Stocker et al v. United States of America
OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
ROBERT W. STOCKER II, et al.,
File No. 1:09-cv-955
HON. ROBERT HOLMES BELL
THE UNITED STATES OF AMERICA,
This matter is before the Court on Plaintiffs’ motion for summary judgment, (Dkt. No.
19), and on Defendant’s cross motion to dismiss for lack of jurisdiction (Dkt. No. 29). For
the reasons stated below, Defendant’s motion to dismiss will be granted, and Plaintiffs’
motion for summary judgment will be denied as moot.
Plaintiffs Robert W. Stocker II and Laurel A. Stocker brought this action to recover
an alleged overpayment of Internal Revenue taxes. Plaintiffs maintain that they are entitled
to a refund or credit in the amount of $64,058 based on a net-loss-carryback deduction
arising out of a March, 2007, settlement between the government and Windward
Communications II, an entity in which the Plaintiffs had invested and lost money. (Dkt. No.
19 at 3.)
Whether or not Plaintiffs did, in fact, overpay $64,058 in taxes has not been the issue
of contention between the parties.1 The dispute focuses instead on whether Plaintiffs timely
filed their amended 2003 return as required by law. Michael Flintoff (CPA) and Karrin
Fennell testified at deposition that they timely prepared and provided Mr. Stocker with
Plaintiffs’ 2006 state and federal tax returns, as well as their amended 2003 state and federal
returns (claiming entitlement to refunds of $7,768 and $64,058, respectively) on October 15,
2007, along with written and verbal reminders that the returns were all presently due. (Dkt.
No. 19 at 4-5, 17-18.) Mr. Stocker testifies that, after receiving the returns, he immediately
proceeded to a post office and mailed all four claims with full knowledge that the then
present day of October 15, 2007, was the deadline for filing the claims. (Dkt. No. 19 at 4.)
In addition to this testimony, Plaintiffs note their recurring habit of filing tax returns on
October 15, and point out that the three returns prepared by Mr. Flintoff which are not the
subject of this suit were all received by the appropriate agencies and accepted as timely
postmarked on October 15, 2007. (Dkt. No. 19 at 17-18.) Plaintiffs argue that, taken
together, this evidence establishes that Plaintiffs’ amended 2003 federal return was also
mailed on October 15, 2007.2
Although Defendant does not concede that Plaintiffs overpaid taxes in 2003, Defendant has
declined to investigate the matter in light of its position that Plaintiffs are time barred from seeking
Additionally, Mr. Stocker maintains that he sent the amended returns by certified mail, but that the
postal representative was unable to date stamp a certified-mail receipt because Flintoff & Klein,
Plaintiff’s tax preparers, had placed the returns in postage-prepaid envelopes and retained the
customer receipts. (Dkt. No. 19 at 5.) At any rate, the incomplete certified mail receipt attached to
Plaintiffs’ motion for summary judgment (Dkt. No. 22, Ex. Q) bears no postmark.
Defendant contends that the Internal Revenue Service (“IRS”) did not receive
Plaintiff’s 2003 amended return until October 25, 2007, and that the postmark date on the
envelope containing Plaintiffs’ amended 2003 return was October 19, 2007. (Dkt. No. 28
at 3-4.) However, Defendant admits that the IRS did not retain the actual envelope that
contained Plaintiffs’ amended return. (Id. at 4.) As the envelope bearing an official
postmark has been lost or destroyed, Defendants rely instead on the date stamp marked on
the amended return itself. The stamp reads “ENVELOPED POST MARKED OCT. 19
On November 27, 2007, the IRS disallowed Plaintiffs’ refund claim on the basis that
it was not postmarked on or before the October 15, 2007, deadline. (Dkt. No. 19 at 8.) On
June 23, 2008, Michael Flintoff requested in writing that the IRS reconsider its rejection of
the Plaintiffs’ refund claim. (Id. at 9.) The IRS rejected the request on September 26, 2008.
