Hale v. United States

3Jn tbe Wniteb ~ta:tes QCourt of jfebera:I QCia:ints
No. 18-1607T (Pro Se)
(Filed: May 14, 2019)

) Keywords: Subject-Matter Jurisdiction;
ANNICE HALE, ) Tax Refund; Offset; Illegal Exaction;
) Presumption of Correctness; I.R.C.
Plaintiff, ) § 6511; I.R.C. § 6532; I.R.C. § 7422;
) Statute of Limitations.
V. )
)
THE UNITED STATES OF AMERICA, )
)
Defendant. )
________________ )

Annice Hale, Houston, TX, pro se.

Katherine R. Powers, Trial Attorney, U.S. Department of Justice, Tax Division, Court of Federal
Claims Section, Washington, DC, with whom were G. Robson Stewart, Assistant Chief, Comi of
Federal Claims Section, David l Pincus, Chief, Court of Federal Claims Section, and Richard E.
Zuckerman, Principal Deputy Assistant Attorney General, for Defendant.

OPINION AND ORDER

KAPLAN, Judge.

In this tax refund case, pro se Plaintiff Annice Hale claims that she is entitled to a refund
of taxes for the tax years 2012 through 2017 because the government improperly adjusted
downward the refunds claimed in her returns for each of those tax years. Ms. Hale's complaint,
liberally construed, also alleges civil rights and tmi claims against the government in connection
with these tax-related government actions. The government has moved to dismiss Ms. Hale's
complaint under Rules 12(b)(l) and 12(b)(6) of the Rules of the Court of Federal Claims
("RCFC").

As discussed below, the Comi lacks subject-matter jurisdiction over Ms. Hale's civil
rights and tort claims, part of her 2012 tax refund claim, and her 2014 refund claim. Moreover,
Ms. Hale has failed to state a claim with respect to tax years 2013, 2015, 2016, and 2017, as well
as the portion of her claim for tax year 2012 over which the Comi has jurisdiction. As to these
remaining claims Ms. Hale's allegations, taken as true, do not establish any claim upon which
relief can be granted.

7018 0040 0001 1393 1280
 BACKGROUND 1

Ms. Hale's complaint alleges that her tax refunds have been improperly "adjusted staiiing
year 2012 through current year 2017." Comp!. at 4, Docket No. 1. She further states that the
government has violated her "Right to a Fair and Just Tax System," "Right to Quality Tax
Service," "Right to Pay no more than the Correct Amount of Tax," "Right to be Informed," and
"Right to Finality." Id. According to Ms. Hale, the government has violated her civil rights by
"diminishing" her credit history and causing her "financial disparity." Id.

Ms. Hale claims the following refund amounts for each tax year at issue:

Difference
Tax Refund Adjusted
(Additional
Year Claimed Refund
Refund Claimed)
2012 $2,975.61 $757.69 $2,217.92
2013 $2,844.39 $1,732.00 $1,112.39
2014 $2,938.20 $1,668.00 $1,270.20
2015 $3,359.00 $1,811.88 $1,547.12
2016 $4,154.00 $2,604.30 $1,549.70
2017 $5,400.00 $1,980.02 $3,419.98

The government filed its motion to dismiss pursuant to RCFC 12(b)(l) and 12(b)(6) on
February 25, 2019. Docket No. 12. The government has construed Ms. Hale's complaint as
alleging claims for violation of civil rights, tortious damages, and claims for tax refunds for the
tax years 2012 through 2017. It contends that the Court lacks jurisdiction over several of Ms.
Hale's claims and that, as to the remaining claims, she has failed to state a claim upon which
relief can be granted. The collli received Ms. Hale's response to the government's motion on
April 8, 2019, and received the government's reply three days earlier, as the government had
already received its own copy of the response the previous month. Docket Nos. 13-14. 2 The
Court agrees with the government that Ms. Hale's entire complaint must be dismissed.

1
The facts set forth below are based on the allegations in Ms. Hale's complaint, as well as
jurisdictional facts drawn from the government's motion to dismiss, Ms. Hale's response, and the
documents attached to the paiiies' filings.
2
As summarized in a previous order of the Court, it is considering Ms. Hale's response to have
been timely filed despite the fact that the court did not receive its copy of the document until
April 8, 2019. Order at 2, Docket No. 15. Ms. Hale first attempted to send the response to the
court via FedEx on March 20, 2019, and the government received a copy the following week. Id.

2
 DISCUSSION

I. Jurisdictional Principles

A. Subject-Matter Jurisdiction

Whether a court has jurisdiction to decide a case is a threshold matter, and, if no
jurisdiction exists, the court must order dismissal without proceeding further. See Steel Co. v.
Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998); RCFC 12(h)(3). The plaintiff bears the
burden of establishing subject-matter jurisdiction by a preponderance of the evidence. Brandt v.
United States, 710 F.3d 1369, 1373 (Fed. Cir. 2013); see also Reynolds v. Army & Air Force
Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). It is well established that complaints filed by
pro se plaintiffs are held to "less stringent standards than formal pleadings drafted by lawyers."
Haines v. Kerner, 404 U.S. 519, 520 (1972). Nonetheless, even prose plaintiffs must persuade
the court that jurisdictional requirements have been met. Bernard v. United States, 59 Fed. Cl.
497,499 (2004), affd, 98 F. App'x 860 (Fed. Cir. 2004).

