United States Court of Appeals
for the Federal Circuit
__________________________
STEVEN T. WALTNER,
Plaintiff-Appellant,
and
SARAH V. WALTNER,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2011-5105
__________________________
Appeal from the United States Court of Federal
Claims in case no. 10-CV-225, Judge Marian Blank Horn.
__________________________
Decided: April 19, 2012
__________________________
STEVEN T. WALTNER and SARAH V. WALTNER, of Avon-
dale, Arizona, pro se.
STEVEN K. UEJIO, Attorney, Tax Division, Appellate
Section, United States Department of Justice, of Wash-
ington, DC, for defendant-appellee. With him on the brief
WALTNER v. US 2
were TAMARA W. ASHFORD, Deputy Assistant Attorney
General, and BRIDGET M. ROWAN, Attorney.
__________________________
Before BRYSON, SCHALL, and PROST, Circuit Judges.
PROST, Circuit Judge.
This case is an appeal from a decision of the United
States Court of Federal Claims dismissing the tax refund
suit brought by Steven T. Waltner and Sarah V. Waltner
(“taxpayers”) for lack of subject matter jurisdiction.
Waltner v. United States, 98 Fed. Cl. 737 (2011). Because
we hold that Court of Federal Claims correctly deter-
mined that the taxpayers’ tax returns for tax years 2004-
2008 did not constitute refund claims over which the
court had jurisdiction, we affirm.
BACKGROUND
The taxpayers filed joint original federal income tax
returns for the tax years 2003 through 2006, followed by
alleged amended tax returns seeking refunds for those
same years. 1 The taxpayers also filed original returns in
2007 and 2008, seeking refunds.
A. Tax Years 2004, 2005, and 2006
For each of the taxable years 2004, 2005, and 2006,
the taxpayers filed Form 1040. On each of these forms,
the taxpayers reported taxable income, as well as taxable
business income, capital gains, taxable ordinary divi-
1 The taxpayers do not appeal the dismissal of their
tax refund claims for the tax year 2003, which was dis-
missed on statute of limitations grounds; thus, this opin-
ion does not address the Court of Federal Claims decision
with regard to 2003.
3 WALTNER v. US
dends, and taxable interest. Accompanying each tax
return was a Form W-2 for Mr. Waltner that reported
wage income paid to him by New Century Mortgage
Corporation and other companies.
Starting in 2008, the taxpayers began filing amended
income tax returns on Form 1040X. For the 2004 taxable
year, the taxpayers adjusted their gross income from
$48,631 to $370, which was the amount of unemployment
compensation received by Mrs. Waltner. On the accom-
panying Form 4852, Substitute for Form W-2, the taxpay-
ers reported that Mr. Waltner’s wages were zero and
alleged that the payer New Century Mortgage Corp.
“erroneously alleged payments of IRC section 3401(a) and
3121(a) wages.” In response to the form’s inquiry into
efforts to obtain a Form W-2c, Corrected Wage and Tax
Statement, Mr. Waltner stated “none, since most compa-
nies refuse to issue forms correctly listing payments of
‘wages’ as defined in 3401(a) and 3121(a).” The taxpayers
also included Form 1099-DIV, listing the amount of
dividends received as zero. The taxpayers submitted this
form to rebut the payer’s submission which alleged a
payment reportable under 26 U.S.C. § 6042. The taxpay-
ers submitted Forms 1099-INT, which all listed the
amount of interest income as zero, and Form 1099-MISC
listing zero non-employee compensation. The taxpayers
seek $8,334.00, plus interest, as a refund claim for tax
year 2004.
Similarly, the taxpayers filed an amended income tax
return Form 1040X for tax year 2005, this time listing no
taxable income and $0 in tax owed. As with the 2004 tax
year, the taxpayers submitted various other amended
forms, including Form 4852, Form 1099-DIV, various
Forms 1099-INT and Forms 1099-MISC, all of which
contained zeros for income and taxes owed. In addition,
WALTNER v. US 4
the taxpayers included Form 8082, Notice of Inconsistent
Treatment of Administrative Adjustment Request, in
which they lowered their dividends to zero because the
trust reporting dividends “is not a ‘Trade or Business’
within the meaning of 26 U.S.C. 7701(a)(26).” The tax-
payers seek $5,582.00, plus interest, as a refund claim for
tax year 2005.
