AMENDED RETURN DIDN'T START 'NEW' LIMITATIONS PERIOD.

            IN THE UNITED STATES COURT OF FEDERAL CLAIMS

HORN, J.

FINDINGS OF FACT

[1] Victor J. and Judy C. Chaney have brought an action concerning the correct classification of certain business expenses for the 1991, 1993, and 1994 tax years. In 1991, plaintiff Victor J. Chaney sold insurance for the State Farm Insurance Company and reported income and expenses from the sales on Schedule C of his 1991 United States Federal income tax return. Plaintiffs timely filed a joint United States individual income tax return for 1991 and paid a $9,167.00 tax on April 6, 1992.

[2] In November 1993, according to the plaintiffs, an Internal Revenue Service (IRS) appeals officer in the Ogden, Utah office, Pamela Pringle, ¹ advised the plaintiffs to amend the income and expense Schedule C of their 1991, 1993 and 1994 tax returns to a Schedule A income and expense report. The plaintiffs argue that they accepted the suggestion of the appeals officer and promptly filed an amended return for the 1991 tax year on November 16, 1993, reporting the income and expenses on Schedule A, and paying an additional tax of $5,127.00 and interest of $561.00. ² On May 24, 1994, plaintiffs paid additional interest of $69.84 on the revised 1991 return. ³

[3] In late 1995, according to the plaintiffs, the same Ogden, Utah, appeals officer, Pamela Pringle, contacted the plaintiffs, advising them to amend their 1991 tax return again. Allegedly, Ms. Pringle suggested that the plaintiffs should change the Schedule A income and expenses back to Schedule C. Upon receiving this recommendation, plaintiffs contacted an IRS appeals officer in San Francisco, Joseph L. Martucci, for a second opinion. The plaintiff, Victor Chaney, previously had met Mr. Martucci at a social golf outing. According to the plaintiffs, Mr. Martucci indicated that they had until November 1996 to file an amended 1991 return because of the date of the first amended return, was filed in November 1993. A sworn statement by Mr. Martucci, offered by the defendant, maintains that he recalled receiving one or two phone calls from the plaintiff Victor Chaney and one call from Judy Chaney, in which he responded generally to their questions, but could not recall the questions or the answers. However, Mr. Martucci further stated he would not have given the plaintiffs definitive statements concerning their tax situation, especially a statute of limitations question, because he had never reviewed the Chaneys' tax returns, either officially or unofficially.

[4] The plaintiffs amended their tax return once again and claimed a refund on overpaid taxes of $5,127.00. The amended return was received by the IRS on January 12, 1996. The plaintiffs maintain that they relied on San Francisco appeals officer Martucci's statements to them that the statute of limitations for the 1991 tax year did not apply because they had amended the 1991 return in November of 1993. In a letter dated March 18, 1996, the IRS denied the plaintiffs' requested refund of $5,127.00 in taxes paid on November 16, 1993. The IRS denied plaintiffs' claim and concluded that based on 26 U.S.C. section 6511(a) (1994) ⁴ the statute of limitations already had expired when the plaintiffs filed their request for a refund on January 12, 1996 for the 1991 tax year because the plaintiffs had not filed their refund claim within three years of the initial tax filing on April 6, 1992, for the 1991 tax period. Additionally, the filing of the refund claim with the IRS occurred more then two years after the November 16, 1993, payment of the tax on which plaintiffs claim a refund. Plaintiffs, therefore, filed a pro se complaint in this court, to which the defendant ultimately responded.

DISCUSSION

[5] The court considers defendant's motion to dismiss in part pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC), for lack of subject matter jurisdiction. The defendant contends that this court does not have jurisdiction to consider plaintiffs' tax refund claim because the plaintiffs filed their tax return for tax year 1991 on April 6, 1992, commencing the time from which to calculate the applicable three-year statute of limitations pursuant to I.R.C. section 6511(a) (1994). Thus, according to the defendant, the three-year statute of limitations ended in April 1995, barring the refund claim filed on January 12, 1996. Also, according to the defendant, Victor and Judy Chaney filed their amended return with the tax payment on November 16, 1993, thus commencing the running of the applicable two-year statute of limitations on taxes paid, pursuant to I.R.C. section 6511(a), which ended on November 16, 1995. Their payment of $69.84 in additional interest did not alter that date. Therefore, the defendant argues that the two-year statute of limitations also expired before plaintiffs filed their claim with the IRS on January 12, 1996, when they once again amended their return to a Schedule C filing.

