                                     oRl0!NAt
       llntbt     @nfttU        $tatts      @ourt of      ft[uu[         @tafmg FILED
                                   No. 16-143T (Pro Se)
                                (Filed: December 13, 2016)                           DEC   | 3 2016
                                                                                    U.S. COURT OF
                                                                                   FEDERAL cLAlMs
                                                   Keyrvords: Subject Matter
 ERICA FREMUTH,                                    Jurisdiction; Pro Se Complaint; Tax
                                                   Refund; Administrative Refu nd
                        Plaintiff,                 Requestl Informal Claim Doctrine:
                                                   I.R.C. $ 6511;I.R.C. $ 6532; Statute
                                                   of Limitations.

 THE UNITED STATES OF AMERICA,

                        Defendant.


Erica T. Fremuth, Triesen, Principality of Liechtenstein, Plaintiff pro se.

Blaine G. Saffo, Attorney of Record, U.S. Department of Justice, Tax Division, Court of
Federal Claims Section, Washington, DC, with whom werc G. Robson Stewdrt, Assistant
Chiel Court ofFederal Claims Section, Dcvrd L Pincus, Chief, Court of Federal Claims
Section, and Caroline D. Ciraolo, Acting Assistant Attomey General, for Defendant.

                                 OPINION AND ORDER
KAPLAN, Judge.

        In this tax refrnd case, pro se Plaintiff Erica Fremuth, a non-resident alien, claims
that she is entitled to a refund oftaxes withheld from her monthly Social Security
payments for the tax years 2000 to 2007 and 2009 to 2012. The govemment has moved to
dismiss Ms. Fremuth's complaint under Rules of the Court of Federal Claims (RCFC)
12(bX1) and i2(b)(6).

        As discussed below, the Court lacks subject matter jurisdiction over Ms.
Fremuth's claims for the tax years 2000 through 2007 because she failed to file a timely
administrative refund request with respect to those years. Further, the Court lacks subject
matter jurisdiction over her claims for the 2012 tax year because the Intemal Revenue
Service (IRS) disallowed her claim for that year, and she failed to file her action in this
Court within two years of the IRS's mailing of the notice of that disallowance. Finally,
Ms. Fremuth's remaining claims lack merit because she, in fact, owed the taxes that were




                                                        ?01,r{ 1,800 0EEE 1033 5366
withheld fiom her Social Security payments. Accordingly, Ms. Fremuth's complaint must
be DISMISSED.T

                                    BACKGROUND2

I.     Ms. Fremuth's Tax Refund Request

        Ms. Fremuth is a citizen and resident of the Principality of Liechtenstein. See
Compl. at 1, Docket No. 1 . She formerly resided in the United States. See id. at 5. She
receives monthly Social Security payments from the Social Security Administration
(SSA). See id. at 2, 6. Pursuant to I.R.C. $$ 871 and 1441, the SSA withholds a portion of
each ofher payments to pay U.S. federal taxes.' See id. at 6.

        In a letter dated May 18, 2009, the IRS informed Ms. Fremuth that she would
receive a refund of$2,080.80 based on "an enor on [her] 2008 Federal Income Tax
Return." See Def.'s Mot. to Dismiss the Compl. (Def.'s Mot.) Ex. 4 at 2, Docket No. 10.
At some point following this communication, Ms. Fremuth sent the IRS a short, undated
letter acknowledging that she had received the refund and "request[ing] information on
refunds due to me for years prior to the period treated on this refund." Id. at I (emphasis
omitted).

       On January 30,2013, Ms. Fremuth sent the IRS a letter titled    "Filing Form 1040
NR U.S. Noruesident Alien Income Tax Retum 2012;'Def.'s Mot. Ex. 2. She apparently
appended her 2012 tax retum to this letter. See Def.'s Mot. Ex. 1 .