Further, the Court has "an independent obligation to determine whether subject-matter
jurisdiction exists, even in the absence of a challenge from any party." Arbaugh v. Y&H Corp ..
546 U.S. 500, 514 (2006). Thus, the Court may raise the issue of subject-matter jurisdiction sua
sponte at any time, see Rick's Mushroom Serv., Inc. v. United States, 521 F.3d 1338, 1346 (Fed.
Cir. 2008), and may "inquire into jurisdictional facts" to determine whether it has jurisdiction,
Rocovich v. United States, 933 F.2d 991,993 (Fed. Cir. 1991).

B. The Court of Federal Claims's Jurisdiction over Tax Refund Cases

The Tucker Act grants the Court of Federal Claims jurisdiction to hear "any claim against
the United States founded either upon the Constitution, or any Act of Congress or any regulation
of an executive depa1iment, or upon any express or implied contract with the United States, or
for liquidated or unliquidated damages in cases not sounding in tort." 28 U.S.C. § 149l(a)(l). It
is well established that this jurisdictional grant extends to suits for the refund of taxes remitted to
the Treasury. See Ont. Power Generation v. United States, 369 F.3d 1298, 1301 (Fed. Cir. 2004);
Ledford v. United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002); Shore v. United States, 9 F.3d
1524, 1525 (Fed. Cir. 1993); see also 28 U.S.C. § 1346(a)(l) (granting the Court of Federal
Claims concurrent jurisdiction with the district comis over civil actions "against the United
States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally
assessed or collected, or any penalty claimed to have been collected without authority or any sum
alleged to have been excessive or in any manner wrongfully collected under the internal-revenue
laws").

This Court's exercise of that jurisdiction is subject, however, to several statutory and
jurisprudential prerequisites. See Ishler v. United States, 115 Fed. Cl. 530, 534-36 (2014).
Among these is the requirement set forth in I.RC. § 7422(a) that the taxpayer file an
administrative refund request before filing a tax refund suit. Specifically, § 7422(a) provides
that:

No suit or proceeding shall be maintained in any comi for the recovery of any
internal revenue tax alleged to have been erroneously or illegally assessed or

3
 collected . . . until a claim for refund or credit has been duly filed with the
Secretary, according to the provisions of law in that regard, and the regulations of
the Secretary established in pursuance thereof.

I.R.C. § 7422(a). Moreover, under§ 651 l(a), the taxpayer must file the administrative refund
request within the later of"3 years from the time the return was filed or 2 years from the time the
tax was paid." Further, "unless a claim for refund of a tax has been filed within the time limits
imposed by§ 651 l(a), a suit for refund ... may not be maintained in any court." United States v.
Dalm, 494 U.S. 596,602 (1990).

In addition to filing a timely administrative refund request, a taxpayer wishing to file a
tax refund suit in the Court of Federal Claims must adhere to the filing restrictions set forth in
I.R.C. § 6532(a)(l). That section provides as follows:

No suit or proceeding ... for the recovery of any internal revenue tax, penalty, or
other sum, shall be begun before the expiration of 6 months from the date of filing
the claim ... unless the Secretary renders a decision thereon within that time, nor
after the expiration of2 years from the date of mailing by cettified mail or registered
mail by the Secretary to the taxpayer of a notice of the disallowance of the patt of
the claim to which the suit or proceeding relates.

I.R.C. § 6532(a)(1). Thus, if the IRS disallows the taxpayer's administrative refund request, the
taxpayer must file suit within two years of the date that the IRS mailed the taxpayer the notice of
that disallowance; otherwise, the comt will lack jurisdiction. Harper Int'! Corp. v. United States,
120 Fed. Cl. 66, 72-73 (2015) (dismissing case for lack of subject-matter jurisdiction where
plaintiff failed to file refund suit within two years of notice of disallowance); !shier, 115 Fed. Cl.
at 534-35 (statute oflimitations set forth in§ 6532(a)(l) is a jurisdictional prerequisite); Brach v.
United States, 98 Fed. Cl. 60, 67-68 (2011) (same); see also Rosser v. United States, 9 F.3d
1519, 1523 (11th Cir. 1993) ("[T]he two-year statute of limitations laid out in 26 U.S.C.
§ 6532(a)(l) begins to run in every case on the date the IRS mails the taxpayer a notice of
disallowance, whether or not the taxpayer actually receives the notice.").

