3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 CAROLE S. GAULER, Case No. 3:24-cv-00082-ART-CSD 6 Plaintiff, ORDER ON MOTION FOR 7 v. RECONSIDERATION (ECF No. 23)
8 IRS, et al.,
9 Defendants.
11 I. Factual and Procedural Background 12 Plaintiff Carole S. Gauler sued the Internal Revenue Service (“IRS”) for not 13 processing a tax refund sent during the COVID-19 pandemic (“pandemic”). (ECF 14 No. 1.) The Government moved to dismiss for lack of jurisdiction. (ECF No. 5.) 15 This Court dismissed Plaintiff’s claim without prejudice and with leave to amend. 16 (ECF No. 22.) Plaintiff has moved for reconsideration arguing that the Court erred 17 in denying equitable relief due to the IRS’s own actions discouraging her from re- 18 sending her tax return during the pandemic. (ECF No. 23 at 3.) The Government 19 responded. (ECF No. 24.) Plaintiff replied. (ECF No. 25.) 20 For the foregoing reasons, the Court denies Plaintiff’s Motion for 21 Reconsideration. 22 II. Legal Standard 23 “Reconsideration is appropriate if the district court (1) is presented with newly 24 discovered evidence, (2) committed clear error or the initial decision was 25 manifestly unjust, or (3) if there is an intervening change in controlling law.” Sch. 26 Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 27 1993); see also LR 59-1(a). A district court “possesses the inherent procedural 28 1 power to reconsider, rescind, or modify an interlocutory order for cause seen by 2 it to be sufficient[,]” so long as it has jurisdiction. City of Los Angeles, Harbor Div. 3 v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001) (quotation and 4 emphasis omitted); see also Smith v. Clark Cty. Sch. Dist., 727 F.3d 950, 955 (9th 5 Cir. 2013). Motions for reconsideration are disfavored, and a movant “must not 6 repeat arguments already presented unless (and only to the extent) necessary to 7 explain controlling, intervening law or to argue new facts.” LR 59-1(b). 8 III. Analysis 9 Plaintiff moves to reconsider the dismissal of her case on the grounds that 10 the Court erred in holding that equitable estoppel does not apply against the 11 Government in this case. Plaintiff acknowledges that she is unable to provide an 12 appropriate proof of mailing her amended tax return as required by Baldwin v. 13 United States, 921 F.3d 836 (9th Cir. 2019). (ECF No. 23 at 1-2.) She argues 14 instead that the Court inappropriately discounted the inequities created by the 15 conditions of the pandemic and the IRS’s own directive to not resend her tax 16 return. These conditions, in her view, make any effort to factually analogize to 17 existing precedent futile and therefore inaccurate. 18 Plaintiff disputes this Court’s reliance on Baldwin v. United States, 921 19 F.3d 836 (9th Cir. 2019), to conclude that she could not state her claim without 20 proof of mailing her tax return. (ECF No. 23 at 2.) Plaintiff argues that Baldwin 21 is not applicable because it “stems from a time when the government, the IRS 22 included, was deemed to be operational” and “that no reasonable circumstances 23 existed to justify deviation from its duties.” (ECF No. 23 at 2.) The Ninth Circuit 24 held in Baldwin that the district court lacked jurisdiction to hear a tax refund 25 suit because the plaintiff failed to allege that she timely filed her tax return by an 26 acceptable delivery method. Baldwin, 921 F.3d at 840-42 (citing 31 C.F.R. § 27 301.7502-1(e)(2)). 