        In the letter, Ms. Fremuth asked the IRS to "look into [her] situation" and refund
to her "any and all taxes [she] ever paid . . . as show[n] in all forms i040 [she] ha[d] ever
filed before the IRS ever since [the] year 2000 A.D." Def.'s Mot. Ex. 2 at 2 (emphasis
omitted). She noted that "way back in 2009, [she] was granted a refund ofUSD 2080[.]80
for the year 2008," which was "the entire amount oftax that was then deducted . . . by the
Social Security Adm[i]nistration." Id. at i-2 (emphasis omitted). Ms. Fremuth stated that
she had "in the past erroneously nle[d] form[] 1040 which only applies to persons
resident in the U.S.A." Id. at I (emphasis omitted). She also noted that "in the past [she
had] sen[t] numerous requests for refund[s]" to the IRS "to no practical avail . . . the

I Along with her complaint, Ms. Fremuth filed a motion for leave to proceed in forma
pauperis. Docket. No. 2. The Court GRANTS that motion solely for the purpose of
deciding the govemment's motion to dismiss.

2
 The facts set forth below are based on the assertions in Ms. Fremuth's complaint, as
well as jurisdictional facts drawn from the govemment's motion to dismiss and the
documents attached to the parties' filings.
3
  I.R.C. $ 871 imposes a tax on non-resident alien individuals with sources of income in
the United States, and specifically provides for the taxation ofsocial security benefits.
See id. $ 871(a)(3). I.R.C. $ 1441(a) requires payors to withhold taxes from any income
Davments made to non-resident alien individuals. See id.
fundamental error being that [she] filed form 1040 . . . when . . . [she] should
have . . . file[d] with form 1040NR as a nonresident alien." Id. (emphasis omitted).
Accordingly, she requested that the IRS refund to her "all taxes [she] ever paid as made
evident in the deductions [by the SSA] . . . ever since [she began] receiving social
security benehts in [the] year 2000 A.D." Id. at 2 (emphasis omitted).

          In another letter, dated March 29, 2013, Ms. Fremuth again requested a refund.
See  Def.'s Mot. Ex. 3. She reiterated her belief that she was "[e]ntitled to be refunded
for . . . all sums ever deducted from" her Social Security income. Id. at 2 (emphasis
omitted). She therefore requested that the IRS "proceed to refund any and all amounts
due to me at your very earliest convenience together with whatever additional sum for
delayed payment you [deem] appropriate." Id. at 2 (emphasis omitted).

il.    The IRS's Denial of Ms. Fremuth's Refund Request

       The IRS mailed a letter to Ms. Fremuth denying her refund request on January 21,
2014. See Compl. at 4. Ms. Fremuth appealed the denial. See id.

       On December 23,2015, the IRS Appeals Office "completed its revie#'of Ms.
Fremuth's claim and found that "there [was] no basis to allow any part of [the] claim." Id.
The Appeals Office first observed that "[t]he retum and claim you filed for 2012 is the
only year under consideration." Id. at 5. It noted, however, that its explanations for
denying her claim "appl[ied] to all years you were a non-resident alien." Id. It then
informed Ms. Fremuth that "[u]nder U.S. tax law, non-residents are required to pay
income tax on Social Security benefits" and that "U.S. income taxes are withheld from
those benefits when the recipient lives outside the U.S." Id. "In your case," the letter
continued, "the withholding [was] the same as the tax liability." Id. Thus, "[s]ince the
withholding [was] the same as the income tax, you [had] no tax due and no refund
available." Id.

       The Appeals Office also observed that "[t]he fact that you received a refund for
the 2008 year does not mean you are entitled to a refund for any other year" because
"each year stands on its own." Id. Further, "[s]ince there is no evidence that we examined
your 2008 retum, we cannot determine whether it was properly prepared, its accuracy[,]
or whether the refund was proper." Id.

III.   This Action

        Ms. Fremuth filed her complaint in this Court on January 27, 2016. She alleged
that the IRS incorrectly treated her claim as applying only to her 2012 taxes. See id. at 1
("While 2012 may be the only year [the IRS is] considering, I have filed multiple claims
and...have...alwaysdemandedthatanyandallincometaxlhaveeverpaidbyvirtue
of deduction from my social benefits should be refunded . . . ." (emphasis omitted)).
Further, she alleged that her annual Social Security payments did not total the "minimum
annual income that would make [her] liable to pay income tax." Id. at2 (emphasis
omitted). Thus, Ms. Fremuth alleged, she was "not liable to pay any taxes at all." Id. at 3
(emphasis omitted). Accordingly, she requested that the Court "instruct [the] IRS to
refund any and all tax ever withheld by virtue ofdeduction from [her] social benefit." Id.
(emphasis omiued).

