Maine Medical Center v. US

Filing

OPINION issued by Sandra L. Lynch, Chief Appellate Judge; David H. Souter, Associate Supreme Court Justice and Norman H. Stahl, Appellate Judge. Published. [11-1426]

Case: 11-1426

Document: 00116355762

Page: 1

Date Filed: 03/30/2012

Entry ID: 5630203

United States Court of Appeals
For the First Circuit
No. 11-1426
MAINE MEDICAL CENTER,
Plaintiff, Appellant,
v.
UNITED STATES,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. George Z. Singal, U.S. District Judge]
Before
Lynch, Chief Judge,
Souter, Associate Justice,*
and Stahl, Circuit Judge.
Robert H. Stier, Jr., with whom Shelli Li Calland, Joshua D.
Dunlap, Michael A. Schlanger, Covington & Burling LLP, and Pierce
Atwood LLP were on brief, for appellant.
Robert William Metzler, Attorney, Tax Division, Department of
Justice, with whom Tamara W. Ashford, Deputy Assistant United
States Attorney, Renee W. Bunker, Ellen Page DelSole, John A.
Dudeck, Jr., Stephen T. Lyons, and Margaret D. McGaughey were on
brief, for appellee.

March 30, 2012

*

The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.

Case: 11-1426

Document: 00116355762

Page: 2

STAHL, Circuit Judge.
refund

suit

stalled

when

Date Filed: 03/30/2012

Entry ID: 5630203

Maine Medical Center's (MMC) tax

the

district

court

found

that

jurisdictional discovery was not warranted and that without such
discovery,

MMC

jurisdiction.

could

not

meet

its

burden

of

demonstrating

MMC appealed the district court's judgment for the

government, arguing that it had offered sufficient evidence to
merit jurisdictional discovery.

Ultimately, MMC did not make an

adequate threshold showing that its refund claim was timely filed,
and thus the district court ruled that it did not have jurisdiction
to hear the case.

After careful review, we affirm.
I. Facts & Background

The facts of this case are largely undisputed.

As early

as August 23, 2004, Maine Medical Center began to look into filing
a tax refund claim for reimbursement of taxes paid under the
Federal Insurance Contributions Act (FICA) on behalf of its medical
residents in 2001.1

On that date, Kevin Montminy, MMC's Acting

Director of Audit and Compliance Services, discussed the potential
refund claim with Al Swallow, MMC's Associate Vice President of
Finance.

Over the following months, Montminy continued to monitor

and consider the possibility of filing a refund claim for the 2001
FICA taxes.

1

MMC later filed timely tax refund claims for FICA taxes paid
in 2002 and 2003, neither of which is at issue on appeal.
-2-

Case: 11-1426

Document: 00116355762

During

a

March

Page: 3

16,

Date Filed: 03/30/2012

2005,

conference

call,

Entry ID: 5630203

Montminy

discussed the FICA refund claim with two accountants from Ernst &
Young, Maggie O'Brien and Jeanne Schuster.

Then, in early April

2005, Montminy faxed a draft copy of the refund claim to Schuster
and Joceyln Bishop, another accountant, noting that the refund
request was due on April 15, 2005.

On April 6 and 7, Montminy and

Schuster emailed each other regarding the specific information
needed to complete the refund claim. Ernst & Young's invoice later
referenced "professional tax services rendered through April 15,
2005," with a specific line-item devoted to researching the 2001
FICA refund claim.
On April 12, 2005, Montminy, Swallow, and two other MMC
employees, John Heye, the Vice President of Finance and Treasurer,
and Gene Joyner, the Assistant Director of Financial Planning, met
to discuss the status of the 2001 FICA refund claim.
meeting, they decided to file the claim form on April 15.

At the
After

the meeting, Montminy initiated a series of emails with Jeff
Winchenbach, MMC's Director of Financial Services, in order to
obtain necessary details for the refund filing; the email exchange
continued until after the close of business on April 14.
At 2:30 PM on April 15, 2005, the day the claim was due,
Montminy met with Heye to get the final draft of the claim form
approved.