28 Plaintiff claims that the Court must focus on the fact that the IRS explicitly 1 directed her to not resend tax filings, rather than the lack of proof of delivery. The 2 Court finds that Plaintiff cannot get around Baldwin’s jurisdictional holding. 3 Treasury Regulation § 301.7502-1 describes circumstances under which the 4 delivery requirements may be altered, and each require the Commissioner to 5 publish guidance in the Internal Revenue Bulletin. See 26 C.F.R. § 301.7502- 6 1(c)(3), (d), (e)(2)(ii). In analyzing the construction of the statute, the court found 7 that “Congress considered the issue of exceptions, and, in the end, limited the 8 statute to the ones set forth.” Baldwin, 921 F.3d at 843 (quoting United States v. 9 Johnson, 529 U.S. 53, 58 (2000)). Because Plaintiff does not have a qualifying 10 exception to the proof of delivery methods, she has failed to demonstrate that the 11 IRS received her timely amended return. 12 Plaintiff also argues because Schuster v. Comm’r, 312 F.2d 311, 317 (9th 13 Cir. 1962) supports her argument that equitable estoppel can be applied against 14 the IRS, the Court erred in distinguishing that case on its facts. (Id.) In Schuster, 15 an outgoing Commissioner told the petitioners that they were not liable for a tax 16 deficiency, and the incoming Commissioner told them that they were. 312 F.2d 17 at 313, 318. The Ninth Circuit found that one petitioner could make an estoppel 18 claim. Id. at 318. In its Order, this Court found that Schuster was not applicable 19 because the IRS never changed its position about what proof would satisfy the 20 agency or a court that the amended return had been timely filed, and it did not 21 involve an equitable exception to a filing deadline. (ECF No. 22 at 6.) 22 Plaintiff proposes that the Court should consider Schuster’s holding, that 23 equitable estoppel was available against the IRS, rather than its facts. Schuster, 24 312 F.2d at 317. Even the Schuster court, however, found that equitable estoppel 25 should only be applied “with utmost caution and restraint,” and that “such 26 situations must necessarily be rare, for the policy in favor of an efficient collection 27 of the public revenue outweighs the policy of the estoppel doctrine in its usual 28 and customary context.” Id. Importantly, Schuster was decided thirty years before 1 the Supreme Court held that time limits in section 6511 of the tax code are not 2 subject to equitable tolling. Brockcamp v. Commissioner, 519 U.S. 347, 351 3 (1997). In rejecting equitable tolling, the Court in Brockamp stated, “Section 4 6511’s detail, its technical language, the iteration of the limitations in both 5 procedural and substantive forms, and the explicit listing of exceptions, taken 6 together, indicate to us that Congress did not intend courts to read other 7 unmentioned, open-ended ‘equitable’ exceptions into the statute that it wrote. 8 There are no counterindications.” Id.1 9 Plaintiff argues that Brockcamp does not prevent the relief she requests 10 because it is a case about equitable tolling, and not equitable estoppel. (ECF No. 11 25 at 4.) The doctrine of equitable tolling focuses primarily on the plaintiff’s 12 excusable ignorance of the limitations period, while equitable estoppel focuses on 13 the actions of the defendant. See Lehman v. United States, 154 F.3d 1010, 1016 14 (9th Cir. 1998).
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3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 CAROLE S. GAULER, Case No. 3:24-cv-00082-ART-CSD 6 Plaintiff, ORDER ON MOTION FOR 7 v. RECONSIDERATION (ECF No. 23)
