us/1768099.json

"{\"id\": \"1768099\", \"name\": \"Heinz HABER, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee\", \"name_abbreviation\": \"Haber v. United States\", \"decision_date\": \"1987-10-21\", \"docket_number\": \"No. 87-1102\", \"first_page\": \"1051\", \"last_page\": \"1056\", \"citations\": \"831 F.2d 1051\", \"volume\": \"831\", \"reporter\": \"Federal Reporter 2d Series\", \"court\": \"United States Court of Appeals for the Federal Circuit\", \"jurisdiction\": \"United States\", \"last_updated\": \"2021-08-10T21:30:49.920860+00:00\", \"provenance\": \"CAP\", \"judges\": \"Before MARKEY, Chief Judge, NEWMAN, and BISSELL, Circuit Judges.\", \"parties\": \"Heinz HABER, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.\", \"head_matter\": \"Heinz HABER, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.\\nNo. 87-1102.\\nUnited States Court of Appeals, Federal Circuit.\\nOct. 21, 1987.\\nEdward Ord, Ord & Norman, of San Francisco, Cal., argued for plaintiff-appellant.\\nB. Paul Klein, Dept, of Justice, of Washington, D.C., argued for defendant-appellee. With him on the brief were Roger M. Olsen, Asst. Atty. Gen., Michael L. Paup and Gilbert S. Rothenberg.\\nBefore MARKEY, Chief Judge, NEWMAN, and BISSELL, Circuit Judges.\", \"word_count\": \"3063\", \"char_count\": \"18568\", \"text\": \"PAULINE NEWMAN, Circuit Judge.\\nMr. Heinz Haber (taxpayer) appeals an Order of the United States Claims Court granting the government's motion to dismiss his suit for refund based on foreign taxes paid. Haber v. United States, 8 Cl.Ct. 371 (1985). We reverse.\\nBackground\\nTaxpayer, a resident of the Federal Republic of Germany, relying on the ten-year limitation period set in the Internal Revenue Code for seeking refund based on credit for foreign taxes paid, filed claims in June, 1977 for the tax years 1970 and 1971, in the amounts of $21,338 and $17,059. The Internal Revenue Service sent taxpayer, through his accountant in the United States Mr. Lasker, a notice of disallowance dated November 14, 1977, stating that the ten-year limitation period for filing such claims did not apply, and that the claims were barred. The Service was at that time involved in litigation based on that position, and in 1978 received three adverse decisions: Allatt v. United States, 218 Ct.Cl. 694 (1978); Hart v. United States, 585 F.2d 1025, 218 Ct.Cl. 212 (Ct.C1.1978); and United States v. Woodmansee, 578 F.2d 1302 (9th Cir.1978). Similar adverse decisions had been received in the past, e.g., Bank of America v. United States, 377 F.2d 575 (Ct.C1.1967). These decisions held that 26 U.S.C. \\u00a7 6511(d)(3)(A) did indeed provide a ten-year limitation period for applying for refunds based on foreign taxes paid, and that other, shorter, periods of limitation did not apply.\\nMr. Lasker averred that he had telephone conversations with IRS personnel in Washington, D.C. and in the Philadelphia IRS Service Center where foreign taxpayers file returns \\\"during the two year period following the 1977 notice; that during these conversations he was \\\"lead [sic] to believe that the notice, dated November 14, 1977 . had been withdrawn and that an extension had been granted\\\" so that he \\\"could continue to pursue the matter on an administrative level\\\". He stated that he could not now (in 1985) remember the specific dates and names of the IRS personnel with whom he spoke because of the long time period between these conversations and the giving of his declaration. He stated that he discussed the Hart and Woodmansee cases with the IRS representatives, and that he \\\"did rely on these representations\\\" and believed that the 1977 dis-allowance was withdrawn. The IRS records of taxpayer Haber's files for this period have been destroyed, and thus provide no enlightenment as to the IRS' side of these conversations, the actions it took, and its reasons.\\nOn October 26,1982 the IRS sent taxpayer a notice of disallowance of his claim for the tax year 1970. This notice made no reference to the notice dated November 14, 1977, to which it was substantially identical. Both the 1977 and the 1982 notices contained the provision:\\nIf you wish to bring suit or proceedings for the recovery of any tax, penalties, or other moneys for which this disallowance notice is issued, you may do so by filing such a suit with the United States District Court having jurisdiction, or with the United States Court of Claims. The law permits you to do this within 2 years from the mailing date of this letter.\\nTaxpayer filed suit in the Claims Court on October 17, 1984, within two years after the 1982 notice of disallowance. The Claims Court held that taxpayer's suit is barred because it was not filed within 2 years after the 1977 notice.\\nDiscussion\\nTaxpayer contends that the period of limitation for this suit is measured from the October 26,1982 notice of disallowance, because the IRS's withdrawal of the 1977 notice removed it as an official action to which the limitation period applied.\\nThe taxpayer's version of the facts concerning the 1977 notice is uncontradicted. Further, as the Claims Court observed, factual inferences are required to be drawn favorably to Haber on this government motion to dismiss, which requires that \\\"the facts alleged by plaintiff [be accepted] as true.\\\" Featheringill v. United States, 217 Ct.Cl. 24, 26 (1978). See also Jewelers Vigilance Committee v. Ullenberg Corp., 823 F.2d 490, 492, 2 USPQ2d 2021, 2023 (Fed. Cir.1987).