Biestek v. United States

In the United States Court of Federal Claims

No. 09-33301

(Filed: December 28, 2022)1

NOT FOR PUBLICATION

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

JAMES H. BIESTEK, *

*

Plaintiff, *

RCFC 12(b)(1); Lack of Subject-

*

Matter Jurisdiction; Federal Insurance

v. *

Contributions Act (“FICA”); Tax

*

Refund Claim; Statute of Limitations;

THE UNITED STATES, *

I.R.C. § 6511; Pro Se.

*

Defendant. *

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

James H. Biestek, Tucson, AZ, pro se.

Emily Van Dam, U.S. Department of Justice, Tax Division, Washington, DC, counsel for

Defendant.

MEMORANDUM OPINION AND ORDER

DIETZ, Judge.

James Biestek, a retired United Airlines pilot proceeding pro se, seeks a refund of

$865.27 in Federal Insurance Contributions Act (“FICA”) tax paid at the time of his retirement

based on the estimated value of his non-qualified deferred compensation benefits. The

government moves to dismiss his complaint for lack of subject-matter jurisdiction pursuant to

Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (“RCFC”). Because the

Court finds that Mr. Biestek did not timely file his tax refund claim with the Internal Revenue

Service (“IRS”) pursuant to section 6511 of the Internal Revenue Code (“I.R.C.”), the Court

lacks jurisdiction to hear his complaint. Accordingly, the government’s motion to dismiss is

GRANTED.

I. BACKGROUND

A FICA tax is “imposed on the income of every individual” by the United States

government, and it is used by the government to fund federal benefits, such as Social Security

and Hospital Insurance (“HI”). See I.R.C. § 3101; 26 C.F.R. § 31.3121(a)-2. Although the FICA

tax is generally paid when the employee receives his wages, wages under a nonqualified deferred

1

To promote clarity and transparency, the Court also filed this Memorandum Opinion and Order in Koopmann, et

al. v. United States, 09-3333.

compensation plan—such as Mr. Biestek’s—are subject to a “special timing rule[.]” See 26

U.S.C. § 3121(a); 26 C.F.R. § 31.3121(v)(2)-1; Balestra v. United States, 803 F.3d 1363, 1366

(Fed. Cir. 2015). Under the special timing rule, the FICA tax on wages deferred under a non-

qualified deferred compensation plan is paid on “[t]he date on which services creating the right

to the amount deferred are performed” or “[t]he date on which the right to the amount deferred is

no longer subject to a substantial risk of forfeiture[,]” whichever is latest. 26 U.S.C. §

3121(v)(2)(a)(ii). Furthermore, for a nonaccount balance plan—the type of nonqualified deferred

compensation plan held by Mr. Biestek—the FICA tax is not required to be paid until “the first

date on which all the amount deferred is reasonably ascertainable (the resolution date).”

26 C.F.R. § 31.3121(v)(2)-1(e)(4)(i)(A). A deferred amount is “considered reasonably

ascertainable on the first date on which the amount, form, and commencement date of the benefit

payments attributable to the amount deferred are known[.]” Id. § 31.3121(v)(2)-1(e)(4)(i)(B).

The deferred amount is taxed at “present value,” which is computed with reference to actuarial

projections for life expectancy and a discount rate which accounts for the time value of money

but does not account for the risk of employer default. See 26 C.F.R. § 31.3121(v)(2)-1(c)(2)(ii);

Koopman v. United States, 150 Fed. Cl. 299, 302 (2020) (citing Balestra, 803 F.3d at 1371).

Mr. Biestek retired from United Airlines on March 1, 1998. See [ECF 3] at 2. At the time

of his retirement, Mr. Biestek’s non-qualified deferred compensation benefits were estimated to

be valued at $187,316.71, with a FICA tax assessment of $4,027.38. Id. at 4. Pursuant to the

special timing rule, United Airlines paid the FICA tax on Mr. Biestek’s behalf in 1998, the year

he retired. Id. However, United Airlines subsequently filed for bankruptcy, and Mr. Biestek’s

non-qualified compensation benefits were terminated on September 1, 2005.2 Id. at 2.

Consequently, Mr. Biestek did not receive $59,673.79 of the estimated benefits that he expected

to receive under the plan. Id. On December 12, 2007, United Airlines informed Mr. Biestek that

it would not pursue a refund of the FICA tax paid on the deferred benefits that he did not receive

and advised Mr. Biestek to file an individual claim with the IRS if he believed that he was

entitled to a refund. Id. at 3. Shortly thereafter, on December 21, 2007, Mr. Biestek filed a refund

claim of $865.27 with the IRS for the HI portion of the FICA tax that “was prepaid on

$59,673.79 of benefits [he] will never receive.” Id. at 1-2.