       On June   l7,20l6,the govemment moved to dismiss the complaint under RCFC
12(bX1) and 12(b)(6). Docket No. 10. By the Court's leave, Ms. Fremuth filed an out-of-
time response on November 1, 2016. Docket No. 15. The govemment filed a reply on
November 17.2016. Docket No. 16.

                                      DISCUSSION

I.     Jurisdiction

        A.     JurisdictionalPrincioles

         Whether a court has jurisdiction to decide a case is a threshold matter, and, ifno
jurisdiction exists, the court must order dismissal without proceeding further. See Steel
 Co. v. Citizens for a Better Env't, 523 U.S. 83,94-95 (1998); RCFC 12(h)(3). The
plaintiff bears the burden ofestablishing subject matter jwisdiction by a preponderaace
 of the evidence. Brandt v. United States, 710 F.3d 1369,1373 (Fed. Cir. 2013); see also
 Reynolds v. Army & Air Force Exch. Serv.,846F.2d746,748 (Fed. Cir. 1988). It is well
 established that complaints frled by pro se plaintiffs are held to "less stringent standards
 than formal pleadings drafted by lawyers." Haines v. Kemer, 404 U.S. 519,520 (1972)'
Nonetheless, even pro se plaintiffs must persuade the court that jurisdictional
 requirements have been met. Bemard v. United States, 59 Fed. Cl. 497,499 (2004), affd,
 98 F. App'x 860 (Fed. Cir. 2004).

        Further, the court has "an independent obligation to determine whether subject-
matter jurisdiction exists, even in the absence of a challenge from any party." Arbaueh v.
Y&H Com., 546 U.S. 500, 514 (2006). Thus, the court may raise the issue of subject
matter jurisdiction sua sponte at any time, see Rick's Mushroom Serv.. Inc. v. United
States,521 F.3d 1338, 1346 (Fed. Cir.2008), and may "inquire into jurisdictional facts"
to determine whether it has jurisdiction, Rocovich v. United States ,933 F .2d 991, 993
(Fed. Cir. 1991).

        B.      The Court of Federal Claims' Jurisdiction Over Tax Refund Cases

        The Tucker Act grants the Court ofFederal Claims jurisdiction to hear "any claim
against the United States founded either upon the Constitution, or any Act ofCongress or
any regulation ofan executive department, or upon any express or implied contract with
the United States, or for liquidated or unliquidated damages in cases not sounding in
tort;'28 U.S.C. $ 1491(a)(1). It is well established that this jurisdictional grant extends to
suits for the refund of taxes remitted to the Treasury. Ont. Power Generation v. United
States, 369 F.3d 1298, 1301 (Fed. Cir. 2004); Ledford v. United States ,297 F.3d 1378,
 1382 (Fed. Cir.2002); Shore v. United States ,9 F .3d 1524, 1525 (Fed. Cir. 1993); see
also 28 U.S.C. $ 13a6(a)(1) (granting the Court ofFederal Claims concurrent jurisdiction
with the district courts over "[a]ny civil action against the United States for the recovery
ofany intemal-revenue tax alleged to have been enoneously or illegally assessed or
collected, or any penalty claimed to have been collected without authority or any sum
alleged to have been excessive or in any manner wrongfully collected under the internal-
revenue laws").