Plaintiffs commenced this action seeking judgment in the amount of their alleged
overpayment on October 15, 2009. Plaintiffs now move for summary judgment on the
grounds that the evidence presented unequivocally establishes that Plaintiffs timely filed their
amended 2003 return on October 15, 2007, and that Defendant has not contested the merits
of their claimed overpayment in the amount of $64,058. Defendant moves for dismissal
under Federal Rule of Civil Procedure 12(b)(1) and (2) on grounds that Plaintiffs’ amended
return was not timely filed, consequently depriving this Court of jurisdiction to hear
As Defendant’s cross motion to dismiss under Rule 12(b)(1) and (2) raises the
question of this Court’s jurisdiction, the Defendant’s motion must take precedence in the
Court’s analysis. The preliminary and, in this case, dispositive question before the Court is
whether Plaintiffs can establish that they timely mailed their amended 2003 return on or
before October 15, 2007.
A plaintiff may bring suit against the United States to recover any “tax alleged to have
been erroneously or illegally assessed or collected . . . .” 28 U.S.C. § 1346(a)(1). However,
a plaintiff must also satisfy the claim for refund requirements of 26 U.S.C. § 7422 and the
timeliness requirements of 26 U.S.C. § 6511. See United States v. Dalm, 494 U.S. 596, 6012 (1990).
Section 7422(a) states that “no suit 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 Secretary, according to the
provisions of law in that regard.” To be “duly filed,” a claim for refund must be timely under
§ 6511, which requires taxpayers to file a claim for refund within three years from the date
that they filed their return. 26 U.S.C. §6511; Comissioner v. Lundy, 516 U.S. 235, 239
(1996). The government is free to place these statutory restrictions as it is well settled that
the United States of America, as sovereign, may not be sued without its consent, and that the
terms of its consent define the Court’s jurisdiction. United States v. Testan, 424 U.S. 392,
399 (1976); United States v. Sherwood, 312 U.S. 584, 586 (1941); United States v. Shaw, 309 U.S.
495, 500-01 (1940).
For Plaintiffs, who filed their 2003 return on October 15, 2004, the three-year cutoff
date for filing an amended return was October 15, 2007. Plaintiffs do not dispute that they
have the burden of establishing jurisdiction, and that in order to meet that burden, they must
demonstrate that they duly filed their amended 2003 return on or before October 15, 2007.
(Dkt. No. 30 at 7.) To this end, Plaintiffs offer affidavits and circumstantial evidence
supporting their emphatic contention that Plaintiff Robert Stocker II did in fact mail the
amended 2003 return on October 15, 2007. (Dkt. No. 19 at 2-6, 17-19.)
Defendant argues that the evidence offered by Plaintiffs is belied by the date stamp
marked on the return after receipt of the return by the Internal Revenue Service on Oct. 25.
More importantly, Defendant argues that all of the evidence presented by Plaintiffs to
establish a timely Oct. 15, 2007, postmark date is inadmissible under binding Sixth Circuit
precedent, rendering Plaintiffs unable to meet their burden in establishing jurisdiction.
In general, a federal tax return is deemed filed on the date that it is actually received
by the IRS. Miller v. United States, 784 F.2d 728, 730 (6th Cir. 1986). This is known as the
“physical delivery rule.” Id. (citing Phinney v. Bank of the Sw. Nat’l Ass’n, Houston, 335
F.2d 266, 268 (5th Cir. 1964)). In 1954, Congress added § 7502 to the Internal Revenue
Code (Title 26) to remedy inequities resulting from delay in mail deliveries in various parts
of the country. Id. That section created two exceptions to the physical delivery rule. 26
U.S.C. § 7502;3 Surowka v. United States, 909 F.2d 148, 150 (6th Cir. 1990); Miller, 784
F.2d at 731. “First, if any return is required to be filed by a certain date, and is received after
26 U.S.C. § 7502 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
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.
