Chaganti et al. v. John Koskinen

Filing 13

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendants motion to dismiss plaintiffs complaint for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) [Doc. #3] is granted. Signed by District Judge Carol E. Jackson on 12/15/2014. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SUREN CHAGANTI, MD, and SPOUSE AS
JOINT TAXPAYERS,

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Plaintiffs,
vs.
COMMISSIONER OF INTERNAL REVENUE,
Defendant.

Case No. 4:14-CV-1450 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on the United States’ motion to dismiss for
lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) and for lack
of service of process pursuant to Fed. R. Civ. P. 12(b)(5).

Plaintiffs have filed a

response in opposition that includes a request for leave to amend the complaint.
I.

Background

On August 20, 2014, Suren Chaganti and his spouse brought this action
against the Commissioner of Internal Revenue as joint taxpayers, claiming that the
Internal Revenue Service (IRS) failed to issue a refund owed to them for tax year
2010.

The United States filed the instant motion for dismissal, asserting lack of

subject matter jurisdiction because of mootness and the plaintiffs’ failure to exhaust
administrative remedies, as well as a lack of service of process on the requisite
governmental agents.
II.

Legal Standards

A motion to dismiss for lack of subject matter jurisdiction under Rule
12(b)(1) of the Federal Rules of Civil Procedure may challenge either the factual
truthfulness or the facial sufficiency of the plaintiff's jurisdictional allegations. Titus

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v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993) (citing Osborn v. United States, 918
F.2d 724, 729 n.6 (8th Cir. 1990)).

“In a factual attack, the court considers

matters outside the pleadings, and the non-moving party does not have the benefit
of 12(b)(6) safeguards.” Osborn, 918 F.2d at 729 n.6. (internal citations omitted).
“In short, no presumptive truthfulness attaches to the plaintiff’s allegations, and the
existence of disputed material facts will not preclude the trial court from evaluating
for itself the merits of jurisdictional claims.

Moreover, the plaintiff will have the

burden of proof that jurisdiction does in fact exist.” Id. at 730 (quoting Mortensen
v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977)).
Rule 12(b)(5) of the Federal Rules of Civil Procedure authorizes a motion to
dismiss on grounds of insufficiency of service of process. A Rule 12(b)(5) motion is
the proper vehicle for challenging the mode of delivery or lack of delivery of the
summons and complaint. 2 James Wm. Moore et al., Moore's Federal Practice §
12.33[4] (3d ed.2010). Rule 4(m) of the Federal Rules of Civil Procedure provides
that if the summons and complaint are not served upon a defendant within 120
days after the filing of the complaint, the Court “must dismiss the action without
prejudice . . . or order that service be made within a specified time.”

“[I]f the

plaintiff shows good cause for the failure, the court must extend the time for
service for an appropriate period.” Fed. R. Civ. P. 4(m).
III.

Discussion

The government first argues that the complaint is subject to dismissal
because the plaintiff’s claim is moot. The government asserts that the relief sought
by plaintiffs—the income tax refund for tax year 2010—has been issued by the IRS.
“Mootness . . . acts as a jurisdictional bar,” since Article III of the Constitution limits

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federal courts’ judicial power to cases and controversies. Ark. AFL-CIO v. F.C.C.,
11 F.3d 1430, 1435 (8th Cir. 1993). “The controversy must be one for which the
court can grant specific and conclusive relief.” Id.
According to the plaintiffs’ income tax return for tax year 2010, filed on or
about May 5, 2011, plaintiffs requested an income tax refund of $25,800. United
States’ Mot. to Dismiss, Ex. 2 [Doc. #4-2]. According to the plaintiffs’ tax account
transcript for tax year 2010, the IRS issued the requested refund in that exact
amount to plaintiffs on or about June 13, 2011. Id. at Ex. 1 [Doc. #4-1]. Plaintiffs
admit to filing their income tax return initially on May 2011, but allege that this
filing was rejected by the IRS as incomplete. Plaintiffs assert they filed a different
return in September 2011 that was accepted by the IRS, but the refund requested
in that filing was not issued.

Plaintiffs did not attach a copy of the purported

second filing to their response to the instant motion.1

Because this is a factual

attack on jurisdiction, “no presumptive truthfulness attaches to the plaintiff[s’]
allegations,” and plaintiffs have the burden to prove that jurisdiction in fact exists.
Osborn, 918 F.2d at 730 (quoting Mortensen, 549 F.2d at 891).

