. at 555-57, 570). To properly state a claim for relief, “[c]onclusory allegations of

law and unwarranted inferences of fact do not suffice to support a claim.” Bradley v.

Chiron Corp., 136 F.3d 1317, 1322 (Fed. Cir. 1998); see also Am. Bankers Ass’n v. United

States, 932 F.3d 1375, 1380 (Fed. Cir. 2019) (“To avoid dismissal under RCFC 12(b)(6),

a plaintiff ‘must allege facts ‘“plausibly suggesting (not merely consistent with)” a showing

of entitlement to relief.’” (quoting Acceptance Ins. Cos., Inc. v. United States, 583 F.3d

849, 853 (Fed. Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 557))); McZeal

v. Sprint Nextel Corp., 501 F.3d 1354, 1363 n.9 (Fed. Cir. 2007) (Dyk, J., concurring in

part, dissenting in part) (quoting C. WRIGHT AND A. MILLER, FEDERAL PRACTICE AND

PROCEDURE § 1286 (3d ed. 2004)); Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981)

(“[C]onclusory allegations unsupported by any factual assertions will not withstand a

motion to dismiss.”), aff’d, 460 U.S. 325 (1983). “A plaintiff’s factual allegations must ‘raise

a right to relief above the speculative level’ and cross ‘the line from conceivable to

plausible.’” Three S Consulting v. United States, 104 Fed. Cl. 510, 523 (2012) (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. at 555), aff’d, 562 F. App’x 964 (Fed. Cir.), reh’g

denied (Fed. Cir. 2014). As stated in Ashcroft v. Iqbal, “[a] pleading that offers ‘labels and

conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ 550

U.S. at 555. Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further

factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. at 555).

The United States Supreme Court has indicated that:

A taxpayer seeking a refund of taxes erroneously or unlawfully assessed or

collected may bring an action against the Government either in United

States district court or in the United States Court of Federal Claims. The

Internal Revenue Code specifies that before doing so, the taxpayer must

comply with the tax refund scheme established in the Code. That scheme

provides that a claim for a refund must be filed with the Internal Revenue

Service (IRS) before suit can be brought, and establishes strict timeframes

for filing such a claim.

United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 4 (2008) (citations omitted).

The statute at 26 U.S.C. 7422(a) (2019) states:

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.

Id.; see also United States v. Dalm, 494 U.S. 596, 609-10, reh’g denied, 495 U.S. 941

(1990); RadioShack Corp. v. United States, 566 F.3d at 1360 (“[I]n the context of tax

refund suits, the [United States Supreme] Court has held that the Court of Federal Claims’

Tucker Act jurisdiction is limited by the Internal Revenue Code, including 26 U.S.C.

§ 7422(a).”); Computervision Corp. v. United States, 445 F.3d 1355, 1363 (Fed. Cir.),

reh’g and reh’g en banc denied, 467 F.3d 1322 (Fed. Cir. 2006), cert. denied, 549 U.S.

1338 (2007); Chi. Milwaukee Corp. v. United States, 40 F.3d 373, 374 (Fed. Cir. 1994)

(stating that section 7422(a) “imposes, as a jurisdictional prerequisite to a refund suit,

filing a refund claim with the IRS that complies with IRS regulations” (citing Burlington N.,

Inc. v. United States, 684 F.2d 866, 868, 231 Ct. Cl. 222 (1982)); Kiselis v. United States,

131 Fed. Cl. 54, 60 (2017) (“To establish jurisdiction, Plaintiff must establish that he filed

an administrative refund claim with the IRS prior to filing suit in this Court.”); Fremuth v.

United States, 129 Fed. Cl. 684, 688 (2016) (“This Court’s exercise of [tax refund]

jurisdiction is subject, however, to several statutory and jurisprudential prerequisites.”);

Smith v. United States, 111 Fed. Cl. 740, 743 (2013) (noting that Congress intended for

26 U.S.C. § 7422(a) to apply broadly); Dumont v. United States, 85 Fed. Cl. 425, 428 (“To

recover under the Tucker Act, a plaintiff must adhere to the requirements of 26 U.S.C.

