Huff-Rousselle v. United States

560 F.Supp.3d 480

Margaret Ann HUFF-ROUSSELLE, Plaintiff,

v.UNITED STATES, Defendant.

Civil Action No. 1:19-cv-10293-IT

United States District Court, D. Massachusetts.

Signed September 16, 2021

Margaret Ann Huff-Rousselle, Boston, MA, Pro Se.

Edward J. Murphy, L. Steven Schifano, U.S. Department of Justice, Tax Division, Washington, DC, for Defendant.

MEMORANDUM AND ORDER

TALWANI, D.J.

Plaintiff Margaret Huff-Rousselle seeks a refund of approximately $7,000 in overpaid taxes that her late husband, Peter Huff-Rousselle, paid towards his 2012 federal tax return. The court denied the government's first Motion for Summary Judgment [#23], finding disputes of material fact resulting from the government's incomplete presentation of the evidentiary record and undeveloped legal arguments. See Mem. & Order [#27]. Following this ruling, the parties engaged in limited written discovery and the government has now renewed its motion, arguing that the IRS properly denied Margaret Huff-Rousselle's refund claim. See Def.’s Second Mot. Summ. J. [#39]. With the benefit of the more complete evidentiary record and the government's briefing on the issues of law raised in the court's earlier order, the court finds that Margaret Huff-Rousselle's refund claim sought to change her election status from married filed separately to married filed jointly outside of the three-year period provided by Congress for changes of election status, and was therefore properly denied. Accordingly, the United States’ Second Motion for Summary Judgment [#39] is GRANTED.

I. FACTUAL BACKGROUND

The background facts are, for the most part, undisputed for the purposes of the summary judgment proceedings, or where disputed, the dispute is not material. On April 15, 2013, Peter Huff-Rousselle requested an extension of time to file his tax return and paid an estimated tax payment of $20,000 for the 2012 tax year. Gov't’s Ex. 4 [#40-4] (Check and Form 4868) ("Application for Extension of Time to File Individual Income Tax Return"). His request did not include Margaret Huff-Rousselle's name or social security number. Id.

Margaret Huff-Rousselle avers that she filed her own Form 4868 application for an automatic six-month extension for the 2012 tax years. Gov't’s Ex. 8 [#40-8] (Pl.’s Response to Interrogatory #3). The government's tax records for Margaret Huff-Rousselle do not include an extension request, see Gov't’s Exs. 1–3 [#40-1] [#40-2] [#40-3] (Pl.’s Tax Records), and Plaintiff has not retained a copy of her extension request, see Gov't’s Ex. 9 [#40-9] (Pl.’s Resp. to Request for Production #2). As discussed further below, the dispute as to whether Margaret Huff-Rousselle filed the Form 4868 for 2012 (extending her 2012 return deadline to October 15, 2013) is ultimately not material to the analysis. On November 12, 2014, nineteen months after the April 2013 deadline for the return, Margaret Huff-Rousselle filed her 2012 tax return with a status of married filing separately. Gov't’s Ex. 1 [#40-1] (2012 Tax Return Transcript listing "Filing Status" as "Married Filing Separate"). Margaret Huff-Rousselle has explained that she made this election in part because of her husband's medical condition. See Pl.’s Resp. 2 [#25].

Peter Huff-Rousselle passed away on June 24, 2015, without having filed a tax return for the 2012 tax year. See Gov't’s Ex. 7 [#40-7] (Death Certificate); Gov't’s Exs. 5–6 [#40-5] [#40-6] (certified records showing no record of a tax return filed).

On October 15, 2016, Margaret Huff-Rousselle mailed the IRS a Form 1040X ("Amended U.S. Individual Income Tax Return"). Gov't’s Ex. 10 [#40-10] (Form 1040X); Gov't’s Ex. 11 [#40-11] (Postmark).¹ This amended return was filled out as a joint return for both Peter and Margaret Huff-Rousselle, with the filing status of "married filing jointly." Gov't’s Ex. 10 at 1, 3 [#40-10]. The amended return stated a 2012 tax liability of $45,106 for the Huff-Rousselles, as a couple, against $52,253 in payments (which included estimated payments made by Peter Huff-Rousselle with his 2012 Form 4868 and credits on his account from prior years’ overpayments). Id. at 1, lines 12, 15. The proposed amended return requested a refund of the difference: $7,147. Id. at 1, line 21.