Heye signed the form, and Montminy took it back to his

office to have his assistant, Debbie Raspiller, prepare it for

-3-

Case: 11-1426

Document: 00116355762

certified mailing.

Page: 4

Date Filed: 03/30/2012

Entry ID: 5630203

At 3:22 PM, Raspiller faxed the completed

signature page back to Heye for his file.
Montminy's standard practice then would have been to
drive to the main United States Post Office on Forest Avenue in
Portland, Maine, and mail the claim via certified mail, return
receipt requested.

Montminy believes this practice was followed;

however, neither he nor anyone else at MMC has a specific memory of
completing the mailing, and no one at MMC is aware of the identity
of the postal service employee who would have dealt with the
mailing of the claim.2

No one can locate the certified mail

receipt or the return receipt.3
mailed for same-day delivery.

MMC admits that the claim was not
The Internal Revenue Service (IRS)

asserts that it has no record of ever receiving the claim.
On December 30, 2009, MMC filed a refund suit against the
government in the United States District Court for the District of
Maine regarding its 2001, 2002, and 2003 refund claims.

The

government conceded that the 2002 and 2003 claims were timely

2

MMC stated at oral argument that it did not question its
employees in order to discover if any of them had personal
recollection of mailing the 2001 refund claim until about a month
before the complaint was filed in December 2009.
3

Though the United States Postal Service offers certified
mail customers the option of requesting a duplicate return receipt
within two years after mailing, MMC admitted at oral argument that
it did not avail itself of this service.
-4-

Case: 11-1426

filed.4

Document: 00116355762

Page: 5

Date Filed: 03/30/2012

Entry ID: 5630203

However, the government refused to answer interrogatories

or provide documents in response to MMC's discovery requests as
they pertained to the 2001 claim,5 arguing that the claim was not
timely filed, and that because timely filing is a jurisdictional
prerequisite to a refund suit, the court did not have jurisdiction
over the claim.

The district court referred the discovery dispute

to a magistrate judge. On February 10, 2011, the magistrate issued
an order finding that MMC lacked any basis to compel discovery from
the IRS, and that without further discovery, MMC could not prove
the jurisdictional prerequisite of timely filing of the 2001

4

At oral argument, MMC admitted that it received some sort of
response from the IRS regarding its 2002 and 2003 claims within a
year of their filing, but did not hear from the IRS as to the 2001
claim until after the refund suit was filed, over four years later.
5

MMC, in its interrogatories, requested: (1) information
pertaining to the time, date, and location of searches by the IRS
for its 2001 return, as well as the identity of persons who
searched, a description of the search, and the identification of
any documents found as a result of the search; (2) a description of
how MMC's tax returns and refund claims since 1996 had been
recorded and stored, and if they had been lost or destroyed; (3)
the routine steps the IRS took to process FICA refund claims from
similar institutions; and (4) the identities of IRS employees or
consultants who had studied or analyzed the way that the IRS stores
and maintains documents submitted by taxpayers. MMC also requested
various documents, including: (1) copies of its tax returns since
2000; (2) documents pertaining to any search by the IRS for MMC's
refunds since 1996; (3) documents pertaining to how MMC's refund
claims since 1996 have been stored or indexed; (4) documents
describing the IRS's policies for searching for taxpayer documents;
(5) documents pertaining to how the IRS stores or loses taxpayer
documents, including recommendations as to how to improve these
policies; and (6) documents pertaining to IRS efforts to improve
record keeping and record retrieval.
-5-

Case: 11-1426

Document: 00116355762

claim.6

Page: 6

Date Filed: 03/30/2012

Entry ID: 5630203

See Me. Med. Ctr. v. United States, 766 F. Supp. 2d 253,

262-63 (D. Me. 2011).

MMC objected to the order, but the district

court denied the objections.

On March 22, 2011, the parties filed

a joint stipulation pursuant to Federal Rule of Civil Procedure
41(a)(1), voluntarily dismissing the 2002 and 2003 tax refund
claims without prejudice and granting MMC the right to reinstate
the claims within two years of the date of the stipulation.

Within

the joint stipulation, the parties further requested that the
district

judge

enter

final

judgment

as

to

the

2001

refund,

stipulating to the facts and conclusions of law contained in the
magistrate's order.