[6] Plaintiffs argue that the three-year statute of limitations which governs civil actions for overpayment of taxes does not bar recovery with respect to their January 12, 1996 refund suit for the 1991 tax year. Plaintiffs assert that their amended 1991 tax return, dated November 16, 1993, began anew the three-year statute of limitations. Alternatively, the plaintiffs assert that because of their reliance on Ms. Pringle's and Mr. Martucci's advice to amend their tax return, the IRS should be estopped from denying their refund claim. The plaintiffs offer the alleged statement to them by appeals officer Mr. Martucci as supportive of their argument. The plaintiffs argue that Mr. Martucci assured them that the refund claim would be timely up to November 16, 1996, ten months after the Chaneys filed their refund claim.

[7] The defendant has filed its motion to dismiss pursuant to RCFC 12(b)(1) of the United States Court of Federal Claims for lack of subject matter jurisdiction. Subject matter jurisdiction may be challenged at any time by the parties, by the court sua sponte, or on appeal. Booth v. United States, 990 F.2d 617, 620 (Fed. Cir. 1993); United States v. Newport News Shipbuilding & Dry Dock Co., 933 F.2d 996, 998 n.1 (Fed. Cir. 1991).

[8] Once jurisdiction is challenged by the court or the opposing party, the plaintiff bears the burden of establishing jurisdiction. McNutt v. General Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936). A plaintiff must establish jurisdiction by a preponderance of the evidence. Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988); Alaska v. United States, 32 Fed. Cl. 689, 695 (1995), appeal dismissed, 86 F.3d 1178 (Fed. Cir. 1996). When construing the pleadings pursuant to a motion to dismiss, the court should not grant the motion "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Son Broadcasting, Inc. v. United States, 42 Fed. Cl. 532, 537 (1998) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted)).

[9] Pursuant to RCFC 8(a)(1) and Federal Rule of Civil Procedure 8(a)(1), a plaintiff need only state in the complaint "a short and plain statement of the grounds upon which the court's jurisdiction depends." However, "[d]etermination 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. 1997). The pleadings of pro se plaintiffs can be held to less stringent standards than formal pleadings drafted by lawyers. Boyle v. United States, 44 Fed. Cl. 60, 61 (1999) (citing Haines v. Kerner, 404 U.S. 519, 520-21, (1972)). Nonetheless, "conclusory allegations unsupported by any factual assertions will not withstand a motion to dismiss." Brisco v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981), affd, 460 U.S. 325 (1983).

[10] When deciding on a motion to dismiss based on either lack of subject matter jurisdiction or 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 plaintiffs' favor. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see also Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995); Hamlet v. United States, 873 F.2d 1414, 1416 (Fed. Cir. 1989). If a defendant challenges jurisdiction or the plaintiffs' claim for relief, however, the plaintiffs cannot rely merely on allegations in the complaint but must instead bring forth relevant, competent proof to establish jurisdiction. McNutt v. General Motors Acceptance Corp. of Ind., 298 U.S. at 189; see also Land, Chairman, United States Maritime Comm'n v. Dollar, 330 U.S. 731, 735 n.4 (1947); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d at 747; Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 404-05 (1994). The court may consider all relevant evidence in order to resolve the factual dispute, including evidentiary matters outside the pleadings. Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985).

