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                                                                                                 No. 13-9047
                                                                                            (Filed: June 5,2014)

                                                                                                                         FILED
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                                                                                                                         JUN   - 5 2014
MICHAEL NICHOLAS PALM. SR.

                                                         Plaintiff,
                                                                                                                        #3i#&l'!h
                                          v.

THE UNITED STATES,

                                                         Defendant.

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                                                                                         OPINION and ORDER

DAMICH, Senior Judge:

        Michael Palm ("Plaintiff'), here appearingpro se, filed his Complaint on
November 12,2013, seeking a refund from the Internal Revenue Service ("IRS") for
partial payments made towards tax assessments made against him for the entire year of
2007 and portions of 2008 and 2009. The United States ("Defendant") brings a Motion
to Dismiss pursuant to Rule 12(b)(1) of the Rules of the United States Court ofFederal
Claims ("RCFC"), arguing that this Court lacks the subject matter jurisdiction to hear
Plaintiff s claims because the two-year statute of limitations expired prior to the date
Plaintiff filed his complaint as required by 26 U.S.C. $ 6532(a)(l). For the reasons set
forth in this opinion, the Court hereby GRANTS Defendant's Motion to Dismiss.

           I.                    Background

                                 A. IRS First Notice of Disallowance (First Notice)

       On July 1,2009, Plaintiff received a notice from the IRS proposing an assessment
of                                         him as a responsible officer, pursuant to $
       a Trust Fund Recovery Penalty against
6672, for unpaid payroll taxes of Albert Lea Hospitality of Minnesota, LLC. Plaintiff did
not timely dispute the proposed assessment and the IRS assessed the penalty on
December 14,2009. In light of the assessed penalty, Plaintiff filed a collections due
process petition onMay 27,2010, and, on March 22,2011, he paid $ 100 toward each
assessed quarter as a partial payment of the employment tax liability and submitted
claims for refund of those tax payments. The IRS denied these claims for refund, issuing
its First Notice on April 18,2011. The First Notice stated in pertinent part:

          [i]f you wish to bring suit or proceedings for recovery of any tax,
          penalties, and other moneys that were paid and for which this notice of
          disallowance is issued, you may do so by filing suit with either the United
          States District Court having jurisdiction or the United States Court of
          Federal Claims. The law permits you to do so reithin two years of the
          mailing date of this letter. You are not required to go to Appeals prior to
          filing suit. Please note that Appeals review of a disallowed claim does not
          extend the two-yeax period for filing suit; however, it may be extended by
          mutual ogreement.

Def. Mot. to Dis. Ex. 4. (emphasis added).

             B, IRS Second Notice     of Disallowance (Second Notice)

        Rather than file a complaint in this Court after the First Notice was issued,
Plaintiff appealed to the IRS Appeals Office. Although the facts are unclear as to when
and how Plaintiff filed his appeal, the IRS Appeals Office reconsidered Plaintiff s claims
for refund, and again denied those claims on November 29,2011. The Appeals Office
also sent Plaintiff its own Notice of Disallowance, which stated that Plaintiff had two
years from the date of the Second Notice to file suit. The second Notice of Disallowance
was followed by a letter (May 9,2012) to Plaintiff from David L. Zoss, a senior IRS
attomey, who not only reiterated the language of the Second Notice that Plaintiff had two
years from the Second Notice to hle but also stated: "That option remains open to you at
present." Pl.'s Sur-Reply, Ex.   1.


        Approximately two years from the date of the Second Notice, on November 12,
201 3, Ptaintiff filed his complaint in this Court. This date is well beyond two years from
the date of the First Notice.

    II.       Legal Standard

              A.   Pro Se pleadings

         Parties actingpro se are generally held to "less stringent standards" than
professional lawyers. See, e.g., Haines v. Kerner,404 U.S. 519, 520-21 (1972) (requiring
that allegations contained in a pro se complaint be held to "less stringent standards than
formal pleadings drafted by lawyers"); Forshey v. Principi,284 F.3d 133 5, 1357(Fed.
Cir.2002) ("[T]he pleadings ofpro se litigants should be held to a lesser standard than
those drafted by professional lawyers . . .). Nevertheless, "[t]he fact that [a plaintiffl
acted pro se in the drafting ofhis complaint may explain its ambiguities, but it does not
excuse its failures. if such there be." Henke v. United States,60 F'3d 795, 799 (Fed. Cir.
1995).