Plaintiffs’ bald

assertions do not satisfy this burden.
In addition, the government argues that subject matter jurisdiction is lacking
because plaintiffs did not first exhaust their administrative remedies by filing a
timely claim for refund with the IRS.

A taxpayer suing the United States for a

refund of federal taxes under 28 U.S.C. § 1346(a)(1) and 26 U.S.C. § 7422 must
first meet certain requirements. First, the taxpayer must pay the tax in full before

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     In their opposition to the instant motion, plaintiffs attached only a copy of a pleading before the United States 
Tax Court with the associated notice of deficiency from the IRS pertaining to tax years 2007 and 2008.  [Doc. #5‐1].  
These years and documents are irrelevant to the plaintiffs’ claim for a refund for tax year 2010. 

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filing suit. Flora v. United States, 357 U.S. 63 (1958). Second, the taxpayer must
timely file an administrative claim for a refund with the IRS. 26 U.S.C. § 7422(a).
A properly executed income tax return constitutes a claim for a refund of an
overpayment of a tax. 28 C.F.R. § 301-6402.3(a)(5). A claim for refund is timely
if filed “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.”
6511(a).

26 U.S.C. §

Third, the taxpayer must wait six months or until the IRS denies the

claim, whichever is earlier, before filing a refund action in district court. 26 U.S.C.
§ 6532(a)(1). Fulfillment of these requirements is essential to establish the district
court's subject matter jurisdiction.
As noted above, the government has provided documentation demonstrating
that plaintiffs filed their income tax return for tax year 2010 in May 2011, and
received their refund in June 2011. Plaintiffs have not provided any proof of any
additional filed claim for a refund for tax year 2010, beyond their conclusory
allegations. Therefore, plaintiffs fail to meet the requisite jurisdictional conditions
under § 7422(a).
Also, plaintiffs’ claim for a refund for tax year 2010 is untimely under §
6511(a). Plaintiffs filed their 2010 tax return on or about May 5, 2011, and their
tax for 2010 was deemed paid on April 15, 2011.2 The deadline for plaintiffs to file
a claim for a refund for tax year 2010 thus expired on or about May 5, 2014.
Plaintiffs argue that the statute of limitations was expressly extended at the request
of the Commissioner and agreed to by both parties.

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However, plaintiffs did not

 “Any tax actually deducted and withheld at the source during any calendar year . . . shall, in respect of the 
recipient of the income, be deemed to have been paid by him on the 15th day of the fourth month following the 
close of his taxable year . . . .”  26 U.S.C. § 6513(b)(1). 

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attach or provide any documentation reflecting this purported agreement.

The

government states that it has no record of such an agreement for extension, and
any notation of the alleged agreement is conspicuously absent on the plaintiffs’ tax
account transcript for tax year 2010. 26 U.S.C. § 6532(a) (stating the time limit
prescribed in § 7422(a) may be extended upon an agreement in writing between
the taxpayer and the Secretary of Treasury).

Furthermore, even if the statutory

time limit under § 6511 had been extended, plaintiffs would still need to have
actually filed the claim for refund as required by § 7422(a) within the extended
time limit; they have not shown or alleged they took this requisite action.
Therefore, plaintiffs’ claim also fails as untimely and hereafter statutorily barred.
The United States has not otherwise waived its sovereign immunity. United
States v. Dalm, 494 U.S. 496, 608 (1990) (“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.’”) (quoting United States v. Testan,
424 U.S. 392, 399 (1976)).

As such, plaintiffs have failed to meet their burden

under Rule 12(b)(1) in response to the government’s factual challenge to
jurisdiction.

Because subject matter jurisdiction is lacking, the Court need not

consider the sufficiency of plaintiffs’ service of process, or lack thereof, on
defendant.

Additionally, plaintiffs have not demonstrated that an amendment of

the complaint would cure the jurisdictional defect.
amend is denied.
* * * * *
For the reasons set forth above,

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Therefore, their request to

IT IS HEREBY ORDERED that defendant’s motion to dismiss plaintiffs’
complaint for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1)
[Doc. #3] is granted.

____________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 15th day of December, 2014.

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