Bishay v. United States

• Court: Court of Appeals for the Federal Circuit
• Decided: August 30, 2022
• Docket: 20-1020
• Status: Unpublished

Opinion

Case: 20-1020 Document: 36 Page: 1 Filed: 08/30/2022

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

BAHIG F. BISHAY, Plaintiff-Appellant

v.

UNITED STATES, Defendant-Appellee ______________________

2020-1020 ______________________

Appeal from the United States Court of Federal Claims in No. 1:18-cv-01665-EDK, Judge Elaine Kaplan. ______________________

Decided: August 30, 2022 ______________________

BAHIG F. BISHAY, Norwood, MA, pro se.

JULIE CIAMPORCERO AVETTA, Tax Division, United States Department of Justice, Washington, DC, for defend- ant-appellee. Also represented by JACOB EARL CHRISTENSEN, RICHARD E. ZUCKERMAN. ______________________

Before NEWMAN, LOURIE, and CHEN, Circuit Judges. Opinion for the Court filed by Circuit Judge CHEN. Case: 20-1020 Document: 36 Page: 2 Filed: 08/30/2022

Dissenting opinion filed by Circuit Judge NEWMAN. CHEN, Circuit Judge. Mr. Bahig Bishay appeals two decisions of the United States Court of Federal Claims (Claims Court), the first dismissing his tax refund, declaratory judgment, and in- junctive relief claims for lack of subject matter jurisdiction; and the second denying his request for an order of default. On appeal, Mr. Bishay challenges the Claims Court’s dis- missal of his tax refund claim and its denial of his request for a default order. Because we agree with the Claims Court that Mr. Bishay has not satisfied the minimum pay- ment required for his tax refund action, we affirm the Claims Court’s dismissal for lack of subject matter jurisdic- tion. We also affirm the Claims Court’s denial of Mr. Bishay’s request for a default order because, at the time of the request, the government had not yet been served with the complaint due to a docketing error. I In February 2007, the Internal Revenue Service (IRS) assessed a penalty of $41,612.40 against Mr. Bishay pur- suant to 26 U.S.C. § 6672 for failure to pay taxes for two quarters in 2002. Bishay v. United States, No. 18-1665C, 2019 WL 4415143, at *1 (Fed. Cl. Sept. 16, 2019). In Au- gust 2013, the IRS recorded a lien to recover the still un- paid penalty. Id.; see also id. at *1 n.3. Mr. Bishay then unsuccessfully litigated the assessment of the penalty be- fore the United States Tax Court (Tax Court). In its sum- mary denial of Mr. Bishay’s claim, the Tax Court noted that a taxpayer “can make a small ‘token’ payment towards the section 6672 penalty, file a refund claim with the IRS, and, if the refund claim is denied, file a refund suit in Federal District Court or the Court of Federal Claims.” Bishay v. Comm’r, T.C.M. 2015-105, 2015 WL 3505310, at *6 n.9 (June 4, 2015), aff’d Bishay v. Comm’r, No. 15-2040, 2017 WL 11453028 (1st Cir. Oct. 11, 2017). Case: 20-1020 Document: 36 Page: 3 Filed: 08/30/2022

