VELLAI-PALOTAY v. USA

Filing 11

Order of Dismissal granting 9 Motion to Dismiss pursuant to RCFC 12(b)(6). The Clerk is directed to enter judgment. Signed by Senior Judge Eric G. Bruggink. (dls) Copy to parties. (USPS Tracking Number 9114 9999 4431 3548 1061 32)

frpF.*F''!
tf

A

q

|,otuiu,n,.r'6*,

lJn tW @nite! $ltstts @surt of

feDtrsl @tuims

No. l6-1257
(Filed: July 13,2016)

*****

*'N,1.

*

{, :*

*,t

:*

FILED

**t **

JUL I 3

20t6

U.S. COURT OF
FEDERAL CLAIMS

EVA B. VELLAI-PALOTAY,

Plaintffi

THE UNITED STATES,
Defendant.

't

'1.

r! ,! *

,1.

* {. *

:{.

*

,i( :1. J.

* ,} {. 't

'1.

,1.

ORDER

l'his is a suit for a refund of taxes pursuant to 28 U.S.C. $ la9l(a)(1).
Plaintiff, who appears pro se, seeks tax refunds for the tax years 2006,2007 ,
2008, and 2010. Pending is defendant's motion to dismiss pursuant to Rules
l2(bxl) and 12(bX6) of the Rules of the United States Court of Federal
Claims ("RCFC"). Plaintiff did not respond to the motion. We need not wait
for a response because it is evident on the face of the complaint that plaintiff
has failed to state a claim upon which reliefcan be granted.

Plaintifls complaint, filed on January 27 ,2016, did not contain a copy
of her claim for refund as required by RCFC 9(m). However, defendant
provided plaintiffs Forms 1040 for the tax years 2006,2007 ,2008, and 2010
as an attachment to its motion to dismiss. Thus, while documents outside of the
pleadings ordinarily may not be considered in deciding a motion to dismiss, we
may consider plaintiff s Forms 1040 because they are integral to the complaint
and should have been attached to it. In addition to plaintiffs Forms 1040,

defendant provided copies

of plaintiffs Form

4340, Cenificate of

Assessments, Payments, and Other Specified Matters ("the transcripts") for the
relevant tax years. Unlike the Forms 1040, however, the transcripts contain
matters not referenced in the complaint and therefore may not be considered
without converting defendant's motion to one for summary judgment. Rather
than converting the motion, however, we decline to consider the transcripts.

rrspstRAcKrNG, 9114 9999

CUSTOMER
RECEIPT
&

it431 3548 1061 32

FdTncking or rqurlas go lo tJSpS com
or c.111.80L222-1811

Defendant produced two of plaintiff s Forms 1040 for the tax year
2006, dated July 12,2014 and July 26, 2015. On both forms, plaintiffreported
$ 10,620 of"long-term disability income" but reported no taxable income and
no tax liability. On both forms plaintiff also claimed an overpay ment of $2,7 47
based on a claimed Eamed Income Credit of $2,747. Defendant produced a
second Form 1040, pertaining to the tax year 2007, filed by plaintiffand dated
July 12, 2014. On this form, plaintiff reported $ 10,968 in "long-term disability
income" but no taxable income and no tax liability. Plaintiff also claimed an
overpayment of $2,853 based on a claimed Earned Income Credit.
Defendant produced three Forms 1040 filed by plaintifffor the tax year
2008, two dated August 28,2013 and one dated July 26,2015. On each form,
plaintiff reported $11,220 of "long-term disability income" but reported no
taxable income and no tax liability. She also claimed an overpayment of
$2,917 based on a claimed Earned Income Credit.

Defendant produced five of plaintiffs Forms 1040 for the tax year
2010, one dated March 22,2012, a second dated January 8, 2013, two dated
April 23, 2013, and another dated July 26, 2015. In each return, plaintiff
reported $11,868 of "long-term disability income" but reported no taxable
income and no tax liability. She also claimed an on overpayment of $3,050
based on an Earned Income Credit.

In its motion, defendant contends that plaintiffs claims should be
dismissed because plaintiffhas failed to state a claim upon which reliefcan be
granted.r According to defendant, plaintiffhas stated no basis upon which she
can recover because she has not alleged any income that qualifies for the
Earned Income Credit under 26 U.S.C. $ 32, which is the basis for her refund
claim.
We agree with defendant. The Earned Income Credit provides a credit

rDefendant also argues that plaintiffs claim for the tax year 2007 should be
dismissed because plaintiff has not met the jurisdictional requirements of 26
U.S.C. $ 651 1(a) and $ 7 422(a); namely, she failed to file an administrative
claim for refund within the later of three years from the time the refund was
filed or two years from the time the tax was paid. 26 U.S.C. g 651 l(a) (2012).
However, because this argument relies on plaintiff s transcript for the tax year
2007, which we decline to consider, we do not reach this argument.

to low-income taxpayers based on the amount of the taxpayer's "eamed
income." The term "eamed income" means wages, salaries, tips, and other
employee compensation, plus the taxpayer's earnings from self-employment.
26 U.S.C. $ 32(c)(2XA) (2012). It does not include amounts received as a
pension, an annuity, unemployment compensation, or workmen's
compensation. 26 C.F.R. $ 1.32-2(c)(2) (2015). Nor does it include welfare
payments or Social Security Disability benefits. Powers v. Comm'r, T.C.
Memo 2000-5, 2000 WL 5255 (2000), aff'd 234 F.3d 1269 (6th Cir. 2000).
Thus, because the only income which plaintiff alleged that she eamed during
the relevant tax years was long-term disability income, which does not qualiff
her for the Earned Income Credit, she is ineligible for a refund based on this
credit. As a result, she has failed to state a claim upon which relief can be
granted.

For the reasons stated above, we grant defendant's motion to dismiss
pursuant to RCFC 12(bX6). The clerk is directed to dismiss the complaint. No
costs.

ERIC G. BRU