§ 7422(a), which states that ‘no such suit shall be maintained in any court . . . until a claim

for refund or credit has been duly filed with the Secretary.’” (quoting 26 U.S.C. § 7422(a))),

aff’d, 345 F. App’x 586 (Fed. Cir. 2009). cert. denied, 559 U.S. 1101 (2010); Buser v.

United States, 85 Fed. Cl. 248, 256 (2009).

Regarding the case filed in this court by plaintiff, Mr. Peretz, the statute at 26

U.S.C. § 6511(a) (2018) states that a

claim for credit or refund of an overpayment of any tax imposed by this title

in respect of which tax the taxpayer is required to file a return shall be filed

by the taxpayer 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.

Id. The Treasury Regulation at 26 C.F.R. § 301.6402-3(a)(5) (2019), clarifies:

A properly executed individual, fiduciary, or corporation original income tax

return or an amended return (on 1040X or 1120X if applicable) 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.

Id. The Treasury Regulation further states:

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.

Id.; see also VanCanagan v. United States, 231 F.3d 1349, 1351 (Fed. Cir. 2000) (finding

that “[u]nder Treas. Reg. § 301.6402–3(a), [plaintiff’s] 1989 return, filed in October 1994,

was a ‘claim for credit or refund’ under [26 U.S.C.] § 6511,” and that “since the return was

also the [plaintiff’s] administrative claim for refund, the claim was timely because it was

filed within three years of (actually, on the same date as) the filing of the return”); Kiselis

v. United States, 131 Fed. Cl. at 60; Murdock v. United States, 103 Fed. Cl. 389, 394

(2012) (“The filing of a tax return reporting overpayments constitutes a simultaneous filing

of such a claim.”) (citing 26 C.F.R. § 301.6402-3(a)(5); VanCanagan v. United States,

231 at 1351; Wertz v. United States, 51 Fed. Cl. 443, 446 (2002)).

In the case currently before the court, defendant states that, “for purposes of

defendant’s motion to dismiss, defendant has assumed to be true that, on April 14, 2009,

plaintiff filed with the IRS a Form 1040 for 2005, requesting a refund of $121,288.”

Accordingly, defendant does not argue that plaintiff’s 2005 Form 1040 submitted on April

14, 2009 was untimely under the provisions of 26 U.S.C. § 7422 and § 6511. Defendant

also does not argue that plaintiff’s 2005 Form 1040 submitted on April 14, 2009 was not

sufficient to have operated as plaintiff’s claim for refund of $121,288.00 for the 2005 tax

year. Instead, defendant argues that, according to the statute at 26 U.S.C. § 6532(a),

plaintiff’s current suit for the recovery of a $121,288.00 refund, which suit was filed on

October 26, 2018, was untimely because the suit was brought more than two years after

the first, July 29, 2015 Notice of Disallowance, was sent to plaintiff by certified mail.

Plaintiff does not deny the existence of the July 29, 2015 Notice of Disallowance, but

instead attempts to argue that because the July 29, 2015 Notice of Disallowance only

mentions a claim received on March 9, 2015, and fails to reference his April 14, 2009

submission of his 2005 Form 1040, the July 29, 2015 Notice of Disallowance did not

pertain to plaintiff’s April 14, 2009 submission, and, thus, the July 29, 2015 Notice of

Disallowance did not trigger the statute of limitations in 26 U.S.C. § 6532(a)(1). Plaintiff

further argues that the statute of limitations only began to run after the issuance of the

second, December 2, 2019 Notice of Disallowance, which, according to plaintiff, is the

first and only Notice of Disallowance to pertain to plaintiff’s April 14, 2009 tax return

submission.

The Effect of the July 29, 2015 Notice of Disallowance

The statute at 26 U.S.C. § 6532(a)(1) states:

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

revenue tax, penalty, or other sum, shall be begun before the expiration of

6 months from the date of filing the claim required under such section unless

the Secretary renders a decision thereon within that time, 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 the disallowance of the

part of the claim to which the suit or proceeding relates.