BISHAY v. UNITED STATES 3

On October 17, 2018, Mr. Bishay filed the complaint at issue in this appeal. Appx. 27–32. 1 He sought “declara- tory, injunctive, and monetary relief” based on allegations that the IRS “arbitrarily, maliciously, and unjustly rec- orded a Federal Tax Lien against [him],” “falsely claim[ed]” that he owed payroll taxes, and “unlawfully claimed” that he was responsible for the payment of penalties under § 6672 for failure to pay the same taxes. Appx. 27. The complaint alleged, among other things, that Mr. Bishay sent the IRS “a ‘token’ payment pursuant to the federal au- thority explained in Weber v. Commissioner, 138 T.C. 348, 363 n.12 (2012).” Appx. 28. The cited authority explains that to litigate a tax refund claim, a taxpayer generally must show that he satisfied the “full payment rule” by re- mitting “the prior full payment of the liability.” Weber, 138 T.C. at 363 & n.12. The § 6672 penalty, however, “is di- visible, so that a taxpayer may litigate the penalty after having paid an amount corresponding to the tax withheld from a single employee.” Id. at 363 n.12 (citing Davis v. United States, 961 F.2d 867, 870 n.2 (9th Cir. 1992); Bland v. Comm’r, T.C.M. 2012-84, 2012 WL 967651, at *25 n.13 (Mar. 22, 2012)); see also Barnhill v. Comm’r, 155 T.C. 1, 15 n.7 (2020). On January 8, 2019, Mr. Bishay filed an application for an order of default after he did not receive a response to his complaint by the deadline, leading to the realization that the complaint had never been served on the government. Appx. 1, 5. The Claims Court subsequently served a copy of the complaint on the government. Appx. 1. On January 11, 2019, the Claims Court denied Mr. Bishay’s application for a default order since the complaint had not been properly served. Appx. 1–2. On January 22, 2019, Mr. Bishay moved for reconsideration and the Claims Court

1 “Appx.” citations are to the appendix filed concur- rently with Appellant’s brief. Case: 20-1020 Document: 36 Page: 4 Filed: 08/30/2022

denied the motion, again finding that “a default judgment was not warranted given that the United States did not re- ceive the complaint until after the deadline for filing an an- swer had passed.” Appx. 5. On May 24, 2019, the government moved for a more definite statement, asking the Claims Court to require Mr. Bishay to show that he paid the equivalent of the tax due for one employee for one quarter of liability. Bishay, 2019 WL 4415143, at *1. Although IRS records indicate that Mr. Bishay paid $100 towards the § 6672 penalty, the govern- ment argued that payroll records attached to his complaint “cast doubt” on whether his payment met the requirements set forth in Weber. Id.; see also Appx. 79–81. The Claims Court denied the motion for a more definite statement, but noted that Mr. Bishay would, in fact, be required to produce evidence that the $100 payment was sufficient. Bishay, 2019 WL 4415143, at *2. The government subsequently moved to dismiss Mr. Bishay’s claims for lack of subject matter jurisdiction and the Claims Court granted the mo- tion. Id. Regarding Mr. Bishay’s tax refund claims, the Claims Court found that it did not have subject matter jurisdiction because his $100 token payment was less than the smallest withholding for one employee for one quarter, which was $135.53. Id. at *3. The Claims Court also concluded it did not have jurisdiction over Mr. Bishay’s declaratory judg- ment claims because it “may not grant declaratory relief if such relief is the primary focus of the plaintiff’s suit.” Id. at *4 (quoting Rice v. United States, 31 Fed. Cl. 156, 164 (1994), aff’d, 48 F.3d 1236 (Fed. Cir. 1995)). For Mr. Bishay’s claims related to the validity of the tax lien, the Claims Court found that “Congress reserved tax lien chal- lenges for federal district and state courts” and that there was no money-mandating substantive source of law that would provide it with jurisdiction. Id. Finally, the Claims Court concluded that the Anti-Injunction Act prevents it Case: 20-1020 Document: 36 Page: 5 Filed: 08/30/2022