The district judge construed this request as

a "Motion for Final Judgment for the Defendant," and entered
judgment for the United States as to the 2001 refund claim.

MMC

then appealed that judgment to this court.7
II. Discussion
We review legal questions, including those in the tax
context, de novo.
Cir. 2009).

Muskat v. United States, 554 F.3d 183, 188 (1st

We thus review the district court's interpretation of

6

We refer to this order as the district court decision,
though it was initially authored by a magistrate judge.
7

On March 12, 2012, while retaining jurisdiction, we remanded
this case to the district court for its consideration of whether to
issue a Rule 54(b) judgment.
See Fed. R. Civ. P. 54(b).
The
district court entered such a judgment on March 13, 2012, stating
that there was no reason to delay the entry of final judgment, and
on March 14, 2012, amended its final judgment for the United States
to incorporate the Rule 54(b) judgment. The case was thus returned
to this court for appellate review.
-6-

Case: 11-1426

Document: 00116355762

Page: 7

Date Filed: 03/30/2012

Entry ID: 5630203

26 U.S.C. § 7502 de novo, while we review its factual findings for
clear error.

State Police Ass'n of Mass. v. Comm'r, 125 F.3d 1, 5

(1st Cir. 1997).
No suit for a tax refund may be maintained in a United
States district court "until a claim for a refund . . . has been
duly filed."

26 U.S.C. § 7422(a).

Thus, timely filing of a refund

claim is a jurisdictional prerequisite to a tax refund suit.
Phila. Marine Trade Ass'n v. Comm'r, 523 F.3d 140, 146 (3d Cir.
2008).

Sovereign immunity is waived only when claims are filed

within the statute of limitations, in this case, three years from
the time the return was filed.

See 26 U.S.C. § 6511; Sorrentino v.

IRS, 383 F.3d 1187, 1188 (10th Cir. 2004) (opinion of Baldock, J.).
Here, the parties agree that MMC had until April 15, 2005 to timely
file its 2001 refund claim.

The burden is thus on MMC, as the

taxpayer, to establish that the jurisdictional prerequisite of
timely filing was met.

Miller v. United States, 784 F.2d 728, 729

(6th Cir. 1986).
Originally, only proof of actual, physical delivery could
satisfy a "timely filed" requirement.

See Phila. Marine, 523 F.3d

at 147 (citing United States v. Lombardo, 241 U.S. 73, 76, 78
(1916)).

As the IRS claims that it did not receive MMC's return,

this method of proving timely filing is clearly not available to
MMC. However, over time, courts developed what came to be known as
the common law mailbox rule, "[t]o help courts determine when the

-7-

Case: 11-1426

Document: 00116355762

Page: 8

Date Filed: 03/30/2012

Entry ID: 5630203

pertinent document was physically delivered," allowing for the
presumption that "physical delivery occurred in the ordinary time
after mailing."

Id. (emphasis added).

While permitting a fact-

finder to presume that "properly mailed documents would actually be
received in due course by the addressee, . . . unless same-day
delivery was in fact the norm, receipt by the addressee was not
deemed to have occurred on the same day as the mailing."

Me. Med.

Ctr., 766 F. Supp. 2d at 258 (quoting Carroll v. Comm'r, 71 F.3d
1228, 1230 (6th Cir. 1995)) (internal quotation mark omitted);
accord Phila. Marine, 523 F.3d at 148 (noting that a taxpayer could
not rely on the common law mailbox rule to prove timely filing
"because it mailed the document before the deadline, but too late
for that document to arrive on time in the ordinary course of post
office business").

Because MMC alleges that it mailed its return

on the afternoon of April 15, 2005, and admits that it did not use
same-day delivery, there is no way the refund request could have
arrived by the filing deadline (the same day as it was mailed) in
the ordinary course of post office business.