II. The Court's Subject-Matter Jurisdiction over Ms. Hale's Claims

A. Civil Rights and Tort Claims

As noted, the government has construed Ms. Hale's asse1tions concerning violations of
cettain alleged rights as civil rights and tortious damages claims. The Court concurs with this
interpretation of Ms. Hale's references to alleged violations of her "Right to a Fair and Just Tax
System," "Right to Quality Tax Service," "Right to Pay no more than the Correct Amount of
Tax," "Right to be Informed," and "Right to Finality," as well as her allegations that the
government's actions have damaged her credit history and caused her "financial disparity."
Comp!. at 4; see also Pl. Resp. Mem. ("Pl. 's Resp.") at 99, Docket No. 13.

The Court finds that it lacks subject-matter jurisdiction over these claims. The Tucker Act
serves as a waiver of sovereign immunity and a jurisdictional grant, but it does not create a
substantive cause of action. Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299,
1306 (Fed. Cir. 2008). A plaintiff, therefore, must establish that "a separate source of substantive

4
law ... creates the right to money damages." Id. (quoting Fisher v. United States, 402 F.3d 1167,
1172 (Fed. Cir. 2005) (en bane in relevant part)); Rick's Mushroom Serv., Inc., 521 F.3d at 1343
("[P]laintiff must look beyond the Tucker Act to identify a substantive source of law that creates
the right to recovery of money damages against the United States."). In this case, Ms. Hale has
not identified any such "source of substantive law" providing relief in this court for the civil
rights and tort claims set fo1ih in her complaint. Indeed, it is well settled that the Court of Federal
Claims lacks jurisdiction over tort claims. See, e.g., Brown v. United States, 105 F.3d 621,623
(Fed. Cir. 1997) (citing 28 U.S.C. § 149l(a)). Similarly, this Court lacks jurisdiction "to entertain
claims involving race, sex, and age discrimination or other claims involving civil rights
violations." Cottrell v. United States, 42 Fed. Cl. 144, 149 (1998).

Although Ms. Hale's response reiterates her position that the Court has jurisdiction over
her civil rights claims, Pl.'s Resp. at 99, she has not provided any authority or substantive
argument to contradict the governing case law cited above. Thus, Ms. Hale has not invoked any
source of substantive law providing the right to money damages related to the non-refund claims
set fmih in her complaint. The Court will therefore dismiss these claims for lack of subject-
matter jurisdiction.

B. Refund Claim for the 2012 Tax Year

Ms. Hale's return for the 2012 tax year requested a total refund of$2,975.61. Pl.'s Resp.
at 13 I. This was based on total self-employment tax of $1,193.39 subtracted from total credits of
$3,169 for the Earned Income Credit ("EIC") and $1,000 for the American Opportunity Credit.
Id. Ms. Hale's tax transcript and another line in her return reflect that her self-employment tax
was actually $1,192.39, rounded down to $1,192.00. Id.; Def.'s Mot. to Dismiss ("Def.'s Mot.")
Ex. I, at App. 2, Docket No. 12. The IRS also found that Ms. Hale incorrectly calculated her EIC
and reduced it from $3,169 to $3,069. Def.'s Mot. Ex. 2, at App. 4.

The foregoing adjustments translated to an expected refund of $2,877.00. Id. However,
the refund was offset in the amount of $2,119.31 by the Bureau of Fiscal Service to satisfy a
"past-due non-tax government agency debt [Ms. Hale] owed." Id. This left a remaining refund of
$757.69, which the IRS issued to Ms. Hale on March 20, 2013. Id.

Documents submitted with Ms. Hale's response indicate that the offset was accomplished
to satisfy a purported debt Ms. Hale owed to FEMA. See Pl.'s Resp. at 142, 144, 147. These
records show that, in December 2012, an "unpaid delinquent debt" to FEMA was referred to the
Department of the Treasury for collection. Id. at 142. The amount of the debt was listed as
$2,095.40. Id. Based on this referral, and in accordance with I.R.C. § 6402(d)(l)(A), $2,119.31
of Ms. Hale's refund for tax year 2012 was withheld as an offset to repay FEMA. 3

I.R.C. § 6402(g) states in pertinent part that "[n]o court of the United States shall have
jurisdiction to hear any action, whether legal or equitable, brought to restrain or review a

3
I.R.C. § 6402(d)(l)(A) states, in pertinent part, that "[u]pon receiving notice from any Federal
agency that a named person owes a past-due legally enforceable debt ... the Secretary shall ...
reduce the amount of any overpayment payable to such person by the amount of such debt."

5
reduction authorized by subsection (c), (d), (e), or (f)." To the extent, therefore, that Ms. Hale is
seeking review of the IRS's reduction of her tax refund to offset a debt she owed to FEMA, the
Court lacks jurisdiction to consider it.

