Stauffer v. Internal Revenue Service

Filing 31

Judge Mark L. Wolf: "1. The attached Report and Recommendation (Docket No. 29) is ADOPTED in part and MODIFIED in part, as described in this Memorandum and Order. 2. Defendant's Motion to Dismiss is DENIED without prejudice. 3. This case is REFERRED to the Magistrate for pretrial purposes, including a Report and Recommendation on any motion for summary judgment." ORDER entered denying 19 Motion to Dismiss for Lack of Jurisdiction; adopting in part Report and Recommendations re 28 Report and Recommendations. (Bono, Christine)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

HOFF STAUFFER, ADMINISTRATOR
OF THE ESTATE OF CARLTON

STAUFFER,

Plaintiff,
C.A. No. 15-10271-MLW
V.

INTERNAL REVENUE SERVICE,
Defendant.
MEMORANDUM AND ORDER

WOLF, D.J.
I.

September 29, 2017

INTRODUCTION

On April 26, 2013, Hoff Stauffer, as administrator of the
estate of his late father, Carlton Stauffer, (the "Estate") sought

a refund for overpaid taxes for the year ending on December 31,
2006. The claim was submitted past the October 15, 2010 deadline

applicable under 26 U.S.C. §6511. The Estate, however, submitted
a statement by Stauffer's treating psychologist alleging that
Stauffer had suffered from a "financial disability" that justified

suspension of the limitations period under 26 U.S.C. §6511(h)(2).
The IRS nevertheless denied the claim as untimely because the

psychologist's letter did not satisfy the requirement of Revenue
Procedure 99-21 that a person claiming financial disability submit
a statement from a "physician," which is defined as a "doctor of
medicine or osteopathy" and excludes psychologists.

The Estate sued. The IRS moved to dismiss, arguing that this

court lacks jurisdiction because the Estate did not properly file
its refund claim during the limitations period. On February 24,

2017, the Magistrate Judge issued a report recommending that the
motion be denied because the IRS did not justify its decision not
to consider the statement from Stauffer's psychologist as proof of

his disability. For the reasons explained below, the court is

adopting

in

part

and

modifying

in

part

the

Report

and

Recommendation, and the motion to dismiss is being denied.
II.

APPLICABLE LEGAL STANDARDS

A. Review of a Magistrate's Disposition

Rule 72(b)(3) of the Federal Rules of Civil Procedure requires
the court to review "de novo any part of the magistrate judge's

disposition that has been properly objected to." "Conclusory

objections that do not direct the reviewing court to the issues in
controversy" are not proper under Rule 72(b). Velez—Padro v. Thermo

King De Puerto Rico, Inc., 465 F.Sd 31, 32 (1st Cir. 2006).
Moreover, "[a party is] not entitled to a de novo review of an

argument never raised" before the magistrate judge. Borden v. Sec'y
of Health & Human Servs., 836 F.2d 4, 6 (1st Cir. 1987). "Parties

must take before the magistrate, 'not only their best shot but all
of their shots.'" Id. (quoting Singh v. Superintending Sch. Comm.

of City of Portland, 593 F. Supp. 1315, 1318 (D. Me. 1984).

Waiver of de novo review by failing to file proper objections

does not entitle a party to "some lesser standard" of review.
Thomas v. Arn, 474 U.S. 140, 149-50 (1985); see also Costa v. Hall,
2010 WL 5018159, at *17 (D. Mass. Dec.2, 2010) ("Absent objections,

the court may adopt the report and recommendation of the magistrate

judge."). However, review by the court in such circumstances is
not prohibited, and some level of oversight, even if not de novo,
is encouraged. See Henderson v. Carlson, 812 F.2d 874, 878 (3rd
Cir. 1987).

B. Motion to Dismiss for Lack of Jurisdiction

"There are two types of challenges to a court's subject matter

jurisdiction: facial challenges and factual challenges." TorresNegron v. J & N Records, LLC, 504 F. 3d 151, 162 (1st Cir. 2007).
"Facial attacks on a complaint 'require the court merely to look

and see if the plaintiff has sufficiently alleged a basis of

subject matter jurisdiction, and the allegations in [plaintiff's]

complaint are taken as true for purposes of the motion." Id.
However, when as in the case, the jurisdictional issue depends on

questions of fact, the court conducts one of two inquiries.
"[W]here...the jurisdictional issue and substantive claims are so
intertwined

the

resolution

of the

jurisdictional

question

is

dependent on factual issues going to the merits, the district court
should employ the standard applicable to a motion for summary

judgment." Id. at 163. In contrast, when as in this case,

the

facts relevant to the jurisdictional inquiry are not intertwined
with the merits of the plaintiff's claim...the trial court is free

to weigh the evidence and satisfy itself as to the existence of
its power to hear the case." Id.
C. Sovereign Immunity

"Under settled principles of sovereign immunity, the United
States, as sovereign, is immune from suit, save as it consents to
be sued...and the terms of its consent to be sued in any court

define that court's jurisdiction to entertain the suit." United
States V. Palm, 494 U.S. 596, 608 (1990). 28 U.S.C. §1346(a)
authorizes individuals to sue for a refund of taxes "erroneously

or illegally assessed or collected...under the internal revenue
laws." However, the Internal Revenue Code establishes the terms of

the consent given in §1346. Before suing, "the taxpayer must comply
with the tax refund scheme established in the Code," which provides
that "a claim for a refund must be filed with the Internal Revenue

Service (IRS) before suit can be brought, and establishes strict
timeframes for filing such a claim." United States v. Clintwood
Elkhorn Min. Co., 553 U.S. 1, 4 (2008).

In particular, 26 U.S.C. §7422(a) specifies 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
or
collected...until a claim for refund or credit has been

duly filed with the [IRS], according to the provisions of
law in that regard, and the regulations of the Secretary

[of the Treasury] established in pursuance thereof.

In C.I.R. V. Lundy, the court explained the time limits for filing
a claim for a refund with the IRS;

[26 U.S.C. §6511] contains two separate provisions for
determining the timeliness of a refund claim. It first
establishes a filing deadline: The taxpayer must file a
claim for a refund "within 3 years from the time the
return was filed or 2 years from the time the tax was

paid, whichever of such periods expires the later, or if
no return was filed by the taxpayer, within 2 years from
the time the tax was paid." §6511(b)(1) (incorporating by
reference §6511(a)).

516 U.S. 235, 239-40 (1996). As explained below, the Estate filed
its tax return for the year 2006 and its claim for a refund on

April 26, 2013. Therefore, the refund claim was timely under
section 6511(b)(1).

However, the statute also establishes a "look-back" period.

If the taxpayer files the refund claim within 3 years from the
time the return was filed, the taxpayer is entitled to a refund

only of the taxes he paid within the three years (plus the period
of any extension for filing the return) before he filed the claim.
See §6511(b)(2)(A).

