Larson v. United States , 376 F. App'x 26 ( 2010 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
DUANE W. LARSON,
Plaintiff-Appellant,
and
PAMELA A. LARSON,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant- Appellee.
__________________________
2010-5020
__________________________
Appeal from the United States Court of Federal
Claims in consolidated case Nos. 08-CV-737 and 09-CV-
470, Judge Marian Blank Horn.
___________________________
Decided: May 20, 2010
___________________________
DUANE W. LARSON, of Murrieta, California, pro se.
PAMELA A. LARSON, of Murrieta, California, pro se.
LARSON v. US 2
RACHEL I. WOLLITZER, Attorney, Appellate Section,
Tax Division, United States Department of Justice, of
Washington, DC, for defendant-appellee. With her on the
brief were JOHN A. DICICCO, Acting Assistant Attorney
General.
__________________________
Before BRYSON, GAJARSA, and MOORE, Circuit Judges.
PER CURIAM.
DECISION
Duane Larson and Pamela Larson appeal the dis-
missal of their tax refund claims for lack of subject matter
jurisdiction and for failure to state a claim upon which
relief can be granted. We affirm.
BACKGROUND
This is the latest in a series of tax refund suits filed
by the Larsons. The impetus for the refund suits dates
back to 1985, when Mr. Larson was investigated for drug
trafficking and faced charges of criminal tax evasion for
tax years 1978, 1979, and 1980. Mr. Larson pleaded
guilty to tax evasion for the 1979 tax year, but conceded
the accuracy of the tax computations for all three tax
years.
On September 16, 1985, the IRS issued a notice of de-
ficiency for 1978, 1979, and 1980. The Larsons filed suit
challenging the notice of deficiency, but the Tax Court
affirmed the full amount of the deficiencies and penalties
in 1994, after some delay due to Mr. Larson’s incarcera-
tion. See Larson v. Comm’r, 67 T.C.M. (CCH) 3154(1994), aff’d, 60 F.3d 830 (8th Cir. 1995).
3 LARSON v. US
On November 23, 1994, following the Tax Court’s de-
cision, the IRS issued a notice of tax due for 1979 and
1980. The amounts due were adjusted downward to
account for jeopardy assessments that the IRS had previ-
ously made on August 15, 1985, pursuant to 26 U.S.C.
§ 6861(a). The IRS also added interest dating back to
1979 and 1980, respectively. The Larsons did not fully
satisfy the assessed liabilities until October 21, 1997.
Between 1991 and 1998, Mr. Larson submitted sev-
eral informal refund requests to the IRS. Initially, he
raised the same arguments as those that were asserted in
the Tax Court action. After the Tax Court’s decision, he
claimed that the IRS had improperly charged interest for
the years preceding his 1985 guilty plea. The IRS did not
immediately act on those refund claims, although the IRS
ultimately disallowed them in 2008.
After receiving no response from the IRS to their re-
fund claims, the Larsons filed suit on October 3, 1997, in
the United States District Court for the Central District
of California seeking a refund of the pre-1985 interest.
That suit was dismissed without prejudice on March 31,
1998, because it was filed before the assessments had
been paid in full. See Larson v. United States, No. 97-782
(C.D. Cal. Mar. 31, 1998). On October 21, 1998, the
Larsons reinstituted their action seeking a refund of the
pre-1985 interest. This time, the district court addressed
the claims on the merits and granted summary judgment
in favor of the government. See Larson v. United States,
No. 98-902 (C.D. Cal. Nov. 24, 1999), aff’d, 2 F. App’x 847
(9th Cir. 2001). The district court held that it did not
have jurisdiction over the Larsons’ request for declaratory
relief. However, the court exercised jurisdiction over their
claim for a refund and addressed the merits of that claim.
The court held that Mr. Larson’s plea agreement did not
prevent the imposition of interest for the period before
LARSON v. US 4
August 19, 1985; that the plea agreement was not
breached by the assessment of interest for that period;
and that the Larsons were not entitled to a refund on any
other ground asserted in that action.
Undeterred, the Larsons continued their efforts to re-
cover tax refunds. See, e.g., Larson v. United States, No.
