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                                        No. 15-153T

                                   (Filed: August 2, 2016)

***************************************
                                      *
WILTON R. STEPHENS, JR. and                       *
CAROL M. STEPHENS,                                *
                                                  *   Reconsideration of Defendant's
                          Plaintiffs,             *   Motion to Dismiss; 26 U.S.C. §§
                                                  *   6511, 7422; Untimely Refund
v.                                                *   Claim Filed with IRS; Equitable
THE UNITED STATES,
                                                  *   Theories; Last v. United States,
                                                  *   37 Fed. Cl. 1 (1996).
                          Defendant.              *
                                                  *
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Craig S. Lair, with whom was Byron J. Walker, Rose Law Firm, Little Rock, Arkansas,
for Plaintiffs.

Matthew D. Lucey, with whom were Caroline D. Ciraolo, Acting Assistant Attorney
General, David I. Pincus, Chief, and Mary M Abate, Assistant Chief, Court of Federal
Claims Section, Tax Division, U.S. Department of Justice, Washington, D.C., for
Defendant.

                       OPlNlON AND ORDER RECONSIDERING
                        DEFENDANT'S MOTION TO DISMISS

WHEELER, Judge.

        In this tax refund suit, the Court on its own motion is reconsidering its prior rulings
denying Defendant's motion to dismiss. Stephens v. United States, 124 Fed. Cl. 424 (2015)
(rejecting Defendant's statute oflimitations argument); Stephens v. United States, Fed. Cl.
No. 15-153T (Order, Mar. 14, 2016) (denying Defendant's motion for reconsideration).
Recently, on June 29, 2016, Defendant requested the Court to certify these orders for
interlocutory appeal, pursuant to 28 U.S.C. § 1292 (d)(2). In reviewing the basis for
Defendant's request, the Court has taken another look at the applicable case law and
statutory provisions, and has concluded that Defendant's motion to dismiss should be
granted.
        The underlying facts are recited in Stephens, 124 Fed. Cl. at 426-27, and are not
contested. Essentially, in this long-running dispute, Plaintiffs want to apply loss
carryforwards from 1995 and 1996 to their 1997 tax return. Under the Internal Revenue
Code, 26 U.S.C. § 7422, "[n]o suit or proceeding shall be maintained in any court for the
recovery of any internal revenue tax alleged to have been erroneously or illegally assessed
or collected ... until a claim for refund or credit has been duly filed with the [IRS]." United
States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 5 (2008). 26 U.S.C. § 651 l(a)
provides that a refund claim must be filed with the IRS no later than "3 years from the time
the return was filed or 2 years from the time the tax was paid, whichever of such periods
expires later." The filing of a refund claim with the IRS within the applicable two- or three-
year period thus is a prerequisite for a refund suit to be brought in any court.

       The time periods may be extended when the IRS and the taxpayer agree to extend
the period of limitations for assessing tax. See 26 U.S.C. § 650l(c)(4). Here, the IRS and
Plaintiffs agreed to extend the period for assessing tax for 1997 to December 31, 2007.
Def.'s Mot. to Dismiss at A29. Under 26 U.S.C. § 6511(c), the period for filing a refund
claim for 2007 was extended for six months after that date, until June 30, 2008. However,
Plaintiffs did not file an amended return for tax year 1997 until October 8, 2009, and thus
it was untimely.

       Even though the refund claim was untimely, Plaintiffs contend that various
equitable theories allow the Court to retain jurisdiction. However, this case has many
similarities to Last v. United States, 37 Fed. Cl. 1 (1996), where Judge Lawrence Margolis
of this Court rejected plaintiffs' arguments of mitigation, equitable recoupment, and
equitable estoppel. The Court adopts the detailed analysis of Judge Margolis in Last, along
with the cited authorities, and denies each of Plaintiffs' equitable arguments.

      Accordingly, the Court on reconsideration GRANTS Defendant's motion to
dismiss, and the Clerk of Court shall dismiss Plaintiffs' complaint pursuant to Rule
12(b)(l). Defendant's motion for certification of the Court's March 14, 2016 and
December 3, 2015 Orders for interlocutory appeal is DISMISSED AS MOOT. Those
previous orders are hereby vacated.

       IT IS SO ORDERED.

                                                   s/Thomas C. Wheeler
                                                   THOMAS C. WHEELER
                                                   Judge




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