Baldwin v. United States, No. 17-55115 (9th Cir. 2019)Annotate this Case
The Ninth Circuit reversed the district court's judgment in favor of taxpayers in their tax refund action. The panel held that the district court lacked the authority to hear this action because, as a prerequisite to bringing this action, taxpayers first had to file a timely claim for a refund with the IRS.
The panel held that Treasury Regulation 301.7502-1(e)(2) provided the exclusive means to prove delivery, and recourse to the common law mailbox rule was no longer available. In this case, taxpayers relied on the common law mailbox rule to establish that the document was presumptively delivered to the IRS. Accordingly, the panel remanded with instructions to dismiss because taxpayers had not filed a timely claim for a refund with the IRS. The panel also reversed the award of litigation costs to taxpayers because they were no longer the prevailing party.
Court Description: Tax. The panel reversed the district court’s judgment, after a bench trial, in favor of taxpayers in their tax refund action, and remanded with instructions to dismiss because taxpayers had not filed a timely claim for a refund with the Internal Revenue Service (IRS). As a prerequisite to bringing their refund action, taxpayers first had to file a timely amended return, claiming the refund, with the IRS. In this case, the IRS did not timely receive such a return. The district court credited the testimony of two employees of taxpayers to find that, under the common-law mailbox rule, the amended return had been timely filed. The common-law mailbox rule provides that proof of proper mailing—including by testimonial or circumstantial evidence—gives rise to a rebuttable presumption that the document was physically delivered to the addressee in the time such a mailing would ordinarily take to arrive. In contrast, Internal Revenue Code § 7502 allows documents to be deemed timely filed only if they are actually delivered to the IRS and postmarked on or before the deadline. For documents sent by registered mail, § 7502 provides a presumption that the document was delivered even if the IRS claims not to have received it, so long as the taxpayer produces the registration as proof. Under Treasury Regulation § 301.7502-1(e)(2), IRC § 7502 provides the