Section 6402(g) also provides, however, that it "does not preclude any legal, equitable, or
administrative action against the Federal agency ... to which the amount of such reduction was
paid." Indeed, where a tax refund is offset to pay a debt to another agency, the plaintiff may have
a cognizable illegal exaction claim against that agency. See Flander v. United States, 737 F.
App'x 530, 532-33 (Fed. Cir. 2018) (Court of Federal Claims erred in finding it lacked
jurisdiction over claim arising out of tax-refund offsets because plaintiffpled claim for illegal
exaction); Greene v. United States, 124 Fed. Cl. 636,641 (2015) ("The Court of Federal Claims
possesses jurisdiction over an illegal exaction claim based on an offset pursuant to 31 U.S.C.
§ 3720A."); Ibrahim v. United States, 112 Fed. Cl. 333,336 (2013) (although court lacked
jurisdiction over tax refund claim, court did possess jurisdiction over a claim against agency "for
illegal exaction of [the plaintiffs] tax refund by the means of an offset").

The Court is cognizant of its obligation to construe a prose plaintiffs complaint
liberally. Nonetheless, in this case, it is apparent that Ms. Hale's complaint does not state a claim
for an illegal exaction against FEMA. Beside the fact that there is no mention of FEMA in the
complaint, the record indicates that Ms. Hale ultimately secured repayment of the offset amount
fromFEMA. 4

As to the $100 reduction in Ms. Hale's 2012 refund due to the IRS's recalculation of her
EIC, the Coutt finds that it has subject-matter jurisdiction over that portion of Ms. Hale's 2012
tax refund claim. As set out in more detail below, an original or amended tax return rep01ting an
overpayment functions as a claim for refund sufficient to satisfy the jurisdictional prerequisite set
f01th in I.RC.§ 651 l(a). See 26 C.F.R. § 301.6402-3(a)(5). Ms. Hale filed a tax return and, later,
two amended returns for 2012. The amended returns both qualify as timely claims for refund
because they were filed within three years of the original return. I.R.C. § 6511 (a); Def. 's Mot.
Ex. 1, at App. 2 (reflecting amended returns filed in April and June of 2015, following original
return filed on April 15, 2013). Accordingly, Ms. Hale fulfilled§ 6511 's requirement to file a
timely administrative claim for refund or credit.

4
Documents submitted with Ms. Hale's response include an April 2013 affidavit in which she
described previous communications with FEMA and requested that it return the $2,119.31 that
was offset from her refund. Pl.'s Resp. at 144. A November 2013 email submitted by Ms. Hale
reveals that she appealed the FEMA offset decision and that her appeal was granted but that she
had not yet received payment from FEMA. Id. at 147. According to the email, the representative
on the phone told Ms. Hale that the agency's records reflected that she would be receiving a
refund. Id. Ms. Hale states in her response to the government's motion to dismiss that she was
"eventually after a long time refunded the Expedite Fund Amount for 2005 and 2006," although
"IRS kept the remaining balance." Id. at 101. It is unclear what "remaining balance" Ms. Hale is
referencing; unless it is the $100 reduction based on the IRS' s recalculation of her EI C, which is
addressed in the text above.

6
 Further, while the IRS sent Ms. Hale at least two letters explaining the $100 reduction in
her EIC, it never sent a notice of disallowance concerning her claim for that sum. Pl.'s Resp. at
40 (June 1, 2015 letter explaining mathematical error made in calculating EIC in amended 2012
return); id. at 52 (September 10, 2015 letter restating IRS's position that 2012 EIC was
calculated incorrectly and had been reduced from $3,169 to $3,069). Thus, the two-year statute
of limitations set forth in§ 6532 was never triggered, and Ms. Hale's complaint is timely with
respect to this portion of her 2012 tax refund claim. 5 The Court has subject-matter jurisdiction to
adjudicate that claim.

C. Refund Claim for the 2014 Tax Year

The government contends that Ms. Hale's tax refund claim for the 2014 tax year is time-
ban·ed. Tax refund claims brought in this court pursuant to I.R.C. § 7422(a) are subject to a two-
year statute of limitations measured "from the date of mailing ... to the taxpayer of a notice of
the disallowance of the part of the [administrative] claim to which the suit or proceeding relates."
l.R.C. § 6532(a)(l). Documents submitted by the parties in this case establish that the IRS sent
Ms. Hale a patiial disallowance letter regarding her claim for refund on September 9, 2015,
which gave her until September 9, 2017 to file any related suit. See Def.'s Mot. Ex. 9, at App.
37-38; Pl.'s Resp. at 48-51. The present lawsuit was not filed until October 11, 2018. See
generally Comp!. Accordingly, the Comi agrees with the government that Ms. Hale's complaint
was untimely with respect to her claim for a refund for the 2014 tax year. This claim must
therefore be dismissed for lack of subject-matter jurisdiction.