BISHAY v. UNITED STATES 5

from adjudicating requests for injunctive relief regarding IRS collection proceedings. Id. Mr. Bishay appealed, challenging the Claims Court’s determination that it lacked jurisdiction over Mr. Bishay’s tax refund claim and arguing the merits of the underlying action. Mr. Bishay also appealed the Claims Court’s denial of his application for an order of default in a separate deci- sion. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). II We review the Claims Court’s legal conclusions de novo and its factual findings for clear error. Casitas Mun. Water Dist. v. United States, 708 F.3d 1340, 1351 (Fed. Cir. 2013) (citing Est. of Hage v. United States, 687 F.3d 1281, 1285 (Fed. Cir. 2012)). The Claims Court’s dismissal of an action for lack of subject matter jurisdiction is a legal conclusion we review de novo. Diversified Grp. Inc. v. United States, 841 F.3d 975, 980 (Fed. Cir. 2016). The plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence and we “accept as true all undisputed facts asserted in the plaintiff’s complaint and draw all reasona- ble inferences in favor of the plaintiff.” Id. (quoting Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011)). The subject matter jurisdiction of the Claims Court is limited by statute and includes tax refund claims. 28 U.S.C. § 1346(a)(1). To establish Claims Court jurisdiction over a tax refund action pursuant to the Tucker Act, the plaintiff must satisfy the “full payment rule,” which “re- quires that a person seeking a refund for a tax or penalty pay in full before filing suit.” Diversified Grp., 841 F.3d at 979 (citing Flora v. United States, 362 U.S. 145, 177 (1960)). The “full payment rule” is subject to the “divisibil- ity exception,” whereby “[i]f an assessment or penalty is merely the sum of several independent assessments trig- gered by separate transactions, it is considered divisible Case: 20-1020 Document: 36 Page: 6 Filed: 08/30/2022

such that the taxpayer may pay the full amount on one transaction, sue for a refund for that transaction, and have the outcome of this suit determine his liability for all the other, similar transactions.” Id. at 981–82 (emphases, in- ternal quotations, and internal citations omitted). One im- plementation of the divisibility exception is that a taxpayer assessed under § 6672 need only pay the portion of the pen- alty attributable to a single employee’s withholding. Boynton v. United States, 566 F.2d 50, 52 (9th Cir. 1977); see also Cencast Servs., LP v. United States, 729 F.3d 1352, 1357 (Fed. Cir. 2013); Vir v. United States, 125 Fed. Cl. 293, 300 (2016) (“Under this exception, ‘a taxpayer assessed un- der section 6672 need only pay the divisible amount of the penalty assessment attributable to a single individual’s withholding before instituting a refund action.’” (quoting Boynton, 566 F.2d at 52)). 2 Analyzing Mr. Bishay’s allegations and arguments un- der the divisibility exception framework, the Claims Court found that, even accepting all of Mr. Bishay’s allegations as true, he did not establish that his $100 payment was sufficient to satisfy the full payment requirement for Claims Court jurisdiction. Bishay, 2019 WL 4415143, at *3. Before the Claims Court, Mr. Bishay only alleged (without support) that he himself was the lowest paid em- ployee, “having received $0 [] per hour from September 1999 through June 2002,” rendering his $100 payment “equivalent to more than his withholding for at least one quarter.” Id. This could not be correct, the Claims Court concluded, because $0 could not serve as a divisible amount of the penalty. Id. That calculation, the Claims Court

2 The Claims Court and the district courts have con- current jurisdiction over tax refund claims, including tax refund claims based on § 6672 penalties. Accordingly, re- gional circuits, in addition to our court, have addressed these issues. Case: 20-1020 Document: 36 Page: 7 Filed: 08/30/2022