Id.

Judges of the United States Court of Appeals for the Federal Circuit and the United

States Court of Federal Claims have traditionally found that complying with 26 U.S.C.

§ 6532 is a jurisdictional pre-requisite to filing suit in the United States Court of Federal

Claims. See RHI Holdings, Inc. v. United States, 142 F.3d 1459, 1460 (Fed. Cir. 1998)

(stating that “[j]urisdiction does not exist in the Court of Federal Claims over the claim

because it is barred by the applicable statute of limitations” in 26 U.S.C. § 6532, and

remanding the case “with instructions to dismiss the case for lack of jurisdiction.”);

Bowerman v. United States, 142 Fed. Cl. 794, 801 (2019) (“[I]f the IRS disallows the

taxpayer’s administrative refund request, the taxpayer must file suit within two years of

the date that the IRS mailed the taxpayer the notice of that disallowance; otherwise, the

court will lack jurisdiction.” (citing Harper Int’l Corp. v. United States, 120 Fed. Cl. 66, 72–

73 (2015) (plaintiff lacked subject-matter jurisdiction after failing to file refund suit within

two years of the notice of disallowance)); see also Ishler v. United States, 115 Fed. Cl.

530, 534–35 (2014) (“Before filing a refund suit in this court, however, a taxpayer must

satisfy certain jurisdictional prerequisites.”); Brach v. United States, 98 Fed. Cl. 60, 67–

68, aff’d on other grounds, 443 F. App’x 543 (Fed Cir. 2011).

The court, however, is also aware of the recent decision by the United States Court

of Appeals for the Federal Circuit in Walby v. United States, 957 F.3d 1295 (Fed. Cir.

2020). The plaintiff in Walby did not file her administrative claim for refund for the 2014

tax year in a timely fashion, in violation of 26 U.S.C. §§ 7422(a) and 6511(a). See Walby

v. United States, 957 F.3d at 1298. The lower court, the United States Court of Federal

Claims, had dismissed Ms. Walby’s 2014 refund suit, finding that her failure to comply

with 26 U.S.C. §§ 7422(a) and 6511(a) resulted in a lack of subject-matter jurisdiction

pursuant to RCFC 12(b)(1). See Walby v. United States, 144 Fed. Cl. 1, 11 (2019), aff’d,

957 F.3d 1295 (Fed. Cir. 2020). The Federal Circuit affirmed, but stated, albeit in dicta,

that “although the Claims Court properly dismissed Walby’s 2014 refund claim because

she did not meet the prerequisite for bringing such a claim, we think that, under Lexmark,

Arbaugh, and their progeny, the court likely did not lack subject matter jurisdiction over

this claim.” Walby v. United States, 957 F.3d at 1301. The Federal Circuit in Walby further

explained that, although “under our [the Federal Circuit’s] existing case law,” it is “correct”

to treat the failure to timely file an “administrative refund claim . . . pursuant to 26 U.S.C.

§ 7422(a)” as a lack of subject matter jurisdiction, “it may be time to reexamine that case

law in light of the Supreme Court’s clarification that so-called ‘statutory standing

defects’—i.e., whether a party can sue under a given statute—do not implicate a court’s

subject matter jurisdiction.” Walby v. United States, 957 F.3d at 1299 (quoting Lexmark

Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 n.4 (2014)). The Federal

Circuit in Walby also stated that “[i]n view of the Supreme Court’s guidance in Lexmark,

it may be improper to continue to refer to the administrative exhaustion requirements of

§ 7422(a) and § 6511 as ‘jurisdictional pre-requisites.’” See Walby v. United Sates, 957

F.3d at 1300.

