Dantzler v. IRS

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
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U.S. COURT OF APPEALS
No. 98-8514
ELEVENTH CIRCUIT
-------------------------------------------- 08/10/99
D. C. Docket No. 5:96-CV-94-1 THOMAS K. KAHN
CLERK

LAURENCE KEITT DANTZLER,
BROOKS WHITTLE DANTZLER,

Plaintiffs-Appellees,
versus

UNITED STATES INTERNAL REVENUE SERVICE,

Defendant-Appellant.

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Appeal from the United States District Court
for the Middle District of Georgia
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(August 10, 1999)

Before EDMONDSON and CARNES, Circuit Judges, and WATSON*, Senior Judge.

_______________

* Honorable James L. Watson, Senior Judge, U. S. Court of International Trade,
sitting by designation.
EDMONDSON, Circuit Judge:

As legal authority, the binding aspect of an earlier case is found in the actual

disposition of the case given its particular essential facts. The power of precedent

chiefly is to assure that like cases have like results. Cases that are not essentially alike

can rightly have different results. These principles come into play as we decide the

government’s appeal from the district court’s judgment awarding Taxpayers refunds

of their federal income taxes. Because Taxpayers’ claims for refunds were not timely,

we reverse.

Background

Each April of 1986, 1987 and 1988, taxpayers Laurence and Brooks Dantzler,

who are husband and wife, submitted to the federal Internal Revenue Service (“IRS”)

a Form 4868 application for a four-month extension of time for filing their annual

federal income tax return. Each year, the Dantzlers enclosed a remittance. These

amounts were sent to the IRS: $5,220.00 in 1986; $3,234.64 in 1987; $4,577.89 in

1988. Each time, the IRS granted the Dantzlers’ request for a four-month extension.

The Dantzlers did not file the returns within the respective four-month

extension periods, nor did they request additional extensions. Instead, the Dantzlers

submitted their tax returns for the years 1985, 1986 and 1987 in December 1992. The

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returns showed that the Dantzlers’ liability was less than the remittances the Dantzlers

had made in connection with the corresponding extension requests, and each return

accordingly sought a refund. In November 1993, the Dantzlers requested that the IRS

return the excess amounts to them. The IRS later notified the Dantzlers that it had

disallowed their refund claims because the claims were barred by the statute of

limitations.

The Dantzlers brought this action seeking a refund for the years 1985, 1986,

and 1987.1 The government and the Dantzlers filed cross-motions for summary

judgment. The district court denied the government’s motion and granted the

Dantzlers’ motion. The government appeals.

Discussion

This case presents the issue of whether the remittances submitted by the

Dantzlers with their 4868 forms, requesting extensions of time for the filing of their

1985, 1986 and 1987 tax returns, constitute payments for purposes of the statute of

limitations on a claim for refund. We conclude that the remittances were payments.

1
The Dantzlers also sought a refund for the year 1989. The government conceded to the
district court that the Dantzlers’ claim for 1989 was timely; so, it is no issue in this appeal.

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The Dantzlers’ refund claims are therefore time-barred.

The Internal Revenue Code contains two jurisdictional time bars for tax refund

claims. Section 6511(a) provides that a refund claim must be filed “within 3 years

from the time the return was filed or 2 years from the time the tax was paid, whichever

of such periods expires the later, or if no return was filed by the taxpayer, within 2

years from the time the tax was paid.” 26 U.S.C. § 6511(a). Even if a claim was filed

within the three-year window of section 6511(a), however, section 6511(b)(2)(A)

limits the amount of a credit or refund to “the portion of the tax paid within the period

immediately preceding the filing of the claim, equal to 3 years plus the period of any

extension of time for filing the return.” § 6511(b)(2)(A).2

So, for the Dantzlers to recover, their claims must have been filed, at the latest,

within three years and four months from the time the tax was paid. If the remittances

submitted with their Form 4868 applications for extensions were payments, their

2
If a refund claim is not filed within the three-year period of section 6511(a), a taxpayer
can obtain a refund only to the extent that the taxes were “paid during the 2 years immediately
preceding the filing of the claim.” § 6511(b)(2)(B). Whether the Dantzlers were even entitled to
the longer three-year-and-four-month look-back provision is questionable, see Miller v. United
States, 38 F.3d 473, 475 (9th Cir. 1994) (concluding that an untimely return does not qualify as a
valid return under section 6511(a)); but see Mills v. United States, 805 F. Supp. 448, 450 (E.D.
Tex. 1992) (concluding that three-year limitations period of section 6511(a), beginning when
return is filed, applies to taxpayer filing late return). But, because we conclude that the
Dantzlers’ claims were not timely even if we give them the maximum possible time under the
statues, we need not (and do not) decide this issue today. That is, we assume without deciding
that the Dantzlers’ returns were valid for purposes of section 6511(a) and, by extension, section
6511(b)(2)(B); and we analyze the case accordingly.