D. Refund Claims for Tax Years 2013, 2015, 2016, and 2017

As to the remaining tax years covered in the complaint, the Court has determined that it
has subject-matter jurisdiction to heat· Ms. Hale's claims. Similar to the $100 adjustment to her
2012 EIC, Ms. Hale filed a claim for refund in the form of her tax return and, in some instances,
amended tax returns for these tax years. Moreover, the documents before the Comi indicate that

5
The Comi observes that in United States v. Clintwood Elkhorn Min. Co., 553 U.S. 1 (2008),
the Supreme Comi suggested-but did not hold-that in the absence of another, more specific
limitations period, tax refund cases are subject to the federal "outside limit" six-year statute of
limitations provided in 28 U.S.C. § 2401(a). Id. at 8 (quoting United States v. A.S. Kreider Co.,
313 U.S. 443, 447 (1941)). The Supreme Court thus implied that the Court of Claims was
incorrect in its 1955 holding that the six-year general statute of limitations never applies in tax
refund cases. See Detroit Trust Co. v. United States, 131 Ct. Cl. 223, 226-28 (1955) (finding that
six-year statute of limitations did not bar action based in part on refund claim filed in 1917 and
disallowed in 1951, where suit was filed within two years of 1951 disallowance); Wagenet v.
United States, No. 08-142, 2009 WL 4895363, at *2 (C.D. Cal. Sept. 14, 2009) (applying the six-
year statute of limitations set fmih in 28 U.S.C. § 240l(a) because where "no notice of
disallowance was mailed ... Section 6532(a)(l) does not apply"). Ms. Hale filed suit within six
years of her claims for refund. With respect to her$ 100 EIC claim for tax year 2012, Ms. Hale's
complaint is timely because her last amended return (in other words, her claim for refund) for
2012 was filed on June 15, 2015 and her complaint was filed on October 11, 2018. Def.'s Mot.
Ex. 1, at App. 2; see generally Comp!.

7
the IRS never sent Ms. Hale a notice of disallowance of the claims in question. Accordingly, and
as explained in further detail below, the Court may properly exercise subject-matter jurisdiction
over these claims.

1. Ms. Hale Filed Claims for Refund

As noted above, a taxpayer must "duly file[]" a "claim for refund or credit" before
bringing a tax refund claim in this comi. I.R.C. § 7422(a). Here, Ms. Hale filed an income tax
return for each year at issue, and for certain tax years she filed one or more amended returns. See
Def.'s Mot. Ex. 3, at App. 7 (2013 tax year); id. Ex. 10, at App. 40 (2015 tax year); id. Ex. 14, at
App. 61 (2016 tax year); id. Ex. 18, at App. 90 (2017 tax year). Treasury regulations provide that
"[a] properly executed ... original income tax return or an amended return ... shall constitute a
claim for refund or credit within the meaning of section 6402 and section 6511 for the amount of
the overpayment disclosed by such return (or amended return)." 26 C.F.R. § 301.6402-3(a)(5).
Thus, Ms. Hale's returns (and amended returns) for tax years 2013, 2015, 2016, and 2017
constituted claims for refund because they reflected an overpayment of taxes and requested
refunds in varying amounts. See, e.g .. VanCanagan v. United States, 231 F.3d 1349, 1351 (Fed.
Cir. 2000) (taxpayer's return was also claim for refund); Murdock v. United States, 103 Fed. CL
389,394 (2012) ("The filing ofa tax return reporting overpayments constitutes a simultaneous
filing of [a claim for refund]."); Simmons v. United States, 29 Fed. CL 136, 140 (1993)
("[R]ather than file a separate claim for refund, a taxpayer may use his tax return as the refund
claim.") (citing Mcllvaine v. United States, 23 CL Ct. 439,442 (1991)). Because an income tax
return or amended return may also serve as a claim for refund, the Comi finds that Ms. Hale filed
claims for refund when she filed her returns and amended returns for tax years 2013, 2015, 2016,
and 2017.

Ms. Hale's claims for refund were also timely. As the Federal Circuit explained in
VanCanagan, a claim for refund filed as part of a return is timely because it is "filed within three
years of(actually on the same date as) the filing of the return." 231 F.3d at 1351. In addition, Ms.
Hale's amended returns for the subject tax years were also filed within three years of the
corresponding original returns. See Def. 's Mot. Ex. 3, at App. 7 (two amended tax returns for
2013 filed in April 2015 and July 2015, respectively, within three years of original return filed on
April 15, 2014); id. Ex. 10, at App. 40 (two amended returns for 2015 filed within same calendar
year as original retmn filed on April 15, 2016); id. Ex. 14, at App. 61 (amended return for 2016
filed on same date as original return filed April 15, 2017). For these reasons, the Comi finds that
Ms. Hale filed timely claims for refund for tax years 2013, 2015, 2016, and 2017.

2. The IRS Did Not Send Notices of Disallowance Corresponding to Ms.
Hale's Remaining Claims

Under I.R.C. § 6532(a)(l), a taxpayer must wait at least six months from the date she
filed a claim for refund to bring a tax refund suit in this court. Moreover, the taxpayer's time to
file suit expires two years after the IRS sends a notice of disallowance of the claim. Id.