(2) Mailing requirements.--This subsection shall apply only if--(A) the
postmark date falls within the prescribed period or on or before the prescribed
date -- (i) for the filing (including any extension granted for such filing) of the
return, claim, statement, or other document, or (ii) for making the payment
(including any extension granted for making such payment), and (B) the return,
claim, statement, or other document, or payment was, within the time
prescribed in subparagraph (A), deposited in the mail in the United States in
an envelope or other appropriate wrapper, postage prepaid, properly addressed
to the agency, officer, or office with which the return, claim, statement, or
other document is required to be filed, or to which such payment is required
to be made.
(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.
that date, the date of the United States postmark shall be deemed the date of delivery.
Second, if a document is sent by registered or certified mail, such registration or certification
shall be prima facie evidence that the document was delivered on the date of the postmark.”
Schentur v. United States, 4 F.3d 994, 1993 WL 330640, at *4 (6th Cir. 1993) (Table
The § 7502 exceptions are not available to Plainitiffs. The first exception is of no
help, as the envelope bearing the relevant postmark was lost or destroyed by the IRS. Nor
does the second exception apply, as Plaintiffs did not send their return by registered mail or
obtain a postmark on a certified mail receipt.
Nevertheless, Plaintiffs argue that the
affidavits and circumstantial evidence which they present establish that their amended 2003
return was mailed on October 15, 2007, and that this is sufficient to satisfy the filing
requirements of 26 U.S.C. §§ 7422 and 6511.
Relying on the Sixth Circuit’s decision in Miller v. United States, 784 F.2d 728, 730
(6th Cir. 1986), Defendant argues that Plaintiffs are prohibited from relying on evidence
extrinsic to § 7502 to establish that their amended return was timely filed. Defendant
maintains that, in this circuit, the specific exceptions to the physical delivery rule laid out in
§ 7502 are the only acceptable alternatives for establishing a timely filing, and that the
evidence presented by Plaintiffs is therefore immaterial. In Miller, the plaintiff-taxpayer
sought a $53,663 refund. 784 F.2d at 729. The taxpayer alleged that he timely mailed his
claim for a refund, but the IRS had no record that the claim was received. Id. Despite the
fact that the taxpayer offered proof extrinsic to § 7502 that he timely mailed his return, the
District Court dismissed the case on jurisdictional grounds. The Sixth Circuit affirmed.
“Because the Court concludes that the only exceptions to the physical delivery rule available
to taxpayers are the two set out in section 7502, we hold that the District Court was correct
in granting defendant’s motion to dismiss for lack of subject matter jurisdiction.” Id. at 731.
Plaintiffs try to distinguish Miller on grounds that, unlike here, the IRS never received
Miller’s amended tax return. The Miller Court reasoned that the plaintiff failed to satisfy the
first exception created by § 7502 because the IRS did not actually receive the amended
return, as 7502(a)(1) requires. Id. at 730. Because the IRS never received the return, and the
taxpayer did not use registered or certified mail, the § 7502 sections did not apply. The same
scenario and reasoning were repeated in Surowka v. United States, 909 F.2d 148 (6th Cir.
1990), where once again a taxpayer claimed that he timely filed his tax return by regular mail,
but the IRS had no record of receiving the return. Plaintiffs believe that the IRS’s receipt of
Plaintiffs’ return in this case is a highly significant distinction, and that Miller and Surowka
should not be applied to the present case. For support, Plaintiffs refer to a bankruptcy court
decision in the Eastern District of Tennessee, which stated that “[t]he Sixth Circuit has only
refused to allow a taxpayer to present extrinsic evidence other than a registered or certified
mail receipt when the IRS has sufficiently proven that the documents in question were not
received.” In re Conner, 187 B.R. 217, 219-20 (Bankr. E.D. Tenn. 1995); But see Schentur
v. United States, No. 92-3605, 1992 WL 95798 (6th Cir. Aug. 30, 1993).
Plaintiffs’ reading of Miller is selective. Miller and Surowka did indeed hold that the
first exception to the physical delivery rule created by § 7502 can only be satisfied when the
document in question is actually delivered. That particular holding has no relevance here.
