[00:00:00] Speaker 03: We will hear argument next in number 221564, Dixon against United States. [00:00:09] Speaker 00: May I please the court? [00:00:10] Speaker 00: I'm here on behalf of appellant Alan C. Dixon. [00:00:14] Speaker 00: Today we request that this court review the lower court's decision de novo and reverse and remand the judgment for the reasons set forth in our brief. [00:00:23] Speaker 00: Hear the lower court conflated. [00:00:25] Speaker 00: the informal claims doctrine with the Angelus-Milling doctrine where he dismissed Dixon's net investment income tax claim on the basis that the IRS could have not waived the signature requirement despite the taxpayer never arguing a waiver in the lower courts. [00:00:45] Speaker 00: I will also address that the taxpayer's unsigned amended tax return can form the foundation of the informal claim doctrine and that the taxpayer perfected the informal claim by filing signed amended tax returns. [00:01:03] Speaker 00: As this court stated in computer vision, formal compliance with the statute and regulation is excused until a formal claim is filed [00:01:14] Speaker 00: when the informal claim doctrine is applicable. [00:01:17] Speaker 00: The formal compliance is not waived under the informal claim doctrine, and the applicability of the informal claim doctrine is dependent on the taxpayer curing the defects by filing a perfected claim for a refund. [00:01:34] Speaker 00: The informal claim for purposes of the informal claim doctrine is a timely claim with purely formal defects [00:01:43] Speaker 00: that fairly apprises the IRS of the basis of the claim within the limitation period. [00:01:50] Speaker 00: And this is precisely what the taxpayer argued in the lower court. [00:01:55] Speaker 00: So when discussing, when the lower court discussed the informal claim doctrine, the lower court first aired in its analysis of the Supreme Court decision in Kales. [00:02:06] Speaker 02: Let's assume we agree with you on this point, that the informal claims doctrine is sufficient [00:02:11] Speaker 02: even without a signature, and that the taxpayer can correct that. [00:02:17] Speaker 02: Doesn't the case also suggest that the taxpayer has to correct that while the IRS still has the authority to rule on the claim? [00:02:26] Speaker 00: Correct. [00:02:26] Speaker 00: And here, our courts have held that if the IRS rejects the claim, there would be no means for a taxpayer to correct the informal claim. [00:02:36] Speaker 00: But here, while the IRS asks for additional documents, they never outright [00:02:40] Speaker 00: Okay, I get that. [00:02:42] Speaker 02: But the problem for you here is that, or at least as I see it, is not just that the IRS didn't reject it, but that you actually filed suit in the court of federal claims before you attempted to correct it. [00:02:54] Speaker 02: And once it's in the court of federal claims, the IRS doesn't have authority to issue a new decision, does it? [00:03:01] Speaker 00: So this issue was also raised in Kales, where the tax... Right, right, right. [00:03:07] Speaker 02: But I think Kales, you know, Kales is very hard to read. [00:03:10] Speaker 02: But I'm not sure it addresses this point specifically. [00:03:13] Speaker 02: And I think in Memphis Cotton, another Supreme Court case, and in our case, computer vision that we do say specifically, more specifically, that if the case is then proceeds to the court of federal claims, [00:03:27] Speaker 02: that the IRS no longer has the authority to remedy any defects in an informal claim. [00:03:32] Speaker 02: And that's what happened here, right? [00:03:34] Speaker 02: You didn't file the amended claim until after you'd already filed suit and in fact lost, I think, right? [00:03:41] Speaker 00: It was dismissed for... Yeah. [00:03:44] Speaker 02: So why doesn't that case law suggest that even if we agree that this was an informal, that first document without signature, without proper signature, was an informal claim that could be remedied, that you lost your ability to do that once you filed suit in the court of federal claims? [00:04:03] Speaker 00: So just to address chaos for one second. [00:04:05] Speaker 02: Well, I'd rather have you address the cases I asked you to address. [00:04:09] Speaker 00: In computer vision, I believe the issue was under Germanus doctrine, which is a different judicial doctrine. [00:04:16] Speaker 00: Under the Germanus doctrine, the taxpayer can submit additional information [00:04:21] Speaker 00: that while the IRS is investigating the claim, there could be the danger of a continued statute of limitations. [00:04:30] Speaker 02: I understand it's under a different doctrine, but doesn't the same rationale apply? [00:04:34] Speaker 02: The whole point of the informal claim doctrine is that you put the IRS on notice that you're going to do something, you're seeking a refund, and you've just not made specific requirements, but that you can do it later while the IRS still has the authority to address that amended filing. [00:04:52] Speaker 02: But if the IRS no longer has the authority to address that filing, then why should you be allowed to file an amended return? [00:05:02] Speaker 00: So that, there has been other cases, for example, I think Green Tapeti, where even a tax court petition was considered the informal claim. [00:05:12] Speaker 00: The court ended up ruling against the informal claim doctrine because the claim wasn't perfected. [00:05:20] Speaker 00: But if there's no valid refund claim filed, because the tax return that doesn't abide by statute is not a refund claim that can maintain a suit in the federal courts. [00:05:33] Speaker 00: So the initial suit was dismissed for a lack of subject matter jurisdiction. [00:05:39] Speaker 00: So it's our position the IRS still had [00:05:42] Speaker 00: the authority to accept the informal claim doctrine because they were put on notice that a valid refund claim will be filed. [00:05:50] Speaker 03: So when I read this piece of the government's brief, I went back and checked what the government had argued to the Court of Federal Claims. [00:06:01] Speaker 03: And at least I was not