dissenting:
The circumstances in which this tax case arose are simply tragic. Mary Morton Parsons was a wealthy and elderly widow. After her close family died, she entrusted her personal and financial affairs to her physician and attorney, who cruelly abused and defrauded her. For years, they kept her drugged up and isolated her from friends and acquaintances. While she was thus incapacitated, they transferred substantial portions of her assets to themselves and their families. To cover their tracks, they filed a gift tax return on Parsons’ behalf and had Parsons pay gift taxes on the fraudulent transfers in the amount of $4,324,822.54.
If ever there were a tax case in which equitable tolling should apply, it is this one. Parsons was not a taxpayer who, because of her incapacity, simply neglected to claim a refund of overpaid taxes that the government rightfully collected or withheld from her. Instead, Parsons paid taxes she never would have paid had she not been rendered incompetent and defrauded by her physician and attorney. The government, although not a participant, was an unintentional beneficiary of the physician’s and attorney’s fraud. In denying the claim for refund filed on behalf *703of Parsons’ estate, the government refuses to return the fraudulent proceeds wrongfully collected from Parsons.
The government can certainly afford to do the honorable thing in this case. To the government, which deals with budgets of trillions of dollars, four million dollars is just a drop in the bucket. Requiring the government to return the money improperly collected from Parsons would not impose any burden on it. Such an unbudgeted loss of revenues would destroy many corporations, but the government would hardly be affected.
I would apply equitable tolling in this case and require the government to refund to Parsons’ estate the money wrongfully collected as gift taxes. Therefore, I respectfully dissent from the majority’s opinion.
I.
The majority argues that the rebuttable presumption of equitable tolling announced in Irwin does not apply in tax refund eases. The Supreme Court held in Irwin that “the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against' the United States.” Supra at 698 (citing Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95-96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990)). The majority reasons that, because tax refund suits are always brought against the government and never against private defendants, the Irwin rule has no force in the tax refund context. Supra at 698.
I read the holding of Irwin more broadly. In Irunn, the Supreme Court announced a “general rule” that equitable tolling should apply in suits brought against the government. Irwin, 498 U.S. at 95, 111 S.Ct. at 457. Before Irwin, some courts had held that equitable tolling of a statute of limitations could not apply in suits against the government because a statute of limitations was a condition of Congress’ waiver of sovereign immunity, which must be construed narrowly. See id. at 93-94, 111 S.Ct. at 456-57. Irwin made clear that equitable tolling did apply in actions against the government. The Supreme Court reasoned that, when Congress waives its sovereign immunity and allows plaintiffs to sue the government in a particular context, it implicitly authorizes equitable tolling of the applicable statute of limitations. Id. at 95, 111 S.Ct. at 457.
When the Supreme Court stated its holding that “the same rebuttable presumption of equitable tolling applicable to suits against private defendants should apply to suits against the United States,” id. at 95-96, 111 S.Ct. at 457-58, it intended to ensure that equitable tolling applied equally against private defendants and the government. The Supreme Court was trying to remedy the unfairness of allowing equitable tolling only in suits against private defendants, but not in equivalent suits against the government. Certainly, the Supreme Court did not intend to allow equitable tolling to be applied more favorably in suits against the government than in suits against private defendants. If a statute or case law limited the application of equitable tolling in suits against private defendants, the Supreme Court intended for that limitation to apply also to suits against the government.
The Supreme Court did not consider how the Irwin rule should apply in a context like tax refund suits, where all suits are brought against the government and none against private defendants. The general thrust of the Irwin holding, however, was to expand the application of equitable tolling to suits brought against the government. The Supreme Court did not intend for equitable tolling to be categorically denied in actions that can be brought only against the government.
Mental incompetency is one of the fundamental equitable reasons for tolling a statute of limitations.* Lopez v. Citibank, N.A, 808 F.2d 905, 906-07 (1st Cir.1987) (holding that there is no absolute rule requiring equitable *704tolling whenever there is mental incompeten-ey, but that tolling may apply on a case-by-ease basis); Char v. Matson Terminals Inc., 817 F.Supp. 850, 855 (D.Haw.1992) (following Lopez). Indeed, courts have tolled the limitations periods for filing tax refund claims on grounds of the taxpayer’s mental incompetence. Wiltgen v. United States, 813 F.Supp. 1387, 1394-95 (N.D.Iowa 1992); Scott v. United States, 795 F.Supp. 1028, 1035 (D.Haw.1992); Johnsen v. United States, 758 F.Supp. 834, 836 (E.D.N.Y.1991). Although courts will not equitably toll the applicable statute of limitations where a mentally incompetent person was represented by counsel, Lopez, 808 F.2d at 907; Char, 817 F.Supp. at 855-56, that restriction on equitable tolling certainly cannot apply in this case. Parsons was rendered incompetent by her attorney and physician, who kept her heavily sedated and isolated from friends and acquaintances for many years. Given these extreme circumstances, I would toll the limitation periods in § 6511 and allow Parsons’ estate to file a claim for refund of the wrongfully paid taxes.
II.