"Although [courts] should not construe such [] time-bar
provision[s] unduly restrictively, [they] must be careful not to

interpret [them] in a manner that would extend the waiver [of
sovereign immunity] beyond that which Congress intended." Palm,
494 U.S. at 608. Therefore, the Supreme Court has held that "unless
a claim for refund of a tax has been filed within the time limits

imposed by §6511(a), a suit for refund...may not be maintained in
any court." Clintwood Elkhorn, 553 U.S. at 5. Accordingly, courts
may not "toll, for non-statutory equitable reasons, the statutory
time...limitations

for

filing

tax

refund

claims

set

for

in

[§6511]." United States v. Brockamp, 519 U.S. 347, 348 (1997).
Therefore, absent some form of tolling, a claimant cannot, by

filing a claim in 2013, obtain a refund for taxes paid in 2006.
26 U.S.C. §6511(h) provides for statutory tolling of the 3-

year limitations period in limited circumstances. In particular,
the

time

limit for

submitting

a

claim

to

the

IRS "shall

be

suspended during any period of [an individual taxpayer's] life
that

such

individual

is

financially

disabled."

26

U.S.C.

§6511(h)(l). An individual is "financially disabled" if he is

"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 not less than 12
months." 26 U.S.C. §6511(h){2)(A). However, "an individual shall

not be considered to have such an impairment unless proof of the
existence thereof is furnished in such form and manner as the
Secretary may require." Id.

Revenue Procedure 99—21 "sets forth in detail the 'form and

manner' in which proof of financial disability must be provided."
Bova V. United States, 80 Fed. Cl. 449, 455 (2008). It requires an
6

individual claiming financial disability to submit "a

written

statement by a physician (as defined in §1861(r)(1) of the Social
Security

Act,

42

U.S.C.

determination" that the

§1395x(r)),

qualified

individual satisfied

to

make

the definition

the
of

"financially disabled" in 26 U.S.C. §6511(h). Rev. Proc. 22-91, §4

(emphasis added). Revenue Procedure 99-21 does not itself define

"physician" for the purposes of its requirements. Instead, it
refers to the definition as established in §1861(r)(1) the Social

Security Act, 42 U.S.C. §1395x(r).
42 U.S.C. §1395x(r) defines the term "physician" as including

five enumerated categories of professionals. The first enumerated

category, which corresponds to §1861(r)(1) of the Social Security
Act, is "a doctor of medicine or osteopathy legally authorized to

practice medicine and surgery by the State in which he performs
such

function

or

action

(including

["osteopathic

practitioners...within the scope of their practice as defined by
state law," 42 U.S.C. §1301(a)(7)])." The parties agree that this
definition excludes psychologists.

Therefore, Revenue Procedure 99-21, incorporating 42 U.S.C.

§1395x(r), provides that a taxpayer seeking tolling of the 3-year
statute of limitations for filing a

refund claim based on a

"financial disability" must submit a letter from a qualified
"doctor of medicine or osteopathy legally authorized to practice
medicine and surgery," to prove the taxpayer's disability.

III. RELEVANT FACTS

The court adopts the facts as recited in the Magistrate

Judge's Report and Recommendation and supplemented by the record,
which are undisputed. See R&R at 2-7.
On October 29, 2012, Carlton Stauffer died at the age of 90.

His son, Hoff Stauffer, became the administrator of his estate.

While closing the Estate, Hoff Stauffer discovered that his father
had not filed tax returns for the tax years 2006 through 2012.

Accordingly, on April 26, 2013, Hoff Stauffer filed those returns
with the IRS. Stauffer claimed that his father overpaid taxes for

the 2006 tax year in the amount of $137,403. He requested a refund
for the Estate in that amount.

On February 18, 2014, the IRS denied the claim for a refund

as untimely pursuant to 26 U.S.C. §6511. Stauffer filed an internal

appeal. In it, he alleged that the IRS was required to toll the
statute of limitations, under 26 U.S.C. §6511(h), because his

father had been "financially disabled" during the relevant period.

In particular, Stauffer submitted an April 9, 2014 certified
statement from Carlton's psychologist.

Dr. Stanley Schneider,

Ed.D., who had treated him from 2001 until his death in 2012. Dr.
Schneider wrote that Carlton Stauffer suffered from "psychological

problems," in addition to "a variety of chronic ailments, including
congestive heart failure, chronic obstructive pulmonary disease,
leukemia,

and

chronic

pneumonia."
8

Objection,

Ex.

2.

These

conditions, he opined, "severely and negatively impacted" Carlton
Stauffer's

"mental

capacity,

cognitive

functioning,

decision

making, and emotional well-being," and prevented him from managing
his financial affairs from at least 2006 until his death. Id.

Nevertheless, on December 2, 2014, the IRS preliminary denied

the Estate's appeal and rejected its claim. The IRS did not
determine

whether

Carlton

Stauffer

was

"financially

disabled"

during the relevant period. Instead, the agency stated that because
Dr. Schneider was not a "physician" as defined in Revenue Procedure

99-21, his letter "cannot be used as a statement that can certify
Mr. Stauffer's condition." Compl. at Sill. On January 7, 2015, the

IRS formally denied the Estate's claim for a refund as untimely.
IV.

PROCEDURAL BACKGROUND

The Estate alleges that the provision in Revenue Procedure

99-21 applied by the IRS to preclude consideration of a letter
from a treating
financial

psychologist in determining

disability

consideration

of

"unreasonably

credible,

relevant

an individual's

limits
evidence

[the
of

IRS's]
financial

disability." Compl. at SI13. It seeks a judgment in the amount of
the

Estate's

overpayment

for

the

year

2006,

plus

interest,

litigation costs, and attorney's fees. The IRS moved to dismiss
the complaint. See Docket No. 19. The IRS argued that the suit is
barred by sovereign immunity because the Estate failed to file a

timely claim for a refund with the agency. The court referred the

case to the Magistrate Judge for pretrial purposes and a Report
and Recommendation on the motion.

On February 14, 2017, the Magistrate Judge issued his report
and recommended that the motion be denied.
V.

DISCUSSION

As explained earlier, courts do not have jurisdiction over a
tax refund suit "until a claim for refund or credit has been duly

filed with the Secretary, according to the provisions of law in

that regard." Abston v. C.I.R., 691 F.3d 992, 995 {8th Cir. 2012).
Section §6511(h)(2)(A)

is

such

a "provision

of law." I^ It

expressly provides that a taxpayer 'shall not be considered
[financially disabled] unless proof of [a disabling impairment] is
furnished in such form and manner as the Secretary

of the

Treasury, through the IRS, and not the court, "'may require.
Abston, 691 F. 3d at 995. By Revenue Procedure 99-21, the IRS

"requires" that a refund claim must be submitted in a particular
"manner:" with a doctor's note attached. Therefore, to be "duly

filed" as required by the terms of the Internal Revenue Code's
limited waiver of sovereign immunity, an untimely refund claim
must be submitted with a letter from a medical doctor. Id. at 995.

