District Court Offers Good Discussion of Claim for Refund Time Requirements in § 6511(a) & (b) (8/17/21)

In Libitzky v. United States, 2021 U.S. Dist. LEXIS 148037 (N.D. Cal. 8/6/21), CL here, the Court offers a good discussion of the dual statutes of limitations for refunds in § 6511.  The opinion is well written, so I recommend it and merely offer the highlights in bullet points:

• The return must be filed within three years from the date the return was filed or two years from the date the tax was paid, whichever is later, and, if no return is filed, within two years from the date of payment.  § 6511(a).  Also, if read literally, the statute means that a taxpayer can file a return 40 years late and qualify under this first rule.  The Libitzkys met this requirement.
• If the first period is met so that the refund claim is timely, the IRS may only refund the amount of tax paid either (i) within three years plus the period of any extension, or (ii) within two years immediately preceding the date of the claim.  § 6511(b)(2).  The Libitzkys did not meet this requirement.
• Informal claim for refund may fix the problem.  The Libitzkys may prevail if they can invoke the informal claim for refund doctrine to make the claim timely under the second rule.  The Court said that it could not decide that issue on summary judgment, so it was to be tried.

I have revised a footnote in the Federal Tax Procedure (Practitioner Edition 2021) for the second limitation (p. 217 n. 1008:

It is said that the limitations period is jurisdictional.  Zeier v. United States Internal Revenue Service, 80 F.3d 1360, 1364 (9th Cir. 1996).  In a practical sense, I think this may mean that the statute is not subject to equitable tolling and that compliance with the limitations period may not be waived.  In cases where the limitations period has arguably expired, taxpayers may want to see if there is some basis for urging that a timely informal claim was filed.  Libitzky v. United States, 2021 U.S. Dist. LEXIS 148037 (N.D. Cal. 2021) (citing and quoting Stevens v. United States, No. 05-03967 SC, 2006 WL 1766794, at *3 n.3 (N.D. Cal. June 26, 2006) (“accepting that Section 6511(b)(2)(A) creates a jurisdictional bar to Plaintiff’s case, Plaintiff may clear that bar with proof that the estate submitted an adequate informal claim, the same thing it will need to prevail on the merits.”).