8 IRS, et al.,
9 Defendants.
11 I. Factual and Procedural Background 12 Plaintiff Carole S. Gauler sued the Internal Revenue Service (“IRS”) for not 13 processing a tax refund sent during the COVID-19 pandemic (“pandemic”). (ECF 14 No. 1.) The Government moved to dismiss for lack of jurisdiction. (ECF No. 5.) 15 This Court dismissed Plaintiff’s claim without prejudice and with leave to amend. 16 (ECF No. 22.) Plaintiff has moved for reconsideration arguing that the Court erred 17 in denying equitable relief due to the IRS’s own actions discouraging her from re- 18 sending her tax return during the pandemic. (ECF No. 23 at 3.) The Government 19 responded. (ECF No. 24.) Plaintiff replied. (ECF No. 25.) 20 For the foregoing reasons, the Court denies Plaintiff’s Motion for 21 Reconsideration. 22 II. Legal Standard 23 “Reconsideration is appropriate if the district court (1) is presented with newly 24 discovered evidence, (2) committed clear error or the initial decision was 25 manifestly unjust, or (3) if there is an intervening change in controlling law.” Sch. 26 Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 27 1993); see also LR 59-1(a). A district court “possesses the inherent procedural 28 1 power to reconsider, rescind, or modify an interlocutory order for cause seen by 2 it to be sufficient[,]” so long as it has jurisdiction. City of Los Angeles, Harbor Div. 3 v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001) (quotation and 4 emphasis omitted); see also Smith v. Clark Cty. Sch. Dist., 727 F.3d 950, 955 (9th 5 Cir. 2013). Motions for reconsideration are disfavored, and a movant “must not 6 repeat arguments already presented unless (and only to the extent) necessary to 7 explain controlling, intervening law or to argue new facts.” LR 59-1(b). 8 III. Analysis 9 Plaintiff moves to reconsider the dismissal of her case on the grounds that 10 the Court erred in holding that equitable estoppel does not apply against the 11 Government in this case. Plaintiff acknowledges that she is unable to provide an 12 appropriate proof of mailing her amended tax return as required by Baldwin v. 13 United States, 921 F.3d 836 (9th Cir. 2019). (ECF No. 23 at 1-2.) She argues 14 instead that the Court inappropriately discounted the inequities created by the 15 conditions of the pandemic and the IRS’s own directive to not resend her tax 16 return. These conditions, in her view, make any effort to factually analogize to 17 existing precedent futile and therefore inaccurate. 18 Plaintiff disputes this Court’s reliance on Baldwin v. United States, 921 19 F.3d 836 (9th Cir. 2019), to conclude that she could not state her claim without 20 proof of mailing her tax return. (ECF No. 23 at 2.) Plaintiff argues that Baldwin 21 is not applicable because it “stems from a time when the government, the IRS 22 included, was deemed to be operational” and “that no reasonable circumstances 23 existed to justify deviation from its duties.” (ECF No. 23 at 2.) The Ninth Circuit 24 held in Baldwin that the district court lacked jurisdiction to hear a tax refund 25 suit because the plaintiff failed to allege that she timely filed her tax return by an 26 acceptable delivery method. Baldwin, 921 F.3d at 840-42 (citing 31 C.F.R. § 27 301.7502-1(e)(2)). 28 Plaintiff claims that the Court must focus on the fact that the IRS explicitly 1 directed her to not resend tax filings, rather than the lack of proof of delivery. The 2 Court finds that Plaintiff cannot get around Baldwin’s jurisdictional holding. 3 Treasury Regulation § 301.7502-1 describes circumstances under which the 4 delivery requirements may be altered, and each require the Commissioner to 5 publish guidance in the Internal Revenue Bulletin. See 26 C.F.R. § 301.7502- 6 1(c)(3), (d), (e)(2)(ii). In analyzing the construction of the statute, the court found 7 that “Congress considered the issue of exceptions, and, in the end, limited the 8 statute to the ones set forth.” Baldwin, 921 F.3d at 843 (quoting United States v. 9 Johnson, 529 U.S. 53, 58 (2000)). Because Plaintiff does not have a qualifying 10 exception to the proof of delivery methods, she has failed to demonstrate that the 11 IRS received her timely amended return. 