Thus, the common law

mailbox rule is not available to MMC as a means of proving timely
filing

of

the

refund

request

for

purposes

of

§

7422(a)

jurisdiction.8

8

There is a split among the circuits as to whether Congress's
enactment of 26 U.S.C. § 7502 supplants the common law mailbox
rule. See Sorrentino, 383 F.3d at 1191-93 (opinion of Baldock, J.)
(describing circuit split). Because the common law mailbox rule is
unavailable based on the facts of this case, we need not decide on
-8-

Case: 11-1426

Document: 00116355762

Page: 9

Date Filed: 03/30/2012

Entry ID: 5630203

There is, however, yet another means of proving timely
filing: in 1954, Congress created a statutory mailbox rule when it
enacted

§

7502

of

the

Internal

Revenue

Code,

which

allows

"[t]imely mailing [to be] treated as timely filing" when certain
requirements are met.
enacting

§

7502,

26 U.S.C. § 7502.

was

to

"alleviate

Congress's purpose, in

inequities

arising

from

differences in mail delivery from one part of the country to
another."

Miller, 784 F.2d at 730 (citing Sylvan v. Comm'r, 65

T.C. 548, 551 (1975)).

Section 7502 provides both a general rule

under § 7502(a) and a specific rule for registered or certified
mail under § 7502(c).
certified

mail

Section 7502(c) allows for a registered or

receipt

to

provide

delivery" on the postmark date.9

"prima

facie

evidence

26 U.S.C. § 7502(c).

of

However,

which side of the circuit split we fall.
9

Section 7502(c) provides in full:

(c) Registered and certified mailing; electronic filing.
(1) Registered mail. For purposes of this section, if any
return, claim, statement, or other document, or payment, is
sent by United States registered mail
(A) such registration shall be prima facie evidence that
the return, claim, statement, or other document was
delivered to the agency, officer, or office to which
addressed; and
(B) the date of registration shall be deemed the postmark
date.
(2) Certified mail; electronic filing. The Secretary is
authorized to provide by regulations the extent to which the
provisions of paragraph (1) with respect to prima facie
evidence of delivery and the postmark date shall apply to
certified mail and electronic filing.
26 U.S.C. § 7502(c).
-9-

Case: 11-1426

Document: 00116355762

Page: 10

Date Filed: 03/30/2012

Entry ID: 5630203

because MMC does not possess a certified mail receipt or a return
receipt, it is unable to avail themselves of the § 7502(c) rule.10
Therefore, the only remaining option is the general rule under
§ 7052(a).
Section 7502(a) provides in relevant part:
(a) General rule. (1) Date of delivery. If
any return, claim, statement, or other
document required to be filed, or any payment
required to be made, within a prescribed
period or on or before a prescribed date under
authority of any provision of the internal
revenue laws is, after such period or such
date, delivered by United States mail to the
agency, officer, or office with which such
return, claim, statement, or other document is
required to be filed, or to which such payment

Section 7502(c)(2) thus provides a special rule for certified mail
only pursuant to regulations handed down by the Secretary of the
Treasury. The relevant regulation, 26 C.F.R. § 301.7502-1(c)(2),
specifies that § 7502(c)'s rule can apply to certified mail where
"the sender's receipt is postmarked by the postal employee to whom
the document or payment is presented." Therefore, only a taxpayer
who can present a receipt may use the certified mail rule under §
7502(c) for prima facie evidence of timely delivery.
10

For the first time in its Rule 28(j) letter, the government
advanced the argument that there can be no presumption of actual
delivery via certified mail where a party never receives its return
receipt. See Moya v. United States, 35 F.3d 501, 504 (10th Cir.
1994); Mulder v. Comm'r, 855 F.2d 208, 212 (5th Cir. 1988);
McPartlin v. Comm'r, 653 F.2d 1185, 1191 (7th Cir. 1981). MMC, in
its response, countered that it did in fact receive the receipt but
then misplaced it, and further, that the government's argument was
not timely raised. See Ungar v. Arafat, 634 F.3d 46, 50 n.3 (1st
Cir. 2011) ("[T]heories not raised squarely in the trial court
cannot be raised for the first time on appeal."); Clauson v. Smith,
823 F.2d 660, 666 (1st Cir. 1987) ("In the absence of extraordinary
circumstances . . . we have regularly declined to consider points
which were not seasonably advanced below."). Regardless of whether
the government's theory is waived, it is not necessary to our
holding today, so we decline to reach it.
-10-

Case: 11-1426

Document: 00116355762

Page: 11

Date Filed: 03/30/2012

Entry ID: 5630203

is required to be made, the date of the United
States postmark stamped on the cover in which
such return, claim, statement, or other
document, or payment, is mailed shall be
deemed to be the date of delivery or the date
of payment, as the case may be.
26 U.S.C. § 7502(a)(1) (emphasis added).
Most courts hold that a taxpayer must show eventual
actual delivery, even if it is after the expiration of the statute
of limitations, if that taxpayer is to take advantage of the
benefits of § 7502(a).