Accordingly, in Abston, the Eighth Circuit held that a
district court must dismiss a refund suit in which the taxpayer

did not substantially comply with Revenue Procedure 99-21. There,

as here, the plaintiff failed to submit a physician's statement,
10

as required by Revenue Procedure 99-21, to the IRS with her request
for a refund. The court reasoned that the court cannot disregard

a lawfully-promulgated revenue procedure to toll the statute of
limitations, because doing so would:
be the kind of non-statutory tolling the Supreme Court
barred
in
Brockamp.
The
administrative
burden
of

responding to late claims, the Court explained, "tells us
that Congress would likely have wanted to decide
explicitly whether, or just where and when, to expand the
statute's limitations periods, rather than delegate to
the courts a generalized power to do so whenever a court
concludes that equity so requires."

Id. at 995-96 (citing Brockamp, 519 U.S. at 353). Judicial waiver

of a lawfully promulgated IRS filing requirement would be "contrary
to that principle and therefore beyond the power of the lower
federal courts." Id.

Under

the

Administrative

Procedure

Act,

5

U.S.C.

§706,

however, a court may set aside an agency action, finding, or
conclusion

when

it

was

"arbitrary,

capricious,

an

abuse

of

discretion, or otherwise not in accordance with law." F.C.C. v.
Fox Television Stations, Inc., 556 U.S. 502, 513 (2009)(citing

Motor Vehicles Mfrs. Ass'n of U.S. v. State Farm Ins. Co., 463

U.S. 29, 43 (1983)). The Estate argues, in effect, that the IRS's
decision

to

exclude

a

psychologist's

letter

as

evidence

of

financial disability is arbitrary and capricious and, therefore,
the court should set it aside. Because the government has offered
no evidence that the IRS had a reason that was not arbitrary for

11

excluding

psychologists

from

the

category

of

professionals

qualified to support a claimant's financial disability, the court
is denying the motion to dismiss.

The court's analysis, however, differs from the Magistrate

Judge's. The Magistrate Judge applied the standard established in
Skidmore v. Swift & Co., 323 U.S. 134 (1944), to determine that
the IRS's limitation on cognizable experts to medical doctors

rather than other "professionals generally considered competent to

opine on the existence of a mental impairment" was not entitled to
"deference." R&R at 12. Under United States v. Mead Corp., 533

U.S. 218, 229-31 (2001), an agency's interpretation of the statute

it is authorized to implement, when the interpretation is contained

in an informal guidance document instead of a formal regulation

carrying the force of law, warrants judicial deference only to the
extent that it has the "power to persuade" according to the factors
discussed in Skidmore. See Merrimon v. Unum Life Ins. Co. of

America, 758 F. 3d 46, 54-55 (1st Cir. 2014).^ If the agency's

interpretation does not warrant deference, the court applies its
own interpretation of the statute. See King v. Burwell, 135 S. Ct.
2480, 2489 (2015).

1 These factors include the "thoroughness evident in the guidance's

consideration,

the

validity

of

its

reasoning,

consistency with earlier and later pronouncements."
(citing Skidmore, 323 U.S. at 140).
12

[and]

its

at 99

The

Estate,

correctly,

does

not

argue

that

the

revenue

procedure misinterprets §6511(h). The statute authorizes the IRS
to establish the "form and manner," that is, the procedure, by

which refund claimants must submit proof of their disability. A

procedural rule is one which "do[es] not [it]self alter the rights
or interests of the parties, although it may alter the manner in

which the parties present themselves or their viewpoints to the

agency." Nat'1 Sec. Counselors v. C.I.A., 931 F. Supp. 2d 77, 10607 (D.D.C. 2013). A procedural rule generally may not "encode []
a substantive value judgment or put[] a stamp of approval or

disapproval on a given type of behavior," but "the fact that the

agency's decision was based on a value judgment about procedural
efficiency does not convert the resulting rule into a substantive
one." Id. at 107. "Rules are generally considered procedural so

long as they do not 'change the substantive standards by which the

[agency] evaluates' applications which seek a benefit that the
agency has the power to provide." JEM Broadcasting Co., Inc. v.
F.C.C., 22 F. 3d 320, 327 (D.C. Cir. 1994).

The Estate does not argue that Revenue Procedure 99-21 is not

a procedural rule. It establishes a rule of evidence—a requirement
that the expert certifying the claimant's condition possess a

certain qualification. The rule does not change the substantive
standard by which the IRS determines whether an individual is
financially disabled.
13

Agencies,

including

the

IRS,

have

especially

"broad

discretion to decide what procedures to use in fulfilling [their]
statutory responsibilities." New Life Evangelistic Center, Inc. v.

Sebelius,

753

F.

Supp.

2d

103,

121

(D.D.C.

2010).

"Absent

constitutional constraints or extremely compelling circumstances'

courts are never free to impose on [an agency] a procedural

requirement not provided for by Congress." Nat. Res. Def. Council,
Inc. V. Nuclear Regulatory Comm'n, 216 F.3d 1180, 1190 (D.C. Cir.

2000);

Vermont

Yankee

Nuclear

Power

Corp.

v.

Nat.

Res.

Def.

Council, Inc., 435 U.S. 519, 54 (1978)(stating that a court may

not "impose upon the agency its own notion of which procedures are
'best' or most likely to further some vague, undefined public

good"). This principle has special force here, where Congress has
explicitly given the IRS the

authority to adopt procedural

requirements with which individuals claiming financial disability
must comply. The court may not, therefore, require the IRS to

accept forms of evidence or manners of proof that the agency, in
a valid exercise of its authority, has foreclosed.

However, Vermont Yankee did not exempt from judicial review

procedural requirements that the agency does choose to impose. In
Allentown Mack Sales and Service, Inc. v. NLRB, for example, the

court held that an agency, in conducting an adjudication, must

apply the substantive standards, as well as the standards of proof,
that it has explicitly adopted. 522 U.S. 359, 378 (1998). In doing
14

so, the Court stated that "clearly announced rules of law or of

evidentiary exclusion [are] subject to judicial review for their
reasonableness

and

their

compatibility

with

[the

governing

statutes]." Id.^ The court stated that this includes "a rule of

evidence that categorically excludes certain testimony on policy

grounds, without reference to its inherent probative value." Id.
Revenue

Procedure

99-21,

which

categorically

excludes

opinion

testimony from non-medical doctors, is such a rule. Therefore, the

court may review the "reasonableness" of such rules according to

2 The court recognizes that a decision committed by statute to an

agency's discretion may be subject to more limited review than the
standard established in 5 U.S.C. §706(2)(A). ^ Webster v. Doe,