In reaching the above conclusion, the Federal Circuit in Walby also relied on

Arbaugh v. Y&H Corp., 546 U.S. 500 (2006), in which the United States Supreme Court

stated, when discussing United States v. Kwai Fun Wong, 575 U.S. 402 (2015):

“If the Legislature clearly states that a threshold limitation on a statute’s

scope shall count as jurisdictional, then courts and litigants will be duly

instructed and will not be left to wrestle with the issue. But when Congress

does not rank a statutory limitation on coverage as jurisdictional, courts

should treat the restriction as nonjurisdictional in character.”

Walby v. United States, 957 F.3d at 1300 (quoting Arbaugh v. Y&H Corp., 546 at 515–

16). The Federal Circuit in Walby further stated that “[t]his ‘clear statement’ rule ‘does not

mean Congress must incant magic words. But traditional tools of statutory construction

must plainly show that Congress imbued a procedural bar with jurisdictional

consequences.’” Walby v. United States, 957 F.3d at 1300 (quoting United States v. Kwai

Fun Wong, 575 U.S. at 410 (internal quotation marks omitted)). The Federal Circuit in

Walby found that there was “no such clear statement apparent in the statutes at issue” in

Walby, 26 U.S.C. §§ 7422(a) and 6511(a). See Walby v. United States, 957 F.3d at 1300.

Therefore, although not explicitly stated by the Federal Circuit in Walby, it appears that

the failure to meet the prerequisites of 26 U.S.C. §§ 7422(a) and 6511(a), instead, might

have been subject to a dismissal as a failure to state a claim upon which relief can be

granted, pursuant to RCFC 12(b)(6). The case was affirmed, and not remanded, “because

‘nothing in the analysis of the court [] below turned on the mistake, a remand would only

require a new Rule 12(b)(6) label for the same Rule 12(b)(1) conclusion.’” See Walby v.

United States, 957 F.3d at 1301 n.4 (alteration in original) (quoting Morrison v. Nat’l

Australia Bank Ltd., 561 U.S. 247, 254 (2010)).

Although the Walby case did not involve the statute of limitations set forth in 26

U.S.C. § 6532, which is the statute at the center of the issue in the above-captioned case,

this court finds that the same reasoning could apply to 26 U.S.C. § 6532 in the future.

See Walby v. United States, 957 F.3d at 1300 (“The Supreme Court has ‘made plain that

most time bars are nonjurisdictional.’” (quoting United States v. Kwai Fun Wong, 575 U.S.

at 410)). Indeed, 26 U.S.C. § 6532 contains “no such clear statement” that jurisdiction

should be removed from this court in the event of a plaintiff’s failure to comply, and, similar

to the requirements of 26 U.S.C. § 7422 and § 6511, the statute of limitations in § 6532

is a threshold requirement. See Walby v. United States, 957 F.3d at 1300.

As discussed above, defendant in the above-captioned case argues that plaintiff’s

instant suit for the recovery of plaintiff’s 2005 refund is untimely, pursuant to 26 U.S.C.

§ 6532, because plaintiff’s instant suit was not filed within two years of the IRS’ issuance

of the July 29, 2015 Notice of Disallowance, which the IRS sent to plaintiff by certified

mail. Plaintiff does not deny the existence of the July 29, 2015 Notice of Disallowance,

but instead attempts to argue that because the July 29, 2015 Notice of Disallowance only

mentions a “claim(s) received” on March 9, 2015, and fails to mention plaintiff’s alleged

April 14, 2009 submission of his 2005 Form 1040, the July 29, 2015 Notice of

Disallowance did not pertain to plaintiff’s April 14, 2009 submission to the IRS, and, thus,

did not trigger the statute of limitations in 26 U.S.C. § 6532(a)(1) for filing in this court

within two years of the Notice of Disallowance.