In the present case, the documents submitted by the parties suggest that the IRS never
sent Ms. Hale a notice of disallowance of her claims for tax years 2013, 2015, 2016, and 2017. In
contrast, and as discussed above, the IRS sent Ms. Hale such a notice disallowing her refund

8
claim for tax year 2014. See Def. 's Mot. Ex. 9, at App. 37-38; Pl.'s Resp. at 48-51. As to the
other tax years at issue, the IRS's c01Tespondence with Ms. Hale took other forms. For instance,
it sent Ms. Hale "math error notices" using form letter 474C for tax years 2013 and 2017, a 288C
letter requesting more information for tax year 2015, and a l 2C letter requesting more
information for tax year 2016. See Def. 's Mot. Ex. 5, at App. 15 (letter 474C advising
c01Tections on amended return for 2013); Pl. 's Resp. at 44 (same); Def. 's Mot. Ex. 13, at App. 56
(letter 288C asking for more information in order to process 2015 return); id. Ex. 16, at App. 81
(letter 12C requesting additional information regarding 2016 taxes); Pl.'s Resp. at 93 (letter
474C informing Ms. Hale of corrections to her 2017 return).

Although a notice of disallowance need not take any "particular form," it must adequately
notify the taxpayer "of the Commissioner's adverse action" in order to trigger the two-year
statute of limitations set forth in § 6532. Smith v. United States, 478 F.2d 398, 399 (5th Cir.
1973); see also Miller v. United States, 117 F.3d 1414 (Table), 1997 WL 381958, at *2 (4th Cir.
1997). Internal guidance from the IRS suggests that-among other criteria-a notice of
disallowance must inform the taxpayer of her "right to file suit" and of the "period in which suit
may be filed." Chief Counsel Advisory, IRS CCA 200203002 (Jan. 18, 2002). Notices informing
taxpayers that the IRS needs more information to process a claim, along with math error notices
or similar correspondence, typically fail to adequately notify taxpayers of a final adverse action
or of their right to file suit within two years. Id.; Form of Notice of Disallowance of a Refund
Claim Refund Suits, FED. TAX COORDINATOR,! T-9022 (2d ed. 2019) (discussing "dual
purposes" of informing taxpayer of final disallowance and of the right to sue along with
applicable statute oflimitations).

Here, none of the correspondence in the record pertaining to tax years 2013, 2015, 2016,
and 2017 meets these criteria for effective notices of disallowance. They do not inform Ms. Hale
of her right to sue or of the applicable two-year limitations period. The government does not
assert that the IRS ever sent notices of disallowance with respect to these tax years. By contrast,
the government (and Ms. Hale) submitted evidence of the notice of disallowance the IRS sent
with respect to Ms. Hale's claims for tax year 2014. That notice unambiguously disallowed Ms.
Hale's claims and informed her of her right to sue, as well as the limitations period. See Def.'s
Mot. Ex. 9, at App. 37-38; Pl.'s Resp. at 48-51. The Court concludes that the two-year statute of
limitations provided by § 6532 never began to run with respect to these claims, meaning they are
subject to the "outside limit" six-year statute of limitations set forth in 28 U.S.C. § 2401(a). 6
Because the relevant claims for refund were filed starting in 2014 (original tax return for 2013)
and her complaint was filed in October 2018, Ms. Hale's complaint is timely with respect to her
2013, 2015, 2016, and 2017 tax refund claims. The Comi, therefore, has subject-matter
jurisdiction to adjudicate these claims.

III. Ms. Hale's Complaint Fails To State a Claim as to Her Remaining Claims

When considering a motion to dismiss for failure to state a claim under RCFC 12(b)(6),
the comi accepts as true the complaint's undisputed factual allegations and construes them in the
light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court

6
See note 5, supra.

9
also draws all reasonable inferences in favor of the non-moving paiiy. Sommers Oil Co. v.
United States, 241 F.3d 1375, 1378 (Fed. Cir. 2001). So construed, the plaintiffs allegations
must "raise [the] right to relief above the speculative level." Bell At!. Corp. v. Twombly. 550
U.S. 544, 555 (2007). In other words, the plaintiffs claim must be plausible on its face. Id. at
570; see also Acceptance Ins. Cos., Inc. v. United States, 583 F.3d 849, 853 (Fed. Cir. 2009). "A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged." Igbal, 556
U.S. at 678 (citing Twombly, 550 U.S. at 556).