486 U.S. 592, 599 (1988)(explaining that 5 U.S.C. §701(a) precludes
APA review where Congress "expressed an intent to preclude judicial
review" under the APA and "in those rare instances where statutes

are drawn in such broad terms that in a given case there is no law

to apply")/ see also Hinck v. United States, 550 U.S. 501, 503—04
(2007)(recognizing that statutory provision providing that the
Secretary of the Treasury "may abate the assessment of all or any

part of...[the] interest" on "any [tax] deficiency attributable
to an IRS error committed the abatement decision to the Secretary's
unreviewable discretion because the provision "neither indicat[ed]

that such authority should be used universally nor provid[ed] any
basis for distinguishing between the instances in which abatement
should and should not be granted"). The government does not argue,

however, that 26 U.S.C. §6511(h)

vests the

IRS

with such

unreviewable discretion to establish the "form and manner

of proof

of impairment. Because the APA establishes a "presumption of
reviewability for all final agency action," U.S. Army Corps of
Engineers v. Hawkes Co., Inc., 136 S. Ct. 1807, 1811 (2016), and
the implied preclusion of judicial review is "rare," Webster, 486
U.S. at 599, it would be inappropriate for the court to find that

§6511(h) precludes judicial review at this stage, absent briefing
on the issue.
15

the deferential "arbitrary and capricious" standard established in
5 U.S.C. §706(2)(A).

In State Farm, the Court explained that the "arbitrary and

capricious" standard is "narrow, and a court is not to substitute
its judgment for that of the agency." 463 U.S. at 43.
Nevertheless, the agency must examine the relevant data
and articulate a satisfactory explanation for its action

including a "rational connection between the facts found
and the choice made." In reviewing that explanation, we
must "consider whether the decision was based on a
consideration of the relevant factors and whether there
has been a clear error of judgment." Normally, an agency

rule would be arbitrary and capricious if the agency has
relied on factors which Congress has not intended it to

consider, entirely failed to consider an important aspect

of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or

is so implausible that it could not be ascribed to a
difference in view or the product of agency expertise.

Id. In addition, the agency must have a reasoned explanation for

rejecting the "reasonably obvious alternatives" available to it.
National Shooting Sports Foundation, Inc. v. Jones, 716 F. 3d 200,

215 (D.C. Cir. 2013). The reviewing court "may not supply a
reasoned basis for the agency's action that the agency itself has

not given." State Farm, 463 U.S. at 43. However, it must uphold
even a "decision of less than ideal clarity if the agency s path

may be reasonably discerned." Fox Television Stations, 556 U.S. at
513-14.

In Abston, the Eighth Circuit reasoned that Revenue Procedure

99-21's requirement that claimants submit a doctors' statement was

16

valid "under any standard of judicial review of executive agency
action:"

Congress defined "financial disability" as meaning that an
individual "is unable to manage his financial affairs by
reason of a medically determinable physical or mental

impairment." Knowing that the IRS would need to fairly and
efficiently process a potentially large number of such
claims. Congress instructed the Secretary to prescribe the
method by which an individual could prove such an impairment.
In

Revenue

Procedure

99—21,

the

Secretary

logically

prescribed, "Bring a doctor's note."

Abston, 691 F. 3d at 996 {citing §6511(h)(2)(A)). However, as the

Magistrate Judge noted, in Abston, the plaintiff had failed to
submit a statement by any doctor at all. Accordingly, the Eighth
Circuit

did

not

consider

whether

the

IRS's

decision

to

categorically refuse to consider certain types of doctors' notes-

-and in particular, statements from treating psychologists—is
arbitrary, capricious, or an abuse of discretion under 5 U.S.C.
§706(2)(A).

As explained earlier, the agency must explain why it rejected
"reasonably obvious" alternatives to the challenged rule. National
Shooting Sports Foundation, 716 F. 3d at 215. It is not "obvious"

why, in establishing a standard for proving mental disability, the
IRS would limit the types of doctors from whom it will accept

certifying statements to those defined as "physicians

for the

purposes of collecting Medicaid payments under the Social Security
Act,

42

U.S.C.

§1395x(r),

and

exclude

a

psychologist

who

contemporaneously diagnosed and treated the individual. Section
17

1395x(r} does not restrict the types of professionals who may opine

on whether a person has a disability for the purpose of determining
whether he is entitled to Disability Insurance Benefits.^ See 20
C.F.R. 404.1527(a)(2) (effective August 24, 2012 to March 26,

2017)("Medical

opinions

are

statements

from

physicians

and

psychologists or other acceptable medical sources that reflect
judgments about the nature and severity of your impairment(s)). In
fact, in the Social Security context, the opinion of a treating

psychologist is entitled to great weight. See Hill v. Astrue, 698
F. 3d 1153, 1159-60 (9th Cir. 2012)(Administrative law judge erred

in

rejecting opinion of treating

psychologist in disability

benefits hearing).

The government, however, has not submitted any evidence of
the

IRS's rationale in

adopting the

definition in 42 U.S.C.

§1395x(r). R&R at 15. The IRS, therefore, has not provided any

explanation for its decision, let alone a "rational connection
between the facts found and the choice made." State Farm, 463 U.S.

at 43. The IRS may conceivably view doctors without medical degrees

to be generally unqualified to make the determination required
under section 6511, and may have determined that, in view of the

"need to fairly and efficiently process a potentially large number

3

As

the

Magistrate

Judge

explained,

the

Social

Security

Administration and the IRS's definitions of "disability" are, in

relevant part, identical. Compare 42 U.S.C. §423(d)(1)(A) with 26
U.S.C. §6511(h)(2)(A).
18

of [refund] claims," Abston, 691 F. 3d at 996, a case-by-case
determination

of

whether

a

given

psychologist is

nevertheless

qualified is unwarranted. However, as explained earlier, at least
where the IRS's reasoning is not obvious, the court may not supply

an explanation for the IRS's choice that the agency itself has not
given. See State Farm, 463 U.S. at 43.

The

government

argues,

in

the

alternative,

that

the

Magistrate Judge erred in rejecting its argument that the Estate's
claim

was

untimely filed for the additional reason that the

psychologist's letter was filed with the Estate's initial appeal,
and not with the refund claim, as required by Revenue Procedure

99-21, §4. The Magistrate Judge, however, correctly found that
"where refund claims may technically be deficient by virtue of

missing some piece of information," courts generally "accept the

missing information at a later stage so it and the taxpayer's claim
may be considered." Report and Recommendation at 17 n. 4 (citing
Abston, 691 F.3d at 995 (where claim for refund was denied as

untimely for failure to submit certain information, plaintiff

permitted on appeal to IRS to submit the missing information) and
Walter v. United States, 2009 WL 5062391, at *10 (W.D.P.A. Dec.

16, 2009)("No case has ever held that a treating physician's
statement that contains a technical deficiency that is easily

corrected is insufficient under 6511(h). On the contrary, there is

a doctrine of allowing informal refund claims that are 'deficient
19

merely in one or two of the technical requirements imposed by the
Treasury regulation.
'

.

