57 F3d 1081 Sugro Inc v. United States

57 F.3d 1081

76 A.F.T.R.2d 95-5458, 95-2 USTC P 50,364

SUGRO, INC., a Colorado corporation, individually and on
behalf of Colorado Sugarbeet Growers Association, Nebraska
Non-Stock Cooperative, Beet Growers Association, Mountain
States Beet Growers Association of Montana, Big Horn Basin
Beet Growers and Big Horn County Sugar Beet Growers
Association, Plaintiff-Appellant,
v.
UNITED STATES of America, Defendant-Appellee.

No. 94-1421.
(D.C. No. 94-C-438)

United States Court of Appeals, Tenth Circuit.

June 20, 1995.

NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.

Before ANDERSON, BALDOCK, and BRORBY, Circuit Judges.

ORDER AND JUDGMENT1

1

After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R.App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument.

2

Plaintiff appeals from the district court's dismissal of its tax refund action for lack of subject matter jurisdiction. Sugro, Inc. v. United States, 156 F.R.D. 233 (D. Colo.1994). The district court held that it lacked jurisdiction because plaintiff's claims for refund of backup withholding taxes were barred by the statute of limitations, 26 U.S.C. 6511(b)(2)(A). Sugro, 156 F.R.D. at 235. Reviewing the district court's determinations de novo, Angle v. United States, 996 F.2d 252, 253 (10th Cir.1993), we affirm.

3

The facts are undisputed. Plaintiff, as agent for various sugar beet grower associations, was entrusted with the distribution of settlement funds from two different class actions. It withheld twenty percent from the distributions to class members who did not sign or return a Form W-9. See 26 U.S.C. 3406(a) and (b)(3) (Supp. V 1987)(twenty percent withholding required when taxpayer identification number not provided for "other reportable payment"); see also 26 U.S.C. 3406(h)(10) (treating payments subject to withholding as wages paid by an employer to an employee and as if deducted and withheld under 26 U.S.C. 3402, which requires withholding by an employer). On March 9 and April 15, 1987, plaintiff sent to the Internal Revenue Service (IRS) information returns, magnetic media reporting packages for the distributions, and checks for the amount of withholding. The IRS rejected the magnetic media reporting packages several times for various reasons. On December 28, 1988, they were finally accepted for filing.

4

Some of the class members subject to the twenty percent withholding did not cash their distribution checks. Those checks were voided by the class action court. The court authorized plaintiff to file claims for refunds with the IRS for excess withholding taxes relating to the uncashed distribution checks "on or about" July 18 and August 23, 1989. Appellant's App. at 124, 126. On May 13, 1991, plaintiff filed two claims for refund. The IRS denied the claims because the statute of limitations had expired.

5

Plaintiff then brought suit in district court seeking a refund for the overpayment of backup withholding taxes. The district court determined that the withholdings were required by 3406 at the time of the distributions, even though the precise amount of tax liability could not be determined until plaintiff's tax returns were accepted for filing in December 1988. Sugro, 156 F.R.D. at 235. Based on 26 U.S.C. 6513, the court decided the withholding taxes were deemed paid April 15, 1988, more than three years before the filing of the claims for refund. Sugro, 156 F.R.D. at 235. The district court therefore concluded the claims were barred by the statute of limitations, 6511(b)(2)(A), and held that it lacked subject matter jurisdiction over plaintiff's action. Sugro, 156 F.R.D. at 235. This appeal followed.