See Phila. Marine, 523 F.3d at 148

("[Section] 7502(a)(1) protects the taxpayer only where the IRS
actually receives the document at some later time."); Miller, 784
F.2d at 730 & n.3 (noting that section 7502(a)(1) "applies only in
cases where the document is received by the I.R.S. after the
statutory period," and citing legislative history stating that the
statute applies "in the case where documents . . . are mailed . . .
and are received by [the IRS after the statutory period] has
expired"); Lee Brick & Tile Co. v. United States, 132 F.R.D. 414,
418 (M.D.N.C. 1990)

(noting that § 7502(a) applies only where "a

document is actually received by the IRS but belatedly delivered").
This analysis is consistent with the plain language of the statute,
which requires that the relevant document be "delivered by the
United States mail."
Ctr.,

766

F.

Supp.

26 U.S.C. § 7502(a)(1); see also Me. Med.
2d

at

260

(stating

that

"the

essential

requirement" of § 7502(a), according to its plain language, is
actual delivery) (quoting Estate of Wood v. Comm'r, 909 F.2d. 1155,
-11-

Case: 11-1426

Document: 00116355762

Page: 12

Date Filed: 03/30/2012

1162 (8th Cir. 1990) (Lay, C.J., dissenting)).

Entry ID: 5630203

As the IRS has

asserted that it has no record of receiving MMC's 2001 refund
claim, MMC must find some way to overcome this difficult hurdle.
MMC argues that it need not show actual delivery because
it can prove, via extrinsic evidence, that its refund claim had a
timely postmark.

The Eighth and Ninth Circuits have endorsed this

method of satisfying § 7502.

See Anderson v. United States, 966

F.2d 487, 491 (9th Cir. 1992) (holding that "direct" extrinsic
proof of postmark is permissible for purposes of § 7502 and that §
7502 does not supplant use of common law mailbox presumption);
Wood, 909 F.2d at 1161 (same).

There are a number of reasons why

this argument does not help MMC.

First, the circuits that do allow

the use of extrinsic evidence generally only do so for purposes of
invoking an "intra- § 7502 mailbox rule," Phila. Marine, 523 F.3d
at 149 (internal quotation marks omitted), which is not available
to

MMC

because

its

refund

request,

allegedly

mailed

on

the

deadline, would not have arrived by that deadline in the ordinary
course of post office business.

Second, extrinsic evidence has

only been used to prove a postmark, or at the very least, actual
mailing; MMC offers no evidence whatsoever of the mailing itself
and thus fails to provide the necessary level of proof.

Third,

recent regulations appear to foreclose the possibility of the use
of extrinsic evidence for purposes of satisfying the requirements

-12-

Case: 11-1426

Document: 00116355762

of § 7502.

Page: 13

Date Filed: 03/30/2012

Entry ID: 5630203

We address each of these problems with MMC's argument

in turn.
MMC's first problem arises from the fact that circuits
that do allow use of extrinsic evidence in a § 7502 context
generally do so to invoke the common law mailbox rule.

There is a

circuit split as to whether extrinsic evidence may be used to meet
the timely postmark requirement of § 7502, or whether an actual
postmark must be produced. The Second and Sixth Circuits have held
that where the taxpayer cannot show an actual postmark and § 7502
is therefore not "literally applicable," it is inappropriate for a
court to accept "testimony or other evidence as proof of actual
date of mailing."

Deutsch v. Comm'r, 599 F.2d 44, 46 (2d Cir.

1979); accord Miller, 784 F.3d at 730-31.

On the other hand, the

Eighth and Ninth Circuits have allowed for extrinsic evidence to
give rise to the common law presumption of delivery in a § 7502
context. See Lewis v. United States, 144 F.3d 1220, 1222 (9th Cir.
1998); Anderson, 966 F.2d at 491; Wood, 909 F.2d at 1161.11
However, as discussed above, because MMC's claim is that it mailed
its refund claim on the date of the deadline, the common law
mailbox rule does not apply.

In both Wood and Anderson, there was

11

The Third Circuit has held that the common law mailbox rule
is still available when taxpayers need not make use of § 7502's
rule excusing late receipt and instead employ the common law
mailbox rule independently. See Phila. Marine, 523 F.3d at 152.
At least one judge on the Tenth Circuit has endorsed this view.
See Sorrentino, 383 F.3d at 1194 (opinion of Baldock, J.).
-13-

Case: 11-1426

Document: 00116355762

Page: 14

Date Filed: 03/30/2012

Entry ID: 5630203

plenty of time for the documents to arrive "in the ordinary
course."12
claimed

See Anderson, 966 F.2d at 488 (stating that taxpayer

return

was

mailed

on

September

15,

1986,

where

the

statutory period expired on April 15, 1988); Wood, 909 F.2d at 1157
& n.3 (noting that the return was due on March 22 and was allegedly
mailed and postmarked on March 19).

Even if we assume that a

taxpayer may employ the common law mailbox rule as a means of
showing timely delivery under § 7502, MMC is no closer to proving
timely filing.
MMC's second problem is that, even if we were to accept
the premise that extrinsic evidence is a viable means of proving a
postmark for purposes of § 7502, Wood and similar cases may be
distinguished based on the level of extrinsic proof required.

At

a minimum, the taxpayers in those cases offered testimony regarding
actual mailing and some additional corroborating evidence.

See

Lewis, 144 F.3d at 1223 (taxpayer offered affidavit describing
personal memory of actual mailing and also proved that state

12

To the extent Lewis purported to be following Anderson in
defining the common law mailbox rule as standing for the
proposition that "[p]roper and timely mailing of a document raises
the rebuttable presumption that the document has been timely
received by the addressee," Lewis, 144 F.3d at 1222 (emphasis
added), we find this to be an unpersuasive interpretation of both
Anderson and the common law mailbox rule, see id. at 1224-25
(White, J., dissenting) (noting that the common law mailbox rule
allows a taxpayer to establish delivery if a document would be
"received by the Commissioner prior to the filing deadline if the
postal service followed its normal delivery schedule" and that "the
mailbox rule does not extend the filing deadline for tax
documents") (emphasis added).
-14-

Case: 11-1426

Document: 00116355762

Page: 15

Date Filed: 03/30/2012

Entry ID: 5630203

return, mailed with the federal return, was received one day after
the deadline, whereas the federal return was received eleven days
after deadline); Anderson, 966 F.3d at 489, 491 (taxpayer offered
testimony describing her observation of the postal clerk affixing
the postmark, corroborated by a friend's testimony that she saw the
taxpayer go into the post office and exit without the envelope);
Wood, 909 F.2d at 1156-57 (taxpayer offered very specific testimony
detailing the mailing and observation of the postmark, as well as
corroborating testimony from the postal service employee who had a
specific memory of the interaction).

MMC has not come close to

presenting the "extraordinarily rare" circumstances that would
satisfy the requirements of the statute without providing an actual
postmark,

even

according

to

the

circuits.

law

of

the

most

permissive

Wood, 909 F.2d at 1161.
Here, no one at MMC can remember filing the return, there

is no testimony from a postal service employee, and there is no
certified

mail

receipt

or

return

receipt

for

the

mailing

transaction, though MMC admits that its standard practice is to
send its refund claims by certified mail, return receipt requested.
Further, MMC did not attempt to obtain a duplicate receipt from the
postal service.

There is absolutely no evidence whatsoever of a

postmark or actual mailing; instead, there is merely evidence of
preparation of the return.

See Me. Med. Ctr., 766 F. Supp. 2d at

262 ("While MMC offers strong evidence that it worked aggressively

-15-

Case: 11-1426

Document: 00116355762

Page: 16

Date Filed: 03/30/2012

Entry ID: 5630203

to make a timely claim of refund . . ., it does not offer strong or
independently verifiable evidence of the actual mailing of the
claim . . . .").

We see no reason why these circumstances would

fall within the coverage of § 7502.

See Washton v. United States,

13 F.3d 49, 50 (2d Cir. 1993) (finding no need to revisit Second
Circuit precedent that § 7502 contains the exclusive exceptions to
the physical delivery rule because taxpayers offered no direct
evidence of postmark and made no effort to ascertain their claim in
a timely manner); see also Davis v. United States, No. 99-5073,
2000 WL 194111, at *3 (Fed. Cir. Feb. 16, 2000) (holding that
taxpayer's testimony of mailing by itself was not sufficient to
meet the Wood rule).
MMC's third problem is that, since the time of the Eighth
and

Ninth

Circuit

decisions,

the

IRS

has

issued

regulations

interpreting § 7502 that would appear to foreclose the use of
extrinsic evidence as a means of proving a timely postmark.13
26 C.F.R. § 301.7502-1(e) (2011).14

See

The regulations lay out a

13

Because the regulations are unnecessary to our holding, we
leave to another day the decision of whether we will give them
Chevron deference. See Dickow v. United States, 654 F.3d 144, 149
(1st Cir. 2011) (citing Mayo Found. for Med. Educ. and Research v.
United States, 131 S. Ct. 704, 713 (2011)). Nonetheless, we find
the regulations to be instructive.
14

The regulations were proposed on September 21, 2004, when
they were first published in the Federal Register.
See Timely
Mailing Treated as Timely Filing, 69 Fed. Reg. 56,377 (proposed
Sept. 21, 2004) (codified at 26 C.F.R. § 301.7502-1). The initial
proposed regulations noted that they would be effective for
documents mailed after the proposal date. Id. at 56,379. This is
-16-

Case: 11-1426

Document: 00116355762

Page: 17

Date Filed: 03/30/2012

Entry ID: 5630203

general rule that § 7502 requires actual delivery, 26 C.F.R.
§ 301.7502-1(e)(1), and that the exclusive exceptions to the rule
are "proof of proper use of registered or certified mail, and proof
of proper use by a duly designated [private delivery service]," id.
§

301.7502-1(e)(2).

The

regulations

further

emphasize

the

exclusivity of the exceptions, stating that "[n]o other evidence of
a postmark or of mailing will be prima facie evidence of delivery
or raise a presumption that the document was delivered."

Id.

The only proof MMC has offered of proper use of certified
mail is Montminy's testimony that his standard practice would have
been to send the refund claim via certified mail, return receipt
requested.

We

doubt

that

this

uncorroborated,

self-serving

testimony is the "proof of proper use of . . . certified mail" to
which the regulations refer.

Id.

The rest of the evidence that

MMC offers goes to the proper preparation of the return, but not to
its mailing in general or the use of certified mail in particular.

also made clear in the final regulations.
See 26 C.F.R.
§ 301.7502-1(g)(4) (2011) (noting that § 301.7502-1(e)(2) applies
to "all documents mailed after September 21, 2004."). Though the
regulations did not become final until August 23, 2011, see Timely
Mailing Treated as Timely Filing, 76 Fed. Reg. 52,561 (Aug. 23,
2011) (final regulations) (codified at 26 C.F.R. § 301.7502-1), the
Secretary of the Treasury is expressly authorized by statute to
make regulations retroactive to the date of their proposal, see 26
U.S.C. § 7805(b)(1)(B); Bowen v. Georgetown Univ. Hosp., 488 U.S.
204, 208-09 (1988) (holding that retroactive administrative
rulemaking is permissible pursuant to "express statutory grant").
Therefore, the regulations apply to MMC's refund claim, as it was
allegedly mailed on April 15, 2005, almost seven months after the
regulations were proposed in the Federal Register.
-17-

Case: 11-1426

Document: 00116355762

Page: 18

Date Filed: 03/30/2012

Entry ID: 5630203

Thus, under the terms of the regulations, MMC fails to show a
timely postmark for purposes of § 7502.
On the evidence presented, MMC did not successfully meet
its burden of establishing that its 2001 claim was timely filed.
The only remaining question is whether MMC has done enough to
compel jurisdictional discovery from the IRS.
As a "district court generally retains broad discretion
in determining whether to grant jurisdictional discovery . . . the
standard for reversing a district court's decision to disallow
jurisdictional discovery is high," and the "aggrieved party must
show that the lower court's discovery order was plainly wrong and
resulted in substantial prejudice."