Mr. Biestek is one of a larger group of retired United Airlines pilots seeking a refund of

FICA taxes. Another retired United Airlines pilot, William Koopmann, filed a case in this Court

on May 26, 2009, in which he similarly sought a refund of the HI portion of the FICA tax paid in

connection with his non-qualified deferred compensation benefits.3 See Compl., Koopmann, et

al. v. United States, No. 09-333 [ECF 1]. In his complaint, Mr. Koopmann sought to include over

160 other retired United Airlines pilots as plaintiffs, including Mr. Biestek. Id. at 1-2. The Court

allowed each retired pilot, including Mr. Biestek, to join the Koopmann case as an individual

plaintiff. See May 26, 2010 Order, Koopmann, et al. v. United States, No. 09-333 [ECF 62].

2

The United States Court of Appeals for the Seventh Circuit approved United Airlines reorganization following its

bankruptcy in 2006. See In re UAL Corp., 468 F.3d 444 (7th Cir. 2006).

3

This case was reassigned to the undersigned on January 12, 2021. See Order, Koopmann, et al. v. United States,

No. 09-333 [ECF 393].

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In an opinion issued on September 30, 2020, this Court dismissed Mr. Koopmann’s

complaint for lack of subject matter jurisdiction because the Court found that his tax refund

claim was not timely filed with the IRS and thus his complaint was time-barred by § 6511.

Koopmann, 150 Fed. Cl. at 304. Mr. Koopmann appealed, and the Federal Circuit affirmed the

dismissal of his complaint. Koopmann v. United States, No. 2021-1329, 2022 WL 1073340 (Fed.

Cir. 2022).4

Despite the dismissal of Mr. Koopmann’s complaint, many of the other retired pilots who

joined the Koopmann case remained active in the litigation and continued to prosecute their

complaints. To ensure that each plaintiff provided the necessary information to support their

individual tax refund claim in this Court pursuant to RCFC 9(m), the Court required each

individual plaintiff to file a short form complaint, see Jan. 12, 2021 Order, Koopmann, et al. v.

United States, No. 09-333 [ECF 391] at 12-13. Mr. Biestek filed his short form complaint on

February 24, 2021. See Biestek Short Form Compl., Koopmann, et al. v. United States, No. 09-

333 [ECF 452]. Mr. Biestek later supplemented his short form complaint with additional

documentation. See [ECF 3].

For case management purposes, the Court used the information contained in the short

form complaints to organize the remaining individual plaintiffs into nine groups based upon

retirement year and to sever each group into a separate case. See Order, Koopmann, et al. v.

United States, 09-333 [ECF 565]. As the only plaintiff to have retired in 1998, Mr. Biestek is the

only plaintiff assigned to the instant case. See id. at 3. On July 7, 2022, the government moved to

dismiss Mr. Biestek’s case for lack of subject-matter jurisdiction pursuant to RCFC 12(b)(1).

Def.’s Mot. to Dismiss [ECF 7]. Mr. Biestek filed a response on September 9, 2022, and the

government replied on September 20, 2022. [ECFs 9, 10]. The Court has reviewed the briefing

and determined that oral argument is not necessary to reach a decision.

II. LEGAL STANDARDS

A motion to dismiss for lack of subject-matter jurisdiction challenges the court’s “general

power to adjudicate in specific areas of substantive law[.]” Palmer v. United States, 168 F.3d

1310, 1313 (Fed. Cir. 1999); see also RCFC 12(b)(1). When considering a motion to dismiss for

lack of jurisdiction, the Court “must accept as true all undisputed facts asserted in the plaintiff’s

complaint and draw all reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc.

v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011). If a motion to dismiss for lack of subject-

matter jurisdiction challenges the truth of the jurisdictional facts alleged, the Court may consider

relevant evidence outside the complaint when resolving the dispute. See Reynolds v. Army & Air

Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988); Engage Learning v. Salazar, 660 F.3d

1346, 1355 (Fed. Cir. 2011). A plaintiff has the burden to establish jurisdiction by a

preponderance of the evidence. Brandt v. United States, 710 F.3d 1369, 1373 (Fed. Cir. 2013).

The Court liberally construes pleadings from pro se plaintiffs. See Ottah v. Fiat Chrysler,

884 F.3d 1135, 1141 (Fed. Cir. 2018). The leniency afforded to pro se plaintiffs, however, does

4

This Court also dismissed another plaintiff, William Brashear, on the same grounds and same day as Mr.

Koopmann. See Koopmann v. United States, 150 Fed. Cl. 290, 299 (2020). Mr. Brashear’s dismissal was also upheld

by the Federal Circuit in Koopmann. See 2022 WL 1073340, at *7.

