26 U.S.C. §6511: Limitations on credit or refund
26 U.S.C. §6405: Reports of refunds or credits
Background on Refunds
As you may be aware, the Internal Revenue Code at 26 U.S.C. §6401 ( c ) at Exhibit ________ asserts:
( c ) Rule where no tax liability.
An amount paid as tax shall not be considered not to constitute an overpayment solely by reason of the fact that there was no tax liability in respect of which such amount was paid.
Now, it is very important to note the fact that the exact same words that appear in the Internal Revenue Code at 26 U.S.C. §6401 ( c ) cited immediately above, also appear verbatim in the corresponding Treasury Regulation 26 CFR §301.6401 – 1 ( b ) at Exhibit ______. To wit:
§301.6401 -1 Amounts treated as overpayments.
( a ) The term “overpayment” includes:
An amount paid as tax shall not be considered not to constitute an overpayment solely by reason of the fact that there was no tax liability in respect of which such amount was paid.
Notice that in both 26 U.S.C. §6401 ( c ) and 26 CFR §301.6401 – 1 ( b ), a double negative is used. With respect to the Rules of English grammar and what it means when a double negative is used in a sentence, according to “The American Heritage Book of English Usage. A Practical and Authoritative Guide to Contemporary English, circa 1996”, it asserts that when a double negative is used in a sentence, it creates an affirmative. In other words, the use of a double negative in a sentence creates a positive. For additional credible evidence proving that two negatives when used in a sentence create a positive, please refer to the United States Government owned internet web site whose url address is http://www.plainlanguage.gov/howto/guidelines/bigdoc/writeNo2Negs.cfm
In light of this fact, what 26 U.S.C. §6401 ( c ) and 26 CFR §301.6401 – 1 ( b ) at Exhibits ___ and ___ really means is:
‘an amount paid as tax shall be considered to constitute an overpayment solely by reason of the fact that there was no tax liability in respect to which such amount was paid.’
So in other words, since I had no income tax liability for calendar year 2007, the $________ that has thus far been withheld from my remuneration, constitutes an overpayment by me and over withholding by __________ Inc..
26 U.S.C. §7422: Civil Actions for refund
TITLE 26 > Subtitle F > CHAPTER 76 > Subchapter B > § 7422
§ 7422. Civil actions for refund
(a) No suit prior to filing claim for refund 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 assessed or collected, or of any penalty claimed to have been collected without authority, 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 regulations of the Secretary established in pursuance thereof.
(b) Protest or duress Such suit or proceeding may be maintained whether or not such tax, penalty, or sum has been paid under protest or duress.
(c) Suits against collection officer a bar
A suit against any officer or employee of the United States (or former officer or employee) or his personal representative for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected shall be treated as if the United States had been a party to such suit in applying the doctrine of res judicata in all suits in respect of any internal revenue tax, and in all proceedings in the Tax Court and on review of decisions of the Tax Court.
(d) Credit treated as payment The credit of an overpayment of any tax in satisfaction of any tax liability shall, for the purpose of any suit for refund of such tax liability so satisfied, be deemed to be a payment in respect of such tax liability at the time such credit is allowed.
Flora v. United States, 362 U.S. 145; 80 S.Ct. 630, 647 (1960)
The foregoing study of the legislative history of 28 U.S.C. 1346 (a) (1) and related statutes leaves no room for contention that their broad terms were intended to alter in any way the Cheatham principle of "pay first and litigate later." 24 For many years that principle has been reinforced by the rule that no suit can be maintained for the purpose of restraining the assessment or collection of any tax. 25 More recently, Congress took care to except from the operation of the Federal Declaratory Judgments Act any controversies "with respect to Federal taxes." 26 To ameliorate the hardship produced by these requirements Congress created a special court where tax questions could be adjudicated in advance of any payment. But there is no indication of any intent to create the hybrid remedy for which petitioner contends.
It is suggested that a part-payment remedy is necessary for the benefit of a taxpayer too poor to pay the full amount of the tax. Such an individual is free to litigate in the Tax Court without any advance payment. Where the time to petition that court has expired, or where for some other reason a suit in the District Court seems more desirable, the requirement of full payment may in some instances work a hardship. But since any hardship would grow out of an opinion whose effect Congress in successive [357 U.S. 63, 76] statutory revisions has made no attempt to alter, if any amelioration is required it is now a matter for Congress, not this Court.
[Flora v. United States, 362 U.S. 145; 80 S.Ct. 630, 647 (1960)]
Laing v. U.S., 423 U.S. 161, 96 S.Ct. 473 (U.S.Ky. 1976)
At this point, Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d 1165 (1958), on rehearing, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960), deserves comment. In that case the Court held that a federal district court does not have jurisdiction of an action for refund of a part payment made by a taxpayer on an assessment. It ruled that the taxpayer must pay the full amount of the assessment before he may challenge its validity in the court action. Payment of the entire deficiency thus was made a prerequisite to the refund suit. The ruling, however, was tied directly to the jurisdiction of the Tax Court where litigation prior to payment of the tax was the usual order of the day. 362 U.S., at 158-163, 80 S.Ct., at 637-640. The holding thus kept clear and distinct the line between Tax Court jurisdiction and district court jurisdiction. The Court said specifically:
“A word should also be said about the argument that requiring taxpayers to pay the full assessments before bringing suits will subject some of them to great hardship. This contention seems to ignore entirely the right of the taxpayer to appeal the deficiency to the Tax Court without paying a cent.” Id., at 175, 80 S.Ct., at 646.