Blair v. City of Worcester,

522 F.3d 105, 110-11 (1st Cir. 2008) (citing United States v. Swiss
Am. Bank, Ltd., 274 F.3d 610, 626 (1st Cir. 2001)) (internal
quotation marks, citation, and alteration omitted) (emphasis in
original).

We will only overturn the district court's ruling upon

"a clear showing of manifest injustice."

Swiss Am. Bank, 274 F.3d

at 626.
In this case, the district court found that MMC was not
entitled to jurisdictional discovery because it had failed to make
a prima facie showing of proof of timely filing.

Me. Med. Ctr.,

766 F. Supp. 2d at 262 (citing Lee Brick, 132 F.R.D. at 422).

The

district court based this finding on MMC's inability either to show
the actual delivery required by § 7502(a)(1) or to provide the

-18-

Case: 11-1426

Document: 00116355762

Page: 19

Date Filed: 03/30/2012

level of evidence necessary under a Wood-type analysis.

Entry ID: 5630203

Id.

The

district court noted that discovery would help MMC overcome these
obstacles only if the IRS actually came across its return and outer
envelope.

Id. at 262 n.4.

This determination was not in any way

"plainly wrong" and was not an abuse of the district court's broad
discretion.

See Blair, 522 F.3d at 110-11.

Further,

in

analyzing

a

demand

for

jurisdictional

discovery, we have repeatedly emphasized the importance of a
plaintiff's diligence. See Swiss Am. Bank, 274 F.3d at 626 (citing
Sunview Condo. Ass'n v. Flexel Int'l, Ltd., 116 F.3d 962, 964 (1st
Cir. 1997)) ("We have . . . held that, in addition to presenting a
colorable claim, a plaintiff must be diligent in preserving his
rights to be entitled to jurisdiction.").

Here, MMC was not

diligent in preserving its rights: it did not attempt to obtain a
duplicate mail receipt, which would have provided prima facie
evidence of timely delivery, and it did not investigate why the IRS
had not responded to its 2001 refund claim until just before filing
this suit, at which point no one had a personal recollection of
mailing the refund claim.

Diligence in preserving one's rights

also "includes the obligation to present facts to the court which
show why jurisdiction would be found if discovery were permitted."
Id. (citing Barrett v. Lombardi, 239 F.3d 23, 26 (1st Cir. 2001)).
Unless the IRS came across MMC's refund claim by chance, MMC's
arguments do not explain how compelling the IRS to respond to its

-19-

Case: 11-1426

Document: 00116355762

Page: 20

Date Filed: 03/30/2012

Entry ID: 5630203

discovery requests would go toward proving jurisdiction under
§ 7502.
While under circumstances like those here presented, the
IRS need do nothing more than assert that it has no record of
receipt of a tax document in order to dispose of a refund suit, we
emphasize that the law encourages parties seeking jurisdictional
discovery to exercise more diligence than that shown by MMC.
Swiss Am. Bank, 274 F.3d at 626.

See

"To be sure, the IRS loses tax

returns; nevertheless, the taxpayer is in the best position with
the clock running to protect himself by procuring independent
evidence of postmark and/or mailing, whether by mail receipt,
corroborating testimony, or otherwise."
1195 (opinion of Baldock, J.).

Sorrentino, 383 F.3d at

Where a taxpayer has not been

diligent in preserving a claim and has presented no evidence of
mailing or postmark, we see no error in denying jurisdictional
discovery.
III. Conclusion
Even assuming an expansive view of the law that is most
favorable to MMC, there is no viable route that leads to proper
district court jurisdiction over the 2001 refund claim. Therefore,
we affirm the district court's judgment in favor of the United
States.

-20-