Although the 2005 Form 1040 attached to plaintiff’s complaint is not date-stamped

by the IRS, the plaintiff argues that his April 14, 2009 filing was his initial filing, and the

defendant accepts, for the purposes of the motion to dismiss, that the IRS received

plaintiff’s 2005 Form 1040 on April 14, 2009, which included a claim for a $121,288.00

tax refund for the 2005 tax year. Defendant also accepts, for the purposes of the motion

to dismiss, that the 2005 Form 1040 attached to plaintiff’s complaint is a copy of plaintiff’s

initial filing of his 2005 Form 1040 that plaintiff states was received by the IRS on April

14, 2009.15 The 2005 Form 1040 attached to plaintiff’s complaint claims an overpayment

in the amount of $121,288.00, and requests the full amount as a refund. Part of the

confusion stems from the fact that the July 29, 2015 Notice of Disallowance issued by the

IRS on July 29, 2015 does not refer to a claim received on April 14, 2009, but instead

As discussed above, the record before the court on the current motion to dismiss

supports that the IRS received a version of plaintiff’s 2005 Form 1040 on April 14, 2009.

In an October 1, 2009 letter to plaintiff, the IRS referred to a submission of plaintiff’s 2005

Form 1040 tax return which plaintiff “submitted with your ITIN application.” Plaintiff’s Form

W-7 ITIN application was initially submitted on April 14, 2009, as indicated by the IRS

date-stamp on the Form W-7. Second, a letter from the IRS to plaintiff, dated December

23, 2009, states that the IRS contemplated assessing a $5,000.00 penalty because the

IRS had “determined that the information you filed as a return of tax, or purported return

of tax, on Apr. 14, 2009, is frivolous and there is no basis in the law for your position.” It

is less clear, however, whether the 2005 Form 1040 submitted with plaintiff’s complaint

is the version of the 2005 Form 1040 submitted on April 14, 2009 because, with the

exception of the 2005 Form 1040s which plaintiff sent the IRS after this case commenced,

the IRS did not produce from IRS files a version of plaintiff’s 2005 Form 1040 which is

identical to the one submitted with plaintiff’s complaint. The IRS did produce one version

which is all but identical to the version submitted with plaintiff’s complaint, except that it

is unsigned by plaintiff. This latter version does not contain a date-stamp of receipt from

the IRS.

refers to a “claim(s) received” by the IRS on March 9, 2015. The March 9, 2015 IRS date-

stamp receipt, however, appears on the letter submitted by plaintiff’s representative, Mr.

Abraham Dan, which letter referred to and enclosed a copy of plaintiff’s 2005 tax return

claiming $121,288.00 as a refund. Based on the explanation for the disallowance

provided by the IRS in the July 29, 2015 Notice of Disallowance,16 the IRS may not have

considered that plaintiff appears to have filed a timely return operating which operated as

a claim for refund on April 14, 2009. The IRS July 29, 2015 Notice of Disallowance,

however, does specifically reference: “Amount of Claim: $121,288.00,” for the “Tax

period: Dec. 31, 2005.” Plaintiff’s complaint in the case currently before this court also

seeks the exact amount of refund claimed owed to plaintiff for the 2005 tax year,

$121,288.00 (plus interest). As indicated in plaintiff’s complaint, plaintiff requests

[t]his Honorable Court should direct Defendant to return the $121,288

deposited with the IRS and misappropriated by the Defendant as of

December 27, 2005, plus 9% pre and post judgment interest compounded

annually as is applicable in New York State on a judgment for conversion,

plus costs and attorney fees.

Plaintiff’s case in this court appears identical to the claim which was disallowed by

the IRS in its July 29, 2015 Notice of Disallowance. Plaintiff’s complaint, therefore, should

be governed by 26 U.S.C. § 6532(a)(1), which, as noted above, states:

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

revenue tax, penalty, or other sum, shall be begun before the expiration of

6 months from the date of filing the claim required under such section unless

the Secretary renders a decision thereon within that time, 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 the disallowance of the

part of the claim to which the suit or proceeding relates.

26 U.S.C. § 6532(a)(1). The statute at 26 U.S.C. § 6532(a) does not allow for an “implied

equitable exception” to the time limits on which plaintiff could try to rely. See RHI Holdings,

The July 29, 2015 Notice of Disallowance, which states: “Date of claim(s) received:

Mar. 09, 2015,” provides the following reason for disallowance: