Commissioner v. Lundy

PETITIONER:Commissioner
RESPONDENT:Lundy
LOCATION:Denver Area Consortium

DOCKET NO.: 94-1785
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 516 US 235 (1996)
ARGUED: Nov 06, 1995
DECIDED: Jan 17, 1996

ADVOCATES:
Glenn P. Schwartz – Argued the cause for the respondent
Kent L. Jones – Department of Justice, argued the cause for the petitioner

Facts of the case

During 1987, Robert F. Lundy and his wife had $10,131 in federal income taxes withheld from their wages. This amount was substantially more than what the Lundys owed in taxes that year, but they did not file their 1987 tax return when it was due, nor did they file a return or claim a refund of the overpaid taxes in the following 2 1/2 years. In 1990, the Commissioner of Internal Revenue mailed Lundy a notice of deficiency for 1987. Subsequently, the Lundys filed their joint 1987 tax return, which claimed a refund of their overpaid taxes. Lundy also filed a petition in the Tax Court seeking a redetermination of the claimed deficiency and a refund. The Commissioner contended that the Tax Court lacked jurisdiction to award Lundy a refund, arguing that if a taxpayer does not file a tax return before the IRS mails the taxpayer a notice of deficiency, the Tax Court can only award the taxpayer a refund of taxes paid within two years prior to the date the notice of deficiency was mailed. The Tax Court agreed, finding also that 2-year “look-back” period applies. In reversing, the Court of Appeals found that the applicable look-back period in these circumstances is three years and that the Tax Court had jurisdiction to award a refund.

Question

Can the Tax Court award a refund of taxes paid more than two years prior to the date on which the Commissioner of Internal Revenue mailed the taxpayer a notice of deficiency, when, on the date the notice of deficiency was mailed, the taxpayer had not yet filed a return?

William H. Rehnquist:

We’ll hear argument now in Number 94-1785, Commissioner of Internal Revenue v. Robert F. Lundy.

Mr. Jones.

Kent L. Jones:

Mr. Chief Justice and may it please the Court–

The tax court is an Article I court of limited jurisdiction.

This case concerns the limitations on the jurisdiction of the tax court to award refunds.

When a taxpayer commences a suit in tax court to review an asserted deficiency, the court may then also determine whether an overpayment was made.

Section 6512(b)(3) of the Internal Revenue Code, however, provides three detailed jurisdictional limits on the amount of the refund that the court may award.

Under section 6512(b)(3)(A), the court may award amounts paid after the notice of deficiency is issued.

Under 6512(b)(3)(C), the court may award amounts for which a claim for refund was made before the notice of deficiency was issued, but when, as in this case, there was neither subsequent payment or a prior refund claim, section 6512(b)(3)(B), which this case concerns, limit the jurisdiction of the tax court to award amounts that would be refundable under 6511(b)(2) if on the date the notice of deficiency was issued a claim for refund had been filed.

In turn, 6511(b)(2) allows a refund of amounts paid within 3 years prior to the claim for refund only if the claim for refund was made within 3 years from the time of the taxpayer’s return, but when–

Sandra Day O’Connor:

Mr. Jones, in subsection (B) that you’re referring to it says that no credit or refund will be allowed unless it was paid within the period which would be applicable under 6511(b)(2)(C), or if on the date of the mailing of the notice of deficiency a claim had been filed, whether or not filed.

Now, that language is just incomprehensible.

What does that parenthetical mean?

Does it mean if it isn’t filed we can deem it to have been filed?

Kent L. Jones:

–That’s… what it means is that, whether or not a claim for refund had actually been filed, the court is to apply these statutes as if a claim for refund was filed on that date.

That was… no one has doubted, I think, that that is the meaning of that provision.

Sandra Day O’Connor:

And is that what should be done in this case?

Kent L. Jones:

Yes.

In this case, because the taxpayer had failed to file a return before the date of the notice of deficiency, 6512(b)(3)(B) operates, and what it operates to do is to require the court to apply 6511(b)(2) as if a claim for refund was filed on the date the notice of deficiency was issued.

David H. Souter:

Why does it say, whether or not, since subsection (C) covers the case in which it had been filed before that?

Kent L. Jones:

Yes, it… subsection (C) applies if a claim had been filed before that date.

Subsection (B) says you are to assume a claim is filed on that date, whether or not one had been filed.

David H. Souter:

Why didn’t it just say that it wasn’t, or if it wasn’t?

Kent L. Jones:

I think one of the reasons it might put it that way is because if you read the rest of subsection (B) it goes on to say, a claim based upon whatever grounds the tax court determined an overpayment was made.

Now, what that refers to is a basic distinction between district court and tax court jurisdiction.

David H. Souter:

Oh, I see.

Kent L. Jones:

The district court only has jurisdiction to consider a judicial claim that is based upon precisely the administrative claim.

If there’s any material variance between the district court claim and the administrative claim, the district court claim has no jurisdiction, but in the tax court there is no requirement of an administrative claim.

The court may award a refund based upon any ground for which it determines an overpayment.

David H. Souter:

Well, in that respect the taxpayer is better off to be in the tax court.

Kent L. Jones:

It… the taxpayer has a broader refund argument in the tax courts.

He has whatever argument he can come up with, but the price that is paid is that the amount of refund that can be awarded is subject to the very specific and detailed jurisdiction provisions–

John Paul Stevens:

Mr. Jones, can I ask you a question about (B), the same… the one that is at issue here?

It says, if a refund claim had been filed.

Now, if on that date… I guess it was September 26, 1990… before receiving a notice of deficiency the taxpayer had decided that he ought to file a refund claim because he realized that they had overwithheld, what document would he have then filed?

Would it not have been a return?

Kent L. Jones:

–He could have filed a return, but–

John Paul Stevens:

What else?

Is there any–

Kent L. Jones:

–Yes.

John Paul Stevens:

–other form that the IRS uses that would have enabled him to claim a refund without filing a return?

Kent L. Jones:

I think the right answer to your question is that courts have routinely held that refund claims can be submitted informally, that they don’t have to be on a return–

John Paul Stevens:

But is there any Internal Revenue form that provides for seeking a refund without filing a return?

Kent L. Jones:

–There are… there isn’t an Internal Revenue form that, of course, is exactly what you’ve described, a return that includes a claim for refund.

There’s also–

John Paul Stevens:

But is there an Internal Revenue form that seeks a refund without filing a return?

I don’t think there is, but if there is, would you identify it for me?

Kent L. Jones:

–It would be the amended return form.

John Paul Stevens:

The amended return form, which is a kind of return.

Kent L. Jones:

It is an amended return.

John Paul Stevens:

But there’s no way, is there, to file a claim for refund at that date without also filing a return?

Kent L. Jones:

No, sir, I’m sorry, I must disagree.

The courts have routinely held that you can file a refund claim informally.

John Paul Stevens:

But there’s no form.

There’s no regular IRS form that the average taxpayer who has overwithheld can go to the office and say, would you give me the refund form.

What would he get?

Kent L. Jones:

There’s no IRS form, but there is… but you don’t have to use an IRS form to make a refund claim, according to the courts.

John Paul Stevens:

How is the average taxpayer to know that?

If he went to the IRS, what would they tell him to do?

If he went to a lawyer, what would he tell him to do?

Kent L. Jones:

If they went to the IRS, the IRS would probably ask him to file a return–

John Paul Stevens:

Correct.

Kent L. Jones:

–which this taxpayer hasn’t done.

Ruth Bader Ginsburg:

And that raises a question, Mr. Jones.

As I understand it, this provision, as you read it, favors the taxpayer when the taxpayer has filed a return.

We get into this problem with the taxpayer who hasn’t filed a return, and at some point in the exchanges between the IRS and the Service, the taxpayer was told, file your return soon, and if you don’t, then we’ll prepare a substitute return for you.

Can you explain how that would have played out if the Service, instead of sending the notice of deficiency, had first filed a substituted return for the taxpayer?

Kent L. Jones:

A substituted return is… it’s lingo, if you’ll pardon the expression.

It is not a return.

A substituted return is simply an internal document that the IRS prepares to set forth their calculations based upon what they think the taxpayer’s liability is.

The return that 6511 refers to is specifically the return filed by the taxpayer.

Ruth Bader Ginsburg:

So that substituted return would not have counted–

Kent L. Jones:

No.

It would–

Ruth Bader Ginsburg:

–to serve as the return.

Kent L. Jones:

–It cannot be the taxpayer’s return.

Anthony M. Kennedy:

Does the taxpayer get a copy of the substituted return?

Kent L. Jones:

It isn’t sent to the taxpayer.

What’s sent to the taxpayer is the notice of deficiency, which includes the calculations.

Whether the taxpayer can see the underlying basis for it, I don’t have any doubt that they can see it, but I don’t believe that it’s routinely sent.

Anthony M. Kennedy:

But they don’t attach the substituted return to the notice of deficiency.

They have the same calculation, but not the form.

Kent L. Jones:

I can’t say definitively.

I’m sorry, Justice Kennedy, I don’t know, but what I am confident about is that this thing that we call a substituted return is not a return of the taxpayer, it is simply… for example, a taxpayer, we might have a W-2.

It might show some information about income and withholdings.

That might have been all that we know.

For example, that might have been all that we know in this case, and based upon that limited knowledge, we “prepare a substituted return”, but what we’re really doing is filling in the blanks as best we know.

The definition of a return in the code I think is best described in 6611(h), which talks about a return in processable form.

A return… it must be a document filed by the taxpayer that purports to be a return, and that contains all of the information from which the taxpayer’s entire liability–

John Paul Stevens:

But does the code define the term, claim, as used in this section?

Kent L. Jones:

–A claim for refund has been defined judicially.

John Paul Stevens:

I… that wasn’t my question.

Kent L. Jones:

I’m not familiar with a definition of a claim for refund in the–

John Paul Stevens:

Well then, why should we look at the definition of return?

We’re asking… the question is, what does the word claim mean in this section–

Kent L. Jones:

–Well, Justice–

John Paul Stevens:

–and you’ve just told me the only way you can file a claim is by filing a return–

Kent L. Jones:

–No, sir, I didn’t.

John Paul Stevens:

–but yet the claim doesn’t include the term, return.

Kent L. Jones:

I did not say that.

The courts have held quite clearly that you can file a claim informally, and you don’t have to use a return, and let me be specific, a claim for refund–

John Paul Stevens:

You can file a claim informally without first having filed a return?

Kent L. Jones:

–Absolutely.

A claim for refund–

John Paul Stevens:

What case gives us an example of that?

Kent L. Jones:

–In our brief, in our reply brief we cite the Salzman Treatise, which elaborates a lot of cases that deal with this subject.

A claim is–

Ruth Bader Ginsburg:

Do I understand correctly that it wouldn’t have made any difference as long as he didn’t file a return?

Kent L. Jones:

–Yes.

Ruth Bader Ginsburg:

As you read the statute, he must have filed a return first.

He could have filed a formal, informal, all the claims in the world, and on your reading of the statute it would not have made any difference.

What he had to file, what he didn’t file before the notice of a deficiency was not a claim, but a return.

Kent L. Jones:

That’s absolutely correct.

The statute makes the distinction between taxpayers who have been delinquent in filing returns and taxpayers who have not, and by its very words it provides an abbreviated period of recovery for taxpayers who have not filed a return before the notice of deficiency was issued.

Sandra Day O’Connor:

Mr. Jones, other than this, rather unusual circumstances of this case, is there any other time that the 2-year look back period would apply under this subsection?

Kent L. Jones:

Well, it applies whenever–

Sandra Day O’Connor:

Does it apply only to circumstances of this case, and in no other instance?

Kent L. Jones:

–It applies routinely when the taxpayer has not filed a return before the notice of deficiency is issued.

That would be the… you only get the 3-year look back if you have filed the return before the claim for refund arises.

Sandra Day O’Connor:

Now, has the IRS been totally consistent in its position and interpretation of this statute?

Sandra Day O’Connor:

It seems rather inconsistent with the position the Government took in the Miller case in the Ninth Circuit, and with the Revenue Ruling 76-511.

Kent L. Jones:

There’s a long answer to that question which I’d like to give, and I’d like to try to give it in a logical order.

The first part of the answer to the question is, has the Government been consistent about tax court cases, and the answer to that is plainly yes.

Since 1957, in Revenue Ruling 57-354, which is quoted at page 48 of the petition appendix, the Commissioner has stated that the status of a claim for refund must be determined as of the time it is filed and that if, as the time it is filed, no return has then been filed, you only get a 2-year look back period.

The tax court has consistently reached the same conclusion under its own jurisdiction since the early 1970’s.

The suggestion that our position in this case is newly minted simply ignores this historical record, and moreover, factually, the suggestion of respondent that we would routinely pay refund claims in this context is demonstrably incorrect, as the tax court found, because 6512(a) of the Internal Revenue Code says that if a notice of deficiency is issued, and the taxpayer files a claim in tax court, then no refund or credit shall be allowed except as the tax court determines, so in tax court cases the Commissioner has no administrative authority to award a refund.

We are deprived of it by statute.

Now, the question that you’re really, I think, focusing on is, have we been the same about district court cases and tax court cases, and I think… there’s a short answer to that and a long explanation.

The short answer is, it is not perfectly clear whether in each and every situation the refund periods are supposed to be the same in district court and tax court cases, and there is no basis for assuming that Congress intended them to always be the same, and I’d like to explain the latter part first.

There’s no reason to think Congress necessarily intended the same periods always to apply in district court and tax court.

Ruth Bader Ginsburg:

Mr. Jones, may I derail you just for a moment to go back to where you were in the tax court?

One might wonder whether the Commissioner was always consistent in the tax court because part of the history of this case that initially this taxpayer, that the answer in the… to the petition in the tax court didn’t raise a time bar, and in fact the taxpayer got a letter that said, you’re going to get a refund check, and then it was over a year after the initial answer that the amendment was made to assert the time bar.

Kent L. Jones:

I believe that you’ve accurately described the facts, Justice Ginsburg, but I also believe that the Commissioner raising the defense in this case is something that he has… she, in this case, has consistently done since the issue has been presented.

The fact that there may have been a delay in it’s assertion in this case–

Ruth Bader Ginsburg:

It’s not just a delay.

There just wasn’t… there was an answer.

The time bar was obvious from the start, and yet over a year went by without this being asserted.

Kent L. Jones:

–It is… I think it’s fair to say that it’s relatively common for defenses to be amended, for answers to be amended, and I would hope the Court wouldn’t draw any inference from that in this case.

There’s really no reason to.

I mean, as I emphasized just a point ago, we don’t have authority to make a refund in a tax court case unless the tax court has determined an overpayment, so we have to… when we think a refund might be appropriate, we have to submit an agreed order that falls within the jurisdiction of the tax court.

It may have been… and I’m speculating here.

It may have been that in preparing a draft of some kind of agreed order to submit in this case, that it then occurred to counsel, oh, wait a minute, this case isn’t within the tax court’s jurisdiction.

It may be that that’s the mechanics that led to this being asserted at the time that it was.

Now–

John Paul Stevens:

Mr. Jones, can I just follow up, because I didn’t think I got a complete answer to my question.

I asked if there were cases involving claims for refunds such as the notations… and you referred on pages 14 and 15 of your reply brief… in which those informal claims had been made without there having previously been filed any return at all.

Kent L. Jones:

–And I–

John Paul Stevens:

And which of those do you think fits that category?

Kent L. Jones:

–I’m sorry, Justice Stevens, I cannot tell you, as I stand here, which of those cases might involve those facts, but I would like–

John Paul Stevens:

Do you think any of them involve that?

Kent L. Jones:

–I would think they might well, and I would be speculating, but let me point out, because you seem… this is something important to you, and I want to emphasize it.

Congress wrote this statute.

Congress wrote it anticipating that there would be situations where claims for refund were filed at a time when no return had been filed.

John Paul Stevens:

How do you know that?

Kent L. Jones:

I know that because section 6511 (a) provides a limited look back for situations where the claim for refund is filed at a time that no return had been filed.

John Paul Stevens:

Correct.

Kent L. Jones:

So Congress anticipated that claims for refund could, in fact, be filed where no return had been filed, and provided for a 2-year look back period and, in fact, that’s this case.

John Paul Stevens:

That would be that no return had previously been filed.

Kent L. Jones:

Absolutely.

John Paul Stevens:

But that doesn’t mean that there could be cases in which the claim for refund could ever be filed without simultaneously filing a return.

Kent L. Jones:

If the claim for refund and the return were filed simultaneously–

John Paul Stevens:

Which they normally would be.

Kent L. Jones:

–Which they often are.

John Paul Stevens:

Normally.

Kent L. Jones:

Most… ordinarily may be, but certainly or not necessarily required–

John Paul Stevens:

Except that you can’t give me an example in adjudicated cases of one having been filed without the other.

That is, of the claim for refund having been filed without the return, which seems to me makes it very reasonable to assume that when Congress used the term, claim, they used it to apply to the document on which the claim is normally made.

Kent L. Jones:

–Justice Stevens, if we were to assume that a claim for refund and a return was the same thing, then very little–

John Paul Stevens:

Oh, I don’t suggest that at all.

I’m just suggesting that you cannot file a claim for refund without also having either previously or simultaneously filed a return.

Kent L. Jones:

–Well, Justice–

John Paul Stevens:

And you haven’t given me a contrary example.

Kent L. Jones:

–Well, this is such a case.

Congress imputed the claim for refund, but setting that aside, Justice Stevens, frankly you would have to write out almost all of 6511(a) to support that view, because first of all the second clause of the first sentence of 6511(a) said that, and if the claim for refund is filed at a time when no return has been filed, then you get a 2-year look back period.

So to suggest… I mean, you can’t suggest that Congress didn’t think that a claim for refund and a return were independent documents that could be filed in different orders.

Congress clearly contemplated that, and clearly also provided an abbreviated period, an abbreviated look back period for the taxpayer who fails to file the return before he files the refund claim.

Antonin Scalia:

Mr. Jones, can I ask something about the Government’s theory of why, when the return is later filed, after the deficiency has been assessed, you do not thereupon get the benefit of the 3-year period?

I think I may disagree with you as to the reason, though perhaps not as to the result.

Kent L. Jones:

Well, the reason that we see is that section 6512(b)(3) provides a detailed set of answers to these questions.

It says that you can base a refund on a refund claim filed before–

William H. Rehnquist:

Where are you reading from, Mr. Jones?

Kent L. Jones:

–6512(b)(3)(C) says that you can award a refund based upon a prior refund claim filed before a notice of deficiency.

6512(b)(3)(B) says you can award a refund based upon a claim assumed to arise on the date of the notice of deficiency.

There is no basis for engrafting onto this statute an additional refund jurisdiction for subsequent refund claims, which is what the court of appeals theories would require.

You’d have to be adding a clause to the statute, and you’d be adding a clause to the statute that would contradict the clauses that would already exist.

Now, this Court has said on several occasions that the jurisdictional limitations on refunds are limited waivers of sovereign immunity that must be strictly applied and strictly adhered to by the judiciary.

In this case, the court of appeals acknowledged that it was not applying the statute as Congress wrote it.

The court said, we will not use the imputed refund claim under 6512(b)(3)(B) to decide whether a 2-year or 3-year look back period applies, but that is precisely what Congress told them to do.

Stephen G. Breyer:

You just before were saying… you were asked the question, has the Government always been consistent.

Kent L. Jones:

Yes, Your Honor.

Stephen G. Breyer:

And then you said, it’s been consistent in the tax court, and then you said, well, in the court of claims for the refunds, it seems to be a little different, and I was wondering if you’d said everything you wanted to say there, or if you wanted to say a little more–

Kent L. Jones:

I’d like to try to briefly describe that, because time is limited.

There is no reason to think they have to be the same.

The jurisdiction of the tax court and the district court have always been different.

The district court had a common law jurisdiction to award refunds against the collector, had a statutory authority, ultimately had a statutory authority to award claims against the United States long before the tax court came into existence, and when the tax court came into existence, it was only allowed as an administrative wing in the Treasury Department to review the notice of deficiency.

It couldn’t even talk about overpayments until 1928, and it wasn’t until 1988, just 7 years ago, that the tax court was allowed to enter an order requiring that a refund be made.

Moreover, as I’ve already described, the jurisdiction of the courts is different, even as we stand here, because of the variance of the claim doctrine, and so there’s no reason to assume, ab initio, that in establishing or in merging these disparate jurisdictions, that… and in using the terminology that is peculiar to tax court litigation in doing so, that you’re always going to reach the same result.

Stephen G. Breyer:

–It’s still a little odd, though, isn’t it, in the–

Kent L. Jones:

At most, it’s odd–

Stephen G. Breyer:

–I take it… it’s April 15, for the last year, right.

This is right.

Then you have… if you file your return within 2 years, you’re home free.

Kent L. Jones:

–Yes.

Stephen G. Breyer:

No problem.

If you wait till after 3 years, you’ve had it.

Kent L. Jones:

In either court.

Stephen G. Breyer:

In either court.

Now we’re talking about that key middle year between 2 years and 3, and if you go into the tax court, on your reading of it, it’s a race.

If they get the deficiency notice out before you file your return, you only get the 2-year look back, so you’ve had it.

If you’re in the court of claims… is that right?

Kent L. Jones:

No, I don’t think so.

It’s not a race.

I don’t want you to ever think it’s a race.

Stephen G. Breyer:

I don’t mean to be pejorative.

Kent L. Jones:

Let me explain why… because they don’t have to go to tax court.

Stephen G. Breyer:

No, no, wait.

If… I didn’t mean… I mucked it up by saying this pejoratively.

I’m just trying to find out what happens.

In the tax court, during that key year… nothing’s happened, 2 years have gone by.

Now, during the next year, if the notice of deficiency comes out, forget it.

If, before the notice of deficiency comes out, the taxpayer wakes up and files his return, then you get back the 3 years.

That’s correct, isn’t it.

But in the court of claims, if the notice of deficiency comes out, the taxpayer can wake up then and file the return, and then he’ll get the 3-year look back.

Kent L. Jones:

I don’t think there’s an answer to the last part of your point, and that’s what I’d like to address.

In the Ninth Circuit decision in the Miller case, the Court concluded that these refund periods were identical in district court and tax court cases.

But they’re wrong, aren’t they?

Kent L. Jones:

I think–

Stephen G. Breyer:

I mean, that’s because they did that, they thought you could file a return forever, but they forget if you file a return 50 years later, you’re only going to get 3-year look back.

Kent L. Jones:

–I don’t think that they are obviously wrong.

I think that they make a textual point, and I need to argue both sides of this, and I want to explain that at the beginning, because my point is, the essential point is, it doesn’t matter.

It isn’t critical.

What’s critical in this case is, what is the tax court’s jurisdiction.

Ruth Bader Ginsburg:

But what does matter is your approach to reading this statute, and I understand what you say about the tax court.

You’ve got to apply this literally.

Kent L. Jones:

That’s right.

Ruth Bader Ginsburg:

And yet Judge Wiggins didn’t apply the limitation there applicable literally.

He seemed to be looking for some… one of the reasons that he gave for a construction that as far as I can see varied from what you said in your revenue ruling, one of the reasons that he gave is there ought to be symmetry between the tax court and the district court claims court.

Kent L. Jones:

Yes, and our first point is that there is no reason to assume there’s symmetry when both the history and the text of the provisions is not symmetrical… are not symmetrical.

David H. Souter:

You’ve given us an example of symmetry, of a symmetry in the taxpayer’s favor in the tax court–

Kent L. Jones:

That’s correct.

David H. Souter:

–and answered my question.

May I ask you another technical question which probably doesn’t matter either, but if the taxpayer had let 2 years go but had filed no return, more than 2 years had passed since the last tax payment, then made an administrative claim and followed that by going into the district court, he would be in exactly the same position he’s in here, wouldn’t he?

He’d be out.

He couldn’t… he couldn’t file his claim in the district court, and then say, oh, wait a minute, I forgot to file a return–

Kent L. Jones:

Oh, I see.

David H. Souter:

–and then file a return and get the 3-year period.

On your reading he’d be just as stuck as he is here.

Kent L. Jones:

The subsequent return would not affect the prior refund claim.

It wouldn’t validate the timing of the prior refund claim.

Because it’s–

Kent L. Jones:

Because the statute says that.

David H. Souter:

–Because the reading of the, within 3 years from–

Kent L. Jones:

That’s correct.

–implies before.

Kent L. Jones:

That’s what the Richards court said–

David H. Souter:

So he’d be in the same boat, in my hypo, in the district court that he’s in here.

Kent L. Jones:

–That is correct.

But let me–

Anthony M. Kennedy:

Could he… in Justice Souter’s hypothetical could he dismiss the district court action and start all over again?

Kent L. Jones:

–Hypothetically, and then we’d have the problem that Miller addresses, and the only thing I want to say about Miller in the brief time that’s remaining is that the Service has ruled to the contrary about district court cases that even a late return might allow a 3-year look back period in the district court, but I do want to point out that that ruling doesn’t explain its analysis.

We don’t know, in reading it, whether it’s based upon a textual analysis or upon administrative grace.

We don’t have administrative grace in tax court cases.

That’s another difference between tax court and district court cases.

Ruth Bader Ginsburg:

The Revenue Ruling, you say you don’t know whether that’s administrative grace, that’s why… but the Revenue Ruling for that particular taxpayer, because of the 3-year look back period, came out that the taxpayer didn’t get the refund.

Kent L. Jones:

On the facts of that ruling.

Ruth Bader Ginsburg:

And wouldn’t that have been the same thing in Miller, that… wouldn’t the tax–

Kent L. Jones:

No, I don’t… I’m sorry.

I believe in Miller the return was filed more than 2 but less than 3 years after its due date, whereas in the ruling it involved a return filed more than 3 years after its due date.

These are very… the intricacies of the intertwining of these provisions are complicated.

I just want to end by explaining once again that on this Court’s decisions, what we should look at is the jurisdictional provisions of the tax court.

Kent L. Jones:

They should not be amended, they should be enforced, and–

John Paul Stevens:

–Mr. Jones, you do have… even in tax court cases, you would have administrative discretion, the week before sending a notice of deficiency, to send a letter to the taxpayer saying we’re about to file a notice of deficiency.

You’ll get 3 years if you promptly file a return.

That you could do, couldn’t you?

Kent L. Jones:

–What we did do was, 90 days before we issued the notice of deficiency–

My question is, you could do that, couldn’t you?

Kent L. Jones:

–we told him that we were about to.

John Paul Stevens:

And if he’d been smart enough, he then could have filed a return right away and been protected.

Kent L. Jones:

The tax court opinions on this are of long standing, Justice Stevens.

I would like to reserve–

John Paul Stevens:

But I just want to be sure, I am correct, he could have protected himself then by immediately filing a return, couldn’t he?

Kent L. Jones:

–Hypothetically, he could have protected himself.

John Paul Stevens:

And you would have had administrative discretion to tell him that that option was open to him, would you not?

Kent L. Jones:

Justice Stevens, I have to answer that question yes, because obviously we would have discretion to tell every taxpayer everything we know, if we had the time.

I would like to reserve the balance of my time for rebuttal.

William H. Rehnquist:

Very well, Mr. Jones.

Mr. Schwartz, we’ll hear from you.

Glenn P. Schwartz:

Mr. Chief Justice, and may it please the Court–

Justice Stevens identified the core issue in the interpretation of 6512(b)(3)(B).

The key question is, what is meant by the word claim in that statute?

Under the interpretation of the IRS, the claim is a defective claim, because if Congress intended, and it must have, that that claim be valid, then it would have to be on a Federal income tax return for the following reasons.

A return is required to be filed under 6011, but 6011 does not define what a return is, nor do the regulations, but the case law has–

William H. Rehnquist:

Well, the Solicitor General said that the code does define a return.

You’re saying that the code doesn’t define a return.

Glenn P. Schwartz:

–The code does not define a return, Your Honor.

David H. Souter:

But the one thing the code clearly does is distinguish, at least in 6511, between claim and return, so presumably it… there is no reason, I guess, to assume that it was… that it was assuming a possible identity.

Glenn P. Schwartz:

Your Honor, a claim and a return can be different documents.

For example, for taxes other than an income tax, Form 843 is used, the claim for refund form.

Prior 1976, a Form 843 claim could be used in lieu of an amended return, but whereas here an original return has not been filed, a valid claim for refund, and Congress must have meant that that claim be valid, must be on a Federal income tax return for these reasons.

David H. Souter:

Before you give me the reasons, would you respond to this (b)(3)(C) deals specifically with the case in which a return has been filed.

David H. Souter:

Doesn’t that suggest that claim in (b)(3)(B) was referring to a claim in which a return had not been filed?

Glenn P. Schwartz:

I don’t believe so, Your Honor.

I… the proper… the question is, what does Congress mean by claim in (b)(3)(B)?

That’s the question, and it has to mean a valid claim.

William H. Rehnquist:

Well, certainly you’d read (C), which comes right along next to it and also contains the word claim, in deciding what claim means in (B).

They’re not totally independent sections.

Glenn P. Schwartz:

That’s correct, Your Honor, but the claim in (B) still has to be a valid claim, and I would like to explain what a valid claim has to be.

Antonin Scalia:

Before you do that, you’ve left me in some confusion.

I was astounded to hear you say that Justice Stevens had put his finger on the crux of the question.

The point he raised was not raised in your brief, as far as I know.

Glenn P. Schwartz:

Oh, yes, Your Honor, I devoted–

Antonin Scalia:

He claimed… well, he is questioning whether the claim might not constitute a return.

Your brief doesn’t say that the claim constituted the filing of the return.

To the contrary, it says the later filing of the return constitutes the claim.

That’s quite different, it seems to me.

Well, which is it?

Glenn P. Schwartz:

–Your Honor–

Antonin Scalia:

I mean, do you think the claim constitutes the return, or the later return constitutes the claim?

Glenn P. Schwartz:

–Your Honor, we have alternative arguments.

The–

[Laughter]

Our first argument is that the statute doesn’t provide for a deemed claim at all, it provides a reference date for application of the limitation period.

Antonin Scalia:

Yes, I understand that.

That has nothing to do–

Glenn P. Schwartz:

All right… okay.

Antonin Scalia:

–with what’s the claim and what’s the return.

But I thought your brief–

Glenn P. Schwartz:

Your Honor–

Antonin Scalia:

–as far as the word claim and return, I thought your position was the later return was the claim.

Glenn P. Schwartz:

–We’ve devoted four or five or six pages of our brief to the question of, if it is assumed that there is a deemed claim, if that’s what the language means, and we don’t concede that, then the deemed claim must have been a valid claim, and the only valid claim that could be filed under these circumstances–

Antonin Scalia:

Is the later return.

Glenn P. Schwartz:

–is a return.

Antonin Scalia:

Yes, and that’s not what Justice Stevens was questioning about at all.

Either you misunderstood him, or–

Glenn P. Schwartz:

Perhaps I misunderstood him, but the core issue with respect to this statute is what is meant by the word claim.

Claim has to mean return.

Claim, again, is not defined in the statute or in the regs, but the regs under 6011 do say that you should make returns in accordance with the applicable Treasury regulations.

Now, a claim… a return has been defined under case law as meaning any document which contains sufficient information to allow the IRS to determine tax liability.

Now, the IRS in its construction of this section has ignored… in every brief it submitted to the tax court, the Fourth Circuit and this Court, the last phrase of the statute treats it as surplusage, stating the grounds upon which the tax court finds that there’s an overpayment.

In fact, the IRS went so far as to excise it from its quotation of the statute on page 5 of its reply brief, but this language is important, because if the claim referred to in 6512(b)(3)(B) states the grounds upon which the tax court finds that there is an overpayment, that would constitute the same information that would be on a return, because the–

Antonin Scalia:

–The Government’s position is that (b)(3)(B) doesn’t refer to any real claim.

It’s a hypothetical claim.

Glenn P. Schwartz:

–Well, it’s… even if it’s a hypothetical claim, it has to be something, and it has to be a valid claim.

A valid claim has to be a return.

The statutory language requires that it state the grounds upon which the tax court finds there’s a overpayment.

In this very case, the IRS employed the taxpayer’s return to determine that there was, in fact, an overpayment.

Sandra Day O’Connor:

Mr. Schwartz, under your interpretation, when would section 6512(b)(3)(B) ever act as a bar to claiming a refund?

Glenn P. Schwartz:

Your Honor, if the notice of deficiency was mailed more than 3 years from the due date of the return, that would be at a time when the taxpayer could not have–

Sandra Day O’Connor:

But you don’t look to that subsection to give me that answer.

What… when would that subsection serve as a bar under your view?

Glenn P. Schwartz:

–I don’t understand the question, Your Honor.

The–

Sandra Day O’Connor:

It just seemed to me that under your interpretation, (b)(3)(B) just would never apply to give effect to your–

–It’s never a bar, but it’s a tolling provision, isn’t that your answer?

Glenn P. Schwartz:

–Your Honor, our view of 6512(b)(3)(B) is that it’s basically… if the statute of limitations was open to the taxpayer on the date that the notice was mailed, then it’s open to him in the tax court, that he… the tax court can grant him a refund, so if the notice was mailed after 3 years from the due date, then under no circumstances could the taxpayer recover.

Sandra Day O’Connor:

Well, I think everybody agrees with that.

So the statute of limitations wouldn’t have run, on your theory, but the bar to recovery of money would have.

Glenn P. Schwartz:

That’s correct.

The statute of limitations on filing, in theory, as Justice Breyer suggested, that goes on forever.

Treasury Reg 6402-3(a)(5) says that a return showing an overpayment constitutes a claim for refund, and it’s deemed filed on the same day, so a return filed several years after the due date would be a timely claim, but the limitation on amount would limit the taxpayer to the amount paid in the 3 years preceding the filing of the return, so there’s no danger of stale claims, and there’s no danger of a stale claim here.

Glenn P. Schwartz:

The second reason that this–

Ruth Bader Ginsburg:

On that… in that same vein, then can you tell us under what circumstances the 2-year look back would apply when the Commissioner… when the Commissioner sends a notice of deficiency?

The Commissioner sends a notice of deficiency.

When would the 2-year look back ever come into play?

Glenn P. Schwartz:

–The 2-year look back would come into play the same way it would come into play if we were not dealing with the tax court, and that is where the 2 years from the date the tax is paid provides for a longer period of limitation than 3 years from the date the return was filed, and that could come up in connection with an audit.

For example, if a taxpayer, 1990 tax year, his due date is April 15, 1991.

That’s the date that the taxes are paid, and pursuant to an audit 2 years later he makes an additional payment.

He has 2 years to claim a refund for the taxes paid pursuant to the audit, but only 3 years to claim the taxes that were paid on the due date.

Ruth Bader Ginsburg:

So your view of the 2-year look back is, it can only work to the taxpayers advantage–

Glenn P. Schwartz:

That is correct.

Ruth Bader Ginsburg:

–when it turns out to be longer than the 3 years from the return filing.

Glenn P. Schwartz:

That is correct.

In the case of a return required tax, the only 2-year rule that applies is the first 2-year rule.

Antonin Scalia:

How do you square your notion that claim means a valid claim, that is, a claim accompanying a return, with the language of 6511(a), which says a claim for credit or refund of an overpayment in respect to which the taxpayer is required to file a return shall be filed within 3 years, blah, blah, blah, and then at the end of that sentence, or if no return was filed by the taxpayer within 2 years from the time the tax was paid.

That clearly contemplates a claim being made without a return having been filed.

Glenn P. Schwartz:

Your Honor, there are several reasons why that second 2-year rule does not apply to a taxpayer who’s required to file a return.

Antonin Scalia:

I’m not… I don’t want to know when the 2-year rule… I want to know how it squares with your notion that when the statute says claim, it means a valid claim, that is, a claim accompanied by a tax return.

That’s your principle.

Glenn P. Schwartz:

My principle is that a valid claim for refund where no original return has been filed must be on a tax return.

Antonin Scalia:

Must be on a tax return.

Well, that doesn’t square with the language of 6511(a).

It clearly contemplates a claim where no return has been filed.

Glenn P. Schwartz:

That’s for nonreturn required taxes.

That second 2-year rule is for nonreturn required taxes, such as transferee liability.

Antonin Scalia:

It doesn’t read that way.

Claim for credit of any tax in respect of which tax, the taxpayer is required to file a return.

Where are you reading from?

6511(a).

Glenn P. Schwartz:

Your Honor, may I explain?

The… there are two or three reasons why that second 2-year rule where no return has been filed does not apply to Mr. Lundy.

Glenn P. Schwartz:

The first is, if… the first 3-year rule, 3 years from the date the return is filed, or 2 years from the date the tax is paid, whichever is later, covers all possible situations, because if you assume that an original claim could be filed that was not a return, it would be covered by that first 2-year rule, making the second 2-year rule surplusage.

The second reason is, if the… if it was possible to file a claim for refund that… where no original return has been filed, it would be limited by the first 2-year rule, because the first 2-year rule would provide a longer period of time than the 3-year rule, so that the second 2-year rule would be surplusage.

The second reason is, if, as the IRS contends, that the first sentence of 6511(a) applies to return required taxes, including the second 2-year rule, or if no return was required, and the second sentence of 6511(a) applies to stamps, then there’s no rule to recover nonreturn required taxes, so that second 2-year rule, which is surplusage for a return required tax, must apply to nonreturn required tax.

Third, as originally enacted in 1954, the statute provided for a limitation period of 3 years from the due date.

It was an absolute minimum 3-year period, so that that second 2-year rule, or if no… 2 years from the date the tax was paid if no return was filed, could not possibly apply to a return required tax.

In fact, the tax court in this very case stated that under the ’54 code as originally enacted, the taxpayer would have been entitled to a refund even under the deemed claim theory because it was filed within 3 years from the due date.

Now, Congress in 1958 extended that period of time.

The amendment in 1958 was to improve the taxpayer’s position to provide that he would be able… because the Commissioner could assess a deficiency within 3 years from the date the return was filed, but the taxpayer was limited to 3 years from the date the return was due, so as the tax court acknowledged that he could have recovered under the language as originally enacted, the tax court judge acknowledged that the purpose of the ’58 amendment was to extend the time for filing, and yet what the tax court said was, somehow Congress did not perhaps analyze all the effects of this language.

And Your Honor, I submit that this legislative history is convincing evidence that a taxpayer is entitled to a minimum of 3 years.

Stephen G. Breyer:

I don’t really see how you avoid the language.

I mean, it’s… I’ve been struggling with it.

It seems just like somebody says… to your son you say, I’ll give you all the ice cream you could have eaten at the drug store if you’d been there.

I mean, if, it sort of means… I can’t get it work any other way.

It’s working like a that.

It’s working like, I’ll tell you how much I’ll give you.

I’ll give you the amount you could have eaten if you’d been there.

And then if you twist it around the way you want to twist it, the thing sort of hangs in the air.

I can’t figure out how to get there.

Glenn P. Schwartz:

You’re talking about the–

Stephen G. Breyer:

Of (B), the key language here, 6512(b)(3)(B).

Glenn P. Schwartz:

–Oh–

Stephen G. Breyer:

It looks like… the question, it seemed to me is whether that comma after (d) means that you should read the if like a which, whereas they want to read it like a that, and I don’t see how you can avoid it, to tell you the truth.

I put that so you can explain to me how you could.

One way is, you get the word claim to mean refund, you see.

I mean, you get… not refund, return.

You get the word claim to include a return.

That would do it, except you run into problems elsewhere across the page, where they quite clearly distinguish it.

Glenn P. Schwartz:

–Well–

Stephen G. Breyer:

But I can’t think of any other way to do it.

Glenn P. Schwartz:

–Your Honor, I d like to get back to the claim.

Glenn P. Schwartz:

I would like to address–

Stephen G. Breyer:

Yes.

Yes, if claim includes return, then you’ve got it.

Glenn P. Schwartz:

–Right.

There’s two–

Stephen G. Breyer:

But the difficulty with that is that only the section before they talk about claims and they talk about returns, and there’s a whole phrase there that doesn’t make too much sense unless they mean to leave open the possibility that you could have a claim that didn’t have a return.

Glenn P. Schwartz:

–Well–

Stephen G. Breyer:

But then is there any other… are you… is there any other reading of this language that gets you where you want?

Glenn P. Schwartz:

–Well, the legislative history.

Stephen G. Breyer:

I understand… I like legislative history, too, but nonetheless you do have to deal with the language that they enacted, and that’s why I’m looking to see is there any other reading of that language, other than a claim including the word return, that will get you where you want to go.

Glenn P. Schwartz:

Well, Your Honor, the IRS has contended that the language is plain throughout the litigation, but it is not plain.

Our interpretation of the statute is that… the statute doesn’t say, as if a claim was… had been filed, or assuming that.

Stephen G. Breyer:

It doesn’t.

It says, if.

Glenn P. Schwartz:

If.

That’s right.

I–

Glenn P. Schwartz:

And if is a conditional.

Stephen G. Breyer:

–Yes.

Well, you can use it, though, and that’s why I use the ice cream example, I’ll give you all you could have eaten if you’d been there.

That’s all… that doesn’t mean, if you had been there, then something else would have happened.

It’s a limitation.

It means how much you’re going to get.

So we use the word if sometimes like that.

Glenn P. Schwartz:

In this context, Your Honor… the problem has arisen because Congress took the short cut of incorporating the general statute of limitations under 6512, and the triggering points, the triggering points for the limitation periods in 6511 are couched in terms of claim for refund, because an administrative claim for refund is a prerequisite to the granting of an administrative refund or the jurisdiction of the district court.

So it… the statute’s not self executing when it’s incorporated by reference into 6512, and so there had to be a reference to the word claim to trigger the limitation periods in 6511, because the taxpayer would not have filed a claim for refund in the tax court because that’s not a prerequisite, and this has always been interpreted as a reference date for application of the limitation periods in the tax court, so that if the statute was open to the taxpayer on that date, if he could have filed a timely claim for refund on the date that the notice was mailed, he’s entitled to a refund in the tax court.

That’s the understanding of Congress.

On page 22 of our brief, we quote from a 60… 1963 Senate report, and it says, since the 1954 enactment, moreover, the Internal Revenue Service has in practice interpreted the law as permitting the refund of amounts where valid claims have been timely filed, as well as where those claims could have been filed on the date of the mailing of the notice of deficiency.

William H. Rehnquist:

What did the 1962 Senate report accompany?

Glenn P. Schwartz:

It accompanied the addition of a provision that allowed… the provision accompanied (b)(3)(C), which allows the tax court to grant a refund where the claims have been filed prior to the mailing of the notice of deficiency.

William H. Rehnquist:

That’s not one of the sections involved here.

Glenn P. Schwartz:

It’s not, but this clearly indicates the existence of a longstanding administrative practice and Senate approval–

William H. Rehnquist:

Well, it indicates the approval by a Senate committee of something that has been done over a period of years, or that the Senate committee thinks has been done over a period of years.

I mean, are we supposed to take that as a substitute for reading the statutes and the rulings?

Glenn P. Schwartz:

–No, Your Honor, but I think a fair reading of the statute is that there is no deemed claim, that it’s a reference date so that the taxpayer is… if he could have filed a valid claim for refund on the date the notice was mailed, he’s entitled to a refund.

William H. Rehnquist:

That’s a plausible argument.

I don’t think much is added to it by quoting a 1962 Senate report.

Glenn P. Schwartz:

Well, Your Honor, there’s other evidence of the longstanding administrative practice of the Service to grant refunds under these circumstances.

For one, I would… the explosion of cases that occurred since 1991 and 1992, this Court in Fribourg Navigation stated that where you have an explosion in litigation where before there was none, it is strong evidence of the longstanding administrative practice.

You have the facts of this very case, where once the taxpayer dropped his petition in the mail box, under the IRS theory of this case, he was barred by the statute of limitations, and yet the IRS answered the complaint, they dealt with him for a year, they made him submit 160-some pages of documents–

Anthony M. Kennedy:

Well, I don’t think he was barred by the statute of limitations.

Assuming that he made a tremendous amount of money and filed a return 10 years down the line, I assume that… and that return had been filed promptly, I assume that within the period of that look back he could have gotten the earlier refund that he was seeking, couldn’t he, or am I wrong about that?

Glenn P. Schwartz:

–No, Your Honor.

Once he petitions the tax court under 6512(a) he’s precluded from thereafter going to the district court, so he was out of luck, and once he filed that petition in the tax court, he had no way of ever getting his refund back.

Anthony M. Kennedy:

Well, I guess I’m assuming that he promptly dismisses and then later on makes money, pays the money, and then asks for some of it back.

Glenn P. Schwartz:

But the tax court acquires deficiency and refund jurisdiction the moment that the taxpayer files his petition in response to the notice.

Once that occurs, he’s thereafter barred from going to the district court and seeking a refund, so he sort of got caught in the crack.

Antonin Scalia:

He can’t dismiss?

Glenn P. Schwartz:

No.

Once the tax court acquires jurisdiction, that’s it.

He’s out of luck.

Antonin Scalia:

He cannot dismiss–

–I understand this–

–He cannot dismiss the suit that he brought?

Glenn P. Schwartz:

He’s not bringing the suit.

He’s responding to the notice of deficiency.

Antonin Scalia:

I understand, but he’s the one that takes the initiative in getting it before the tax court.

Glenn P. Schwartz:

Your Honor, my understanding is that once he files a petition, that’s final.

The tax court acquires jurisdiction, and thereafter the tax court is precluded… excuse me, the taxpayer is precluded from ever going to another court.

David H. Souter:

Well, what is your… do you have a textual basis for that understanding that he cannot dismiss?

Glenn P. Schwartz:

6512(a), Your Honor.

David H. Souter:

Does it say he can’t dismiss?

Glenn P. Schwartz:

I don’t have the statute in front of me–

Okay.

Glenn P. Schwartz:

–but it precludes him from thereafter filing a suit in the district court.

David H. Souter:

So long as he stays in the tax court, but if he gets out of the tax court–

Glenn P. Schwartz:

He can’t get out of the tax court, Your Honor.

David H. Souter:

–He cannot dismiss.

Glenn P. Schwartz:

That’s correct.

Ruth Bader Ginsburg:

But in answer to the question about, couldn’t you revive a stale claim by paying a little bit years down the road, don’t you… aren’t you still bound by the look back period that you can’t go more than 3 years… you can’t get back money that you paid more than 3 years ago?

Glenn P. Schwartz:

You mean assuming that he somehow would be able to file a refund suit?

Ruth Bader Ginsburg:

In other words, doesn’t the look… the very purpose of the look back provision to stop that kind of thing where you, many years down the road, pay a small piece, a small overpayment, claim that back, and then… and use that as leverage to go 7 years back to get the rest of the overpayment?

Isn’t that the very purpose of having these look back provisions?

Glenn P. Schwartz:

Yes, but the look back rule is the teeth of the limitation provisions, and prevents stale claims.

But Your Honor, this case is very much like Williams, because the very purpose of the tax court is to assist taxpayers like Mr. Lundy to allow him to contest an asserted deficiency without first… without prepaying, and yet, once he filed his petition in the tax court, he was in a position where he had no realistic alternative, and no remedy, because his only choice once that notice of deficiency is mailed to him is either to prepay the tax and file a suit in the district court, or go to the tax court, where he forfeits his refund, so that remedy–

Antonin Scalia:

Maybe that’s one of the penalties for not filing a tax return when you’re supposed to.

I mean, there are all sorts of penalties.

Isn’t it conceivable that this is one of them?

Glenn P. Schwartz:

–Your Honor, there are penalties.

There’s a penalty for late filing, 6651, but confiscation of your refund is not one of those penalties.

Antonin Scalia:

Well, that remains to be seen.

I mean–

[Laughter]

But the mere notion that this is unthinkable doesn’t strike me as self evident.

I mean, we begin with a taxpayer who didn’t file a tax return when he should have.

Glenn P. Schwartz:

That’s correct, Your Honor, but if we assume that Mr. Lundy had a neighbor in the same position who overpaid his ’87 income taxes, the return was due on April 15, ’88, and he also was late filing, but he never got a notice of deficiency, he filed on the same date, on December 28, more than 2 but less than 3 years, he’d get his refund.

Mr. Lundy didn’t.

Or–

David H. Souter:

Which is an inducement to the taxpayer to get moving.

I mean, you can’t say it’s irrational.

Glenn P. Schwartz:

–But Your Honor–

Ruth Bader Ginsburg:

No taxpayer would be in this bind if they filed the tax return with 2 years, is that right?

Glenn P. Schwartz:

–That’s correct, but Congress has afforded taxpayers a 3-year grace period, and this is taken away from them by the mailing of a notice of deficiency.

Why–

Ruth Bader Ginsburg:

That’s the question.

Has Congress done that, or has Congress said, if you wait beyond 2 years, you’re in jeopardy of getting that notice of deficiency first.

Glenn P. Schwartz:

–But Congress has not said that.

That’s nowhere to be found in the statute.

William H. Rehnquist:

That’s what we’re arguing about in this case, I take it.

Glenn P. Schwartz:

Well, Your Honor–

Stephen G. Breyer:

I still don’t see how you read the statute… I mean, you know, I… it makes sense for Congress to say, everybody gets 3 years.

It also makes sense to say, if you don’t file your return, you get 2 years.

Maybe they ought to say, 2 years if you don’t file your return, 3 years if you do.

Maybe it’s a little different, whether it’s… but what does it say?

I can’t work out… I mean, I can’t figure out any way to get it–

Glenn P. Schwartz:

–Our interpretation is that the taxpayer is in the same position in the tax court as he would be in the district court, the claims court, or filing an administrative claim for refund.

Antonin Scalia:

–How would Congress have said what the Government says it said more clearly than what is here?

You apparently… I gather from an earlier comment you apparently think it would have been, the problem is that (3)(B), what was it, 6512(b)(3)(B) does not say, as if on the date of mailing, but just if on the date of the mailing, but it couldn’t possibly say as if.

Within the period which would be applicable, as if on the date of the mailing?

No.

I mean, the way to say what the Government says it says is precisely what is written here, within the period that would be applicable under section 6511 if on the date, not as if.

I wouldn’t put an as in there.

They would be totally incoherent.

Glenn P. Schwartz:

But that’s what the Government does in all of its briefs.

They say, as if–

No, no–

Glenn P. Schwartz:

–assuming that.

Antonin Scalia:

–No, you say that it requires as if, in order to get their interpretation, but it seems to me their interpretation is precisely what’s written there… within the period which would be applicable if the notice of deficiency had been filed.

I don’t know how you get an as if there.

It doesn’t make sense at all.

Glenn P. Schwartz:

The language is not clear, Your Honor.

My time is limited.

I–

It seems perfectly clear to me.

Glenn P. Schwartz:

–My time is limited.

I’d like to take the opportunity to persuade you that the claim should be considered a return.

There are two other reasons that claim in this context must be considered to be return.

Treasury Reg 6502-2(b) requires that a claim contain the detailed statement of the grounds upon which the claim is based.

That, again, is the same information that if on a document submitted to the IRS under case law and under a ’74 revenue ruling would constitute a return and finally, and most important, Regulation 6402-3(a)(1) requires, whereas here no original return has been filed, that the taxpayer must file his claim on a return.

So the IRS is asking you to ignore its own regulations and treat the claim referred to in 6512(b)(3)(B) as a defective claim, and I think that’s an impermissible construction.

I think you have to attribute to Congress an intent that that claim is a valid claim.

John Paul Stevens:

Whereas I guess you take the position that in 6511(a) the term claim can include valid claims and invalid claims that have to be corrected to become valid, and the 2-year rule would apply to the invalid claim.

Glenn P. Schwartz:

Well, Your Honor–

John Paul Stevens:

And then if… you know, one filed without a return.

Glenn P. Schwartz:

–Well, I think the key thing here is that a claim filed on a return, that a return showing an overpayment, is the equivalent of a claim under the Treasury regs… own regulations.

Thank you.

William H. Rehnquist:

Thank you, Mr. Schwartz.

Mr. Jones, you have 2 minutes remaining.

Kent L. Jones:

Thank you.

The principal contention that Respondent raises here was not addressed by the court of appeals and has not been accepted by any court.

That contention is that a claim for refund and a return are synonymous concepts.

Congress plainly didn’t intend that.

They use the terms quite distinctly and separately.

They make the periods of limitation and the refund periods depend upon which came first and how long apart they were, so to reach the conclusion that respondent seeks would literally make nonsense out of 6511(a), 6511(b), and 6512(b).

No court has supported that assertion.

The suggestion that somehow this problem would be cured if the respondent could have filed a timely claim is simply off the point.

A taxpayer can always file a claim for refund at any time, but that doesn’t alter the limitations that apply when the refund claim is filed.

For example, in this case, if they had filed… if respondent had filed a refund claim on the date the notice of deficiency was issued, he would have been limited to the 2-year refund period, because as of that date he had filed no return.

Respondent simply ignores what’s the principal dilemma that he faces.

That is, that he was delinquent in filing his return, and Congress made that delinquency relevant in determining the refund jurisdiction of the tax court.

Antonin Scalia:

–The question, Mr. Jones… you can answer yes or no… can a taxpayer dismiss a petition filed with the tax court?

Kent L. Jones:

If I could answer yes or no–

Once a tax court has him–

Kent L. Jones:

–Justice Scalia, I certainly would.

I have to admit, I don’t know.

I have looked at 6512(a).

It doesn’t say.

It simply says that when you have this tax court case, no other court can decide whether there’s a refund, and neither can the Commissioner.

It doesn’t say whether that case could be dismissed and a subsequent case filed.

It’s possible the Commissioner has taken a position on that, so I’m reluctant to make an argument on it not knowing what position we may have taken.

Thank you very much.

William H. Rehnquist:

Thank you, Mr. Jones.

The case is submitted.