The IRS does not contest that Dr. Stanley Schneider's letter

establishes

"financial

that

Carlton

disability"

Stauffer's

sufficient

to

impairments

suspend

constituted

the

a

limitations

period for filing his refund claim under 26 U.S.C. §6511(h).
Therefore, the motion to dismiss is being denied without prejudice.

If the government possesses evidence that the IRS considered
reasonably obvious alternatives in excluding psychologists from
the definition of "physicians" in Revenue Procedure 99-21, or if
it believes that the court lacks authority to review the Revenue

Procedure for the reasons discussed supra, at n. 2, it may submit

such evidence or argument with a motion for summary judgment.
VI.

ORDER

1.

The attached Report and Recommendation (Docket No. 29)

is ADOPTED in part and MODIFIED in part, as described in this
Memorandum and Order.

2.

Defendant's

Motion

to

Dismiss

is

DENIED

without

prejudice.

3.

This case is REFERRED to the Magistrate for pretrial

purposes, including a Report and Recommendation on any motion for
summary judgment.

20

(^1

UNITED STATES DISTRICT JUDGE / J

21

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 1 of 18

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

Hoff Stauffer, Administrator of
the Estate of Carlton Stauffer,
Plaintiff,

No. 15-CV-10271-MLW

v.
Internal Revenue Service,
Defendant.

REPORT

AND

RECOMMENDATION

ON

DEFENDANT UNITED STATES’ MOTION
(DKT. NO. 19)

TO

DISMISS

CABELL, U.S.M.J.:
This matter comes before the Court on the United States’
Motion to Dismiss.1

(Dkt. No. 19).

Hoff Stauffer (“the plaintiff”

or Stauffer) is the administrator of the estate of his late father,
Carlton Stauffer.

In 2013, Stauffer filed several years’ worth of

estate tax returns with the United States Internal Revenue Service
(the IRS or “the defendant”), and requested for the 2006 tax year
a refund for an overpayment of more than $100,000.
the claim as untimely under the statute.

The IRS denied

The plaintiff concedes

that he filed the refund claim late but argues that the limitations

1

Though the complaint names the Internal Revenue Service, the proper defendant
in civil actions for federal tax refunds is the United States. See 28 U.S.C.
§ 1346(a)(1).

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 2 of 18

period was tolled because his father was financially disabled
during the relevant period.

The defendant argues that the failure

to comply with the statute’s timing requirements divests the Court
of subject matter jurisdiction.

For the reasons discussed below,

I recommend that the defendant’s motion to dismiss be denied.
I.

RELEVANT FACTS
The relevant facts framing the lawsuit are apparently not in

dispute.

Carlton Stauffer passed away in October 2012 at the age

of 90 and the plaintiff became the administrator of the estate.
(Compl. ¶¶ 5-6).

In the course of fulfilling that role the

plaintiff discovered that his father had neglected to file tax
returns for the tax years 2006 through 2012. (Compl. ¶ 6). Seeking
to rectify the delinquency, the plaintiff filed the outstanding
returns on or about April 26, 2013.

(Compl. ¶ 7).

Relevant here,

the estate claimed that it overpaid taxes for the 2006 tax year by
$137,403, and the plaintiff accordingly requested a refund for
that amount.

(Compl. ¶ 7).

On or about February 18, 2014, the IRS denied the request for
refund as untimely under 26 U.S.C. § 6511.

(Compl. ¶ 8).

The

plaintiff pursued the claim via the IRS’s internal appeals process.
(Compl. ¶ 8).

The IRS will excuse a late filing if the taxpayer

was “financially disabled.”

26 U.S.C. § 6511(h).

In that regard,

the plaintiff submitted a written explanation from a licensed
psychologist who had previously treated Carlton Stauffer from 2001
2

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 3 of 18

until his death in 2012.

(Compl. ¶ 9).

The psychologist’s

explanation detailed a variety of mental and physical conditions
which, he opined, had prevented Carlton Stauffer from managing his
financial affairs from at least 2006 until his death.

(Id.).

By letter dated December 2, 2014, the IRS preliminarily
rejected the plaintiff’s claim.

(Compl. ¶ 11).

The IRS stated

that while it will accept an explanation from a “physician,” a
psychologist is not a physician under the definition contained in
Revenue Procedure 99-21.

(Compl. ¶¶ 11-12).

On January 7, 2015,

the IRS formally denied the plaintiff’s claim for a refund.
(Compl. ¶ 14).
II.

PROCEDURAL HISTORY

The plaintiff filed this action on February 5, 2015.

The

complaint asserts jurisdiction pursuant to 26 U.S.C. § 7422, 28
U.S.C. §§ 1402, 1349, 1346 and 1331, and seeks a judgment for the
amount of the overpayment for the year 2006, plus interest,
litigation

costs

and

attorney’s

fees.

On

May

3,

defendant moved to dismiss for lack of jurisdiction.

2016,

the

On May 17,

2016, the plaintiff opposed the motion.
III. LEGAL STANDARD
The

defendant

argues

that

the

court

lacks

jurisdiction

because the plaintiff’s claim for refund was untimely under the
pertinent statute.

A plaintiff bears the burden of proving that

the court has jurisdiction.

O'Toole v. Arlington Trust Co., 681
3

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 4 of 18

F.2d 94, 98 (1st Cir. 1982).

Generally, a court should apply a

standard of review “similar to that accorded a dismissal for
failure to state a claim” under Rule 12(b)(6).
Specialty

Ins.

Co., 905

F.Supp.2d

414,

Menge v. N. Am.

416

(D.R.I.

2012)

(quoting Murphy v. United States, 45 F.3d 520, 522 (1st Cir. 1995).
A court confronted with a Rule 12(b)(6) motion “may dismiss a
complaint only if it is clear that no relief could be granted under
any

set

of

allegations.”

facts

that

could

be

proved

consistent

with

the

Educadores Puertorriquenos en Accion v. Hernandez,

367 F.3d 61, 66 (1st Cir. 2004) (quoting Hishon v. King & Spalding,
476 U.S. 69, 73 (1984)).

To show that one is entitled to relief,

the plaintiff must provide “enough facts to state a claim to relief
that is plausible on its face.”
U.S. 544, 570 (2007).

Bell Atl. Corp. v. Twombly, 550

A court must “accept as true all well-

pleaded facts set forth in the complaint and draw all reasonable
inferences therefrom in the pleader’s favor.”

Haley v. City of

Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting Artuso v. Vertex
Pharmaceuticals, Inc., 637 F.3d 1, 5 (1st Cir. 2011)). In deciding
Rule 12(b)(1) motions, however, the court may consider materials
outside the pleadings, and factual disputes may be resolved.
Gonzalez v. United States, 284 F.3d 281, 288 (1st Cir. 2002);
Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir.
2001).