As with tax years 2004 and 2005, the taxpayers filed
an amended income tax return Form 1040X for tax year
2006, reporting adjusted gross income of $0.00. Again,
the taxpayers filed accompanying Form 4852, Forms
1099-MISC, 1099-DIV, 1099-INT, and Form 8082, all of
which replaced previously reported amounts with zeros.
Additionally, the taxpayers filed Form 1099-S, which
listed the gross proceeds as zero. The taxpayers seek
$11,139.00, plus interest, as a refund claim for tax year
2006.
B. Tax Years 2007 and 2008
In 2008, taxpayers also filed their federal income tax
return Form 1040 for tax year 2007, reporting taxable
income of $0.00, a reported tax due of $0.00, and an
overpayment of $8,480.88. Rather than submitting a W-2
Form, they submitted Form 4852, Substitute for Form W-
2, reporting Mr. Waltner’s wages as zero and asserting
that the W-2 provided by the payer “erroneously alleged
payments of IRS Section 3401(a) ‘wages’” even though he
“received no such ‘wages.’” As on all previously filed W-2c
forms, Mr. Waltner again stated that he made no efforts
to obtain a corrected W-2 from the payer. The taxpayers
also submitted Form 4852, Substitute for Form 1099-R,
asserting that the original form was incorrect because Mr.
Waltner “received no such ‘gains, profit or income’ from a
‘U.S.’ ‘employer.’” As with the amended tax returns, the
5 WALTNER v. US
taxpayers submitted Form 1099-INT, reporting zero
interest income received. The taxpayers subsequently
filed two amended returns for tax year 2007, continuing
to list all income totals as zero and adding Form 1099-
DIV, which listed zero income from dividends. The tax-
payers seek $11,457.88, plus interest, as a refund claim
for tax year 2007.
In 2009, the taxpayer filed their federal income tax
return Form 1040 for tax year 2008, reporting zero tax
liability. Additionally, they submitted three Form 4852,
Substitute for Form W-2s, each of which listed zero for
wages earned. The taxpayers also submitted Form 1099-
B, listing zero gross proceeds from Broker and Barter
Transactions, again alleging erroneous payment of pro-
ceeds by the payer. The taxpayers seek $10,678.77, plus
interest, as a refund claim for tax year 2008.
C. The Court of Federal Claims Decision
On April 12, 2010, the taxpayers filed a complaint in
the Court of Federal Claims seeking a claim for refund for
six tax years: 2003, 2004, 2005, 2006, 2007, and 2008.
They alleged that “[t]he amended returns filed by the
Plaintiffs for the years 2003 through 2007 proved that
Plaintiffs had, in fact, no tax liability for those years and
were due a refund for overpayment made against the
possibility of later proven income tax liability.” The
taxpayers also sought damages for the alleged violation of
the Arizona statute A.R.S. § 330429 for a tax lien filed
against Mrs. Waltner on December 30, 2009, as a result of
penalties assessed for tax years 2003 through 2007.
The United States filed a partial motion to dismiss
and a motion for summary judgment. In its reply, it
changed its position, arguing that all the claims should be
WALTNER v. US 6
dismissed because the Court of Federal Claims lacks
jurisdiction over them or, in the alternative, the plaintiffs
fail to state a claim for the taxable years 2004-2008. The
taxpayers filed a cross-motion in response.
On April 22, 2011, the Court of Federal Claims dis-
missed the refund claims for tax years 2003 to 2008.
With regard to tax year 2003, the court found that it
lacked jurisdiction because the claim for refund was filed
after the statute of limitations expired. Waltner, 98 Fed.
Cl. at 756. With regard to tax years 2004 through 2008,
the court found that it lacked subject matter jurisdiction
because the taxpayers’ amended returns and original
returns that contained zeros in place of income did not
constitute returns and thus were not proper claims for
refund. Id. at 760-61. Alternatively, the court concluded
that even if it had subject matter jurisdiction, the taxpay-
ers’ complaint would be dismissed for failure to state a
claim because the taxpayers did not allege any facts
sufficient to state a plausible claim for a tax refund. Id.
at 763. With regard to damages claimed as a result of a
tax lien, the court found that it did not have jurisdiction
to enforce the Arizona state statute and, alternatively,
could not exercise supplemental jurisdiction over the
taxpayers’ claim. Id. at 764-65.