BISHAY v. UNITED STATES 7

explained, relies on “the penalty assessment attributable to a single individual’s withholding” and having no income would not result in any withholding. Id. (emphasis in orig- inal). Additionally, we note that a $0 payment would be inconsistent with the nature of a tax refund action. The Claims Court also found that Mr. Bishay offered no facts or argument challenging the government’s calcu- lation that the minimum required payment is $135.53. Id. Mr. Bishay’s appeal does not dispute the government’s cal- culation. We therefore agree with the Claims Court’s ulti- mate conclusion that Mr. Bishay did not establish subject matter jurisdiction over his tax refund action. We also conclude that Mr. Bishay has not identified any other statute that confers power on the Claims Court to grant his desired relief. For example, Mr. Bishay’s brief refers to 26 U.S.C. §§ 7426, 7432, and 7433, but those pro- visions of the Internal Revenue Code clearly authorize a lawsuit against the United States “in a district court of the United States,” not in the Claims Court. Brown v. United States, 36 Fed. Cl. 290, 298 (1996), aff’d 217 F.3d 858 (Fed. Cir. 1999) (“the United States District Courts have exclu- sive jurisdiction over claims of monetary damages related to the failure of IRS personnel to release a federal tax lien” (citing 26 U.S.C. § 7432)); Ledford v. United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002) (“Congress has provided that claims for damages such as [for unlawful collection ac- tivities of the IRS] must be brought exclusively before a district court of the United States. The Court of Federal Claims is not a district court of the United States, and therefore it lacks subject matter jurisdiction over [tax- payer]’s damages claims.”); see also 28 U.S.C. § 2410(a) (“the United States may be named a party in any civil ac- tion or suit in any district court, or in any State court hav- ing jurisdiction of the subject matter . . . to quiet title to . . . real or personal property on which the United States has or claims a mortgage or other lien.”); 28 U.S.C. § 1346(a)(1) Case: 20-1020 Document: 36 Page: 8 Filed: 08/30/2022

(providing the Claims Court with jurisdiction over only tax and penalty refund actions). Finally, we disagree with the dissent’s alternative ap- proach supplying a new calculation for the minimum pay- ment. On appeal, Mr. Bishay does not provide an alternative calculation nor any reason that the Claims Court clearly erred in adopting the government’s uncontro- verted calculation. Mr. Bishay instead argues that the Claims Court should have found jurisdiction because: (1) he “needed not pay the United States any money—much less a ‘token payment’ . . . —to confer subject matter juris- diction”; and (2) the full payment rule “has no support in law or in fact, and is nothing but subterfuge intended to side-step and obfuscate” the lower court’s duty to review “the United States’ unlawful activities.” Appellant’s Br. 4, 7 (emphasis added); see also id. at 12–13, 41–42. Regardless, our case law, as well as the case law of re- gional circuits addressing the same question, establishes that penalties are divisible on a transaction-by-transaction basis, dividing assessments based on a single individual’s withholding (the calculation performed by the government) and not type of tax (the calculation performed by the dis- sent). Diversified Grp., 841 F.3d at 981–82; Boynton, 566 F.2d at 52 (“a taxpayer assessed under section 6672 need only pay the divisible amount of the penalty assessment attributable to a single individual's withholding before in- stituting a refund action”); Cencast Servs., 729 F.3d at 1357 (“where a tax is divisible, the taxpayer may pay the full amount on one transaction” (citation and internal quota- tions omitted)); Korobkin v. United States, 988 F.2d 975, 976 (9th Cir. 1993) (“payroll taxes can also be divisible be- cause they’re assessed separately for each employee”); see also Vir, 125 Fed. Cl. at 300; Gaynor v. United States, 150 Fed. Cl. 519, 533 (2020) (explaining that “payroll taxes paid by employers . . . are considered divisible because they are assessed separately for each employee”). Here, the “trans- action” or “assessment” for a single individual’s Case: 20-1020 Document: 36 Page: 9 Filed: 08/30/2022

