Johnson v. United States

54 Fed. Cl. 187, 90 A.F.T.R.2d (RIA) 7013, 2002 U.S. Claims LEXIS 277, 2002 WL 31414720
CourtUnited States Court of Federal Claims
DecidedOctober 25, 2002
DocketNo. 99-936T
StatusPublished

This text of 54 Fed. Cl. 187 (Johnson v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. United States, 54 Fed. Cl. 187, 90 A.F.T.R.2d (RIA) 7013, 2002 U.S. Claims LEXIS 277, 2002 WL 31414720 (uscfc 2002).

Opinion

OPINION

REGINALD W. GIBSON, Senior Judge.

INTRODUCTION

This case is before the court on cross-motions for summary judgment. Plaintiff is the executrix of the taxpayer, William H. Johnson, Jr., and alleges that an implied-in-fact contract arose when the IRS informed her by letter that — ‘Tour [income tax refund] claim has been allowed in full.” The undisputed amount at issue, approximately $30,000, collected by the government from William H. Johnson, Jr. between August 31, 1990 and December 2,1991, was held to have been time-barred under a tax refund claim in the U.S. District Court for the Southern District of New York,1 pursuant to 26 U.S.C. § 6511(b)(2)(B).2 Although plaintiffs claim is here before us on a contract theory, any recovery thereupon must also be constrained by the time-limiting statutes governing tax refund claims given that the very subject matter of the alleged contract is, in fact, a tax refund.3

Based upon the foregoing, and for reasons discussed in detail below, plaintiffs motion [189]*189for summary judgment is hereby DENIED, and her contract claim is dismissed for failure to state a claim upon which relief can be granted. Defendant’s cross-motion for summary judgment is hereby GRANTED. JURISDICTION

The Court of Federal Claims has jurisdiction, pursuant to 28 U.S.C. § 1491(a)(1), to hear claims against the United States that are founded 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. Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1078 (Fed.Cir.2001).

FACTUAL BACKGROUND

This case comes before us by way of transfer, pursuant to 28 U.S.C. § 1631, from the U.S. District Court for the Southern District of New York, where Judge Stein best characterized the facts herein as being “both largely undisputed and relatively convoluted.”4 That court commendably charted the operative course of events and the cause of action before it. We shall endeavor to do likewise.

The taxpayer, William H. Johnson, Jr., was a retired New York City police officer who failed to timely file a federal individual income tax return Form 1040 for the 1986 tax year. As a result, in November 1989, the Internal Revenue Service (“IRS”) prepared a “substitute” 1986 tax return on behalf of Mr. Johnson based upon his estimated income.5 In March 1990, the IRS issued a notice of deficiency reflecting a total tax liability of $47,249.63 based upon its calculations in the substitute tax return.6 To satisfy said deficiency, the IRS began collecting payments in equal installments of $499.68 from the taxpayer, Mr. Johnson, where some sixty-one (61) installment payments and three (3) levies were collected in all between 1988 and 1995, aggregating $60,652.63.7

Apparently Mr. Johnson had been ill for several years before his death in November 1994, and never filed on his own behalf a 1986 tax return. In January 1996, plaintiff, Dorothy Battle Johnson, his spouse and executrix, caused a 1986 Form 1040 individual tax return to be filed on Mr. Johnson’s behalf, which claimed a total tax liability of $3,086 for subject tax year, and was duly accepted by the IRS.8 Notwithstanding Mr. Johnson’s prior failure to timely file a 1986 tax return, he purportedly did file an administrative refund claim on or about December 3, 1993, in the amount of $46,500.72.9 That refund [190]*190claim remained outstanding until May 28, 1996, when the IRS informed plaintiff by letter that it had disallowed the claim on the grounds that said claim had not been timely filed.

In June 1996, plaintiff appealed the IRS decision to disallow the taxpayer’s December 1993 claim. Therein, the plaintiff relied upon the equitable tolling doctrine10 as the legal basis for the appeal. The Manhattan appeals division, in turn, based its decision to allow plaintiffs claim “in full” upon said doctrine. Evidently, the decision, by memorandum dated November 6, 1997, was recommended by the appeals officer, Phyllis Cayenne (signed and dated by her on October 20, 1997), and approved by the associate chief, Howard Kahn (signed and dated by him on October 21, 1997). Following thereon, an IRS Form Letter 913(RO), dated November 6, 1997, was sent to plaintiff notifying her that the December 1993 claim (i.e., the subject of the appeal) “has been allowed in full.”

Subsequent to that November 1997 decision to allow plaintiffs claim in full, the Appeals Division at some point reversed its decision.11 For reasons not stated, the government’s apparent reversal was unbeknownst to plaintiff until some six (6) months later when plaintiffs counsel inquired of the appeals officer, Ms. Cayenne, about the alleged anticipated “full” payment. Only then did Ms. Cayenne, or any IRS representative, explicitly inform plaintiffs counsel that no such payment “in full” would be forthcoming pursuant to the November 1997 decision and letter.

Immediately acting thereupon, plaintiff filed suit in the U.S. District Court for the Southern District of New York, on May 4, 1998, “for a refund of moneys taken pursuant to 28 U.S.C. Section 1346, whereby federal district courts assert jurisdiction to recover any Internal Revenue tax alleged to have been erroneously or illegally assessed.” Pl. Compl. (dist.ct.) at 1. Plaintiff further averred, in the initial complaint filed in the U.S. District Court for the Southern District of New York, that “[ojnce the Appeals officer submits her findings to the Associate Chief and he signs off on the case, the Associate Chief has bound, the IRS to a settlement of the issue.” Pl. Comp, (dist.ct.) at 5 (citing Gardner v. Commissioner, 75 T.C. 475, 1980 WL 4481 (1980)) (emphasis added).

In a Statement of Account dated May 25, 1998, defendant (IRS) advised plaintiff that $4,996 plus statutory interest was due to plaintiff, representing in part the amounts paid within three years of the January 1996 filing of the 1986 delinquent tax return/claim for refund. For reasons not in dispute before this court, the aforementioned amount plus an additional $9,156 (the balance of payments made during that three-year period) was subsequently transferred from the taxpayer’s 1986 account and credited to the [191]*191taxpayer’s 1987 tax year. Then, following a pre-trial conference before Magistrate Judge Buchwald, defendant decided that the period within two years of the December 1993 administrative refund claim was also refundable to the taxpayer, and therefore issue a refund check in the amount of $18,041.93 to plaintiff.12

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Bluebook (online)
54 Fed. Cl. 187, 90 A.F.T.R.2d (RIA) 7013, 2002 U.S. Claims LEXIS 277, 2002 WL 31414720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-united-states-uscfc-2002.