Rollock Co, et al v. USA

Filing

NOT PRECEDENTIAL OPINION Coram: FUENTES, SMITH and NYGAARD, Circuit Judges. Total Pages: 5. Judge: FUENTES Authoring.

Case: 14-2028

Document: 003112119084

Page: 1

Date Filed: 11/03/2015

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 14-2028
__________
ROLLOCK COMPANY, A Corporation;
ANTHONY KORDELL, an individual;
CHRISTOPHER KORDELL, an individual,
Appellants,
v.
UNITED STATES OF AMERICA
__________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 3-12-cv-00162)
District Judge: Honorable Cathy Bissoon
Submitted Under Third Circuit LAR 34.1(a)
October 5, 2015
BEFORE: FUENTES, SMITH, and NYGAARD, Circuit Judges

(Filed November 3, 2015)
__________
OPINION*
FUENTES, Circuit Judge.

*

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

Case: 14-2028

Document: 003112119084

Page: 2

Date Filed: 11/03/2015

Plaintiffs-Appellants, Anthony Kordell, Chris Kordell, and the Rollock Company,
appeal the District Court’s dismissal of their claims asserted against the United States
seeking recovery of taxes, penalties, and interest, which Appellants allege were wrongly
assessed against them. The District Court dismissed the complaint for lack of subject
matter jurisdiction.1 For the following reasons, we affirm.
I.
Anthony and Christopher Kordell (the “Kordells”), shareholders and officers of
Rollock Company (“Rollock”), owned a tract of land in Somerset, Pennsylvania, which
was leased to Rollock for the operation of its scrap metal business. On September 11,
2001, the crash of Flight 93 occurred approximately three hundred yards from Rollock’s
principal place of business. After the incidents of September 11th, the Kordells claim
that they received a notice from the IRS in early 2002, designating the Rollock property
as a “September 11th case.”

Based on this notice, Plaintiffs claim that they were

exempted from filing federal tax returns and depositing employee withholdings on behalf
of Rollock and its employees from January 1, 2002 through September 30, 2009.
Plaintiffs further contend that a safe containing the 2002 written notice was stolen from
the Rollock property in 2005. Thus, they claim that no formal proof of this alleged notice
from the IRS exists. Plaintiffs also contend that they received no further communication

Prior to the District Court’s dismissal of the complaint for lack of subject matter
jurisdiction, Plaintiffs asserted jurisdiction below pursuant to 28 U.S.C. §§ 1346(a)(1)
and 1367(a). This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
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Date Filed: 11/03/2015

from the IRS until 2009, when the agency called to inquire about the status of their tax
returns.
After receiving the IRS’s inquiry, Rollock filed its employment tax returns and
paid the IRS $550,000 in September 2009. Rollock also requested that the IRS credit this
amount toward its outstanding tax liabilities. However, the IRS later notified Rollock
that it still owed over $600,000 in outstanding tax liability.

Shortly after, Rollock

submitted an IRS Form 843, requesting an abatement of interest and penalties. Then, in
October of 2010, Rollock filed an IRS Form 656 Offer in Compromise (“OIC”). In the
OIC, Rollock offered a proposed monthly payment plan of $10,000 to satisfy its
outstanding tax obligations. Around the same time, the Kordells settled a Trust Fund
Recovery Penalty Assessment with the IRS for $219,000. This Assessment encompassed
certain liabilities incurred by the Kordells as responsible persons of Rollock for unpaid
taxes that Rollock owed from 2007 through 2009.
Eventually, the IRS rejected Rollock’s proposed 2010 OIC.

Rollock then

submitted yet another OIC in 2011, which the IRS also rejected. Although Plaintiffs
argue that Rollock continued to make payments to satisfy its outstanding liability, the IRS
issued a notice, stating that Rollock still owed the IRS approximately $876,000. The IRS
also notified Plaintiffs that their 2011 federal income tax refund would be applied to their
default for the 2003 tax year. With their tax dispute unresolved, Plaintiffs filed the
instant complaint against the government, primarily seeking “recovery of taxes, penalties

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and interest erroneously, improperly, and illegally assessed and collected.” 2 At the time
that the complaint was filed, Plaintiffs claim to have paid the IRS approximately
$1,057,000 toward any outstanding tax liability.
II.
In relevant part, I.R.C. § 7422(a) provides that 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 “until a claim for refund or credit has been duly filed
with the Secretary.” In granting the government’s motion to dismiss for lack of subject
matter jurisdiction, the District Court held that Plaintiffs failed to file a timely tax refund
claim with the IRS, as required under I.R.C. § 7422, prior to bringing suit. Although the
District Court concluded that it is feasible for a party to file an informal administrative
refund claim to satisfy the claim-filing prerequisite, the Court held that Plaintiffs failed to
establish communications with the IRS sufficient to demonstrate the existence of such an
informal claim.3

2

In addition, Appellants brought a claim seeking relief under the Declaratory Judgment
Act, which the District Court also dismissed for lack of subject matter jurisdiction. The
dismissal of that claim, however, is not raised in this appeal.
3

As the District Court noted below, the parties do not dispute that Appellants did not file
a formal refund claim using the designated IRS form.
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Date Filed: 11/03/2015

We, too, find that Plaintiffs have failed to show that any “minimum amount of
communication” with the IRS took place to establish an informal claim.4 As the District
Court noted, the Form 843 simply indicates that Plaintiffs were seeking a tax abatement,
not a refund. Moreover, the two letters from the IRS to Rollock informed the company
that the IRS was denying its request for penalty adjustment. Those letters did not,
however, mention any potential claim for a tax refund. Additionally, the OICs were
proposed plans for future payments and not requests for refunds. Similarly, neither the
requests for accounting nor the appeal of the IRS’s treatment of Plaintiffs’ 2011 tax
refund contain any communication sufficient to place the IRS on notice that Plaintiffs
were seeking a tax refund. In sum, nothing in the record suggests that Plaintiffs satisfied
the IRC’s claim-filing prerequisite before bringing suit in federal court. The District
Court thus properly concluded that it lacked subject matter jurisdiction over Plaintiffs’
claims.
III.
We have carefully reviewed Plaintiffs’ remaining arguments and find that they
have no merit. We therefore affirm the District Court’s order for substantially the same
reasons set forth in the thorough and persuasive opinion below.

4

See D’Amelio v. United States, 679 F.2d 313, 315 (3d Cir. 1982).
5