BISHAY v. UNITED STATES 9

withholding is that individual’s total federal withholding, which includes the individual’s income tax and FICA tax withholding, as calculated by the government. Appx. 154– 55, 160; see Godfrey v. United States, 748 F.2d 1568, 1573 (Fed. Cir. 1984) (noting that the United States Claims Court had allowed the case to proceed after each plaintiff paid “the amount in excess of income and FICA taxes with- held from one employee”). We disagree that payment of a single employee’s FICA tax alone would be sufficient to render the Claims Court with jurisdiction. An otherwise singular penalty does not become divisible just because it “involves summing multiple figures,” such as the income tax and FICA tax components of the § 6672 penalty relied on by the dissent. Diversified Grp., 841 F.3d at 982. III We also affirm the Claims Court’s decision denying Mr. Bishay’s application for an order of default. Under Rule 55 of the Rules of the United States Court of Federal Claims (RCFC), “[w]hen a party against whom a judgment for af- firmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” RCFC 55(a). Here, the circumstances leading to the application for an order of default arise from failure of service of the com- plaint, not failure of the government to plead or otherwise defend. RCFC 4(a). Following eventual service of the com- plaint, the government moved forward promptly, request- ing a stay pending resolution of the government shutdown and ultimately moving to dismiss within the deadline. Appx. 2. Accordingly, we also affirm the Claims Court’s denial of Mr. Bishay’s request for an order of default. CONCLUSION We have considered Mr. Bishay’s remaining arguments and do not find them persuasive. For the foregoing rea- sons, we affirm the Claim Court’s dismissal and the Claims Case: 20-1020 Document: 36 Page: 10 Filed: 08/30/2022

Court’s denial of Mr. Bishay’s request for an order of de- fault. AFFIRMED Case: 20-1020 Document: 36 Page: 11 Filed: 08/30/2022

United States Court of Appeals for the Federal Circuit ______________________

Appeal from the United States Court of Federal Claims in No. 1:18-cv-01665-EDK, Judge Elaine Kaplan. ______________________

NEWMAN, Circuit Judge, dissenting. The court today expels Mr. Bahig Bishay from the fourth court in which he has sought review of a lien that the IRS placed on his property in 2013. The lien was in collection of a penalty the IRS assessed on Mr. Bishay per- sonally, for non-payment to the IRS of employee withhold- ing taxes. These taxes accrued during the first two quarters of the bankruptcy of the Commonwealth Automo- bile Company in 2002. 26 U.S.C. § 6672 authorizes a pen- alty for willful, untruthful, and purposefully tax-evasive failure to withhold and pay to the IRS certain employee taxes. The penalty provision provides: Case: 20-1020 Document: 36 Page: 12 Filed: 08/30/2022

26 U.S.C. § 6672. Failure to collect and pay over tax, or attempt to evade or defeat tax (a) General rule. Any person required to collect, truthfully account for, and pay over any tax im- posed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or de- feat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be lia- ble to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. Mr. Bishay states that these culpable conditions did not ex- ist, that the Company was in bankruptcy and the IRS filed a claim for these taxes in the bankruptcy proceeding, and that the statute of limitations had run. The Federal Circuit is the fourth court that has declined to review the merits of this penalty assessment, starting with the Tax Court in 2015. I respectfully dissent from the majority’s affirmance of the dismissal by the Court of Federal Claims, and from our failure to consider aspects that could resolve the issue. DISCUSSION Mr. Bishay was the president and owner of Common- wealth Automobile Company. The company initiated bankruptcy proceedings under Chapter 11 on January 2, 2002, and all operations ceased under Chapter 7 in May 2002. The record contains W-2 forms showing withholding of employee income tax and FICA (Social Security and Medicare) taxes totaling $41,612.40 during the first two quarters of 2002. The record states that this withholding was not paid over to the IRS. The record contains copies of communications among the IRS, the trustee in bankruptcy, and various Common- wealth representatives, and in 2003 the IRS filed a claim for these taxes with the bankruptcy court. In 2005 the Case: 20-1020 Document: 36 Page: 13 Filed: 08/30/2022