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claims are time-barred because the claims at issue in this appeal were made more than

three years and four months after each respective remittance was made. But, if the

remittances were deposits and if the taxes were not paid until the Dantzlers filed their

returns in 1992, the Dantzlers’ claims are not barred: the payments would have

occurred simultaneously with the refund claims.

The Dantzlers argue that their remittances were no payments. They say that

binding precedent of our circuit establishes a per se rule that there can be no payment

of a tax until there has been an assessment of a tax. Because an assessment had not

been made when the Dantzlers filed their returns in this case3 (at which time they also

filed their claim for a refund), the Dantzlers contend that their claims were timely.

The distinction between deposits and payments was initially recognized in

Rosenman v. United States, 323 U.S. 658 (1945). In Rosenman, the Supreme Court

concluded that a refund claim for a remittance of anticipated (but disputed) estate

taxes was not time-barred by the predecessor to section 6511: the Court concluded

that the pertinent remittance was a “deposit” rather than a “payment.” Id. at 663. The

estate executors in Rosenman had submitted a remittance of an anticipated estate tax,

with a letter stating that payment was “made under protest and duress, and solely for

the purpose of avoiding penalties and interest[.]” Id. at 660. The IRS had then placed

3
That the IRS has never made an assessment is undisputed.

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the amount in a suspense account4 to the credit of the estate. Id.

Based on its evaluation of the specific facts before it -- the timing of the

remittances and the disputed IRS assessment, which came years later than the

remittance; the taxpayers’ intent in making the remittance; and how the IRS treated

the remittance upon receipt -- the Court, in Rosenman, ruled that the remittance was

a deposit; so the statute of limitations did not apply. The taxpayers were accordingly

entitled to a refund. Id. at 661-63.

In Thomas v. Mercantile National Bank, 204 F.2d 943 (5th Cir. 1953), the court

seemed to interpret Rosenman as establishing, in effect, a per se rule that a remittance

will not be construed as a payment until an assessment of the tax owed has been made.

Id. at 944. Thomas involved a remittance for a proposed estate tax deficiency. The

taxpayers responded with a check for the exact amount, but the assessment was not

entered until some time after the government received the money. The facts of the

case were such that the refund claim was timely only if the tax was deemed “paid” on

the date of the assessment rather than at the time the check was received. The court

concluded that the check was not a payment until the pertinent tax had been assessed;

therefore, the refund claim was timely. Id.

4
A suspense account is a repository for funds received in connection with federal taxes if
no assessment for taxes is outstanding when the funds are received. Rosenman, 323 U.S. at 662.

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 In Ford v. United States, 618 F.2d 357 (5th Cir. 1980), the court applied

Thomas in a case where the taxpayers sought a refund of their federal income taxes.

The taxpayers in that case remitted funds in response to a statutory notice of

deficiency. After an assessment by the IRS, it was determined they had overpaid. But,

the taxpayers did not file a refund claim until the limitations period -- if measured

from the time when they remitted funds in response to the notice of deficiency -- had

expired. The Ford court said the case was controlled by Thomas, id. at 361, and while

disagreeing with the result, see id. at 359-61 (criticizing Thomas and inviting en banc

consideration “of a rule we believe not justified by Supreme Court precedent, the

practice of other courts, or the realities of our tax system”), the Ford court concluded

that the tax was not deemed paid until the date of assessment of deficiency, id. at 361.

In the instant case, the district court believed that Thomas and Ford required it

to accept the Dantzlers’ position that their remittances were deposits. So, the district

court determined that the provisions of section 6511 did not preclude Plaintiffs from

obtaining their refunds.

The district court was correct, of course, that it must follow the law of our

circuit. We must do so too. Each panel of this court is bound by an earlier decision

of this court which decided an indistinguishable case, unless and until that decision

is overruled by the court en banc or by the Supreme Court. See Bonner v. City of

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Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc). The law-of-the-circuit rule,

however, will not determine the outcome here, because the Thomas and Ford cases are

distinguishable, given the facts of the present case.