This passage demonstrates that the full-payment rule applies only where a deficiency has been noticed, that is, *209 only where the taxpayer has access to the Tax Court for redetermination prior to payment. This is the thrust of the ruling in Flora, which was concerned with the possibility, otherwise, of splitting actions between, and overlapping jurisdiction of, the Tax Court and the district court. Id., at 163, 165-167, 176, 80 S.Ct., at 640, 641-642, 646. Where, as here, in these terminated period situations, there is no deficiency and no consequent right of access to the Tax Court, there is and can be no requirement of full payment in order to institute a refund suit. The taxpayer may sue for his refund even if he is unable to pay the full amount demanded upon the termination of his taxable period. Irving v. Gray, 479 F.2d, at 24-25, n. 6; Lewis v. Sandler, 498 F.2d 395, 400 (CA4 1974).
I recognize that on occasion the refund procedure may cause some hardship for the terminated taxpayer whose entire assets may be seized and who may be required to wait as long as six months before filing his refund suit. Indeed, this hardship was one of the reasons for establishing the Board of Tax Appeals as a prepayment forum in the first place. See H.R.Rep. No. 179, 68th Cong., 1st Sess., 7 (1924); S.Rep. No. 398, 68th Cong., 1st Sess., 8 (1924).FN14 It is obvious, of course, that when one taxpayer dishonestly *210 evades his share of the tax burden, **498 that share is shifted to all those who comply with the law. This balance of “hardship” doubtless was in the minds of those who formulated the statutory structure.
[Laing v. U.S., 423 U.S. 161, 96 S.Ct. 473 (U.S.Ky. 1976)]
Bull v. United
States, 295 U.S 247, 261, 55 S.Ct. 695, 700, 79 L.Ed. 1421,
through Mr. Justice Roberts:
The United States, we have held, cannot, as against the claim of an innocent party, hold his money which has gone into its treasury by means of the fraud of its agent. While here the money was taken through mistake without element of fraud, the unjust retention is immoral and amounts in law to a fraud of the taxpayer's rights. What was said in the State Bank Case applies with equal force to this situation. ‘An action will lie whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obligated by natural justice and equity to refund. The form of the indebtedness or the mode in which it was incurred is immaterial.
[Bull v. United States, 295 U.S 247, 261, 55 S.Ct. 695, 700, 79 L.Ed. 1421]
Gordon v. U. S.,
227 Ct.Cl.
328, 649 F.2d 837 (Ct.Cl.,
1981)
When the Government has illegally received money which is the property of an innocent citizen and when this money has gone into the Treasury of the United States, there arises an implied contract on the part of the Government to make restitution to the rightful owner under the Tucker Act and this court has jurisdiction to entertain the suit.
90 Ct.Cl. at 613, 31 F.Supp. at 769.
It does not follow, however, that there is a contract implied in fact where, as now, a nontaxpayer may recover property improperly levied upon through timely suit in the district court. In this situation it seems unlikely that the government also has agreed to make restitution to the nontaxpayer under an implied contract, which may be sued upon in this court. An important reason for the Kirkendall decision, although not explicitly set forth in the opinion, would appear to be that unless there were such a contract implied in fact, there might be no method by which the nontaxpayer effectively could recover the property the government improperly had taken from him through a levy. With the enactment of section 110(a), however, that situation no longer exists. Cf. Fletcher v. United *847 States, Ct.Cl. No. 572-79T, order entered December 31, 1980.
In view of our disposition of this case, there is no occasion here to reach this issue, which neither party has addressed. I discuss it only because it seems important to point out that, if and when the court faces the issue, it may conclude that Kirkendall no longer is viable.[Gordon v. U. S., 227 Ct.Cl. 328, 649 F.2d 837 (Ct.Cl., 1981)]
Sinking Fund Cases, 99 U.S. 700 (1878)
"In Calder v. Bull, which was here in 1798, Mr. Justice Chase said, that there were acts which the Federal and State legislatures could not do without exceeding their authority, and among them he mentioned a law which punished a citizen for an innocent act; a law that destroyed or impaired the lawful private [labor] contracts [and labor compensation, e.g. earnings from employment through compelled W-4 withholding] of citizens; a law that made a man judge in his own case; and a law that took the property from A [the worker]. and gave it to B [the government or another citizen, such as through social welfare programs]. 'It is against all reason and justice,' he added, 'for a people to intrust a legislature with such powers, and therefore it cannot be presumed that they have done it. They may command what is right and prohibit what is wrong; but they cannot change innocence into guilt, or punish innocence as a crime, or violate the right of an antecedent lawful private [employment] contract [by compelling W-4 withholding, for instance], or the right of private property. To maintain that a Federal or State legislature possesses such powers [of THEFT!] if they had not been expressly restrained, would, in my opinion, be a political heresy altogether inadmissible in all free 306Hrepublican governments.' 3 Dall. 388."
[HSinking Fund Cases, 99 U.S. 700 (1878)]