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not give the court “discretion to bend . . . [or] take a liberal view of jurisdictional requirements

for pro se litigants[.]” Stanley v. United States, 107 Fed. Cl. 94, 98 (2012). Pro se plaintiffs must

still establish the court’s jurisdiction by a preponderance of the evidence. See Spengler v. United

States, 688 F. App’x 917, 920 (Fed. Cir. 2017); see also Kelley v. Sec’y, U.S. Dep’t of Labor,

812 F.2d 1378, 1380 (Fed. Cir. 1987) (“[W]here the question is the calculation of the time

limitations placed on the consent of the United States to suit, a court may not [] take a liberal

view of that jurisdictional requirement and set a different rule for pro se litigants.”).

III. DISCUSSION

The government asserts that this Court lacks jurisdiction over Mr. Biestek’s complaint

because “the administrative claim[] filed by [Mr. Biestek] [was] untimely, and his refund claim

in this suit is barred by I.R.C. § 6511.” [ECF 7] at 1. This Court possesses jurisdiction over

claims for tax refunds provided that the plaintiff meets certain jurisdictional requirements. See 28

U.S.C. § 1346(a)(1); I.R.C. § 7422(a); United States v. Clintwood Elkhorn Mining Co., 553 U.S.

1, 4, 14 (2008). One of those requirements is that the plaintiff must timely file a refund claim

with the Secretary of the Treasury before proceeding with a refund suit in this Court. See I.R.C. §

7422(a); Sun Chem. Corp. v. United States, 698 F.2d 1203, 1206 (Fed. Cir. 1983) (“[I]t is a well-

established rule that a timely, sufficient claim for refund is a jurisdictional prerequisite to a

refund suit”); see also Greene v. United States, 191 F.3d 1341, 1343 (Fed. Cir. 1999). Under §

6511, a federal tax refund claim must 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[.]” Additionally, when calculating the time limitations for a FICA tax refund claim, the

following must be taken into consideration:

(1) If a return for any period ending with or within a calendar

year is filed before April 15 of the succeeding calendar year,

such return shall be considered filed on April 15 of such

succeeding calendar year; and

(2) If a tax with respect to remuneration or other amount paid

during any period ending with or within a calendar year is

paid before April 15 of the succeeding calendar year, such

tax shall be considered paid on April 15 of such succeeding

calendar year.

I.R.C. § 6513(c). Failure to file a refund claim within the requisite period deprives this Court of

jurisdiction to hear the case. See Clintwood, 553 U.S. at 4.

Following Mr. Biestek’s retirement on March 1, 1998, United Airlines paid the

applicable FICA tax on his non-qualified deferred compensation benefits. [ECF 3] at 4.

According to IRS transcripts,5 United Airlines filed its quarterly returns for the year 1998 on

5

Mr. Biestek argues that the IRS transcripts provided by the government show only that United Airlines “filed FICA

tax returns regularly,” not that United Airlines filed a FICA tax return specifically on his behalf. Pl.’s Resp. to Def.’s

Mot. to Dismiss [ECF 9] at 3. This argument is meritless. Mr. Biestek never argues that United Airlines failed to

report his wages on its quarterly tax returns or to make payment of the FICA taxes attributable to his wages.

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June 8, 1998, September 7, 1998, December 14, 1998, and March 22, 1999. See [ECF 7-1].

Because all of the returns for the 1998 tax year were filed before April 15, 1999, these returns are

considered filed as of April 15, 1999. See I.R.C. § 6513(c)(1). IRS transcripts also demonstrate

that United Airlines made the applicable tax deposits by no later than May 30, 2000. See [ECF 7-

1] at 7. Under these circumstances, Mr. Biestek was required by § 6511 to file his refund claim

with the IRS by May 30, 2002—which is the later date of three years from the time that United

Airlines filed the return and two years from the time when United Airlines paid the tax. See §

6511. Mr. Biestek did not file his tax refund claim until December 21, 2007. See [ECF 3] at 1.

Because Mr. Biestek’s tax refund claim was not timely filed as required by § 6511, the Court

lacks jurisdiction to consider his tax refund suit. The Court reaches this conclusion despite Mr.

Biestek’s various arguments that § 6511’s time limitations do not bar his tax refund suit. As

demonstrated below, the Federal Circuit has previously rejected similar arguments under similar

circumstances. See Koopmann, 2022 WL 1073340.6

First, Mr. Biestek argues that the time limitations of § 6511 are inapplicable to his tax

refund suit. He argues, “[b]ecause the statute clearly limits only one taxpayer and the employer is

the only one taxpayer required to file FICA tax returns, the statute cannot limit the rights of

taxpayers who are not required to file the tax return.” Pl.’s Resp. to Def.’s Mot. to Dismiss [ECF

9] at 4. The Federal Circuit rejected this argument in Koopmann stating that “irrespective of who

actually sent the money for FICA taxes to the IRS and filed the returns reporting the payment of

the FICA taxes . . . [Plaintiffs’] refund claims for those FICA taxes are not exempted from the

time limitations of I.R.C. § 6511(a).” Koopmann, 2022 WL 1073340, at *5; see also RadioShack

Corp. v. United States, 566 F.3d 1358, 1363 (Fed. Cir. 2009) (finding that “the ambiguity of §

6511(a) is best resolved by imposing that section’s time limitations on all taxes and all

taxpayers.”) (emphasis in original).