The district court erred in concluding that it was bound to follow Thomas and

Ford in this case. The courts in Thomas and Ford were not presented with and did not

decide the question presented in this case: whether taxpayers’ remittances submitted

with a Form 4868 request for an extension of time for the filing of income tax returns

constitute payments of tax for purposes of the statute of limitations for refund claims.

We do face that particular question; and we conclude that the remittances in this case

were not deposits, but were payments.

An automatic extension pursuant to Form 4868 does not relieve the taxpayer

of the obligation to pay the taxes on the statutory due date: The regulations for Form

4868 extensions provide, “[n]otwithstanding the application of § 1.6081-1(a), any

automatic extension of time . . . shall not operate to extend the time for payment of

any tax due on such return.” 26 C.F.R. § 1.6081-4(b). Form 4868 itself states, in bold

print, “[t]his is not an extension of time for payment of tax.” Most important, section

6513, “Time return deemed filed and tax considered paid,” provides that “[a]ny

amount paid as estimated income tax for any taxable year shall be deemed to have

been paid on the last day prescribed for filing the return . . . for such taxable year

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(determined without regard to any extension of time for filing such return).” 26

U.S.C. § 6513(b)(2).5

Section 6513(b)(2) applies to remittances made in conjunction with a request

for extension of time because such remittances are estimates of tax. Form 4868

remittances are the taxpayer’s estimate of the tax liability for the preceding year. The

IRS regulations, which require remittances to be submitted with Form 4868

applications, see 26 C.F.R. § 1.6081-4(b), state that “[a]n application for extension

must show the full amount properly estimated as tax for the taxable year.” 26 C.F.R.

§ 1.6081-4(a)(4) (entitled “Proper estimate of tax”). Therefore, based on the specific

statutory and regulatory scheme at issue in this case, the Dantzlers’ remittances were

payments, rather than deposits. See Ertman v. United States, 165 F.3d 204, 207-08

(2d Cir. 1999) (concluding that section 6513(b)(2) applies to Form 4868 remittances

and that such remittances are payments); Ott v. United States, 141 F.3d 1306, 1309

(9th Cir. 1998) (concluding that taxpayer filing Form 4868 application was required

to remit estimated taxes, as that term is used in section 6513(b)(2), and that remittance

with Form 4868 is payment).

5
A general provision of the Code further states, “when a return of tax is required . . . the
person required to make such return shall, without assessment or notice and demand from the
Secretary . . . . pay such tax at the time and place fixed for filing the return (determined without
regard to any extension of time for filing the return).” 26 U.S.C. § 6151(a). But, in this case,
because we have specific statutes and regulations governing automatic extensions, we need not
rely solely on section 6151.

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 The existence of this specific statute and the implementing regulations -- which

constitute part of the material circumstances of this case and, thus, the circumstances

on which our decision is based -- distinguishes Thomas and Ford from the instant

case. Neither Thomas nor Ford had occasion to address the collective effect of the

provisions which govern the Dantzlers’ remittances. Those cases have different facts:

they do not involve remittances of estimated income tax and a statute which

specifically defines when a remittance of such a tax constitutes a payment. Thomas

involved taxpayers who responded to a notice of deficiency in estate tax to forestall

the accrual of interest on any potential deficiency, see Thomas, 204 F.2d at 943, and

Ford involved taxpayers who responded to a notice of deficiency proposed by the IRS

years after the taxpayers had filed their returns, see Ford, 618 F.2d at 358. In this

case, the Dantzlers’ remittances, submitted in conjunction with a request for an

extension of time to file their tax returns, were their own undisputed estimates of their

tax liability.

To the extent that the Thomas and Ford opinions purport to hold anything

extending beyond the facts with which each of those courts was presented, statements

to that effect are unnecessary to the Thomas and Ford decisions, that is, the language

is dicta. See United States v. Eggersdorf, 126 F.3d 1318, 1322 n.4 (11th Cir. 1997)

(“[L]anguage in . . . [an opinion] not necessary to deciding the case then before us”

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is dicta); Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller, 957 F.2d

1575, 1578 (11th Cir.1992) (explaining that what is said in a prior opinion about a

question not presented there is dicta, so a later panel is "free to give that question fresh

consideration"). Neither the Ford nor Thomas court could make a judicial decision

about an issue which was not squarely presented by the material facts of those cases.