able to find any [00:06:06] Speaker 03: raising by the government in the court of federal claims of the idea that the informal claim is barred because the cure came too late, i.e. [00:06:20] Speaker 03: at a time when the IRS couldn't do anything about it. [00:06:24] Speaker 03: But your reply brief does not assert forfeiture. [00:06:29] Speaker 03: that does not assert that the government forfeited this argument, even though, I mean, the informal claim is like a page or two in each of the motion to dismiss and the reply brief. [00:06:41] Speaker 03: And at least if it's there, if this point is there, I've missed it. [00:06:46] Speaker 03: So should we say, I mean, I would be inclined had you, I think, [00:06:52] Speaker 03: made the argument that it was forfeited and indeed if it were true or from the government that it was not made below to say the government had forfeited the point, but you haven't made that point. [00:07:05] Speaker 00: In the reply briefly, we did just address that we did not. [00:07:10] Speaker 00: The taxpayer has still had the authority to submit the perfected claim of refund. [00:07:16] Speaker 00: But yes, the main argument. [00:07:17] Speaker 03: What would be, if I'm remembering right, and just you can fill in some details, that in [00:07:25] Speaker 03: In our case on the subject with computer vision, where this is talked about in the germane-ness context, although some of the Supreme Court decisions seem to actually talk about it in the informal claim, [00:07:40] Speaker 03: context that the loss of IRS authority was attributable to a 1933 executive order transferring authority from Treasury to the Justice Department when something is in litigation. [00:07:57] Speaker 03: I'm not quite sure what to make of all of that, but do you have anything more to say? [00:08:04] Speaker 00: Because the case was dismissed, the federal court didn't have subject matter jurisdiction. [00:08:13] Speaker 03: It was dismissed by the claims court on February 21st. [00:08:19] Speaker 03: You filed your cure on February 25th. [00:08:22] Speaker 03: You then filed a notice of appeal a couple of weeks later, and the appeal went on for some time before you voluntarily dropped it. [00:08:30] Speaker 03: So it was in litigation at the time your cure was filed. [00:08:37] Speaker 03: Is it possible that your cure, though not ripe then, ripened upon the final dropping of the appeal? [00:08:47] Speaker 03: So that IRS perhaps could not have acted on, you know what I mean by the cure, right? [00:08:54] Speaker 03: The signed form of the identical refund request. [00:08:59] Speaker 03: Couldn't have acted on it then, but when finally you [00:09:04] Speaker 03: this court, I guess by agreement of the parties, dismissed the appeal in the first suit, then the IRS could have acted on it then and therefore this still pending perfected refund claim counted. [00:09:25] Speaker 00: correct your honor. [00:09:27] Speaker 00: So Wendy, once it was completely dismissed out of the federal courts, the IRS certainly had the jurisdiction then again to assess that claim. [00:09:36] Speaker 02: What is that argument in your briefs? [00:09:39] Speaker 00: I'm not quite sure. [00:09:40] Speaker 02: I mean, the briefing in this case on both sides is atrocious. [00:09:43] Speaker 02: I mean, on this point, I get why it wasn't addressed below, because the government didn't raise it. [00:09:50] Speaker 02: But they did raise it in the red brief. [00:09:54] Speaker 02: talk about forfeiture, and then whether it ripened or not, it could be right, could be wrong, and you didn't address that either. [00:10:04] Speaker 02: So the appeal got dismissed, and you had filed these amended refund claims. [00:10:12] Speaker 02: So assuming they ripened, when did you then file a new case in the Court of Federal Claims? [00:10:17] Speaker 00: The new case was filed, I believe, three days later after the dismissal of the notif. [00:10:24] Speaker 02: So during that three day window, you think the IRS could have had the authority to consider that and continue to deny the claims? [00:10:33] Speaker 03: I'm sorry. [00:10:34] Speaker 03: I thought that you voluntarily dismissed case number one in this court on September 21, 2020. [00:10:42] Speaker 03: The case you now have in front of us was filed [00:10:50] Speaker 03: Yes, three days, September 24th. [00:10:52] Speaker 03: Okay. [00:10:53] Speaker 03: So that's the window of IRS available action. [00:10:59] Speaker 00: I believe it was a previous council for taxpayer started counting from the day it was filed. [00:11:08] Speaker 00: But if the jurisdiction was transferred on September 21st, then the Court of Federal Claims also didn't have the jurisdiction for the foreign tax credit. [00:11:19] Speaker 00: And the government is arguing that while the Court of Federal Claims didn't have jurisdiction of the first two claims, they had it over the second claim. [00:11:27] Speaker 04: Can I go back to the question that Judge Hughes raised about 12, 14 minutes ago in the argument, which [00:11:33] Speaker 04: opened up this discussion about whether or not the jurisdiction of the case had been transferred to the courts and away from the IRS, and therefore you can't have any relief, even assuming you had a valid informal claim. [00:11:45] Speaker 04: I want to go back to whether the assumption that you had a valid informal claim and talk about that. [00:11:53] Speaker 04: It looks to me, and maybe I'm wrong, it looks to me like Brown sets forth a default rule. [00:11:59] Speaker 04: And the default rule is that an unsigned refund return is invalid. [00:12:05] Speaker 04: And they cite the regulation that says that, and it's invalid for the lack of a signature, and that such a return is not for any purpose in the regulation. [00:12:19] Speaker 04: I realize that Brown took its default rule and applied it to Section 78-422. [00:12:28] Speaker 04: to say that the client there hadn't satisfied one of the elements of the cause action. [00:12:34] Speaker 04: But nonetheless, it's a default rule. [00:12:37] Speaker 04: And so if I take that default rule and I apply it here, I say, well, an unsigned refund