              B. Motion    to Dismiss under RCFC Rule 12(b)(f)
        A motion brought pursuant to RCFC l2(b)(1) challenges the Court's subject
matter jurisdiction. See RCFC 12(bX1). When faced with a motion to dismiss for lack of
subject matter jurisdiction, a court must assume that all undisputed facts alleged in the
complaint are true, and it must draw all reasonable inferences in the plaintiff s
favor. Scheuer v. Rhodes,4t6 U.S. 232,236 (1974); see also Henke v. United States,60
F.3d 795, 797 (Fed. Cir. 1995). Plaintiffbears the burden ofproofto establish subject
matter jurisdiction, and must do so by a preponderance ofthe evidence. Alder Terrace,
Inc.v. United States, 161 F.3d1372,1377(Fed. Cir. 1998), Reynolds v. Army &Air
Force Exch. \erv.,846F.2d746,748 (Fed. Cir. 1988).

   III,      Discussion

        Defendant argues the case must be dismissed because Plaintiff s complaint is
untimely pursuant to 26 U.S.C. $ 6532. According to Defendant, the two-year statute of
limitations started to run from the First Notice, not the Second Notice, and to be timely,
Plaintiff s complaint had to be filed on or before April I 8, 2013. On the contrary,
Plaintiff avers that his complaint is timely for two reasons. First, Plaintiff argues that the
two-year statute of limitations started to run from the Second Notice, and second, even    if
the statute of limitations started to run from the First Notice, the Second Notice, bolstered
by the letter from Senior Attomey Zoss, constitutes a "mutual agreement" which acts to
extend the two-year filing period.

             A. Legal Framework
        Pursuant to 26 U.S.C. $ 7422(a), this Court hasjurisdiction to entertain suits for
tax refunds. 26 U.S.C. $ 6532(a)(1) provides the statute of limitations for such suits. It
provides:

        [n]o suit or proceeding under section 7 422(a) fot the recovery of any
        intemal revenue tax, penalty, or other sum, shall be begun before the
        expiration of 6 months from the date of filing the claim required under
        such section ... nor after the expiration of 2 years from the date of mailing
        by certiJied 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.

26 U.S.C. 6532(aX1) (emphasis added).

Additionally, subsection (a)(4) provides that:

          [a]ny consideration, reconsideration, or action by the Secretary with
          respect to such claim following the mailing of a notice by certified mail or
          registered mail of disallowance shall not operate     to extend the period
          within which suit may be begun.
26   u.s.c.   $ 6s32(a)(4).

        The sole exception to this rule is found in subsection (a)(2) which dictates that
"the 2-year period . . . shall be extended for such period as may be agreed upon in writing
between the taxpayer and the Secretary." 26 U.S.C. $ 6532(a)(2). Therefore, following
the statute, a taxpayer has two years from the first Notice of Disallowance to file his or
her complaint unless the claim is extended by mutual agreement.

              B. The statute   of limitations started to run from the First Notice.

        The difficulty here, ofcourse, is that there are two Notices of Disallowance and
furthermore that the second Notice of Disallowance states that the taxpayer has two years
from the date of the second Notice of Disallowance to file suit. Unfortunately, the
second Notice of Disallowance is misleading regarding the time limit. The First Notice
and the Second Notice concemed the same dispute; therefore, the Second Notice derived
from a "consideration, reconsideration or action" as provided for in 26 U.S.C. $
6532(a)@), which does not extend the statute of limitations period which began with the
First Notice.

        But Plaintiff also argues that the language of the second Notice of Disallowance,
supported by the Zoss letter, was a "mutual agreement" which acts to extend the two-year
filing period. Although this argument is plausible, the statute states that there must be an
agreement in writing between the taxpayer and the Secretary to extend the period ofthe
statute of limitations. 26 U.S.C. S 6532(a)(2), This Court feels that it is too much of a
stretch to construe the boiler-plate language ofthe Second Notice, even with the language
ofthe Zoss letter, as such an agreement.

        This conclusion is in iine with the case of Orlando v. United States,94 Fed.Cl.
286 (2010),453 Fed.Appx. 967 (2011). ln Orlando, and as here, the plaintiffsought
recovery of a tax penalty and was served a Notice of Disallowance from the IRS. 1d. at
288-89. The plaintiffthen filed a letter ofappeal which was denied, and the IRS sent a
second Notice of Disallowance, stating that the taxpayer could bring suit for the tax
recovery "within 2 years from the mailing date of this letter." 1d. (emphasis added). As
expressed by the court in Orlando, this second representation by the IRS Appeals Office
was "legally incorrect" because the First Notice was controlling as to the correct start
date of the statute of limitations period. Id. al290.