However, the broader holding of the two cases is that the two § 7502 exceptions are the sole
exceptions to the physical delivery rule, and that evidence extrinsic to § 7502 may not be
offered as proof of a timely mailing in an effort to bypass the physical delivery rule. Miller,
784 F.2d at 731 (“[T]he only exceptions to the physical delivery rule available to taxpayers
are the two set out in section 7502); Surowka, 909 F.2d at 149-50 (“The exception embodied
in section 7502 and the cases construing it demonstrate a penchant for an easily applied,
objective standard. Where, as here, the exception of section 7502 is not literally applicable,
courts have consistently rejected testimony or other evidence as proof of the actual date of
mailing.”) (citations omitted) (emphasis added). The fact that Plaintiffs in this case fail the
first § 7502 exception for a different reason than the plaintiffs in Miller or Surowka does not
provide a basis for ignoring the broader holding of those cases.
This Court’s reading of Miller is directly supported by the Sixth Circuit’s decision in
Schentur . Although the Sixth Circuit’s opinion in Schentur is unpublished and therefore not
binding upon this Court, it confirms this Court’s determination that Miller and Surowka
require the exclusion of evidence extrinsic to § 7502 for purposes of evading the physical
delivery rule. In Schentur, as here, the IRS did receive plaintiff-taxpayers’ amended returns
but did not retain the postmarked mailing envelopes. 1992 WL 95798 at *1. The Schentur
plaintiffs submitted affidavits as evidence that they timely filed their returns. The Sixth
Circuit ignored the plaintiffs’ extrinsic evidence, holding, “[P]laintiffs do not meet either [§
7502] exception. The postmarks from the returns were destroyed and are not available as
evidence. Moreover, plaintiffs did not use registered or certified mail to file their returns.
Thus, without looking to the affidavits, the returns were filed as a matter of law when they
were actually received by the IRS . . . .” 4
The plaintiffs in Miller and Surowka failed under the first § 7502 exception because
their tax returns were never received by the IRS. The plaintiffs in Schentur and the Stockers
fail under the first exception because the envelopes containing their tax returns were lost or
destroyed, and therefore no postmark is available as proof. All of these plaintiffs fail under
the second § 7502 exception because they did not utilize registered or certified mail. And
none of these plaintiffs are permitted to rely on evidence extrinsic to § 7502 for the purpose
of evading the physical delivery rule.
The Court is sympathetic to Plaintiffs’ case. It is the fault of the IRS that the
postmarked envelope which contained Plaintiffs’ amended return is not available. Defendant
Plaintiffs argue that Schentur may not necessarily stand for the exclusion of extrinsic evidence, as
it appears the District Court weighed the evidence provided by the plaintiffs in that case. However,
regardless of whether the District Court in Schentur considered extrinsic evidence, it is clear that the
Sixth Circuit panel did not. At oral argument before the panel, the government argued “that the
affidavits produced by plaintiffs were insufficient to establish their claim because the only ways to
establish delivery to the IRS are a postmark or a certified or registered mail receipt.” Shentur, 1993
WL 330640 at *3. The Sixth Circuit agreed, and held as a matter of law that the physical delivery
rule governed the case “without looking to the affidavits.” Id. at *4. The fact that the Stockers’
extrinsic evidence, if admissible, would likely be more convincing than that of the Schenturs is also
argues that the IRS was under no obligation to preserve the envelope5 and that the date stamp
of Oct. 19 is an acceptable substitution for the lost postmark. The Court disagrees. In the
Court’s view, the date stamp touted by Defendants is just as extrinsic to § 7502 as the
evidence presented by Plaintiffs. Unfortunately for Plaintiffs, it is they who carry the burden
of proving the timely delivery of their return.