4

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 5 of 18

IV.

LEGAL FRAMEWORK

FOR

TAX REFUND CLAIMS

A taxpayer seeking a refund of taxes erroneously or unlawfully
collected may bring a federal court action against the United
States.

28 U.S.C. § 1346(a)(1).

The Internal Revenue Code

specifies that before doing so, though, the taxpayer must comply
with the tax refund scheme established in the Code.
v. Dalm, 494 U.S. 596, 609–610 (1990).

United States

That scheme provides that

a claim for a refund must be filed with the IRS before suit can be
brought, and establishes strict timeframes for filing such a claim.
United States v. Clintwood Elkhorn Min. Co., 553 U.S. 1, 4 (2008).
In particular, civil claims for tax refunds are governed by
26 U.S.C. § 7422.

Pursuant to that statute, “[n]o suit or

proceeding shall be maintained… until a claim for refund or credit
has been duly filed with the Secretary.”

26 U.S.C. § 7422.

To be

duly filed under section 7422, a claim for refund must in turn be
timely under 26 U.S.C. § 6511.
144, 149 (1st Cir. 2011).

Dickow v. United States, 654 F.3d

To be timely under section 6511, a claim

for refund “shall be filed by the taxpayer within 3 years from the
time the return was filed or 2 years from the time the tax was
paid, whichever of such periods expires the later, or if no return
was filed by the taxpayer, within 2 years from the time the tax
was paid.”

26 U.S.C. § 6511(a).

Applied here, both parties agree

that a claim for refund for the tax year 2006 would have properly
been filed within three years of the original April 15, 2007 filing
5

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 6 of 18

deadline, or April 15, 2010, but Carlton Stauffer had received an
automatic six-month extension, so the deadline would have been
October 15, 2010.
refund

until

The plaintiff did not submit his claim for

April

26,

2013,

well

beyond

the

deadline

and

limitations period.
However, section 6511(h) provides that the time limit for
submitting a claim “shall be suspended during any period of such
individual’s life that such individual is financially disabled.”
26 U.S.C. § 6511(h)(1).

An individual is “financially disabled”

if he is “unable to manage his financial affairs by reason of a
medically determinable physical or mental impairment” expected to
result

in

death

6511(h)(2)(A).

or

last

at

least

12

months.

26

U.S.C.

§

One claiming a financial disability must provide

proof of its existence “in such form and manner as the Secretary
may require.”

Id.

Revenue Procedure 99-21 “sets forth in detail the ‘form and
manner’ in which proof of financial disability must be provided.”
Bova v. United States, 80 Fed. Cl. 449, 455 (Fed. Cl. 2008).

Among

other things, and relevant here, Revenue Procedure 99-21 provides
that one claiming a financial disability must submit “a written
statement by a physician (as defined in § 1861(r)(1) of the Social
Security

Act,

determination…”
Revenue

42

U.S.C.

§

1395x(r)),

qualified

to

R.P. 99-21, § 4(1) (emphasis added).

Procedure

99-21

does

not
6

itself

define

make

the

As such,
the

term

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 7 of 18

“physician,” but instead borrows a definition of the term as used
by the Social Security Administration (SSA).
As an initial matter, it is not patently obvious what the IRS
deems the definition of “physician” to be in this context.

The

revenue procedure refers to section “1861(r)(1)” but that is
confusing because section 1861(r) does not formally contain any
subsections.

Rather, section 1861(r) sets out in one large

paragraph a definition for the term “physician” that includes five
enumerated categories of professionals, including:

(1) “a doctor

of medicine or osteopathy,” (2) “a doctor of dental surgery or of
dental medicine,” (3) a doctor of podiatric medicine,” (4) “a
doctor of optometry,” and (5) “a chiropractor.” See § 1861(r).
Assuming as a matter of common sense that the IRS’s reference to
a

subsection

category,

one

some

is

meant

confusion

to

refer

still

to

remains

the

first

because

enumerated

the

revenue

procedure directly links section “1861(r)(1)” to “42 U.S.C. §
1395x(r)” --a statute that essentially tracks verbatim the wording
and format of section 1861(r), but does not contain a corresponding
reference to a subsection one.

Indeed, section 1395x(r), like

section 1861(r), does not formally contain any subsections.

So,

is the reference to a subsection one in section 1861(r)(1) a
scrivener’s error, or is it meant to purposely narrow the scope of
the meaning of a physician to a doctor of medicine or osteopathy?
If it is the latter, why does not the reference to section 1395x(r)
7

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 8 of 18

also refer to a subsection one?
when

one

considers

principally

by

that

one

IRS

The ambiguity is not lessened

Revenue
employee

Procedure
and

99-21

does

not

was

drafted

contain

any

accompanying rationale explaining the choice of the definition of
the word “physician.”2 It is not necessary for the Court to resolve
this question here, though, because both parties agree that,
whatever definition of “physician” controls, it does not facially
include a psychologist.
V.

ANALYSIS
A revenue procedure is a “statement of procedure that affects

the rights or duties of taxpayers or other members of the public
under the Code and related statutes or information that, although
not necessarily affecting the rights and duties of the public,
should

be

a

matter

601.601(d)(2)(i)(b).

of

public

knowledge.”

26

C.F.R.

§

The stated purpose of Revenue Procedure 99-

21 is to “describe[] the information that is required under §
6511(h)(2)(A) of the Internal Revenue Code in order to request
suspension of the period of limitations under § 6511 for claiming
a credit or refund of tax due to an individual taxpayer’s financial
disability.”

See R.P. 99-21, § 1.

2

At the end of RP 99-21, and under the heading “DRAFTING INFORMATION,” one is
informed that “[t]he principal author of this revenue procedure is Paul E.
Tellier of the Office of Assistant Chief Counsel (Income Tax and Accounting).”

8

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 9 of 18

“An agency’s interpretation of a statute that it administers
may warrant judicial deference, depending on the degree to which
the

agency’s

authoritative.”

exposition

of

the

issue

is

deemed

Merrimon v. Unum Life Ins. Co. of America, 758

F.3d 46, 54 (1st Cir. 2014).

Agencies speak in a variety of ways,

and therefore authoritativeness often depends on context.

Id.

On

the one hand, when an agency speaks with the force of law, the
agency’s

interpretation

is

due

judicial

deference,

known

as

Chevron deference, as long as its interpretation is reasonable.
Id.

See also Chevron U.S.A., Inc. v. Natural Resources Defense

Council, 467 U.S. 837 (1984).

But when an agency speaks with

something less than the force of law its interpretations are not
entitled to Chevron deference.

See Christensen v. Harris County,

529 U.S. 576, 587 (2000) (“Interpretations such as those in opinion
letters—like

interpretations

contained

in

policy

statements,

agency manuals, and enforcement guidelines, all of which lack the
force of law—do not warrant Chevron-style deference.”).