        In addition, the plaintiff in Orlando had also argued that the second Notice of
Disallowance was a mutual agreement to extend the statute of limitations period. Judge
Firestone concluded that the second notice:

         is not an agreement or even an offer to extend the statute of limitations by
         two years. Rather it is only an explanation, albeit an incorrect one, of
         what the law permits . . . [and even if the second notice] could be
         construed to be an 'extension' of the limitations period, it would still not
         meet the requirements for an 'agreement' under the applicable regulation.
Id. at29l.

      Judge Firestone then recited the regulation which provides in pertinent part that an
agreement for extension:

       must be signed by the taxpayer or by an attomey, agent, trustee, or other
       fiduciary on behalf of the taxpayer . . . [and t]he agreement will not be
       effective until signed by a district director, a director of an internal
       revenue service center. or an assistant resional commissioner.

26 C.F.R. $ 301.6s32-l(b).

         Although there was no letter in Orlando equivalent to the Zoss letter in this case,
this difference does not change this Court's conclusion. First, the relevant language in
the Zoss letter plays off of the language in the Second Notice. It is not a thoughtful
reflection of the Plaintiff s situation as a whole. Indeed, Senior Attomey Zoss was
assigned to handle the case brought by Mr. Palm in the U.S. Tax Court, and his attention
would naturally be focused on that suit. Second, as the regulation cited by Judge
Firestone indicates, an agreement for an extension ofthe statute of limitations period
must be signed on behalf ofthe IRS by a "district director, a director of an intemal
revenue service center, or an assistant regional commissioner," not by a mere senior
attorney. Moreover, Plaintiff himself did not sign the Zoss letter or the Second Notice.

        The Court sympathizes with Plaintiff s plight in this case, but it must follow the
clear language of the statutes and the regulation. Nevertheless, the Court's decision does
not detract from the fact that Plaintiff was misled (albeit unintentionally) both by the
boiler-plate language ofthe Second Notice and -worse- by the statement of Senior
Attomey Zoss, who should have been more circumspect. Inexplicably, the IRS continues
to use misleading language in its Notices of Disallowance after appeal, even after the
Orlando case highlighted the problem some four years ago. If the IRS will not address
this problem, perhaps it is time to bring this issue to the attention of the U'S. Congress.

             C. The Court    is not permitted to grant equitable   tolling here because it   is
                statutorily limited by 26 U.S.C.   S   6532.

        The Supreme Court first addressed the issue of equitable tollingin United States
v. Brockamp,s19 U.S. 347 (1997), holding that "the limitations period on tax refund
claims does not authorize equitable tolling." Id.at353. The Federal Circuit then
expanded this standard and logic to cases involving 26 U.S.C. $ 6532 in RHI Holdings'
Inc. v. United Stotes,142F.3d 1459 (1998). The Federal Circuit held that "unless the
statute of limitations,26 U.S.C. $ 6532, contains an implied equitable exception,
considerations of equitable principles axe not appropriate." Id. at 1460. RIll further
established that "the statute in question, 26 U.S.C. $ 6532(a), does not contain an impiied
'equitable' exception." Id. at 1462. The court detailed that'
          26 U.S.C. $ 6532 is part of the same statutory scheme as the statute of
          limitations in Brockamp [as] it sets forth its limitations in a detailed,
          technical manner, and reiterates the two year limitations in subsections (1),
          (2), and (3) . . . prescribes a particular process for extending the two year
          period in subsection (2) . . . [and] subsection (4) states that any further
          action taken by the Secretary after a notice of disallowance is mailed to
          the taxpayer does not operate to extend the statutory period.

ld, at 1462.

        As it/// is binding precedent for this Court, and since .RIll specifically addresses
the exact statute here at hand, Q 6532(a), the Court here has no choice but to dismiss the
complaint since it is statutorily limited. The statute of limitations does not toll and
further, does not contain an equitable exception, thus this Court does not have jurisdiction
over the case. Regardless, of the fact that the IRS completely misstated the rule in its
November 201 1 letter, misleading the Plaintiff, that language was legally incorrect, and
the Defendant's Motion to Dismiss must be granted. This notion is equally discussed in
Thomasson v. Uniled States, 1997 WL 220321 (N.D. Cal.) (1997), where the court noted:

                                                                        .
          [t]he court does not condone the behavior of the IRS . . Misleading
          taxpayers or their representatives is irresponsible and below the standard
          of conduct the public has a right to expect of its govemment. Congress
          has chosen, however, to apply a 'brightJine' rule in this statute for the
          sake of administrative efficiency.

Id. at * 4.

    IV.       Conclusion

       Due to the fact that the statute of limitations period ran before Plaintiff filed his
complaint, the court does not have subject matter j urisdiction over it. Therefore, the
Court hereby GRANTS Defendant's Motion to Dismiss. The Clerk is directed to enter
judgment accordingly.




                                                                Senior Judge