Next, Mr. Biestek argues that § 6511’s time limitations should separately apply to each

individual tax year for which the benefits are received. See [ECF 9] at 9 (“If a statute considers

multiple years’ unfunded benefits, the time statute governing refunds must apply to each year’s

taxes, separately, or the taxpayer’s property is confiscated without due process of law.”). The

Federal Circuit similarly rejected this argument as “fundamentally at odds with the plain

language of I.R.C. § 6511(a), which sets forth two possible time limitations, neither of which is

based on the date on which the compensation is paid to the taxpayer.” Koopmann, 2022 WL

1073340, at *6. In rejecting this argument, the Federal Circuit also noted that “Congress could

have enacted a statute that contained a deadline for filing a refund claim that is counted

beginning from when compensation is received[,]” however, “Congress did not enact such a

statute, and it is not within the province of the courts to rewrite Congress’s clearly worded

statutes.” Id. (citing Newport News Shipbuilding & Dry Dock Co. v. Garrett, 6 F.3d 1537, 1558

(Fed. Cir. 1993)).

Furthermore, the documentation provided by Mr. Biestek clearly shows that United Airlines paid the FICA taxes on

his behalf at the time of his retirement as required by IRS regulations. [ECF 3] at 3-4.

6

Although Koopmann is unpublished and not strictly binding upon this Court, this case is highly persuasive because

the Federal Circuit ruled on the timeliness of refund claims by individual plaintiffs who were a part of the same case

that Mr. Biestek joined. See RhinoCorps Co. v. United States, 87 Fed. Cl. 261, 279 (2009) (stating that while an

unpublished Federal Circuit opinion is not binding on this Court, “the Federal Circuit has indicated its view.”).

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Finally, Mr. Biestek contends that applying § 6511 to his tax refund suit violates his Due

Process rights because it “deprives him of a reasonable opportunity to start a lawsuit.” [ECF 9] at

9 (emphasis omitted). However, the Federal Circuit soundly rejected arguments based upon the

unfairness of the application of § 6511’s time limitations. Koopmann, 2022 WL 1073340, at *6-

7. The Federal Circuit stated that “the Supreme Court has made clear that equitable

considerations do not override Congress’s judgment as to the time limitations for filing a tax

refund claim.” Id. at *6 (citing United States v. Dalm, 494 U.S. 596, 610 (1990)). The Federal

Circuit further highlighted that “our precedent demonstrates that particular equitable doctrines

are inapplicable to the time limitations in I.R.C. § 6511(a)” and that “there is no discovery rule

with respect to the deadlines in I.R.C. § 6511(a)[.]” Id. at *7 (citing Lovett v. United States, 81

F.3d 143, 145 (Fed. Cir. 1996)).7

IV. CONCLUSION

For the reasons stated above, the government’s motion to dismiss is GRANTED. Mr.

Biestek’s complaint is DISMISSED. The Clerk is DIRECTED to enter judgment accordingly.

IT IS SO ORDERED.

s/ Thompson M. Dietz

THOMPSON M. DIETZ, Judge

7

Mr. Biestek makes two additional arguments that are unavailing. Mr. Biestek challenges the constitutionality of the

special timing rule by arguing that “taxing rights to income, and not income received, violated his constitutional

rights.” [ECF 9] at 2. This argument fails because the Federal Circuit has previously upheld application of the

special timing rule to require payment of FICA tax on benefits under a non-qualified deferred compensation plan at

the time of retirement before the benefits are received. See Balestra, 803 F.3d at 1373 (Fed. Cir. 2015). Mr. Biestek

also argues that IRS officials violated a criminal statute, 18 U.S.C. § 241, because they “used their powers to

willfully conspire to deprive UAL retired pilots of their rights and privileges protected by the U.S. Constitution[.]”

[ECF 9] at 12-13. The Court cannot consider this argument because it lacks jurisdiction over criminal matters. See

Joshua v. United States, 17 F.3d 378, 379 (Fed. Cir. 1994); Jones v. United States, 440 F. App’x 916, 918 (Fed. Cir.

2011); Adams v. United States, No. 07–809 C, 2008 WL 4725452, at *2 (Fed. Cl. July 16, 2008) (“This court does

not have jurisdiction over criminal proceedings, including those arising under Sections 241 and 242.”).

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