6

"Filing a timely tax refund claim with the IRS is a jurisdictional prerequisite to maintaining a tax refund suit." Angle, 996 F.2d at 253; see 26 U.S.C. 7422(a) (failure to make timely refund claim bars action for refund); Graham v. United States (In re Graham), 981 F.2d 1135, 1138 (10th Cir.1992)(7422 and 6511 are nonwaivable jurisdictional requirements). The statute of limitations provides that a refund claim for an overpayment of tax must be made within the later of three years from the time the return is filed or two years from the time the tax is paid. 26 U.S.C. 6511(a); Richards v. Commissioner, 37 F.3d 587, 589 (10th Cir.1994), petition for cert. filed, 63 U.S.L.W. 3707 (U.S. Mar. 14, 1995)(No. 94-1537).2 There is no dispute in this case that the refund claims were timely filed within three years of the filing of the returns. The statute of limitations, however, further provides that refunds are limited to taxes paid within three years before the claim for refund is filed. 26 U.S.C. 6511(b)(2)(A); see Oropallo v. United States, 994 F.2d 25, 30 n. 7 (1st Cir.1993)( 6511(b)(2)(A) sets "outside limit" for refunds), cert. denied, 114 S.Ct. 705 (1994). Thus, the district court lacked subject matter jurisdiction over this case only if the complaint sought a refund of taxes paid more than three years before the filing of the refund claims.

7

Plaintiff argues on appeal that the district court has subject matter jurisdiction because the amounts it withheld and remitted were not taxes paid within the meaning of 6511(b)(2)(A). Rather, plaintiff maintains that it intended for the amounts remitted to be treated as deposits. Additionally, plaintiff contends the remittances could not be taxes paid because plaintiff could not accurately estimate its tax liability or identify the taxpayers at the time of the remittances.

8

As indicated above, 3406 required plaintiff to withhold amounts from the distributions to class members and pay the amounts as backup withholding taxes.3 For statute of limitations purposes, an amount withheld and remitted is deemed paid on April 15 of the year following the close of the tax year. 26 U.S.C. 6513(c)(2); cf. Weigand v. United States, 760 F.2d 1072, 1074 (10th Cir.1985)(26 U.S.C. 6513(b)(2)); Oropallo, 994 F.2d at 31 (26 U.S.C. 6513(b)(1)); Ehle v. United States, 720 F.2d 1096, 1097 (9th Cir.1983)(same). Thus, the taxes plaintiff remitted in 1987 were deemed paid on April 15, 1988, more than three years prior to the May 13, 1991, filing of the claim for refund.

9

Because 6513(c)(2) specifies when the remittances are deemed a tax payment, it renders plaintiff's intent irrelevant. See Ehle, 720 F.2d at 1097.4 Also, plaintiff's actual tax liability is irrelevant. See id.; see also Binder v. United States, 590 F.2d 68, 70 (3d Cir.1978)(lack of tax liability does not affect status of remittance as payment of tax).

10

Plaintiff next argues that even if the remittances were a tax payment, they were not paid until the IRS accepted the returns on December 28, 1988, the date its tax liability was determinable. The date of filing the returns did not rebut the statutory requirements discussed above. Cf. Blatt v. United States, 34 F.3d 252, 256 (4th Cir.1994)(date estate's income taxes deemed paid fixed by statute, not by date return actually filed).

11

The district court correctly determined the claims for refund were barred by the statute of limitations. Because the statutory requirements for a refund were not complied with, the district court correctly held that it lacked subject matter jurisdiction over plaintiff's action for refund. See United States v. Dalm, 494 U.S. 596, 602, 609-10 (1990). Accordingly, the judgment of the United States District Court for the District of Colorado is AFFIRMED.

1

This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of the court's General Order filed November 29, 1993. 151 F.R.D. 470

2

Lundy v. IRS, 45 F.3d 856, 866-67 (4th Cir.), cert. granted, 63 U.S.L.W. 3841, 3847 (U.S. May 30, 1995)(No. 94-1785-CFX), declined to follow Richards on other grounds

3

Plaintiff recognized the withholding was required by statute. Appellant's App. at 10, 18, 44

4

Plaintiff incorrectly contends this case is factually similar to Risman v. Commissioner, 100 T.C. 191 (1993). In Risman, the IRS treated the taxpayer's remittance as a deposit, id. at 198, because the taxpayer's remittance was not within the scope of 6513 and therefore had no deemed payment date, id. at 202