Such

interpretations are entitled to deference “only to the extent that
those interpretations have the ‘power to persuade.’”

Merrimon,

758 F.3d at 55 (quoting Christensen, 529 U.S. at 587).

Under this

lower standard of review, known as the Skidmore standard, courts
look to a variety of factors, including the thoroughness of the
agency’s consideration, the validity of its reasoning, and the
consistency

of

its

interpretation
9

with

earlier

and

later

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 10 of 18

pronouncements.

Doe v. Leavitt, 552 F.3d 75, 81 (1st Cir. 2009).

See also Skidmore v. Swift & Co., 323 U.S. 134 (1944).
With respect to IRS revenue procedures, courts generally have
tended to treat them as non-binding and not entitled to Chevron
deference.

See Exxon Mobil Corp. & Affiliated Cos. v. C.I.R., 689

F.3d 191, 200-201 (2d Cir. 2012) (revenue procedure not entitled
to

Chevron

Supply,

or

Inc.

Skidmore
v.

deference);

United

Tualatin

States, 522

F.3d

Valley
937

Builders

(9th

Cir.

2008) (without deciding the issue, applying Skidmore rather than
Chevron standard); Federal Nat. Mortg. Ass’n v. United States, 379
F.3d 1303, 1307-08 (Fed. Cir. 2004) (revenue procedure not entitled
to Chevron deference); Battle Flat, LLC v. United States, 2015 WL
5554807, at *3 (D.S.D. Sept. 21, 2015) (assuming revenue procedures
not entitled to Chevron deference); In re Peterson, 321 B.R. 259,
261 (D. Neb. 2004) (revenue procedure not entitled to Chevron
deference).

Some courts have suggested IRS revenue procedures may

not even be entitled to Skidmore deference.

See Corbalis v.

C.I.R., 142 T.C. 46, 54 (Tax Ct. 2014) (revenue procedure not
entitled to deference); Exxon Mobil Corp. & Affiliated Cos. v.
C.I.R., 689 F.3d 191, 200 (2d Cir. 2012) (revenue procedure
“entitled to little, if any, deference”); Marandola v. United
States,

76

Fed.

Cl.

237,

246

n.14

(Fed.

Cl.

2007)

(revenue

procedures “can, where they set out a persuasive rationale, be
entitled to limited Skidmore deference”).
10

The First Circuit has

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 11 of 18

apparently not yet had occasion to address the issue directly but
it has held in an analogous case that an agency’s interpretative
guidance is not entitled to Chevron deference where the agency
simply co-opts an existing definition designed by a different
agency for use in connection with a different statute. See Navarro
v. Pfizer Corp., 261 F.3d 90 (1st Cir. 2001) (holding in an FMLA
lawsuit that EEOC interpretative guidance issued pursuant to the
ADA was not entitled to Chevron deference when applied in FMLA
context,

particularly

where

EEOC

never

had

any

promulgate regulations pursuant to the FMLA).

authority

to

And perhaps not

surprisingly, the Department of Justice has publicly announced
that it no longer advocates for Chevron deference for revenue
procedures.3

Against this backdrop, I conclude similarly that

Revenue Procedure 99-21 is not binding and is not entitled to
Chevron deference.
That does not end the inquiry, however.

The precedent cited

above suggests that even if not accorded Chevron deference, a
revenue procedure may warrant deference if it survives scrutiny
under the Skidmore standard.

See e.g., Navarro, 261 F.3d at 99

3

Marie Sapirie, DOJ Won’t Argue for Chevron Deference for Revenue Rulings and
Procedures,
Official
Says,
taxanalysts
(May
12,
2011),
http://www.taxhistory.org/www/features.nsf/Articles/2EC3B72AF2B851808525788E0
056818B?OpenDocument (Last visited: Jan. 30, 2017) (“The Department of Justice
will no longer argue for Chevron deference for revenue rulings and revenue
procedures, said Gilbert Rothenberg, appellate section chief in the DOJ's Tax
Division.”).

11

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 12 of 18

(choosing to apply Skidmore standard to agency’s regulation where
Chevron deference not warranted).

As noted, under the Skidmore

standard an agency’s interpretation of its regulations will be
entitled to deference only to the extent those interpretations
have the power to persuade, a determination which turns on a number
of factors such as the “thoroughness evident in the guidance’s
consideration,

the

validity

of

its

reasoning,

consistency with earlier and later pronouncements.”

[and]

its

Navarro, 261

F.3d at 99 (citing Skidmore, 323 U.S. at 140) (internal alteration
marks omitted); Doe v. Leavitt, 552 F.3d 75, 81 (1st Cir. 2009).
This is where the IRS’s reliance on Revenue Procedure 99-21 falls
short.
The purpose of Revenue Procedure 99-21 is to provide guidance
for taxpayers who need to show a disability under section 6511 to
excuse their late filing.

To that extent, Revenue Procedure 99-

21 at its most basic level requires the taxpayer to bring a
doctor’s

note,

an

entirely

reasonable

proposition.

However,

section 6511(h) allows a disability to be based on a showing of a
“mental

impairment”

and

Revenue

Procedure

99-21

directly

undermines that goal where it demands a note from a physician but
then defines that term to exclude a whole class of professionals
generally considered competent to opine on the existence of a
mental impairment.

On the record before the Court, there is no

evidence that the IRS has considered the implications of its
12

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 13 of 18

interpretation of the word “physician” as used in the revenue
procedure.

On the contrary, and as noted, Revenue Procedure 99-

21 was drafted principally by a single IRS employee who without
elaboration or explanation selected a definition of “physician” as
used by the SSA.
is

just

no

In the absence of additional information, there

basis

to

assess

the

soundness

of

the

IRS’s

interpretation of the word “physician” in Revenue Procedure 9921.
Moreover, if the IRS’s goal was to look to the SSA for
instructive

guidance

on

who

may

be

competent

to

opine

on

a

disability based on a physical or mental impairment, then its
interpretation of the word “physician” in Revenue Procedure 99-21
directly contravenes that purpose, because the SSA does permit
psychologists to opine on whether an individual is disabled as a
result of a mental impairment.
(“[m]edical

opinions

are

See 20 CFR § 404.1527(a)(2)

statements

from

physicians

and

psychologists or other acceptable medical sources that reflect
judgments about the nature and severity of your impairment(s)….”)
(emphasis added).

See also Weiler v. Shalala, 922 F.Supp. 689,

696 n.10 (D. Mass. 1996) (“The opinion of a treating psychologist
is considered an acceptable medical source under the treatingphysician rule.”).

Indeed, the SSA and IRS both use definitions

of “disability” that are in relevant part virtually identical.
Compare 42 U.S.C. § 423(d)(1)(A) (“The term “disability” means the
13

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 14 of 18

inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve
months.”)

with

26

U.S.C.