04-1176 (C.D. Cal. May 3, 2005) (new claim of double
taxation barred by res judicata), aff’d, 175 F. App’x 814
(9th Cir. 2006). The present appeal stems from a series of
15 amended returns filed by the Larsons during 2006 and
2007, in which they sought refunds for tax years 1978,
1979, 1980, 1986, 1988, 1989, and 1991 under a variety of
theories.
The Court of Federal Claims grouped the Larsons’
claims into four categories. First, the court dismissed the
refund claims for 1978, 1979, and 1980 because the
amended returns filed by the Larsons in 2006 and 2007
were untimely and because the refund claims did not
relate back to earlier refund claims filed between 1991
and 1998. The court held that those earlier claims could
not be revived or amended because they had already been
fully adjudicated and were no longer pending. In the
alternative, the court found that the amended returns
were not germane to the earlier refund claims, and were
barred in any event by collateral estoppel and res judi-
cata.
Second, the court dismissed the Larsons’ refund claim
for 1986. The court construed that claim to be an attempt
to resurrect refund claims filed in 1991 and 1992 through
amended returns filed in 2006 and 2007. Again, the court
held that the amended returns were untimely, that the
Larsons could not amend refund claims that were no
longer pending, and that the new refund claims were not
germane to the earlier refund claims. Alternatively, the
5 LARSON v. US
court held that the refund claim was never articulated
with sufficient detail in the earlier refund requests and
that it was not until 2006 that the Larsons made clear the
basis of that claim—at which point the claim was un-
timely.
Third, the court dismissed the argument that the IRS
had improperly transferred payments for 1988, 1989, and
1991 to other tax years. The court found that the Larsons
had failed to raise that argument in any of their amended
returns and that it was therefore barred by the doctrine of
variance. The court also ruled that the argument failed
on the merits because the Larsons had not yet filed re-
turns for those tax years at the time of the relevant
payments; for that reason, the IRS had discretion under
26 U.S.C. § 6402(a) to apply overpayments to previous
outstanding tax liabilities.
Finally, the court dismissed the Larsons’ request for a
refund of the sales proceeds of 256 gold coins that were
pledged as bond collateral in Mr. Larson’s criminal case.
The court addressed that claim on its merits and con-
cluded that the IRS lawfully obtained possession of the
gold coins by serving notice of levy in order to collect upon
the August 15, 1985, jeopardy assessments.
DISCUSSION
On appeal, the only issue of substance raised by the
Larsons is that their earlier refund claims, although
received by the IRS, were never “filed” with the Secretary
of the Treasury as required by 26 U.S.C. § 7422(a). The
Larsons allege that those refund claims were ignored by
the IRS because the Larsons were secretly designated as
“Illegal Tax Protestors,” a fact they did not learn until
sometime after 1998 when Congress invalidated those
designations.
LARSON v. US 6
The Larsons claim that the government’s failure to
“file” their refund claims with the Secretary of the Treas-
ury has two consequences. First, it renders all the prior
court decisions adjudicating their claims void for lack of
subject matter jurisdiction, thus depriving those decisions
of res judicata effect. Second, it means that the unfiled
refund claims remained viable and were properly
amended when the Larsons made their submissions to the
IRS in 2006 and 2007.
The Larsons’ arguments are flawed at the outset be-
cause any claim that is received by the IRS is deemed to
have been “filed with the Secretary.” See Jones v. United
States, 226 F.2d 24, 28 (9th Cir. 1955) (“The ‘filing’ of a
return or a claim for refund by a taxpayer is completed
when the return or claim reaches the collector's office.”).
The fact that the IRS failed to address the Larsons’ re-
fund claims until 2008 does not mean those claims were
not “filed” with the Secretary. The decisions of the Tax
Court and the United States District Court for the Cen-
tral District of California remain valid and retain their
preclusive effect. Although we find that the Larsons were
entitled to amend their refund claims in 2006 and 2007
because the IRS did not disallow those claims until 2008,
we agree with the trial court’s conclusions that the
amendments were not germane and that the amended
claims were precluded by res judicata. Because we find
no error in any of the other rulings by the Court of Fed-
eral Claims, we affirm that court’s judgment in its en-
tirety.
AFFIRMED.