return is invalid for any purpose. [00:12:47] Speaker 04: Then why doesn't that end the case? [00:12:50] Speaker 00: So the language for any purpose has been in trash regulations for almost 60 years. [00:12:54] Speaker 00: Within the last 60 years, courts have found valid informal claims. [00:12:58] Speaker 04: I realize that there's a huge body of law on informal claims. [00:13:03] Speaker 04: And I realize that even a Supreme Court case like Kaos deals with a situation where there wasn't a signed return. [00:13:11] Speaker 04: Memphis Cotton, there was. [00:13:12] Speaker 04: And probably, I think, in the Melling case, there was a sworn declaration. [00:13:18] Speaker 04: But yes, there are lots of case law, but I haven't found a single case where the question was presented. [00:13:24] Speaker 04: The challenge was made to say, I'm sorry. [00:13:28] Speaker 04: An unsigned return is invalid, can't be used. [00:13:31] Speaker 04: So you have Judge Posner's cute dictum in a case, Seventh Circuit. [00:13:37] Speaker 04: But I don't find a holding that has said, dealt with the issue. [00:13:44] Speaker 04: And the government points out in its brief [00:13:46] Speaker 04: Certainly in this circuit, there's no direct holding. [00:13:49] Speaker 04: So I'm just asking you. [00:13:51] Speaker 04: There is a default rule that I see, and I don't see that that default rule is limited to applying it in a 7422 setting. [00:14:00] Speaker 00: So the ruling in Brown that addressed the signature requirement, that addressed the signature requirement whether it can be waived. [00:14:07] Speaker 00: An informal claim doctrine doesn't request a waiver of statute of regulation from the IRS. [00:14:13] Speaker 00: It just requests it. [00:14:14] Speaker 04: I mean, what purpose, what policy would be promoted by allowing an informal claim that was not signed to go forward where someone who was relying on a waiver theory is barred? [00:14:29] Speaker 04: A class of people who would like to argue that their informal return, even though it wasn't signed, is legit, arguing, well, the IRS worked on it and didn't mislead anybody, those people are out of luck after Brown, correct? [00:14:46] Speaker 04: Correct. [00:14:47] Speaker 04: So if that body of people is out of luck, why should you treat an informal claimant [00:14:53] Speaker 04: differently when you have a default rule that says clearly that the unsigned return is invalid. [00:15:01] Speaker 00: So in Brown, the difference here is that if we were talking about the Angeles Milling Doctrine, we're looking into the IRS's action. [00:15:10] Speaker 00: And we're looking at whether they examined the claim. [00:15:13] Speaker 00: And in Brown, a discord ruled that- I understand Brown. [00:15:18] Speaker 04: And Brown is over in the Angeles Milling body of law. [00:15:21] Speaker 04: But I'm just saying, if you have [00:15:23] Speaker 04: A default rule that says something that's unsigned is invalid. [00:15:30] Speaker 00: For the informal claim doctrine to apply, the taxpayer needs to do an additional act. [00:15:35] Speaker 00: So it wouldn't automatically apply. [00:15:37] Speaker 00: And there's the big distinction between it. [00:15:41] Speaker 00: The informal claim doctrine just allows more time than a taxpayer would normally have. [00:15:46] Speaker 02: But in terms of equity, it seems like the situation in Brown, [00:15:51] Speaker 02: deserves more equity than your situation. [00:15:53] Speaker 02: In Brown, the taxpayers filed something that's legally insufficient, but the IRS goes ahead and processes it and doesn't even tell the taxpayer that it's insufficient. [00:16:03] Speaker 02: And it turns out it is. [00:16:05] Speaker 02: Here, the IRS doesn't do anything to suggest to your client that it has filed a deficient claim. [00:16:15] Speaker 02: Right? [00:16:16] Speaker 00: Correct. [00:16:16] Speaker 00: I would agree with you. [00:16:17] Speaker 02: I mean, I think this is all, but I mean, [00:16:20] Speaker 02: It's a little baffling why Brown would say that you can't get around the statutory requirement through waiver, but then this other body of case law says you can through an informal claim. [00:16:33] Speaker 02: They seem to be conflicting policy purposes if we're talking about equity. [00:16:43] Speaker 00: In Brown, the signature requirement was held to be statutory, and there can be no waiver of statutory requirements. [00:16:50] Speaker 00: so under the informal claim doctrine. [00:16:52] Speaker 00: And I would agree that in Brown, the court should have cited that the signature requirement can be waived. [00:16:58] Speaker 00: But in the informal claims doctrine, this courts and computer vision compliance with statute and regulation can be excused until the formal claim is filed. [00:17:08] Speaker 00: And that is a distinction. [00:17:10] Speaker 00: We're not requesting a waiver from the IRS because of something that they cannot waive. [00:17:16] Speaker 00: We're just asking them to give the taxpayer more than the three years under IRC section 65-11. [00:17:22] Speaker 03: Thank you. [00:17:25] Speaker 03: I'll restore your rebuttal time. [00:17:29] Speaker 03: We'll hear from Mr. Rosenberg. [00:17:32] Speaker 01: May it please the court? [00:17:33] Speaker 01: Good morning. [00:17:34] Speaker 01: Isaac Rosenberg for the United States. [00:17:36] Speaker 01: I'm actually going to pick up where Ms. [00:17:38] Speaker 01: Hunt left off. [00:17:39] Speaker 01: She said she's just asking for more time under the statute of limitations under 6511 to correct a core defect in the original refund claim. [00:17:50] Speaker 01: The problem with that is that the statute of limitations is firm and under Broadcamp versus the United States, it can't be told or waived. [00:18:00] Speaker 01: And the statute of limitations probably supplies a lot of the answers to the questions that the court is wrestling with today. [00:18:05] Speaker 03: When you say statute of limitations, do you mean the time to go to court or the time to make a request to an administrative agency? [00:18:14] Speaker 01: The time to file a refund claim with the IRS under 6511A. [00:18:18] Speaker 