§

6511(h)(2)(A)

(“an

individual

is

financially disabled if such individual is 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 not less than 12 months.”) (emphasis added).
So, to the extent the goal underlying Revenue Procedure 99-21 was
to

implement

a

disability-determination

process

based

on

principles consistent with those of the SSA, the interpretation of
“physician” urged by the government here undermines that purpose
where the SSA treats psychologists as physicians and welcomes their
medical opinions in disability determination matters.
To be clear, this is not to suggest that the IRS should have
also incorporated the SSA’s regulation endorsing the acceptance of
medical opinions from psychologists, or defined “physician” more
broadly to encompass and reflect the SSA’s practice.

Rather, the

point is that where the IRS has taken its definition of “physician”
from an agency that demonstrably does not interpret it in practice
to exclude psychologists from opining on a patient’s impairment,
the failure of the IRS to provide any insight explaining the
14

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 15 of 18

deliberative

process

it

went

through

in

implementing

Revenue

Procedure 99-21 gives rise to the concern that the IRS did not
thoroughly consider the implications of interpreting the word
“physician” as it did, or how applying that definition might thwart
a taxpayer’s ability to show a legitimate mental impairment-based
disability, or how, if the IRS did consider such things, why the
policy should nonetheless be enforced.
Perhaps the IRS is in possession of such information.

On the

present record, though, I am not persuaded that the Court should
defer to the defendant’s view that a psychologist’s statement
describing a mental impairment cannot constitute a physician’s
statement within the meaning of Revenue Procedure 99-21.
None of the authority cited by the defendant compels a
different result.

In Abston v. Commissioner, 691 F.3d 992 (8th

Cir. 2012), the court found that the plaintiff failed to satisfy
the requirements of Revenue Procedure 99-21 because she failed to
submit a physician’s statement at all; the court never considered
the issue of whether a statement from a psychologist might also
suffice. Abston, 691 F.3d at 996 (“Because Abston failed to submit
a physician’s statement altogether, we agree with the district
court that she did not provide the IRS with probative evidence of
financial disability.”).

Similarly, all of the cases cited by the

Abston court and relied on by the defendant either explicitly
involve physical impairments –the sort of impairment one might not
15

Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 16 of 18

consider a psychologist competent to comment on, or make no mention
of the type of impairment, but none discusses the appropriateness
of

relying

on

a

psychologist’s

statement

Procedure 99-21 or section 6511(h).

to

satisfy

Revenue

The defendant does cite to

one case where the Tax Court observed that a psychologist is not
a

physician

under

Revenue

Procedure

99-21.

Commissioner, 97 T.C.M (CCH) 1542 (2009).
the

IRS

itself

appears

to

have

See

Green

v.

In that case, however,

accepted

and

considered

the

psychologist’s letter opining that the taxpayer suffered from a
mental

impairment,

and

instead

argued

only

that

the

facts

demonstrated that the taxpayer was actually able to handle her
financial affairs and thus was not disabled.

Id.

Regardless, the

Tax Court has also noted that revenue procedures are not entitled
to deference where, as here, “[t]here is no reasoning in support
of the conclusion stated in the revenue procedure.”

Corbalis, 142

T.C. at 54.
In sum, I conclude that the defendant’s interpretation of the
term “physician” in Revenue Procedure 99-21 is not entitled to
deference

here.

psychologist’s

I

conclude

statement

the

further

that

plaintiff

to

the

submitted

extent
supports

the
a

financial disability based on a mental impairment, the IRS was not
required to reject it on the ground that it did not constitute a
“physician’s” statement.

Consequently, I find no basis on this

record to deem the plaintiff’s claim for refund untimely under
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section 6511(h), and thus do not agree that the Court lacks
jurisdiction to hear the plaintiff’s suit.4
VI.

CONCLUSION

For the foregoing reasons, it is respectfully recommended
that the defendant’s Motion to Dismiss be DENIED.

The parties are

hereby advised that under the provisions of Federal Rule of Civil
Procedure 72(b), any party who objects to this recommendation must
file specific written objections thereto with the Clerk of this
Court within 14 days of the party's receipt of this Report and
Recommendation.

The written objections must specifically identify

the portion of the proposed findings, recommendations, or report
to which objection is made and the basis for such objections.

4

The

The defendant raises two additional points that merit brief attention. First,
the defendant argues that even assuming a psychologist’s statement is
acceptable, the plaintiff’s claim still fails because the plaintiff did not
submit the statement at the same time he submitted the claim for refund, but
instead submitted it with the estate’s initial appeal. I reject this argument,
as have other courts.
Where refund claims may technically be deficient by
virtue of missing some piece of information, the practice is to accept the
missing information at a later stage so it and the taxpayer’s claim may be
considered. See Abston, 691 F.3d at 995 (where claim for refund was denied as
untimely for failure to submit certain information, plaintiff permitted on
appeal to IRS to submit the missing information); see also Walter v. United
States, 2009 WL 5062391, at *10 (W.D.P.A. Dec. 16, 2009) (“No case has ever
held that a treating physician’s statement that contains a technical deficiency
that is easily corrected is insufficient under 6511(h). On the contrary, there
is a doctrine of allowing informal refund claims that are ‘deficient merely in
one or two of the technical requirements imposed by the Treasury regulation.’
”) (quoting Commissioner v. Ewing, 439 F.3d 1015 (9th Cir. 2006)). Finally,
the defendant argues in a closing footnote, and without citation to any
authority, that it is “questionable” whether the psychologist was qualified to
opine that Carlton Stauffer was disabled where the psychologist appears to have
based his determination in part on the taxpayer’s physical ailments, matters
outside a psychologist’s area of expertise.
The sufficiency of the
psychologist’s statement is not before the Court so there is no need to address
this claim. But, even assuming the psychologist may not have been qualified to
assess the significance of Mr. Stauffer’s physical impairments, it does not
mean that his mental impairments were not sufficient on their own to support a
determination of financial disability.

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Case 1:15-cv-10271-MLW Document 28 Filed 02/14/17 Page 18 of 18

parties are further advised that the United States Court of Appeals
for this Circuit has repeatedly indicated that failure to comply
with Rule 72(b) will preclude further appellate review of the
District Court's order based on this Report and Recommendation.
See Keating v. Secretary of Health and Human Servs., 848 F.2d 271
(1st Cir. 1988); United States v. Emiliano Valencia-Copete, 792
F.2d 4 (1st Cir. 1986); Park Motor Mart, Inc. v. Ford Motor Co.,
616 F.2d 603 (1st Cir. 1980); United States v. Vega, 678 F.2d 376,
378-379 (1st Cir. 1982); Scott v. Schweiker, 702 F.2d 13, 14 (1st
Cir. 1983); see also Thomas v. Arn, 474 U.S. 140 (1985).

/s/ Donald L. Cabell
DONALD L. CABELL, U.S.M.J.
DATED:

February 14, 2017

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