Miller and the parallel Second Circuit decision in Deutsch v. Comm’r of Internal
Revenue, 599 F.2d 44 (2nd Cir. 1979), cert. denied, 444 U.S. 1015 (1979) have been
criticized for allowing sloppiness on the part of the government, and several courts have
taken a more permissive view of § 7502. See, e.g., Phila. Marine Trade Ass’n-Int’l
Longshoremen’s Ass’n Pension Fund v. Comm’r, 523 F.3d 140, 151 (3d Cir. 2008) (“The
Second and Sixth Circuit Courts, contrary to what we decide today, have seemingly
concluded that § 7502 preempts the common-law mailbox rule even where the taxpayer does
not need § 7502’s protection.”); Anderson v. United States, 966 F.2d 487, 491 (9th Cir. 1992)
(“Neither the language of the statute nor Ninth Circuit precedent bars admission of extrinsic
In contradiction to Defendant’s claim, Plaintiffs point to the IRS’s manual, which requires that
employees “[a]lways attach envelopes and stamp receive date on . . . [a]ll returns specifically sorted
as ‘Amended’ . . . returns.” Reliance on a date stamp without an original postmark is less than
desirable, as courts have noted that the IRS is not immune to human error. Gless v. United
States ex rel. IRS (In re Gless), 179 B.R. 646, 653 (Bankr. D. Neb. 1995) (refusing to assume
that an IRS computer printout was accurate where the IRS failed to preserve the actual
documents as required by the Internal Revenue Manual); Harzvi v. United States, 73-2 U.S.
Tax Cas. (CCH) P9712, 1973 U.S. Dist. LEXIS 12117, at *5 (E.D.N.Y. Aug. 29, 1973)
(“The IRS employees' faith in the perfection of their system is commendable, but the court
is not persuaded that IRS index records are the only man-made records that are free from
evidence to prove timely delivery.”); Estate of Wood v. Comm’r, 909 F.2d 1155, 1159 (8th
Cir. 1990) (“To the extent that the Sixth and Second Circuits in Miller and Deutsch hold that
a presumption of delivery can never be used to satisfy the requirement of delivery in section
7502(a)(1), we disagree.”); Lee Brick & Tile Co., Inc. v. United States, 132 F.R.D. 414, 419
(M.D.N.C. 1990) (“Importantly for this case, in the Fourth Circuit, the court specifically held
that enactment of Section 7502 did not eliminate the prior judicially created common law
presumption of delivery by proof of mailing.”); Sorrentino v. IRS, 383 F.3d 1187, 1193 (10th
Cir. 2004) (“I am not prepared, based upon § 7502's plain language, to hold a taxpayer may
never prove delivery to the IRS of the “undelivered return” in the absence of a registered,
certified, or electronic mail receipt.”).
However, the fact remains that Miller and its progeny are binding upon this Court.
Carroll v. Comm’r, 71 F.3d 1228, 1232 (6th Cir. 1995) (“A number of judges voted in favor
of rehearing [of Miller and Surowka] (it may come as no surprise to the attentive reader that
the author of the present opinion was among them), but the number was less than a
majority.”); Schentur, 1992 WL 95798 at *6 (Nelson, J., concurring) (“If I were free to do
so, I would follow Anderson and Wood. Under § 10.2 of the Court Policies of this circuit,
however, the Surowka and Miller decisions, both of which have been published in the
Federal Reporter, are binding on this panel.”); In re Crump, 282 B.R. 859, 863 (Bankr. N.D.
Ohio 2002) (“This rule, although it has been criticized on the grounds that it allows
sloppiness by the IRS, has on several occasions been reiterated by the Sixth Circuit Court of
Under binding Sixth Circuit precedent, the statutory exceptions created by 26 U.S.C.
§ 7502 are the only alternatives to the physical delivery rule for establishing delivery of a
federal tax return. Plaintiffs cannot avail themselves of the § 7502 exceptions. Therefore,
Plaintiffs amended 2003 return is deemed delivered on October 25, 2007, the day it was
actually received by the IRS. Because Plaintiffs have failed to show that they timely filed
their amended 2003 return pursuant to 26 U.S.C. §§ 7422 and 6511, this Court lacks
jurisdiction to hear this case, and Defendant’s cross motion to dismiss pursuant to Rule
12(b)(1) and (2) will be granted. Plaintiffs motion for summary judgment will be denied as
moot. An order corresponding with this opinion will be entered.
Dated: June 20, 2011
/s/ Robert Holmes Bell
ROBERT HOLMES BELL
UNITED STATES DISTRICT JUDGE
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