As a backup argument, the majority argues that the presumption of equitable tolling has effectively been rebutted in the context of tax refund suits. Following the lead of the First Circuit in Oropallo v. United States, 994 F.2d 25 (1st Cir.1993), cert. denied, — U.S. -, 114 S.Ct. 705, 126 L.Ed.2d 671 (1994), the majority finds the structure of the limitations periods in § 6511 inconsistent with equitable tolling. The majority finds “compelling” the following reasoning of the Oropallo court:
[Sjeetion 6511(a) serves simply to identify which taxpayers have properly positioned themselves to obtain a refund_ [H]ow-ever, it does not describe which of those potential claimants will actually succeed in pursuing their rights. That task is left to section 6511(b)(2)(A), which, significantly, the tax code characterizes not as a limitations period, but as a “limit on [the] amount of credit or refund”_ Unquestionably, then, th[e] date [mandated by § 6511(b)(2)(A) ] serves as an absolute cutoff point.
Supra at 699 (quoting Oropallo, 994 F.2d at 31). The majority concedes that § 6511(b)(2) is not a pure statute of repose but “instead works together with 6511(a) to operate like a statute of limitations.” Supra at 700. Nonetheless, the majority finds that the tax code’s caption of § 6511(b)(2) as a “[l]imit on [the] amount of credit or refund” demonstrates Congress’ intent to establish an outside limit on the recovery of funds in tax refund suits. Id. The majority therefore concludes that § 6511(b)(2) operates akin to a statute of repose, which is inconsistent with equitable tolling. Id.
I read § 6511(b)(2) simply as a statute of limitations. As the majority recognizes, the limitations periods in § 6511(b)(2) operates together with § 6511(a) as a statute of limitations. In fact, § 6511(a) is the more benign of the two limitations periods. Section 6511(a) merely requires the taxpayer to file his claim for refund either within three years of the filing of the tax return or within two years of the payment the taxes. The taxpayer can easily satisfy this requirement at any time by remembering to file a tax return before filing the claim for refund. Section 6511(b)(2) imposes the more significant limitation on the filing of claims for refund. It requires the taxpayer to file his claim for refund within either two or three years from the date on which the taxes were paid. The taxpayer receives the three-year limitations period as long as he has filed a tax return within the three years preceding the filing of the claim for refund. Otherwise, the taxpayer receives only the two-year limitation period. In effect, § 6511(b)(2) is the real statute of limitations; it identifies which taxpayers have properly positioned themselves to obtain a refund. Section 6511(a) merely determines whether the taxpayer receives the two-year or three-year limitations period under § 6511(b)(2).
The caption to § 6511(b)(2) does not magically turn that section into an absolute cut-off of refund claims. Whatever the caption, § 6511(b)(2) is simply a statute of limitations, requiring the taxpayer to file his claim for refund within either two or three years of the *705payment of taxes. Nothing about the structure of § 6511 or the phrasing of the caption to § 6511(b)(2) suggests that Congress intended § 6511(b)(2) to serve as an absolute cut-off of refund claims. Like any statute of limitations, § 6511(b)(2) can be equitably tolled in appropriate circumstances.
The statutory scheme in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991), presents a different situation. The Lampf case dealt with the following statute of limitations applicable to securities fraud suits under § 10(b) of the Securities Exchange Act of 1934: “No action shall be maintained to enforce any liability created under this section, unless brought within one year after the discovery of the facts constituting the violation and within three years after such violation.” Lampf, 501 U.S. at 358-61 and n. 6, 111 S.Ct. at 2779-81 and n. 6 (citing 15 U.S.C. § 78i(e)). In this statutory scheme, the three-year limitation acts as a statute of repose. The plaintiff must sue within three years of the occurrence of the securities violation, regardless of whether the plaintiff knew during that three-year period that the violation had occurred. The three-year period operates as an absolute cut-off, and there is no room for a court to expand the limitations period, no matter how equitable the grounds. Thus, a plaintiff who knows about a securities fraud violation but waits more than a year to sue is barred from suing because of his own delinquency, but even the most conscientious plaintiff is barred from filing suit if he discovers the fraud more than three years after its occurrence.
The majority’s comparison of § 6511(b)(2) to the limitations period in Lampf is unavailing. The three-year limitations period in Lampf could operate only as a statute of repose. In light of the one-year limitations period for those who discover a securities fraud violation, Congress must have intended the three-year period to serve as an absolute cut-off of claims. The limitations period in § 6511(b)(2) simply requires a taxpayer to file his claim for refund within two or three years of the payment of taxes. Nothing about § 6511(a) suggests that Congress intended § 6511(b)(2) to operate as an absolute cut-off of refund claims. Therefore, I disagree with the majority’s conclusion that the presumption of equitable tolling has been rebutted in the context of tax refund suits.
III.
For the foregoing reasons, I respectfully dissent from the opinion of the majority. I would apply the doctrine of equitable tolling and allow Parsons’ estate to collect a refund of her wrongfully paid taxes.
Although there is a line of cases holding that mental incompetence does not toll a statute of limitations, e.g., Harris v. Ford Motor Co., 635 F.Supp. 1472, 1473-74 (E.D.Mo.1986) (citing cases), most of those cases involved claims against the federal government and were decided on sovereign immunity grounds. Lopez v. Citibank, N.A., 808 F.2d 905, 906-07 (1st Cir.1987); Char v. Matson Terminals Inc., 817 F.Supp. 850, 855 (D.Haw.1992).