03: Was Broadcamp about that? [00:18:20] Speaker 01: Broadcamp was about that statute specifically and says that statute can't be equitably told. [00:18:25] Speaker 01: So and Broadcamp's 1998 decision, which comes much later than all these venerable cases about the informal claim doctrine. [00:18:32] Speaker 03: Right. [00:18:33] Speaker 03: And in the world of statutes of limitations generally, in district courts, is the question of tolling the same question as the adequacy of the complaint filed that launches the action? [00:18:53] Speaker 03: So that in a district court, if you say there's a seven year statute of limitations and within that seven years, you file a complaint that's in some way defective. [00:19:06] Speaker 03: Isn't the question of curable defect, not the same question as a question of equitable tolling? [00:19:15] Speaker 01: Well, it can be, and in this case it is. [00:19:18] Speaker 01: And here's the problem. [00:19:20] Speaker 01: So this goes to Judge Hughes' question about computer vision. [00:19:23] Speaker 01: Mr. Dixon effectively filed two sets of claims. [00:19:26] Speaker 01: The first set he filed in 2017 were timely but defective because they were not properly executed under Brown. [00:19:33] Speaker 01: The second set filed in 2020 were untimely. [00:19:36] Speaker 01: Neither set of those claims looked at individually could support a refund suit. [00:19:41] Speaker 01: And this case only concerns the things that were filed in 2020. [00:19:45] Speaker 01: Mr. Dixon wants this court to treat those untimely filings, those untimely submissions as timely under the informal claim doctrine. [00:19:52] Speaker 01: And he argues [00:19:53] Speaker 03: that the 2020 submissions were... That they were essentially fixing a defect in the 2017 claim, and therefore relate back in time, which is what KALES is all about. [00:20:07] Speaker 03: I think that's the theory. [00:20:08] Speaker 01: Right. [00:20:08] Speaker 01: That's the theory. [00:20:08] Speaker 01: And it's wrong for at least two independent reasons. [00:20:10] Speaker 01: And the first is computer vision. [00:20:12] Speaker 01: So let's assume that under computer vision, or under the informal claim doctrine, you can still sign and verify a refund claim after the statute of limitations has expired. [00:20:23] Speaker 03: After the statute of limitations to the agents. [00:20:25] Speaker 01: Correct. [00:20:26] Speaker 01: After that statute of limitations has expired. [00:20:28] Speaker 01: Mr. Dixon still loses because under computer vision, once you sue on a filing with the IRS. [00:20:34] Speaker 03: Now we're not talking about the computer vision, the piece about informal claims, we're talking about the germane. [00:20:41] Speaker 01: Correct. [00:20:42] Speaker 01: Correct. [00:20:42] Speaker 01: But that analysis, that logic applies to any corrections or amendments to a claim after the statute of limitations. [00:20:49] Speaker 01: So we're looking at what does the taxpayer do after the three-year limitations period has expired, because we know under Broadcamp that time can't be extended or told. [00:20:57] Speaker 01: Everything has to be done to the extent it's required within the statute of limitations. [00:21:01] Speaker 01: And the various strands of the substantial variance doctrine are ways that you get something out of time to be timely. [00:21:08] Speaker 01: So under computer vision, once Mr. Dixon sued on the, on the 2017 submission, he shut the door on his ability to amend or correct that piece of paper that he sent to the IRS in 2020. [00:21:19] Speaker 03: So the thing that he, and the entire basis for that is that, um, you know, the FDR executive order, um, allocating powers across agencies in 1933. [00:21:29] Speaker 03: Is that right? [00:21:30] Speaker 01: Well, that goes to the IRS's jurisdiction over the piece of paper, but it's more than that. [00:21:34] Speaker 01: So computer vision, when it made this assertion, it made this point. [00:21:39] Speaker 01: It's basically the analog to the IRS rejecting an improperly executed refund claim for a defect. [00:21:46] Speaker 01: So the informal claim doctrine doesn't work. [00:21:48] Speaker 01: if the IRS rejects something as defective before the taxpayer corrects it. [00:21:53] Speaker 01: When you sue on a defective piece of paper and then it's dismissed by court, because the court, and Dixon won, determined that that piece of paper was defective, you can't amend that thing anymore. [00:22:04] Speaker 01: What you submit to the IRS after that, what Mr. Dixon submitted to the IRS in 2020, wasn't an amendment or a correction to the thing that he submitted in 2020 anymore. [00:22:12] Speaker 01: It was a new piece of paper, it was a new claim, and it had to satisfy all the statutory requirements for refund claims on its own. [00:22:18] Speaker 01: and because it was filed more than after the statute of limitations had expired. [00:22:22] Speaker 03: So I guess I'm trying to understand the basis for what you're saying. [00:22:26] Speaker 03: You're stating a kind of coherent view, but the question is whether that coherent view is, in fact, the correct view. [00:22:32] Speaker 03: And Kales seems to be about how a timely defective claim can hold the statute of limitations open for a cure. [00:22:46] Speaker 03: which would then relate back and the cure is a newly proper claim. [00:22:53] Speaker 03: So are you hanging your hat in describing the cured filing as a new claim entirely on this executive order that says the window closes [00:23:07] Speaker 03: once the IRS is done. [00:23:10] Speaker 03: Done either because now DOJ runs the matter or because something else. [00:23:15] Speaker 01: It's not just because the IRS doesn't have authority to take action on the thing once it's in DOJ's hands to litigate. [00:23:22] Speaker 01: This is right out of Memphis Cotton. [00:23:24] Speaker 01: There's a quote on page 72. [00:23:25] Speaker 03: That's an actual rejection. [00:23:27] Speaker 03: Right, I get that. [00:23:28] Speaker 01: Right. [00:23:29] Speaker 01: If it's an actual rejection and there's an amendment afterward, it's too late to make