[11] In order for this court to have jurisdiction over a plaintiff's complaint, the Tucker Act requires that the plaintiffs identify an independent substantive right enforceable against the United States for money damages. 28 U.S.C. section 1491 (1994 & Supp. III 1997). The Tucker Act states:

     The United States Court of Federal Claims shall have

[12] The Tucker Act, however, merely confers jurisdiction on the United States Court of Federal Claims; "it does not create any substantive right enforceable against the United States for money damages." United States v. Mitchell, 445 U.S. 535, 538, reh'g denied, 446 U.S. 992 (1980) (quoting United States v. Testan, 424 U.S. at 398-99); see also Saraco v. United States, 61 F.3d at 865 (citing In Zumerling v. Devine, 769 F.2d 745, 749 (Fed. Cir. 1985) (citing United States v. Testan, 424 U.S. at 398)); United States v. Connolly, 716 F.2d 882, 845 (Fed. Cir. 1983) (en banc), cert. denied, 465 U.S. 1065 (1985). Individual claimants, therefore, must look beyond the jurisdictional statute for a waiver of sovereign immunity. United States v. Mitchell, 445 U.S. at 538. For claims founded on a statute or regulation to be successful, "the provisions relied upon must contain language which could fairly be interpreted as mandating recovery of compensation from the government." United States v. Testan, 424 U.S. at 400 (quoting Eastport Steamship Corp. v. United States, 178 Ct. Cl. at 607, 372 F.2d at 1009); see also John Doe v. United States, 100 F.3d 1576, 1579 (Fed. Cir. 1996).

[13] In the case of a civil action for the recovery of a tax refund, this court shall have original jurisdiction pursuant to 28 U.S.C. section 1491(a). Sovereign immunity is waived in a tax refund case when the claim is "duly filed" with the IRS. I.R.C. section 7422(a) (1994); ⁵ United States v. Michel, 282 U.S. 656 (1931); see also Hampton v. United States, 206 Ct. Cl. 422, cert. denied, 423 U.S. 837 (1975); Sun Chem. Corp. v. United States, 698 F.2d 1203, 1206 (Fed. Cir.), cert. denied, 464 U.S. 819 (1983). A claim for a tax refund, however, is not duly filed pursuant to I.R.C. section 7422(a) unless it is filed within the time allotted under I.R.C. section 6511(a).

[14] The plaintiffs in this case argue that the United States Court of Federal Claims has jurisdiction over their civil action for a tax refund based upon 28 U.S.C. section 1346(a)(1) (1994), ⁶ I.R.C. section 6511 and I.R.C. section 7422(a). The defendant responds, however, that plaintiffs' claim is time barred pursuant to I.R.C. section 6511(a) because the claim was not timely filed. Therefore, according to the defendant, the court must grant partial dismissal of plaintiffs' lawsuit regarding their 1991 tax refund claim for lack of subject matter jurisdiction. Plaintiffs respond that because they relied on the advice of appeals officers within the IRS, the IRS should be estopped from denying relief. Plaintiffs allege that as a result of following the advice of Ms. Pringle they amended their 1991 taxes and paid an additional $5,127.00, and that two years later, IRS appeals officer Martucci counseled the plaintiffs again to amend their taxes, and assured them that they would be entitled to a refund.

[15] The first issue presented to this court, therefore, is whether the three-year statute of limitations for filing began on April 6, 1992, the initial filing date for the 1991 tax year, or November 16, 1993, the filing date of the amended return. ⁷ The second question is whether the plaintiffs' dependance on information allegedly provided by the IRS appeals officers can estop the IRS from denying the plaintiffs' claim.

[16] The initial conflict between the plaintiffs and the defendant revolves around interpretation of the phrase, a claim for refund "shall be filed by the taxpayer within 3 years from the time the return was filed," as used in I.R.C. section 6511(a). The plaintiffs assert that November 16, 1993, the date of filling the amended return, is the date which should start the three-year statute of limitations of I.R.C. section 6511(a). ⁸ Such conflict must be resolved in accordance with accepted rules of statutory construction. The United States Court of Appeals for the Federal Circuit has offered guidance on how to approach statutory interpretation, as follows:

     Statutory construction requires the application of recognized

     [A] literal interpretation would lead to an incongruous result.