DISCUSSION
This court reviews de novo the Court of Federal
Claims decision to dismiss for lack of jurisdiction. Ra-
dioshack Corp. v. United States, 566 F.3d 1358, 1360
(Fed. Cir. 2009). As the Supreme Court has recognized,
the United States can only be sued in instances where it
has waived its sovereign immunity. See United States v.
Dalm, 494 U.S. 596, 608 (1990). In the context of tax
refund suits, the United States sovereign immunity is
7 WALTNER v. US
construed narrowly and jurisdiction of the Court of Fed-
eral Claims is limited by the Internal Revenue Code,
including 26 U.S.C. § 7422. See United States v. Clint-
wood Elkhorn Mining Co., 553 U.S. 1, 8-9 (2008). Section
7422(a), which governs civil actions for refunds, states:
No suit or proceeding shall be maintained in any
court for the recovery of any internal revenue tax
alleged to have been erroneously or illegally as-
sessed or collected . . . or of any sum alleged to
have been excessive or in any manner wrongfully
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 regu-
lations of the Secretary established in pursuance
thereof.
26 U.S.C. § 7422(a). Thus, whether sovereign immunity
has been waived and the Court of Federal Claims has
jurisdiction over these refund claims depends on whether
the taxpayers’ submissions to the IRS constitute a claim
for refund.
While a tax return can itself constitute an adminis-
trative claim for refund, the tax return must first satisfy
various Treasury Regulations. Specifically, 26 C.F.R.
§ 301.6402-3(a)(5) states that “[a] properly executed indi-
vidual . . . original income tax return or an amended
return . . . shall constitute a claim for refund or credit . . .
. if it contains a statement setting forth the amount
determined as an overpayment and advising whether
such amount shall be refunded to the taxpayer.” (empha-
sis added). The Treasury Regulations also impose a
specificity requirement to prevent against frivolous
claims, requiring that for a return to constitute a claim, it
“must set forth in detail each ground upon which a credit
WALTNER v. US 8
or refund is claimed and facts sufficient to apprise the
Commissioner of the exact basis thereof . . . . A claim
which does not comply with this . . . will not be considered
for any purpose as a claim for refund or credit.” 26 C.F.R.
§ 301.6402-2(b)(1); see also Kehmeier v. United States, 95
Fed. Cl. 442, 444 (2010). 2
Thus, under the applicable regulations, to be a valid
return for purposes of a refund claim, the return must
contain sufficient data to allow calculation of tax and
must “evince[] an honest and genuine endeavor to satisfy
the law.” Zellerbach Paper Co. v. Helvering, 293 U.S. 172,
180 (1934). At issue here is whether amended and origi-
nal tax returns that replace income reported on W-2s and
other forms with zeros constitute properly executed
returns that may serve as claims for refund. While this
court has yet to analyze such circumstances, an over-
whelming majority of the circuits have heard this issue
and determined that forms that lack essential informa-
tion—particularly, forms that are replete with zeros in
place of a taxpayer’s income—are not tax returns within
the meaning of the Internal Revenue Code and thus
cannot serve as a basis for a tax refund suit. See, e.g.,
United States v. Goetz, 746 F.2d 705, 707 (11th Cir. 1984)
(“alleged tax returns which do not contain any financial
information are not ‘returns’”); United States v. Mosel, 738
2 To the extent that the taxpayers argue that
§ 301.6402-3 controls over § 301.6402-2, we disagree. The
requirements of these two sections are not mutually
exclusive, and a taxpayer must satisfy both for an income
tax return to constitute a claim for refund. See e.g.,
Beckwith Realty, Inc. v. United States, 896 F.2d 860, 863
(4th Cir. 1990) (“the taxpayer’s full compliance with
§ 301.6402-3(a)(5) did not relieve it of also having to
comply with the specificity rule set forth in § 301.6402-
2(b)(1)”); Hamzik v. United States, 64 Fed. Cl. 766, 767
n.3 (2005).