bankruptcy estate was closed; the IRS claim was not paid due to lack of funds. On December 22, 2006, the IRS noti- fied Mr. Bishay that “assessment will be made” of the “Trust fund recovery penalty,” unless he paid the $41,612.40 by the stated date. This was followed by an As- sessment notice dated February 5, 2007. On August 29, 2013, the IRS filed a Notice of Federal Tax Lien with the Registry of Deeds in Dedham, Massa- chusetts, for the penalty amount of $41,612.40. The Notice states: This Notice of Federal Tax Lien gives public notice that the government has a lien on all your property (such as your house or car), all your rights to prop- erty (such as money owed to you) and to property you acquire after this notice is filed. Appx72–73. The Notice stated he could bring a “collection- due-process appeal.” The Tax Court described this proceed- ing as affirming the assessment because “Mr. Bishay’s re- ceipt of Letter 1153 and his subsequent Appeals conference was, for purposes of section 6330(c)(2)(B), a prior ‘oppor- tunity to dispute’ his liability for the trust fund recovery penalties. Therefore, Appeals did not err by precluding Mr. Bishay from re-raising that argument at his CDP hearing.” Bishay v. Comm’r, 109 T.C.M. (CCH) 1543, 2015 WL 3505310 at *7 (June 4, 2015). The Tax Court stated that “[t]he lack of opportunity for judicial review after the Letter 1153 proceeding does not severely prejudice the taxpayer because, as we have previ- ously noted, ‘the section 6672 penalty is divisible, so that a taxpayer may litigate the penalty after having paid an amount corresponding to the tax withheld from a single employee.’” Id. at *6 n.9. “[T]he taxpayer . . . can make a small ‘token’ payment towards the section 6672 penalty . . . [and] file a refund suit in Federal District Court or the Court of Federal Claims.” Id. Case: 20-1020 Document: 36 Page: 14 Filed: 08/30/2022

Mr. Bishay appealed to the First Circuit Court of Ap- peals, and that court affirmed the Tax Court as acting within its discretion. Bishay v. Comm’r, 2017 WL 11453028 (1st Cir. Oct. 11, 2017) (per curiam). Neither of these courts mentioned Mr. Bishay’s juris- dictional issue of the statute of limitations, or his challenge to his personal liability and the applicability of the penalty provisions of § 6672, although the Tax Court recited that “[i]n 2002 Commonwealth filed . . . a petition under the Bankruptcy Code” and “Mr. Bishay was removed and re- placed by a chapter 7 bankruptcy trustee.” T.C.M. at *2. Mr. Bishay then paid a $100 “token” to the IRS, filed the IRS forms for refund, and then filed a claim in the Court of Federal Claims. The government moved to dis- miss for lack of subject matter jurisdiction, on the ground that Mr. Bishay’s payment of $100 was insufficient. The government argued that Mr. Bishay should have paid at least $135.53, based on the formula for divisible tax-refund claims developed in Lucia v. United States, 474 F.2d 565, 576 (5th Cir. 1973). The Federal Circuit has applied this formula, e.g., in Cencast Servs., L.P. v. United States, 729 F.3d 1352 (Fed. Cir. 2013), explaining: When a taxpayer sues for a refund based on a di- visible refund claim, it is meant to “test the validity of the entire assessment.” Id. at 1366. However, Mr. Bishay is not disputing the amount of any Commonwealth Automobile Company tax obligation; and the trustee in bankruptcy did not dispute this withholding obligation. Mr. Bishay is challenging the penalty levied against him personally under § 6672. He seeks judicial review of the government’s penalty action; he has yet to achieve such review. The Court of Federal Claims and the Federal Circuit are successors to the original Court of Claims and continue the prior court’s Tucker Act jurisdiction of the defined Case: 20-1020 Document: 36 Page: 15 Filed: 08/30/2022