        This Court's exercise ofthat jurisdiction is subject, however, to several statutory
and jurisprudential prerequisites. See Ishler v. United States, 115 Fed. Cl. 530, 53+36
(2014). Among these is the requirement set forth in I.R.C. $ 7a22@) that the taxpayer file
an administrative refund request before filing a tax refund suit. Specifically, $ 7 422@)
provides that:

            No suit or proceeding shall be maintained in any court for the
            recovery of any intemal revenue tax alleged to have been
            enoneously or illegally assessed or collected . . . until a claim for
            refund or credit has been duly frled with the Secretary, according
            to the provisions of law in that regard, and the regulations of the
            Secretary established in pursuance thereof.

Id. Further, under $ 6511(a), the taxpayer must file the administrative refund request
within the later of "3 years from the time the retum was filed or 2 years from the time the
tax was paid." Id.; see also United States v. Dalm, 494 U.S. 596,602 (1990) ("[U]nless a
claim for refund of a tax has been filed within the time limits imposed by $ 65 I 1(a), a
suit for refund . . . may not be maintained in any court.").

        For purposes ofthis timely frling requirement, retums are treated as filed on the
last permissible date regardless oftheir actual date of filing. See I.R.C. $ 6513(a).
Further, under a doctrine known as the "informal claim doctrine," a refund request need
only "fairly apprise[] the IRS ofthe basis for the claim within the limitations period" to
comply with the timely filing requirement. Computervision Corp. v. United States, 445
F.3d 1355, 1364 (Fed. Cir. 2006); see also United States v. Kales,314 U.S. 186, 194
(1941). That is, so long as the refund request notifies the IRS of the nature and basis of
the taxpayer's claim, it need not comply with every formal administrative requirement at
the moment of filing to be considered timely filed. See Kales, 314 U.S. at 194 (informal
letter describing taxpayer's claim was sufficient to meet timely filing requirement "where
formal defects and lack of specificity [could be] remedied by amendment filed a"fter the
lapse ofthe statutory period").

         In addition to filing a timely administrative refund request, a taxpayer wishing to
file a tax refund suit in the Court of Federal Claims must adhere to the filing restrictions
set forth in LR.C. $ 6532(a)(1). Section 6532(a)(1) provides as follows:

            No suit or proceeding . . . for the recovery ofany intemal revenue
            tax, penalty, or other sum, shall be begun before the expiration of
            6 months from the date of filing the claim . . . unless the Secretary
            renders a decision thereon within that time, nor after the expiration
            of 2 years from the date of mailing by certified mail or registered
            mail by the Secretary to the taxpayer of a notice of the
            disallowance of the part of the claim to which the suit or
            proceeding relates.
Id. Thus, if the IRS disallows the taxpayer's adminishative refund request, the taxpayel
must file suit within wo years of the date that the IRS mailed the taxpayer the notice of
that disallowance; otherwise, the court will lack jurisdiction. Haroer Int'l Corp. v. United
 States, 120 Fed. Cl. 66, 72 (2015) (dismissing case for lack of subject matter judsdiction
where plaintiff failed to file refund suit within two years of notice of disallowance);
Ishler, 115 Fed. Cl. at 535 (statute of limitations set forth in $ 6532(a)(1) is a
jurisdictional prerequisite); Brach v. United States, 98 Fed. Cl. 60, 67-{8 (2011) (same);
 see also Rosser v. United States, 9 F.3d 1519, 1523 (1 lth Cir. 1993) ("[T]he two-year
 statute of limitations laid out in 26 U.S.C. $ 6532(aX1) begins to run in every case on the
 date the IRS mails the taxpayer a notice of disallowance, whether or not the taxpayer
 actually receives the notice.").

        C.     Annlication to This Case

        As discussed above, under the informal claim doctrine, an administrative refund
request need only "fairly apprise[] the IRS ofthe basis for the claim" to be considered
timely filed. See Computervision Com., 445. F.3d at 1364. The Court concludes that the
undated letter Ms. Fremuth submitted after she received a refund in 2009 does not meet
this standard. Thus, the three-sentence letter did not demand payment or indicate that Ms.
Fremuth believed that the SSA had improperly withheld money from her benefit
payments. See Def.'s Mot. Ex.4 at 1. Instead, Ms. Fremuth merely "request[ed]
information" about any reflrnds that might be "due to [her] for years prior to the period
treated on this refund." Id. Accordingly, even under the informal claim doctrine, the
undated letter did not contain enough information to apprise the IRS ofthe nature ofher
refrrnd claim, and thus did not constitute an administrative refund request for purposes of
$ 6s11(a).