the correction. [00:23:34] Speaker 01: A dismissal [00:23:36] Speaker 01: of a defective refund claim as unduly filed is the same, functionally the same, as if the IRS had looked at the piece of paper from 2017 and said, oh, this isn't signed, reject it. [00:23:46] Speaker 01: Now the taxpayer has to fix it. [00:23:48] Speaker 01: And if they've waited until the end of the statute of limitations to fix the defect in the submission to the IRS, then they're out of time under 6511, and they're barred by the statute of limitations. [00:23:57] Speaker 03: So this is not an argument that you made to the Court of Federal Claims, right? [00:24:02] Speaker 03: It's not. [00:24:03] Speaker 02: OK. [00:24:04] Speaker 02: It doesn't even sound like the argument you made in your brief. [00:24:07] Speaker 02: I mean, you didn't cite Brockkamp in your brief, did you? [00:24:09] Speaker 01: Brockkamp's discussed in computer vision. [00:24:11] Speaker 01: And the statute of limitations is the entire essence of these doctrines. [00:24:14] Speaker 01: There's no way around it. [00:24:15] Speaker 01: And Supreme Court was very emphatic and Brockkamp about the statute of limitations. [00:24:18] Speaker 03: What is the law generally in statute of limitations and defective notices of appeal that can be cured out of time? [00:24:28] Speaker 01: OK. [00:24:29] Speaker 03: I didn't think that you needed equitable tolling. [00:24:32] Speaker 03: for that, that there's, I thought that there was a body of law under, you know, rule four or appellate rule four or other things that say, you don't need equitable tolling to cure a defect as long as the notice of appeal is good enough. [00:24:50] Speaker 01: Okay. [00:24:50] Speaker 01: A lot of these Supreme court cases. [00:24:52] Speaker 01: draw analogies to pleadings and litigation. [00:24:55] Speaker 01: And the closest analogy that I've been able to come up with that mirrors the problem in this case. [00:24:59] Speaker 03: Is it Kales? [00:25:00] Speaker 03: I think it's Kales. [00:25:02] Speaker 01: We're talking about analogizing to pleadings. [00:25:06] Speaker 01: So here's basically the analogy in this case. [00:25:10] Speaker 01: You file a tort suit, a negligence claim. [00:25:14] Speaker 01: You assert all three of the four elements, but you haven't pled the final element. [00:25:19] Speaker 01: And your complaint is dismissed for failure to state a claim. [00:25:24] Speaker 01: And that's basically what happened here. [00:25:25] Speaker 01: Once Mr. Dixon sued on his 2017 filing, and it was dismissed because it wasn't duly filed. [00:25:32] Speaker 01: If you then file a new complaint in the court, [00:25:35] Speaker 01: that fixes the problem in your original pleading, you would never call that second complaint an amended complaint. [00:25:41] Speaker 01: It's a new complaint. [00:25:42] Speaker 03: Right. [00:25:42] Speaker 03: But I guess the problem I'm having, this is why I started when I asked you right at the outset about statute and limitations. [00:25:49] Speaker 03: There's the precondition to get into court. [00:25:52] Speaker 03: That's 7422. [00:25:53] Speaker 03: Absolutely doesn't apply [00:25:55] Speaker 03: I mean, or rather, that barred the first suit because there had not been a cure. [00:26:00] Speaker 03: You couldn't get into court without a dually, whatever the expression is, dually something refund claim. [00:26:07] Speaker 03: That's not the same as the 65, the what, 60? [00:26:13] Speaker 03: 6511A. [00:26:14] Speaker 03: Well, there's 6511A, but also the [00:26:18] Speaker 03: the 6061 and 6065, which were the provisions relied on for the signature requirement in Brown. [00:26:26] Speaker 03: That's about what you need to do to have Treasury actually entertain your claim. [00:26:33] Speaker 03: So why isn't the question whether take the body of law [00:26:41] Speaker 03: about curing defective pleadings and forget about the court and you have a pleading that isn't signed. [00:26:52] Speaker 03: And now it's amended after the statute of limitations runs to now be signed or something else like that. [00:27:02] Speaker 03: And in the notice of appeal context, there are cures you can make, right? [00:27:06] Speaker 03: Without talking about tolling. [00:27:08] Speaker 02: uh... sure if there's an unbroken chain of events in front of the tribunal now and the computer vision problem here is that you know that that's pretty like that make sure i understand they filed a defective claim and even if the statute of limitations of ron at the agency but it's still after that [00:27:30] Speaker 02: cured the defective claim, would that fall within the informal claim doctrine and be a proper cure, as long as they had not yet proceeded to court? [00:27:40] Speaker 01: No. [00:27:41] Speaker 01: Why? [00:27:41] Speaker 01: Okay, and that goes to our principal argument and the basis for the trial court's ruling. [00:27:45] Speaker 01: So, we go back to first principles and default rules. [00:27:48] Speaker 01: You have to file a claim with the IRS before you sue. [00:27:51] Speaker 01: It has to be duly filed, which means it has to be properly signed and executed, and it has to be timely. [00:27:57] Speaker 01: Now, to the extent that you have to do all the things required for a refund claim before the IRS, you should have to do it within the three-year statute of limitations, because that time limit can't be extended. [00:28:08] Speaker 01: This court's case law in American Radiators, Sickenhoff Vegetable, and Computer Vision recognize that if there are cures, if there are waivers, all the [00:28:18] Speaker 01: All these things have to happen within the statute of limitations. [00:28:21] Speaker 03: How about Kales? [00:28:22] Speaker 03: The whole point of Kales is that that's not true. [00:28:24] Speaker 01: What Kales said was that a very skeletal assertion of a claim amounted to a claim even though it didn't satisfy the regulation requiring specificity. [00:28:35] Speaker 01: And that as long as the IRS had not rejected the claim for lack of specificity under the regulation, [00:28:40] Speaker 01: the iris could not complain about it if the claim was fixed