claims against the United States. See Pocono Pines Assem- bly Hotels Co. v. United States, 73 Ct. Cl. 447 (1932): To remove [cases against the United States] from a legislative to a judicial forum was the especial pur- pose of the Tucker Act. What Congress desired was a judicial determination of liability in the same manner as suits between individuals so that a jus- ticiable claim against the United States, if estab- lished, under judicial procedure would determine the respective rights of the parties. Id. at 486. For tax appeals specifically directed to employer/em- ployee obligations, the courts created a protocol whereby, when a tax issue concerns several employees or pay peri- ods, it suffices for Tucker Act jurisdiction to prepay the dis- puted tax for one employee and one pay period. For example, in Michaud v. United States, 40 Fed. Cl. 1 (1997), the plaintiffs prepaid “amounts represent[ing] the FICA taxes withheld from the compensation of two . . . employ- ees,” although income tax as well as the FICA taxes were at issue. The Court of Federal Claims accepted that the remittance measured by the FICA taxes served to establish Tucker Act jurisdiction. See id. at 28 (accepting jurisdic- tion based solely on FICA (Social Security and Medicare) prepayment). The same situation is present here, for Mr. Bishay’s $100 more than suffices to meet the prepayment protocol for the FICA withholding. As precedent explains, income tax withholding and FICA tax withholding are separate provisions of the tax code. See, e.g., Jenkins v. United States, 101 Fed. Cl. 122, 130 (2011), aff’d, 484 F. App’x 511 (Fed. Cir. 2012). These withholdings are measured separately, see CSX Corp. v. United States, 518 F.3d 1328, 1338, 1343 (Fed. Cir. 2008) (finding the different purposes behind the FICA taxes for Social Security and Medicare, and income tax, justified treating the base measures of wages differently). These Case: 20-1020 Document: 36 Page: 16 Filed: 08/30/2022

taxes are listed separately on each employee’s W-2 form. See Appx177–184 (W-2 forms for 2002 for fourteen Com- monwealth Auto employees, where Box 1 states wages for income tax purposes and the amount withheld appears in Box 2; Box 3 states wages subject to Social Security with the amount withheld in Box 4; and Box 5 states Medicare wages with the amount withheld in Box 6). The withhold- ings for all three categories are separate assessments at different rates. As in Michaud, there is no reason why the FICA taxes are unable to represent the “one transaction” that precedent endorses for Tucker Act jurisdictional pur- poses. Applying this formula to the record, the withholding for the lowest paid Commonwealth employee shown in W-2 forms in the Appendix is $128.25 for Social Security and $29.99 for Medicare, for a total of $158.24 for three quar- ters. Appx178. Dividing by three, see Fed. Cl. Op. at *3, 1 the required pre-payment is $52.75. Mr. Bishay’s $100 thus established jurisdiction under the formula shown in precedent. Although the panel majority criticizes this cal- culation, I agree with the Court of Federal Claims that it “is not inclined to prevent [a plaintiff] from challenging [a] full assessment in this forum simply because the repre- sentative amount he paid might not be representative enough.” Kaplan v. United States, 115 Fed. Cl. 491, 494 (2014). Nonetheless, the Court of Federal Claims and now the panel majority endorse the government’s argument that Mr. Bishay’s $100 is inadequate and therefore that there is no jurisdiction of his appeal. Mr. Bishay instead presented the argument that since the lowest paid employee (himself) was paid no wages, no pre-payment at all was required. Whatever one’s view of this argument, it suffices to

1 Bishay v. United States, 2019 WL 4415143 (Fed. Cl. Sept. 16, 2019). Case: 20-1020 Document: 36 Page: 17 Filed: 08/30/2022

conclude any pre-payment requirement was met by the $100 that was paid. The judicial obligation is to apply the correct law and to apply it correctly, whether or not the parties do so. As reiterated in Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90 (1991): [T]he court is not limited to the particular legal the- ories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law. Id. at 99. The panel majority notes that in Diversified Grp Inc. v. United States, 841 F.3d 975 (Fed. Cir. 2016), this court held that a tax obligation does not become divisible by “in- volv[ing] summing multiple figures.” Id. at 982. However, in Diversified the court held taxes are divisible when they are their “own assessments.” Id. at 981. An assessment is the “[d]etermination of the rate or amount of something.” Assessment, Black’s Law Dictionary (11th ed. 2019). The FICA Social Security and Medicare taxes are distinct as- sessments, rates, and amounts, and they support Tucker Act jurisdiction under existing rules. The panel majority also asserts that this theory cannot be considered because Mr. Bishay did not argue this theory of adequacy of his $100 payment. However, jurisdiction must be correctly decided. See J.R. Sand & Gravel Co. v. United States, 552 U.S. 130, 132 (2008) (“The question pre- sented is whether a court must raise on its own the timeli- ness of a lawsuit filed in the Court of Federal Claims, despite the Government’s waiver of the issue. We hold that the special statute of limitations governing the Court of Federal Claims requires that sua sponte consideration.”). Jurisdictional issues are “open at any stage of the liti- gation, whether or not the parties have raised them.” UST, Inc. v. United States, 831 F.2d 1028, 1031 (Fed. Cir. Case: 20-1020 Document: 36 Page: 18 Filed: 08/30/2022

