Robb Evans & Associates, LLC v. United States, No. 15-2540 (1st Cir. 2017)Annotate this Case
A court-appointed receiver (the Receiver), acting on behalf of a class of defrauded persons (the underlying plaintiffs), attempted to collect judgments previously rendered against several corporations and their proprietors. When the Receiver was able to recoup only a portion of the amount, it filed a tax-refund claim. The IRS denied the tax-refund claim. Thereafter, the Receiver responded by bringing this suit pursuant to 28 U.S.C. 1346(a). At issue in this case was the statute’s requirement that a taxpayer who seeks to reduce her tax liability under certain circumstances have an “unrestricted right” to income when she first reported it. The district court fashioned a judicially-created exception to the statute’s “unrestricted right” requirement, proceeded to deny the government’s motion to dismiss, and granted a modicum of relief. The First Circuit reversed, holding that the district court erred in refusing to follow section 1341(a)’s unambiguous textual mandate by carving out a special exemption from the “unrestricted right” requirement for parties in either the Receiver’s or the underlying plaintiffs’ position. Remanded for entry of judgment dismissing the tax-refund suit.