Moreover, in tax refund cases, there is a "presumption of the correctness of the findings
of the Commissioner oflnternal Revenue." Albemarle Corp. & Subsidiaries v. United States,
118 Fed. Cl. 549,560 (2014); see also WMI Holdings Corp. v. United States, 891 F.3d 1016,
1021 (Fed. Cir. 2018) ("It is well established that, in a tax refund case, the ruling of the
Commissioner of Internal Revenue is presumed correct.") (internal quotations and alteration
omitted). The taxpayer must rebut the presumption of correctness by "com[ing] forward with
enough evidence to support a finding contrary to the Commissioner's determination." Bubble
Room, Inc. v. United States, 159 F.3d 553, 561 (Fed. Cir. 1998). The taxpayer must also "prove
the amount of the refund due." WM! Holdings, 891 F.3d at 1021-22 (citing United States v.
Janis, 428 U.S. 433,440 (1976); Bubble Room, Inc., 159 F.3d at 561).

With these principles in mind, the Comi turns to its analysis of Ms. Hale's remaining
refund claims for tax years 2013, 2015, 2016, and 2017. The government asserts that these
remaining claims should be dismissed because Ms. Hale "fails to state a substantive basis for the
claims and cannot overcome the [presumption] of correctness." Def.'s Mot. at 12 (capitalization
altered). The Comi agrees with the government as to these tax years-and with respect to the
2012 $100 EIC claim-for the reasons discussed below. 7

A. 2012 Tax Year: Reduction of Ms. Hale's Claimed Earned Income Credit

The Court finds that Ms. Hale has failed to state a claim upon which relief may be
granted with respect to the $100 EIC reduction for the 2012 tax year. Nothing in her complaint or
response supplies any basis for the Comito conclude that the IRS was incorrect to reduce her
EIC. Ms. Hale's response to the government's motion, insofar as it concerns tax year 2012, is
mostly focused on the offset taken from her refund to pay an alleged FEMA debt. Ms. Hale
makes no mention of the $100 EIC reduction, unless her reference to "the remaining balance" of
her refund, which she alleges the IRS has improperly retained, refers to that sum. See Pl. 's Resp.
at 101. In any event, Ms. Hale has not presented sufficient evidence or argument to overcome the
presumption of correctness as to this adjustment to her claimed 2012 EIC. She has therefore
failed to state a claim upon which relief can be granted and the Court must dismiss this claim
with prejudice.

7
The government did not specifically address the $100 EIC claim in its submissions to the
Comi.

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 B. 2013 Tax Year

Ms. Hale's original return for the 2013 tax year claimed an EIC of $3,250.00, a
refundable education credit of $1,000.00, and a total refund of $2,844.39. Id. Ex. 4, at App. 11-
12; id. Ex. 5, at App. 15. The IRS reduced the EiC to $3,137.00, disallowed the education credit,
and issued a refund of $1,732.00. Id. Ex. 3, at App. 7. Ms. Hale later filed amended returns on
April 1, 2015 and July 1, 2015. Id. On September 7, 2015, the IRS abated the entire $1,405.00 it
had assessed in tax when Ms. Hale filed her original return. Id. It then issued her an additional
refund of$1,462.98, including $57.98 in interest. Id.

Thus, the IRS paid a total of$3,194.98 in refunds and interest to Ms. Hale in connection
with the 2013 tax year (first refund of$1,732.00 plus second refund of$1,462.98 including
interest). This exceeds Ms. Hale's original requested refund of $2,844.39. Nothing in her
complaint contradicts or rebuts the IRS's records of these transactions, and her response to the
motion to dismiss further confirms that she received one refund of$1,732.00 and a later refund
of $1,405.00 for the 2013 tax year. Pl. 's Resp. at 105. Accordingly, Ms. Hale's complaint fails to
state a claim as to the 2013 tax year because she has already received refunds which together
exceed the refund she requested in her return for that year.

C. 2015 Tax Year

Ms. Hale's return for tax year 2015 requested a refund of $3,359.00. Def. 's Mot. Ex. 11,
at App. 43. Along with her Form 1040, Ms. Hale filed a Schedule C-EZ and Schedule SE
reporting net profit from her business as a daycare provider. Id. at App. 44, 48. The Schedule SE
rep011ed total self-employment tax of$1,547.19, although the official IRS return transcript lists
the amount as $1,547.12. Id. at App. 48; id. Ex. 12, at App. 54. However, this amount was not
transferred to Line 57 of Ms. Hale's Form 1040, as instructed by the Schedule SE. Compare id.
Ex. 11, at App. 48 (instructions on Schedule SE) with id. at App. 43 (Form 1040 with amount for
Line 57 listed as "O"). Therefore, the IRS reduced Ms. Hale's requested refund of $3,359.00 by
the amount of self-employment tax owed ($1,547.12) and issued her a total refund of$1,81 l.88.
Id. Ex. 12, at App. 55.

Ms. Hale's complaint does not allege any facts which contradict the conclusion that the
IRS properly deducted from her requested refund the self-employment tax listed on her Schedule
SE and omitted from her Form 1040. Her response to the government's motion confirms that she
did not include the self-employment tax on her return "because of wanting IRS to calculate" and
because Ms. Hale thought that "perhaps [she] would not pay [d]ouble [s]elf-employment [t]ax."
Pl.'s Resp. at 106. It appears Ms. Hale may have harbored this belief because the IRS abated her
tax and issued an additional refund for the 2013 tax year. Id. In any event, Ms. Hale has not
provided any substantive grounds suggesting the IRS's calculations of her tax owed for 2015
were incorrect. Therefore, the complaint fails to state a claim as to this tax year.