9 WALTNER v. US
F.2d 157, 158-59 (6th Cir. 1984) (per curiam) (holding
that a Form 1040 in which the taxpayer indicated zero
income from wages and interest and owing zero income
taxes did not constitute a return “because [it failed] to
include any information upon which tax could be calcu-
lated” and that “no reasonable person employing [the
symbol zero] in these circumstances could understand
that he submitted the information which is required in a
tax return”); United States v. Grabinski, 727 F.2d 681,
686 (8th Cir. 1984) (finding that where taxpayer entered
zero income in tax returns, IRS had insufficient informa-
tion to calculate tax liability and thus the returns were
not valid); United States v. Rickman, 638 F.2d 182, 184
(10th Cir. 1980) (rejecting argument that filing zeros in
tax form gives sufficient income information); United
States v. Moore, 627 F.2d 830, 835 (7th Cir. 1980); United
States v. Smith, 618 F.2d 280, 281 (5th Cir. 1980) (“‘re-
turns’ which contain nothing but zeros and constitutional
objections, plainly do not even purport to disclose the
required information”); see also Maruska v. United States,
77 F. Supp. 2d 1035, 1039 (D. Minn. 1999) (“The Plain-
tiffs’ return, replete with zeros in responses to all inquir-
ies—except the amount of refund claimed—and
containing no recitation of the Plaintiffs’ wages or other
income, is not a return for purposes of the tax laws.”);
Kehmeier, 95 Fed. Cl. at 445 (holding that “tax returns
reporting zero wages cannot serve as claims for refund
because they fail to include information upon which a tax
could be calculated.”); Hamzik, 64 Fed. Cl. at 768 (“Plain-
tiff’s Form 1040 is replete with zeros in response to most
inquiries—except the amount of tax withheld and refund
claimed—and thus failed to include any reliable informa-
tion upon which the IRS could accurately calculate his
taxes, or the amount of taxes he owed or had overpaid. . . .
[and] ‘under no circumstances can it be rationally con-
strued as a return.’”). But see United States v. Long, 618
WALTNER v. US 10
F.2d 74, 75 (9th Cir. 1980) (per curiam) (finding that “[a]
return containing false or misleading figures is still a
return”). As these cases indicate, “it is not enough for a
form to contain some income information; there must also
be an honest and reasonable intent to supply the informa-
tion required by the tax code.” Moore, 627 F.2d at 835
(citing Florsheim Bros. Drygoods Co. v. United States, 280
U.S. 453, 462 (1930) and discussing Zellerbach Paper Co.,
293 U.S. at 180).
We agree with these courts that a form that contains
zeros in place of any reportable income does not constitute
a valid tax return; it is not “properly executed” for pur-
poses of § 301.6402-3(a)(5) and does not meet the specific-
ity requirements imposed by § 301.6402-2(b)(1). Here,
taxpayers submitted amended returns for 2004, 2005, and
2006 in which they replaced the income they previously
reported, which was consistent with third-party informa-
tion provided to the IRS, with zeros and inserted a string
of zeros in their 2007 and 2008 tax returns that directly
contradicted W-2s and other forms submitted by third
parties to the IRS. The taxpayers admittedly took no
action to obtain “corrected” third party forms that would
corroborate their claims of zero taxable income. Thus, the
taxpayers’ amended returns for 2004, 2005, and 2006, as
well as their returns for 2007 and 2008 do not implicate
an “honest and reasonable intent to supply information
required by the tax code” or rise to the level of specificity
required by regulation. None of the forms submitted by
the taxpayers constitute “properly executed” returns that
can serve as claims for refund over which the Court of
Federal Claims has jurisdiction. 3 We affirm the dismissal
3 Because we affirm the decision of the Court of
Federal Claims dismissing for lack of subject matter
jurisdiction, we do not reach whether the taxpayers failed
11 WALTNER v. US
of the taxpayers’ claims for tax refund for lack of jurisdic-
tion.
COSTS
Each party shall bear its own costs.
AFFIRMED
to state a claim and whether the court erred in consider-
ing exhibits relating to this issue.