Strictly speaking, judicial opinions do not make binding precedents; judicial

decisions do. As the Supreme Court has recently explained, “[t]here is, of course, an

important difference between the holding in a case and the reasoning that supports that

holding.” Crawford-El v. Britton, 118 S. Ct. 1584, 1590 (1998). A judicial opinion

is not a statute, and not every sentence in a judicial opinion is law.6 And there is a big

difference between following a precedent where the prior-precedent rule demands it

and extending a precedent.

Thomas and Ford are binding, but only on cases presenting facts materially the

same as those presented to the Thomas and Ford courts. Of course, precedents can

have persuasive force that goes beyond their technical powers to bind. The reasoning

contained in the Thomas and Ford opinions may prove persuasive in other cases, see

6
We understand that the precedential sweep of decisions and opinions of the United
States Supreme Court may possibly be broader than those of lower courts; our comments today
are limited to the decisions of lower courts, such as our own.

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McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1314-15 (11th Cir. 1998) (Carnes,

J., concurring) (recognizing some useful purposes of dicta): for example, where a

specific statute does not otherwise provide for a date on which taxes are deemed paid,

where a taxpayer submits a remittance under protest merely to stop penalties from

accumulating, rather than a situation, as in this case, where the taxpayer (at the time

of the remittance) is not challenging a liability claimed by the IRS. But, the Thomas

and Ford decisions are not binding in this case,7 and because of the differences noted

above, we do not find them persuasive. We cannot ignore the plain statutory and

regulatory language applicable in this case. We base our decision on that language,

and on the precise facts before us.

Although the district court did not rely on it, we also note that our decision is

in no way contrary to the Supreme Court’s Rosenman decision or opinion. In

Rosenman, the Court did not have before it the question whether there can be payment

of a tax without assessment, and it made no ruling in that regard. “[Rosenman]

involved a complicated, individualized set of circumstances . . . [and] was decided

7
But see Harden v. United States, 76 A.F.T.R.2d 95-7980 (5th Cir. 1995) (unpublished)
(concluding that Thomas and Ford are controlling of court’s decision about whether remittances
forwarded to IRS with requests for extension constitute deposits). Harden is unpersuasive to us.
Harden says that “In [Thomas and Ford], we held that as a matter of law a remittance forwarded
to the IRS before an assessment of tax is to be considered a deposit rather than a payment.” 76
A.F.T.R.2d at 95-7981. For reasons explained earlier, we think Harden is incorrect: Thomas
and Ford could not have “held” anything beyond the facts and circumstances with which those
courts were presented.

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before the IRS adopted the automatic extension procedure of Form 4868.” Ott, 141

F.3d at 1307. Thomas’s unnecessarily broad interpretation of Rosenman -- an

interpretation by which the decision in Thomas is explained -- is in no way binding

on us. Even the Ford court acknowledged that Rosenman did not require the result in

Thomas, see Ford, 618 F.2d at 359 (“Rosenman . . . did not necessarily dictate the

disposition of [Thomas].”); see also Fortugno v. Commissioner, 353 F.2d 429, 435 (3d

Cir. 1965) (“Rosenman does not foreclose treating as a tax payment a remittance made

prior to assessment.”). In addition, Ford’s unnecessarily broad interpretation8 of

Thomas’s holding is not binding in this case, and it cannot change the dicta in Thomas

to something more. See United States v. Hunter, 172 F.3d 1307, 1310 n.1 (11th Cir.

1999) (Carnes, J., concurring) (“Two layers of dicta cannot do what one does not--

bind a later panel.”). We also note that at least six other circuits have rejected the

notion that Rosenman establishes a per se test. See Ertman, 165 F.3d at 206-08

(collecting cases and concluding that Form 4868 remittance is payment and not

deposit).

So, we conclude that the Dantzlers’ remittances in 1986, 1987 and 1988 with

their respective 4868 forms constituted payments rather than deposits. The applicable

limitations periods began to run when those remittances and forms were filed with the

8
The facts of Thomas and Ford seem materially different from each other.

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IRS. Because they did not seek refunds until 1992, the Dantzlers’ claims are time-

barred.

Because the Dantzlers’ refund claims were not timely, the government was

entitled to summary judgment. We therefore REVERSE the district court’s judgment

and REMAND for proceedings consistent with this opinion.

REVERSED AND REMANDED.

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