        On the other hand, Ms. Fremuth's January 30,2013 and March 29, 2013 letters
spell out the basis for her refund request in sufficient detail to apprise the IRS of the
nature of her refund claim. ln those letters, she claimed that she was entitled to a refund
of"all taxes [she] ever paid as made evident in the deductions" withheld from her Social
Security benefits by the SSA. Def.'s Mot. Ex. 2 at2. She noted that she received a refund
in an amount equal to those deductions for the 2008 ta,r year. See id.; Def.'s Mot. Ex. 3 at
2. And she claimed that she was similarly entitled to a refund for every other tax year
"since [she began] receiving social security benehts in [the] year 2000 A.D." Def.'s Mot.
Ex.2 at2 (emphasis omitted). Under the informal claim doctrine, the Court concludes
that these letters adequately apprised the IRS of Ms. Fremuth's request for a refund ofthe
taxes withheld from her Social Security benefits for every tax year from 2000 through
2007 and from 2009 through 201 2.4

         Even so construed, however, Ms. Fremuth's request is untimely under $ 65 t 1(a)
with respect to the tax years fiom 2000 through 2007. See Def.'s Mot. at 8-9. The statute
of limitations for filing a timely administrative claim regarding the 2007 tax year expired

4
  The Court has excluded the 2008 tax vear because Ms. Fremuth in fact received a
refund for that year.
in April 201l See id. Because Ms. Fremuth did not file her administrative refund request
until January 30,2013, her request was untimely as to the 2007 tax year and every
previous tax year as well.

         Further, Ms. Fremuth's claim with respect to the 2012 tax year is baned by the
two-year statute of limitations set forth in I.R.C. $ 6532(a)(1). As noted above, the IRS
 mailed its letter denying Ms. Fremuth's request as to the 2012 tax year on January 21,
 2014.s See Compl. at 4. The two-yeax statute of limitations thus expired on January 21,
 2016, six days before Ms. Fremuth filed her complaint.6 Accordingly the Court lacks
jurisdiction over Ms. Fremuth's claims with respect to the 2012 tax year.7

        In summary, even under the informal claim doctrine, the Court lacks jurisdiction
over Ms. Fremuth claims with respect to the tax years from 2000 to 2007 because Ms.
Fremuth failed to file a timely administrative refund request for those years. Further, the
Court lacks jurisdiction over Ms. Fremuth's claim with respect to the 2012 tw< yeat
because the IRS mailed Ms. Fremuth a notice of the disallowance of her request with
respect to the 2012 tax year more than two years before Ms. Fremuth filed suit in this
Court. On the other hand, the Court has jurisdiction to hear Ms. Fremutl's claims with
respect to the 2009, 2010, and 201 1 tax years.

II.    Ms. Fremuth's Claims for the 2009,2010, and 2011 Tax Years

        When considering a motion to dismiss for failure to state a claim under RCFC
12(b)(6), the court accepts as true the complaint's undisputed factual allegations and
construes them in the light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S.
662,678 (2009). The court also draws all reasonable inferences in favor ofthe non-
moving party. Sommers Oil Co. v. United States,24lF.3d1375,1378 (Fed. Cir.2001).
So construed, the plaintiffs allegations must "raise [the] right to relief above the


s
  Although Ms. Fremuth clearly requested refunds for every tax year from 2000 on, the
IRS's denial letter expressly stated that *[t]he retum and claim you filed for 2012 is the
only year under consideration." See Compl. at 5. And while the letter opines that the
IRS's "explanations apply to all years fMs. Fremuth was] a non-resident alien," it did not
itself dispose of Ms. Fremuth's claims for any tax years other than 2012. See id. Indeed,
it expressly declined to do so. Id. Accordingly, for purposes of I.R.C. $ 6532, the Court
concludes that the notice of disallowance the IRS mailed to Ms. Fremuth covered only
her claims related to the 2012 tax year.

o
 The Court notes that the "mailbox rule"-under which a document sometimes may be
deemed filed as ofthe date it was postmarked--does not apply in tax refund suits in the
Court of Federal Claims. See Hamer Int'I, 120 Fed. Cl. at72.