D. 2016 Tax Year

Ms. Hale's 2016 tax return requested a total refund of $4,154.00 based on a claimed
$3,154.00 EiC and a $1,000 education credit. Def.'s Mot. Ex. 15, at App. 64. The return also
repo11ed net profit for Ms. Hale's business of $9,085.00. Id. at App. 65. In a May 10, 2017 letter,

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the IRS stated that, based on the $9,085.00 Ms. Hale reported in profit on her Schedule C-EZ,
she could be liable for self-employment tax. Id. Ex. 16, at App. 8 I. The letter requested that Ms.
Hale complete Schedule SE to determine the amount of self-employment tax due or submit an
explanation of why she was not liable for self-employment tax, as applicable. Id. On July 24,
2017, the IRS assessed self-employment tax of $1,284.00 and issued a refund of $2,604.30
including $23.30 in interest. Id. Ex. 14, at App. 61. This amount represented an EIC of$2,865.00
(corrected by the IRS from $3,154.00 to $3,069.00, then reduced by $204.00), plus the $1,000
refundable credit, less $1,284.00 in self-employment tax. See id.

As noted above with regard to the 2015 tax year, Ms. Hale has not alleged any facts that
bring into question the correctness of the IRS's actions with regard to her return for the 2016 tax
year. Based on Ms. Hale's response, her chief complaint as to tax year 2016 appears to be
excessive delays of her refund without explanation, along with the failure of various services,
including the Tax Advocate Service, to provide her with effective assistance in resolving her tax
issues. See Pl. 's Resp. at I 02-03. These circumstances, while undoubtedly frustrating, do not
controvert the correctness of the IRS's calculations of Ms. Hale's taxes owed and refund due.
Therefore, this claim must also be dismissed for failure to state a claim upon which relief can be
granted.

E. 2017TaxYear

Similar to the previous two tax years, Ms. Hale filed a Schedule C-EZ with her 2017
return, rep01ting $10,050.00 in net profit and, on her Schedule SE, $1,420.02 in self-employment
tax. Def.'s Mot. Ex. 19, at App. 95, 97. 8 Ms. Hale again did not list the self-employment tax on
her Form 1040, which contributed to her excessively high requested refund of$5,400.00. Id. at
App. 93. The IRS assessed $1,419.98 in self-employment tax and found Ms. Hale ineligible for
her claimed $2,000 refundable American Opp01tunity Credit. Id. Ex. 18, at App. 90. She was
ineligible for the credit because her return reflected that she (the qualifying student) had not been
enrolled "at least half-time for at least one academic period" as required. Id. Ex. 19 at App. 94.
Accordingly, the IRS issued a refund of $1,980.02 (EIC of $3,400.00 less $1,419.98 in self-
employment tax). Id. Ex. 18, at App. 90.

Ms. Hale's complaint does not allege any facts that contradict the propriety of the IRS's
actions with regard to her 2017 tax return. Her response similarly does not provide any grounds
disproving the correctness of the IRS' s calculations as to her tax due and the refund to which she
was entitled. In light of the presumption of correctness and the bm'den placed on plaintiffs in tax

8
In a September 7, 2018 letter, the IRS asserted to Ms. Hale that she "did not complete [her]
Form Schedule SE." Pl.'s Resp. at 244. This conflicts with the document appearing at page 97 of
the government's appendix, which appears to be a Schedule SE form showing self-employment
tax of$1,420.02 on Line 5 and $710.01 in Line 6 entered for a self-employment tax deduction.
Def.'s Mot. Ex. 19, at App. 97. This discrepancy, however, does not affect the Court's ability to
conclude that the issued refund was correct because Ms. Hale owed $1,420 in self-employment
tax which she did not enter on Line 57 of her Form 1040. Id. at App. 93.

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refund cases, this portion of the complaint must also be dismissed for failure to state a claim
upon which relief can be granted.

CONCLUSION

For the reasons discussed above, the government's motion to dismiss Ms. Hale's
complaint is GRANTED. Ms. Hale's claims with respect to the $2,119.31 offset to satisfy a
purported debt to FEMA, all of her claims for tax year 2014, and any civil rights or tort claims,
are DISMISSED without prejudice. Her claims with respect to the $100 reduction of her 2012
Earned Income Credit, as well as her refund claims for the 2013, 2015, 2016, and 2017 tax years,
are DISMISSED with prejudice. The Clerk is directed to enter judgment accordingly. Each
party shall bear its own costs.

IT IS SO ORDERED.

ELAINE D. KAPLAN
Judge

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