within before the iris took action on the claim and that's not going on any time in years later yes if the iris doesn't doesn't reject it right and that i don't risk rejection then we're just then they're not a whole different ball now as long as we're still talking about purely defects of form like filing on the wrong piece of paper or a failure to comply with a purely regulatory augmentation of a statutory requirement [00:29:06] Speaker 01: That line of cases still works. [00:29:08] Speaker 01: There's no problem. [00:29:09] Speaker 01: Because under this court's decision in American Radiator, those irregularities in the original filing are corrected and cured retroactively. [00:29:18] Speaker 01: They're treated as though they were done nunk pro-tunk to the time of the original submission. [00:29:22] Speaker 01: But under Brown, when it comes to statutory requirements, we can't waive them. [00:29:28] Speaker 01: So under the waiver doctrine, if we try to affirmatively waive the requirement to sign and verify within the statute of limitations, Brown says, [00:29:37] Speaker 01: That's no good. [00:29:38] Speaker 01: And if the taxpayer doesn't fix it in time, they're going to be out of luck. [00:29:41] Speaker 01: That's what happened in Brown. [00:29:42] Speaker 01: That's what happened in Dixon 1. [00:29:45] Speaker 01: The informal claim doctrine is essentially a doctrine of constructive waiver. [00:29:52] Speaker 03: Or maybe not. [00:29:55] Speaker 03: Maybe it's a doctrine that says, as long as the rule violated, whatever the rule is, is of a certain nature. [00:30:07] Speaker 03: Not from a certain source, not whether it comes from Congress or whether it comes from the IRS, but whatever the assessment would be. [00:30:16] Speaker 03: The statute actually permits [00:30:20] Speaker 03: The treatment of a fixing of that problem to relate back. [00:30:27] Speaker 03: No violation of a statute. [00:30:29] Speaker 03: Why does one not read Kales to say this is a piece of the statutory regime, the allowance of out-of-time cures in certain circumstances? [00:30:43] Speaker 01: There are two problems with that. [00:30:44] Speaker 01: The first is Broadcamp came much later and was emphatic about 6511. [00:30:48] Speaker 01: I don't even know if 6511 existed in the 1940s and it probably did not. [00:30:53] Speaker 03: I'm sorry, but this is not equitable tolling, so that doesn't work. [00:30:56] Speaker 01: The second big problem is that before 1954 there was no statutory requirement that you had to sign and verify your refund claims. [00:31:04] Speaker 01: The requirement to sign and verify was a function of a regulation, the same regulation that required specificity. [00:31:10] Speaker 04: Why did the cases refer to filing refund claims under oath? [00:31:17] Speaker 01: Right, because the regulation required the refund claim to be under oath. [00:31:19] Speaker 01: That was purely under the regulation. [00:31:21] Speaker 01: There was no statute. [00:31:22] Speaker 01: Section 6065 wasn't a statute. [00:31:25] Speaker 02: But at the time of Kales, it wasn't a statutory requirement? [00:31:28] Speaker 01: It was not. [00:31:28] Speaker 02: So Kales didn't stand for the proposition that you could cure a statutory violation? [00:31:33] Speaker 01: No. [00:31:33] Speaker 01: And in fact, it says the division, and the quote from Kales says, the line of division must be kept a sharp one between the function of a statute [00:31:40] Speaker 01: requiring the presentation of a claim within a given period of time, and the function of a regulation. [00:31:44] Speaker 02: Did you explain this to us in your brief? [00:31:46] Speaker 01: This is probably under the, well, no. [00:31:51] Speaker 01: Yes, we did make this argument. [00:31:53] Speaker 04: Sign and verify starts in 1954? [00:31:56] Speaker 01: For refund claims, verification under penalties of perjury comes with a 1954 Revenue Act. [00:32:02] Speaker 04: What about signature? [00:32:04] Speaker 01: Signature was not required by statute. [00:32:08] Speaker 01: Oh, no. [00:32:09] Speaker 01: So yes, also 1954. [00:32:10] Speaker 01: Before that, you had to sign your returns and had to submit your returns under oath, but not refund claims. [00:32:17] Speaker 01: And it wasn't until 1976 that the regulations required income tax refund claims to be filed in the form of an income tax return. [00:32:26] Speaker 01: So we have these old cases. [00:32:29] Speaker 01: They adopt a doctrine dealing with an advisor. [00:32:32] Speaker 01: I see them up against my time, but if I could finish. [00:32:34] Speaker 04: So you're saying that basically the reason why we don't see this issue raised in the earlier cases before 1954 is there was no statutory requirement for signing and verifying? [00:32:43] Speaker 01: Correct. [00:32:44] Speaker 01: And then we have a venerable doctrine from the Supreme Court that applies to a still existing regulation. [00:32:50] Speaker 01: And the case law deals with these issues as though they are violations of regulation or purely formalistic defects. [00:32:57] Speaker 01: But after Brown, the court can't do that anymore because we know [00:33:01] Speaker 01: The requirement to sign and verify a refund claim is imposed by statute, and it can't be affirmatively waived. [00:33:06] Speaker 01: And it would be very perverse to have a doctrine of constructive waiver, where the IRS could essentially allow something to be imperfect, improperly executed within the statute of limitations. [00:33:16] Speaker 01: But then, just because they haven't rejected the claim yet, the taxpayer can sue on that thing based on a constructive waiver, where an affirmative waiver wouldn't allow it. [00:33:26] Speaker 03: So much of what we've been talking about here is new on appeal. [00:33:34] Speaker 03: Why should we not vacate and remand for actual development of, in light of, Brown and many of these new arguments? [00:33:44] Speaker 01: Well, your question before is whether we had forfeited the argument by not raising it below. [00:33:48] Speaker 03: And it's possible that the other side forfeited forfeiture. [00:33:52] Speaker 01: But sometimes that's also