1987). Appellate jurisdiction extends not just to the correc- tion of the specific error appealed, but also to the power to dispose of the case “as justice requires.” Patterson v. Ala- bama, 294 U.S. 600, 607 (1935). On this appeal, although Mr. Bishay states several times that the statute of limita- tions has run, the government does not respond. This as- pect should have been resolved at the threshold. Mr. Bishay was denied the forum of the Tax Court and the regional circuit, where those courts relied on the avail- ability of the forum of the Court of Federal Claims. In Co- hens v. Virginia, 19 U.S. 264 (1821), the Court stated the principles of jurisdiction in terms of judicial responsibility: It is most true that this Court will not take juris- diction if it should not: but it is equally true, that it must take jurisdiction if it should. The judiciary cannot, as the legislature may, avoid a measure be- cause it approaches the confines of the constitution. We cannot pass it by because it is doubtful. With whatever doubts, with whatever difficulties, a case may be attended, we must decide it, if it be brought before us. We have no more right to decline the ex- ercise of jurisdiction which is given, than to usurp that which is not given. The one or the other would be treason to the constitution. Id. at 404. See also Hyde v. Stone, 61 U.S. 170, 175 (1857) (“But the courts of the United States are bound to proceed to judgment, and to afford redress to suitors before them, in every case to which their jurisdiction extends.”). These classical principles have guided the nation. Courts should be especially wary of interpretations that exclude unrepresented litigants from the courts. See Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curiam) (“[W]e hold [pro se complaints] to less stringent standards than formal pleadings drafted by lawyers.”). Although complexities surround the Tucker Act, Mr. Bishay repeat- edly stressed his concern for a wrongful assessment Case: 20-1020 Document: 36 Page: 19 Filed: 08/30/2022

followed by wrongful taking of his property. This claim is within the jurisdiction of the Court of Federal Claims. The Tax Court and the First Circuit deemed the issues raised by Mr. Bishay to be within the jurisdiction of the Court of Federal Claims. That court’s response is unclear, for although the court stated that “the Court lacks jurisdic- tion on claims that request a withdrawal of a tax lien . . . because the claims are not based on a money-mandat- ing source of law . . . . [and] [t]herefore, Mr. Bishay’s chal- lenges to the tax lien are not within the Court’s jurisdiction,” Fed. Cl. Op. at 4, that court dismissed the complaint “without prejudice.” Thus, in all events, and however these ancillary issues are resolved, it is reasona- ble and just that the Court of Federal Claims has jurisdic- tion to decide whether the § 6672 penalty was properly assessed. Over the nine years since the IRS placed this lien, no court has considered any of the potentially dispositive threshold questions, such as the absence of even an allega- tion of willful or untruthful behavior as required for a § 6672 penalty, or the role of the bankruptcy proceeding and the treatment of the IRS’s claim by the bankruptcy court, or the expiration of the statute of limitations. Any of these issues is dispositive of Mr. Bishay’s liability for the assessed penalty. The government also states that “Congress reserved tax lien challenges for federal district and state courts.” I take note that neither the Tax Court nor the First Circuit nor the Court of Federal Claims suggested transfer or dis- missal on this ground, and the Court of Federal Claims dis- missed the claim without prejudice. From my colleagues’ affirmance of the dismissal, I re- spectfully dissent.