     On numerous occasions we have noted that "'"'[i]n expounding a

[18] Furthermore, in construing a statute, courts should attempt not to interpret a provision such that it renders other provisions of the same statute inconsistent, meaningless or superfluous. Boise Cascade Corp. v. United States EPA, 942 F.2d 1427, 1432 (9th Cir. 1991). See Sutherland Stat. Const. 46.06 (5th ed. 1992). The meaning of statutory language depends on context and a statute should be read as a whole. Bailey v. United States, 516 U.S. 137, 145 (1995); King v. Saint Vincent's Hosp., 502 U.S. 215, 221 (1991) (citing Shell Oil Co. v. Iowa Dept. of Revenue, 488 U.S. 19, 26 (1988)). "Words are not pebbles in alien juxtaposition; they have only a communal existence; and not only does the meaning of each interpenetrate the other, but all in their aggregate take their purport from the setting in which they are used." King v. Saint Vincent's Hosp., 502 U.S. at 221 (quoting NLRB v. Federbush Co., 121 F.2d 954, 957 (2d Cir. 1941) (L. Hand, J.)). Therefore, when reviewing a statute, this court must construe each section in connection with each of the other sections, so as to produce a harmonious whole.

[19] The issue of whether a particular tax filing constitutes a filing for statute of limitations purposes is not a new one. The language of I.R.C. section 6511(a) indicates that the three-year statute of limitations commences "from the time the return was filed." The statute states:

     Claim for credit or refund of an overpayment of any tax imposed

[20] The commencement date for initiating the running of the statute of limitations has been interpreted by the United States Supreme Court, in Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934), to mean that, "[t]he return exacted by the statute, the one that in the absence of fraud is to start the term of limitation . . . is the return filed by the taxpayer at the close of the fiscal year, though supplementary information may modify or add to it." Id. at 177-78; see also Badaracco v. Commissioner, 464 U.S. 386, 393-97 (1984) (and cases cited therein); Clifton Mfg. Co. v. United States, 293 U.S. 186, 186-88 (1934); In re Grassgreen, 172 B.R. 383, 390 (Bankr. M.D. Fla. Sep. 26, 1994) (No. 93-640-BKC-3PL); see also Buffard v. Commissioner, 506 U.S. 523, 533 (1993) (holding that the limitations period for assessing tax liability of the shareholder began to run from the filing date of the original individual return).

[21] Statutes of limitations "are established to cut off rights, justifiable or not, that might otherwise be asserted and they must be strictly adhered to by the judiciary." Kavanagh v. Noble, 332 U.S. 535, 539 (1947) (citing Rosenman v. United States, 323 U.S. 658, 661 (1945)), reh'g denied, 333 U.S. 850 (1948). As noted above, the statute of limitations time periods set out by I.R.C. section 6511(a) are three years from the time of the filing of the original return or two years from the time of the tax payment, whichever is later.

[22] The plaintiffs next argue the IRS should be equitably estopped from denying their claim for a refund after Mr. and Mrs. Chaney followed advice which they assert they obtained from IRS officials Pringle and Martucci. Moreover, plaintiffs assert that following the erroneous advice of Ms. Pringle led to the overpayment of taxes of which they are now being denied recovery. According to the plaintiffs, appeals officer Martucci represented the IRS when he told the plaintiffs they could recover the overpayment and that their claim would be timely.

[23] Defendant contends that the statutory language of I.R.C. section 6511(a) must be strictly read to prohibit the introduction of equitable principles into statute of limitations legislation. Moreover, defendant argues that the opinions and statements of IRS employees should not be allowed to override the clear requirements of the statute, especially in the case of Mr. Martucci, who neither reviewed plaintiffs' return nor was assigned any administrative responsibility for their claims. In support of its position, the government directs the court's attention to numerous court decisions. ⁹

[24] The doctrine of equitable estoppel is a judicial remedy by which a party may be precluded, by its own acts or omissions, from asserting a right to which it otherwise would have been entitled. See Heckler v. Community Health Servs. of Crawford County, Inc., 467 U.S. 51, 59 (1984). Although the United States Supreme Court in Heckler did not come to a final conclusion as to whether equitable estoppel could be raised against the United States, the Supreme Court appears to suggest that there are limited circumstances in which equitable estoppel is applicable against the sovereign. Id. at 60. The Supreme Court stated in Heckler:

          When the Government is unable to enforce the law because

[25] For recovery against the government based on estoppel, the plaintiffs must prove the following: (1) a misrepresentation by an agent of the United States acting within the apparent scope of his or her duties; (2) the absence of contrary knowledge by the taxpayer in circumstances where he may reasonably act in reliance; (3) actual reliance; (4) detriment; and (5) a factual context in which the absence of equitable relief would be unconscionable. See Last v. United States, 37 Fed. Cl. at 10 (quoting Rocovich v. United States, 18 Cl. Ct. 418, 424 (1989)); see also Henry v. United States, 14 Cl. Ct. 795, 799 (1988), aff'd, 870 F.2d 634 (Fed. Cir. 1989). Even if the plaintiffs could show that the IRS employees actually misrepresented information to the plaintiffs, plaintiffs must further demonstrate that the alleged deception was within the apparent scope of those agents' power. A claim that is based on the misrepresentations of a government agent will only succeed if the agent acted within the general scope of his or her duties.

     The principle underlying this rule is that when a government

[26] The United States Supreme Court explained in Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947), that when individuals rely on a government employee, they are charged with knowing the extent of the employee's authority and the rules and regulations of the Code of Federal Regulations. Id. at 384. Accordingly, an appeals officer's authority cannot extend the statute of limitations or provide alternative opportunities for tax refund cases not allowed by law. 26 C.F.R section 601.106(a)(1)(ii)(a) (1999).

[27] Plaintiffs' complaint alleges:

     WE HAVE WORKED WITH THE OGDEN APPEALS OFFICE FOR 1990'S RETURNS.

          There are five and a half years that we have been working

          I have read the Chaney's [sic] response to the Government's

[31] Due to the consistently strict application of the applicable statute of limitations in tax refund claims, plaintiffs are precluded from relying on equitable estoppel in order to extend the statute of limitations against the IRS. The United States Supreme Court wrote in United States v. Brockamp, 519 U.S. 347, 352 (1997):

     Section 6511's detail, its technical language, the iteration of

CONCLUSION

[32] The court finds that the plaintiffs' claim for a tax refund for 1991 was filed after the applicable statute of limitations had run. Therefore, the court GRANTS the defendant's motion to partially dismiss pursuant to RCFC 12(b)(1). Jurisdiction is proper regarding the $69.84 paid by the plaintiffs for the 1991 tax year. Plaintiffs' claims regarding the tax years 1993 and 1994 also remain to be resolved.

[33] IT IS SO ORDERED.

                                   Marian Blank Horn

² Plaintiffs' complaint does not assert a claim for the $561.00.

³ In its brief, defendant does not contest plaintiffs' recovery of the $69.84 paid on May 24, 1994, as follows: "The only payment of 1991 taxes that plaintiffs are not precluded from recovering is the $69.84 paid on May 24, 1994, within two years of filing their claim." Therefore, defendant has conceded jurisdiction regarding the $69.84.

⁴ Limitation on credit or refund

          (a) Period of limitation on filing a claim. Claim for

⁵ The provisions of I.R.C. section 7422(a) state:

     (a) No suit prior to filing claim for refund.

     (a) The district court shall have original jurisdiction,

⁸ The plaintiffs attempt to support their position with the statement allegedly made by appeals officer Martucci with the San Francisco Internal Revenue Office that the plaintiffs "had until Nov. 1996 to file an amended return on 1991 because of the date of the first amended return, which was Nov. 1993."

⁹ See United States v. Brockamp, 519 U.S. 347 (1996); Akin v. United States, 31 Fed. Cl. 89, aff'd, 43 F.3d 1487 (Fed. Cir. 1994); Kingston Prods. v. United States, 368 F.2d 281 (Ct. Cl. 1966); Joseph v. IRS, 637 F. Supp. 1219 (D. Mass. 1983); Colemen v. United States, 82-1 Tax Cas. (CCH) paragraph 9133 at 83,111 (E.D. Ky. 1981), rev'd on other grounds, 704 F.2d 326 (6th Cir. 1983).

¹⁰ The court notes that in December, 1995, the later statute of limitations (the two year period) had already expired on November 16, 1995.