not true. [00:33:53] Speaker 01: But the problem is a jurisdictional one. [00:33:56] Speaker 04: Well, the problem with your late-raised argument is that if we were to adopt it, it has a slice-through effect on refined claims, right? [00:34:09] Speaker 04: That would be a very big change in existing tax law. [00:34:15] Speaker 01: Well, the computer vision argument is narrower, is a narrow basis. [00:34:18] Speaker 04: Yes, but you're asking us, [00:34:20] Speaker 04: to take something out of the germainness doctrine and apply it generally to all claims, right? [00:34:27] Speaker 04: And then to do that, whether it's right or wrong, has a dramatic impact. [00:34:34] Speaker 04: And what I'm saying is we haven't the question of the strength of this regulation that pushes the case over to justice or wherever it pushes it away from the IRS. [00:34:44] Speaker 04: As the presiding judge pointed out, we don't really know much about that. [00:34:48] Speaker 04: So why should this court? [00:34:50] Speaker 04: exercise its discretion to hear your final argument in your brief. [00:34:56] Speaker 01: Two responses. [00:34:57] Speaker 01: The first is that the wide sweeping effect may not be that wide after all for two reasons. [00:35:01] Speaker 04: And you don't know and I don't know what it could be. [00:35:04] Speaker 01: Because the vast majority of refund claims are filed in original returns. [00:35:10] Speaker 01: And so if there's a problem with the signature verification in an original return, the IRS will flag it and the taxpayer will have three years to fix it. [00:35:19] Speaker 01: This return was an amended return filed on the eve of the statute of limitations expiring. [00:35:23] Speaker 01: That was a decision that this taxpayer made or his preparer chose to make in addition to not properly executing the thing in the first place. [00:35:30] Speaker 01: The second reason why the effect of this might not be so wide is because as of the summer of 2020, you can file your amended returns electronically. [00:35:38] Speaker 01: So this kind of signature verification deficit is going to be a very, very small problem if it's a continuing problem at all. [00:35:46] Speaker 01: But to judge Toronto's question about forfeiture or possible forfeiture forfeiture, if we are right about your inability to correct this sort of defect out of time, and if you understand that the 2020 submission has to satisfy all the statute requirements on its own because they can't be treated as an amendment or a correction to the original submission, [00:36:09] Speaker 01: than the thing that was filed in 2020 was actually an untimely claim under 6511. [00:36:13] Speaker 01: And under the Supreme Court's decision in Dalm and Brockham, [00:36:17] Speaker 01: That's a jurisdictional defect. [00:36:20] Speaker 03: Can I ask you a couple of things? [00:36:23] Speaker 03: Yes. [00:36:23] Speaker 03: So what about the three-day window in September of 2020? [00:36:26] Speaker 03: Why didn't the October 20th? [00:36:33] Speaker 03: I'm off on a date. [00:36:34] Speaker 01: I remember the question. [00:36:35] Speaker 01: I think I have the answer. [00:36:37] Speaker 01: So the problem with waiting three days until after the mandate issued is if you understand the IRS to have then rejuvenated this jurisdiction over the claim, [00:36:47] Speaker 01: The claim was submitted before the IRS could take action. [00:36:49] Speaker 01: And under 6532, there has to be a six-month window from the time the claim is submitted until a suit is filed. [00:36:56] Speaker 01: Because if a suit is filed before the six-month window under 6532 hasn't run yet, then the claim's unripe. [00:37:02] Speaker 01: You can't get into court unless you wait the six months. [00:37:05] Speaker 01: And so if the claim, three days after the mandate issued, comes into the IRS's jurisdiction again, by dent of the lawsuit, rather, [00:37:14] Speaker 01: The lawsuit filed three days after the mandate issued would have been unripe under 6532. [00:37:19] Speaker 01: So that's another separate problem if you reject the computer vision argument and if you reject the idea that you can [00:37:28] Speaker 01: satisfy strict statutory requirements outside of statute of limitations through inaction by the IRS. [00:37:34] Speaker 03: Another question. [00:37:35] Speaker 03: When I look at 6061, the signing of returns, there is in that repeated grants to the secretary of discretion to decide what to do. [00:37:48] Speaker 03: How does one get an absolute statutory rule out of that? [00:37:53] Speaker 03: that precludes the secretary from acting. [00:37:56] Speaker 01: And we addressed this in Brown. [00:37:59] Speaker 03: Brown seems to state this, but put Brown aside because I want to know why. [00:38:03] Speaker 01: So the authorization of the statute is for rulemaking. [00:38:06] Speaker 01: The IRS can relax the statutory rule by adopting a regulation, and then it has to comply with the regulation. [00:38:13] Speaker 01: It can't be on an ad hoc basis. [00:38:15] Speaker 01: So if the IRS adopts a regulation that relaxes the default rule, which is what happened in Brown, [00:38:21] Speaker 03: The only way... Does Treasury have [00:38:27] Speaker 03: um, the general agency background authority to grant exceptions to its regulations? [00:38:32] Speaker 01: Yeah, there's a, there's a statute. [00:38:33] Speaker 01: I'm sorry. [00:38:34] Speaker 01: I don't remember off the top of my head, but there's a statute that authorizes rulemaking to implement the income tax scheme. [00:38:39] Speaker 03: Okay. [00:38:39] Speaker 03: Well, let me write. [00:38:40] Speaker 03: And does it say that, um, treasury has general authority in appropriate cases to waive requirements of its regulations? [00:38:52] Speaker 01: I don't think so. [00:38:53] Speaker 01: I'm not aware of a statute that allows the agency to waive the requirements of its own regulation. [00:38:57] Speaker 01: But to your question, how can we, so the problem in Brown and in Dixon one, Brown, was that we had our power of attorney that was not submitted with return. [00:39:07] Speaker 01: And so the argument was and what the court