12 Plaintiff also argues because Schuster v. Comm’r, 312 F.2d 311, 317 (9th 13 Cir. 1962) supports her argument that equitable estoppel can be applied against 14 the IRS, the Court erred in distinguishing that case on its facts. (Id.) In Schuster, 15 an outgoing Commissioner told the petitioners that they were not liable for a tax 16 deficiency, and the incoming Commissioner told them that they were. 312 F.2d 17 at 313, 318. The Ninth Circuit found that one petitioner could make an estoppel 18 claim. Id. at 318. In its Order, this Court found that Schuster was not applicable 19 because the IRS never changed its position about what proof would satisfy the 20 agency or a court that the amended return had been timely filed, and it did not 21 involve an equitable exception to a filing deadline. (ECF No. 22 at 6.) 22 Plaintiff proposes that the Court should consider Schuster’s holding, that 23 equitable estoppel was available against the IRS, rather than its facts. Schuster, 24 312 F.2d at 317. Even the Schuster court, however, found that equitable estoppel 25 should only be applied “with utmost caution and restraint,” and that “such 26 situations must necessarily be rare, for the policy in favor of an efficient collection 27 of the public revenue outweighs the policy of the estoppel doctrine in its usual 28 and customary context.” Id. Importantly, Schuster was decided thirty years before 1 the Supreme Court held that time limits in section 6511 of the tax code are not 2 subject to equitable tolling. Brockcamp v. Commissioner, 519 U.S. 347, 351 3 (1997). In rejecting equitable tolling, the Court in Brockamp stated, “Section 4 6511’s detail, its technical language, the iteration of the limitations in both 5 procedural and substantive forms, and the explicit listing of exceptions, taken 6 together, indicate to us that Congress did not intend courts to read other 7 unmentioned, open-ended ‘equitable’ exceptions into the statute that it wrote. 8 There are no counterindications.” Id.1 9 Plaintiff argues that Brockcamp does not prevent the relief she requests 10 because it is a case about equitable tolling, and not equitable estoppel. (ECF No. 11 25 at 4.) The doctrine of equitable tolling focuses primarily on the plaintiff’s 12 excusable ignorance of the limitations period, while equitable estoppel focuses on 13 the actions of the defendant. See Lehman v. United States, 154 F.3d 1010, 1016 14 (9th Cir. 1998). Plaintiff argues that equitable estoppel applies here because the 15 amended return “would have been timely resubmitted but for the unprecedented 16 backlog and the IRS publicly directing taxpayers not to refile.” (ECF No. 9 at 6.) 17 But as noted in this Court’s Order, Brockcamp’s holding has been applied to 18 equitable estoppel in cases such as Danoff v. United States, F. Supp. 2d 1086, 19 1099-1100 (C.D. Cal. 2004) (collecting cases where equitable estoppel was denied 20 in tax refund suits). (ECF No. 22 at 6.) 21 The specific issue at hand is whether equitable relief is available for failure 22 to timely file under section 6511. Plaintiff cites several cases where courts have 23 applied equitable estoppel against IRS. See In re Anderson, 650 B.R. 510, 517 24 1 Contrary to Plaintiff’s position, the availability of equitable tolling under the 25 Social Security Act is not inconsistent with Brockcamp. See Bowen v. City of New 26 York, 476 U.S. 467, 480 (1986) (observing that the statute was “designed to be unusually protective of claimants” and Congress had authorized the Secretary of 27 Health and Human Services to toll the statute of limitations, “thus expressing its clear intention to allow allowing in some cases.”) 28 1 || (W.D. Tenn. 2023) (applying quasi-estoppel against the IRS in a bankruptcy case); 2 || In re Kreidle, 143 B.R. 941 (D. Colo. 1992) (applying equitable estoppel against 3 || IRS in Chapter 7 bankruptcy case); Walsonavich v. United States, 335 F.2d 96, 4 || 100 (3d Cir. 1964) (applying equitable estoppel against the IRS in tax refund case 5 |} under 1954 Code); Miller v. United States, 500 F.2d 1007, 1010 (2d Cir. 19774) 6 || (applying equitable estoppel against the IRS under section 6532). None of these 7 || cases persuade this Court that equitable estoppel is available against the IRS 8 || under section 6511. 9 Therefore, Plaintiffs Motion for Reconsideration (ECF No. 23) is denied. 10 IV. Conclusion 11 It is therefore ordered that Plaintiffs Motion for Reconsideration (ECF No. 12 || 23) is DENIED. 13 14 Dated this 21st day of February, 2026. 15 16 Ana □□□ Td 17 ANNE R. TRAUM 18 UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28