While Margaret Huff-Rousselle signed the Form 1040X for herself, id. at 3, there is some ambiguity as to who signed for Peter Huff-Rousselle. Where the form requested the spouse's signature, Margaret Huff Rousselle included a remark that she was "filing as surviving spouse." Id. However, the form was prepared by Karl Schramek, CPA, who was also the Huff-Rousselles’ son and the executor of Peter Huff-Rousselle's estate. Pl.’s Resp. 2 [#25]; Gov't’s Ex. 12 at 2 [#40-12] (Peter Huff-Rousselle's Will); see also Gov't’s Ex. 8 [#40-8] (Pl.’s Response to Interrogatory #1). However, Karl Schramek only signed the document as the document's preparer and did not sign as Peter Huff-Rousselle's representative. Id. at 3.

On February 17, 2017, the IRS denied the refund claim, asserting that 26 U.S.C. § 6013(b)(2)(A) does not allow amended returns based on a married couple's change of election of filing status to be filed three or more years after the original due date. Gov't’s Ex. 13 [#40-13] (IRS administrative denial of claim for refund).

Margaret Huff-Rousselle then filed a timely pro se complaint in this court on February 15, 2019, requesting a "full refund" of the $7,147 balance on her and her husband's proposed 2012 amended return. Compl. ¶ 7 [#1]. Plaintiff's complaint states that her husband's declining health prior to his death should suspend the statute of limitations for filing the amended return. Id. ¶¶ 5–6.²

II. APPLICABLE STANDARD

Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute is ‘genuine’ if the evidence about the fact is such that a reasonable jury could resolve the point in favor of the non-moving party." Baker v. St. Paul Travelers Ins. Co., 670 F.3d 119, 125 (1st Cir. 2012) (quoting Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st Cir. 2009) ). "A fact is ‘material’ if it has the potential of determining the outcome of the litigation." Id.

When reviewing a motion for summary judgment, the court must take all properly supported evidence in the light most favorable to the nonmovant and draw all reasonable inferences in the nonmovant's favor. Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990). In so doing, the court properly "give[s] no heed to speculative, unsupported, or unreasonable conclusions." Showtime Entm't, LLC v. Town of Mendon, 769 F.3d 61, 69 (1st Cir. 2014).

III. STATUTORY SCHEME³

There are two interacting provisions of the Internal Revenue Code (Title 26 of the U.S. Code) at play in this case. Section 6511, entitled "Limitations on credit or refund," sets forth deadlines and limits for obtaining a refund of any overpayment of tax (through the filing of a refund claim, here the Form 1040X).⁴ Section 6013(b) of the Internal Revenue Code, meanwhile, is the provision that provides married couples the ability to file a single joint return after having filed separate return(s) and sets certain conditions for those filings. As discussed further below, in its Second Motion for Summary Judgment [#39], the government argues that, regardless of whether Margaret Huff-Rousselle's claim for a refund was timely under Section 6511, her change of status was untimely under Section 6013(b) as it occurred more than three years after the date her 2012 return was due. See Gov't’s Mem. 4–10 [#40]. The court briefly reviews the statutory scheme below, starting with Section 6511 before turning to Section 6013(b).

a. Internal Revenue Code Section 6511

Section 6511 sets forth two limitations on a claim for a refund of a tax overpayment. The first is a "filing" deadline, contained in Section 6511(a), which provides that refund claims must be filed within three years from when the return was filed or two years from the time the tax was paid, whichever of such periods expires later. The second limitation, contained in Section 6511(b), imposes a restriction commonly referred to as a "lookback period." The term of the lookback period is a function of when the refund claim was filed and whether an extension of the filing deadline was obtained. If the claim was filed within three years from when the return was filed, then "the amount of the credit or refund shall not exceed 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). If the claim was not filed within this three-year period, then "the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim." § 6511(b)(2)(B).⁵

In United States v. Brockamp, 519 U.S. 347, 354, 117 S.Ct. 849, 136 L.Ed.2d 818 (1997), the Supreme Court held that a prior version of Section 6511 was not subject to equitable tolling. The following year, Congress amended the statute, providing in Section 6511(h) that the deadlines for filing refund claims, and the lookback periods governing what payments may be refunded, are subject to being suspended during any period in the taxpayer's life that the individual is "financially disabled." Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, § 3202, 112 Stat. 685, 740 (1998). The tolling provision in Section 6511(h) is narrow in scope as it suspends the deadlines under only Section 6511(a), (b), and (c), see § 6511(h)(1), and only where the individual was "unable to manage his financial affairs by reason of a medically determinable physical or mental impairment of the individual which can be expected to result in death or which has lasted or can be expected to last for a continuous period of...