agreed with is that in order to satisfy the statutes to sign and verify, [00:39:15] Speaker 01: If there's a regulation that relaxes the default rule, the only way you can satisfy the statute is to comply strictly with the regulation. [00:39:22] Speaker 01: You can't dance around the requirements of the statute by sneaking under an alleged waiver of the regulation. [00:39:27] Speaker 03: Okay. [00:39:28] Speaker 03: And one other question. [00:39:28] Speaker 03: So was it last week, I think the Supreme Court decided a case that seems to- Wilkins. [00:39:34] Speaker 01: What's it called? [00:39:35] Speaker 01: Wilkins. [00:39:35] Speaker 03: Wilkins that seems to perhaps more vigorously than earlier decisions say, [00:39:43] Speaker 03: Um, on sovereign immunity and timing requirements, um, it's going to be extremely rare that we would find anything that we would be prepared to call jurisdictional. [00:39:53] Speaker 03: Does this have any effect on this? [00:39:54] Speaker 01: But no, because this is still mandatory and we raised it timely. [00:39:58] Speaker 03: And it's, if it's a crime processing, a couple of times said, you know, we can't do something because it's jurisdictional. [00:40:03] Speaker 01: Well, until the Supreme court actually says that Dawn was wrong and Clintwood Elkhorn was wrong about the effect of 65 11, then no. [00:40:11] Speaker 01: I don't think Wilkins erodes the basis for that, for the understanding that the 6511 requirement is jurisdictional. [00:40:18] Speaker 01: And I only raise it as a jurisdictional point because you asked a question about forfeiture, and my response to that is, well, if it's jurisdictional, it has a jurisdictional consequence under Dahm and Clintwood Elkhorn. [00:40:28] Speaker 01: And therefore, I wish we raised it earlier, but I'm trying to answer the court's questions and be helpful now. [00:40:34] Speaker 03: Thank you. [00:40:35] Speaker 01: Thank you. [00:40:36] Speaker 00: May it please the court? [00:40:37] Speaker 00: The first thing I want to address from the government's argument is the jurisdictional issue. [00:40:42] Speaker 00: This court in Brown stated that 7422A is not jurisdictional. [00:40:47] Speaker 00: It's a claim processing rule. [00:40:49] Speaker 00: So there's no jurisdictional issue. [00:40:52] Speaker 00: There's the claim processing issue. [00:40:54] Speaker 00: I'm sorry. [00:40:56] Speaker 00: Just say it again. [00:40:58] Speaker 00: 7422A is not jurisdictional. [00:41:00] Speaker 00: And this court stated that in Brown. [00:41:03] Speaker 00: They found this is a claim processing rule. [00:41:05] Speaker 00: So the government's [00:41:06] Speaker 00: statement that this is a jurisdictional issue is just incorrect. [00:41:11] Speaker 02: The other issue is that you have to make the correction within the statute of limitations at the agency, not that the signature requirement itself is jurisdictional. [00:41:28] Speaker 02: It seems like that's two different arguments. [00:41:31] Speaker 02: Whether or not the signature requirement is just, I mean, I don't think they're arguing that the signature requirement itself is jurisdictional, but that once that time limit has passed that is jurisdictional under a Brock camp, that you can't correct it. [00:41:45] Speaker 00: It's our position under the informal claims doctrine from an agency perspective. [00:41:49] Speaker 00: So the 7422A, in part, just for confusion was from a court's perspective, whether it confers jurisdiction to the court. [00:41:57] Speaker 00: But from an agency perspective, the informal... So let me just... [00:42:06] Speaker 02: were now, the defective claim, which you're now trying to say was an informal claim. [00:42:11] Speaker 02: And then after the defect is found and after the statute of limitations that the agency has expired, you think you can still cure that defect? [00:42:21] Speaker 00: Correct. [00:42:22] Speaker 02: If the defect would be cured with... How can the agency act on it if it no longer has authority under the statute of limitations to act? [00:42:31] Speaker 00: The informal claim doctor is a judicial doctor, and it would confer any jurisdiction onto the court. [00:42:36] Speaker 00: to make the assessment of the claim. [00:42:38] Speaker 00: But if the correction would need to be made within the statute of limitations, we don't need a judicial doctrine. [00:42:44] Speaker 00: That's just called a superseding return. [00:42:46] Speaker 00: Any taxpayer who makes a mistake on the return can file a superseding return. [00:42:52] Speaker 00: That wouldn't require any court intervention on that part. [00:42:58] Speaker 04: In your view, the purpose of the informal claim doctrine is to toll the statute of limitations [00:43:05] Speaker 00: Correct, yes. [00:43:06] Speaker 00: Forever? [00:43:07] Speaker 00: No, just until the perfected claim is filed. [00:43:11] Speaker 04: And that's a different... Hypothetically, you could have an informal claim filed today, right? [00:43:18] Speaker 04: And the IRS doesn't ever turn it down. [00:43:22] Speaker 04: And my great-grandchild could cure the claim. [00:43:27] Speaker 04: Correct? [00:43:28] Speaker 04: One time, there's no limit. [00:43:30] Speaker 00: Well, I don't believe in that scenario that would be possible. [00:43:35] Speaker 04: There is no limit to the length of time in which under the informal claim doctrine, as articulated by all the courts, the length of time during which you have to cure whatever the fault was, so long as the agency hasn't shut you off by denying the claim, it's infinite. [00:43:55] Speaker 00: Technically, it's a very long time. [00:43:56] Speaker 00: But courts have looked at cases. [00:44:00] Speaker 00: And it's believed in Kalzow was over 10 years before the informal, before the valid claim was filed after even that issue was litigated in court. [00:44:08] Speaker 00: So yes, it does, it tolls the statute of limitations for quite a long time. [00:44:14] Speaker 00: But that has not been grounds in other circuits to turn down the informal claim doctrine. [00:44:20] Speaker 03: Thank you. [00:44:20] Speaker 03: And thanks to both counsels, cases submitted.