7
 By contrast, the statute of limitations has not yet begun to run for Ms. Fremuth's claims
with respect to the 2009, 2010, and 201 I tax years because the I.R.S. has not mailed a
notice of the disallowance of those claims. See I.R.C. $ 6532(a)(1).
speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544,555 (2007). In other words,
the plaintiffs claim must be plausible on its face. Id. at 570; see also Acceotance Ins.
Cos.. Inc. v. United States, 583 F.3d 849, 853 (Fed. Cir. 2009). "A claim has facial
plausibility when the plaintiffpleads factual content tlat allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556
U.S. at 678 (citing Twomblv, 550 U.S. at 556).

         In her complaint, Ms. Fremuth alleges that she is entitled to a refund of the taxes
withheld from her Social Security benefits because her annual income (which consists
only ofher Social Security payments) is insuflicient to make her liable to pay income tax.
See Compl. at 2. According to Ms. Fremuth, "[c]ommon sense . . . has it that a widow
with an annual income ofonly $6t,1999.30 should not pay any taxes at all."8 Id. In her
view, the fact that the IRS paid her a refund for the 2008 tax year shows that she should
be entitled to a refund for every other tax year at issue, as her income in 2008, like her
income for every other tax year, consisted solely ofher Social Security benefits. See id. at
2-3.

        Ms. Fremuth's claims lack merit. As noted above, I.R.C. $ 871 imposes a tax on
the income that non-resident alien individuals like Ms. Fremuth receive from sources
within the United States. In particular, $ 871(a)(1) imposes a tax of thirty percent on
income from United States sources that are not connected with a United States business.
Income from Social Security benefits falls within this category. See id. $ 871(a)(3).
Indeed, $ 871(a)(3) modifies $ 871(aXl) with respect to Social Security benefits, so that
for the purposes of $ 871(a)(1), "85 percent ofany social security benefit . . . shall be
included in gross income."

        Importantly, the Intemal Revenue Code does not permit non-resident alien
taxpayers to take deductions from income subject to taxation under $ 871(a)(1). See id.
$ 873(a); see also Treas. Reg. 1.871-7(a)(3) ("Deductions shall not be allowed in
determining the amount subject to tax under [$ 871(aX1)] . . . ."). Thus, in contrast to the
incomes ofindividuals residing in the United States, a non-resident alien's income from
Social Security benefits is subject to taxation regardless ofhow little income she may
receive from United States sources that are not connected with a United States business.

       Further, as the govemment points out, the IRS may not be equitably estopped
from conecting an earlier mistake of law. See Def.'s Mot. at 7 (citing Auto. Club of
Mich. v. Comm'r, 353 U.S. 180, 183 (1957)). Thus, even if the IRS erred when it
refunded Ms. Fremuth's taxes for the 2008 tax year, that fact would not prevent it from
conecting that error with respect to subsequent tax years.




d
  The Court notes that Ms. Fremuth's claimed income of $6,999.30 is the amount she
receives after her taxes have been withheld.
       Accodingly, the Court concludes that Ms. Fremuth    has not plausibly alleged any
legal basis demonstrating her entitlement to a refund for the 2009, 2010, and 201I tax
yean|.

                                    CONCLUSION

        For the reasons discussed above, the govemment's motion to dismiss Ms.
Frcmuth's complaint is GRANTED. Ms. Fremuth's claims with respect to thc tax years
from 2000 through 2007 and 2012 are dismissed without prejudice. Her claims with
respect to the 2009, 2010, and 2011 tax years are dismissed with prejudice. The Clerk is
directed to enter judp.ent accordingly, Each side shall bear its own costs.



       ITIS SOORIIERED.

                                                        tu/l
                                                   .EI.AINE D. KAPLAN
                                                   Judge




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