\\nThe issue thus is whether the taxpayer was entitled to rely on the oral statement by the Service that the 1977 notice was withdrawn. The government states that a prudent accountant should have filed suit within two years after the November 1977 notice, and that taxpayer did not act reasonably.\\nTaxpayer argues that it was clear, in view of the several contemporaneous decisions adverse to the IRS position, that the 1977 disallowance was in error. Since taxpayer was plainly entitled to the refund, he argues, it was reasonable to believe the oral statement that the notice was withdrawn. The government conceded before the Claims Court that the IRS could orally withdraw a notice of disallowance.\\nReinforcing taxpayer's argument is the 1982 notice of disallowance, which makes no reference to the 1977 notice. The 1982 notice supports an inference that the IRS considered the 1977 notice withdrawn because, without such withdrawal, there was no reason for the IRS to send a new notice five years later. No such reason has been offered by the government. The IRS offered no evidence to rebut the inference that the IRS considered that it was writing on a clean slate in its 1982 disallowance of the claim. The destruction by the Service of records of active cases has not been justified, and requires that the government face the same adverse inferences therefrom as would a private person. The government can not prevail on unsupported arguments that could be defeated by information reasonably expected to be contained in its destroyed files.\\nThe Claims Court found that the taxpayer did not act reasonably, in his inaction during the period after receipt of the 1977 notice. We agree that no sense of urgency wells from taxpayer's approach to the entire matter. The taxpayer's apparent unconcern for the passage of time is matched only by that of the Service, which issued a notice of disallowance in 1982 on a refund claim filed in 1977 for a 1970 tax, said notice bottomed on a legal position on which the courts have regularly held against the Service.\\nTaxpayer cites Beardsley v. United States, 126 F.Supp. 775 (D.Conn.1954), to support the argument that he was entitled to rely on the oral advice that the first notice was withdrawn. In Beardsley the taxpayers received a notice of disallowance without the customary thirty day letter. Taxpayers' attorney was orally told that the notice of disallowance could be ignored. More than two years later taxpayers received a letter \\\"reaffirming\\\" the disallowance. In rejecting the government's position that suit was barred by the statute of limitations measured from the date of the first notice, the court observed that \\\"the statute does not in specific terms prohibit withdrawal, revocation, or cancellation of the notice by the Commissioner\\\", id. at 777, and held that the original notice had been, in effect, withdrawn. The Claims Court stated that \\\"the facts in Beardsley closely parallel [Haber's] situation\\\", but distinguished Beardsley because there the parties had stipulated that an authorized IRS official had told the Beardsleys to ignore the first notice. Haber asserts that because the IRS failed to produce records during discovery, he could not adduce evidence that the personnel who led Mr. Lasker to believe that the first notice had been withdrawn were \\\"authorized\\\".\\nAlthough the significance of missing records is to be determined with respect to the circumstances of each case, the government's challenge to the authority of the personnel who gave the oral notice of withdrawal can not shift to taxpayer the burden of proving that the personnel were not unauthorized. The burden of coming forward remains with the government, and the prejudicial effect of its destruction of active files weighs against it. See Belton v. Commissioner, 562 F.Supp. 30, 31-33 (D.D.C.1982) (based on \\\"inactivity of the agency, and the government's [indication] that the files may have been destroyed\\\", the court found estoppel based on \\\"the cumulative prejudicial effect of the facts\\\").\\nThe government also argues that the two-year period for filing suit can be extended only in writing , and that an oral withdrawal of a notice is prohibited by the statute. In essence, the IRS argues that a withdrawal of a disallowance is the equivalent of an indefinite extension of time for filing suit. This position is not supported by the statute. Section 6532(a)(2) presupposes, and requires, that an effective notice of disallowance exists. If that notice was withdrawn, there is nothing to extend. The issue at bar is not whether there was an extension of a term of limitation; it is whether the term ever started.\\nWe conclude that the Claims Court erred in holding that taxpayer could not have reasonably believed that the November 1977 notice was withdrawn. Our predecessor court has stated that \\\"taxpayers and the court can and should reasonably view the second disallowance as incorporating a reconsideration of the . claim previously rejected____\\\" Southeast Bank of Orlando v. United States, 676 F.2d 660, 662, 230 Ct.Cl. 277 (1982). On the totality of cir cumstances herein discussed, we hold that taxpayer was entitled to rely on the IRS oral representation that the notice was withdrawn. The dismissal is reversed, and the case is remanded for proceedings on the merits of taxpayer's claim.\\nREVERSED AND REMANDED.\\n. 26 U.S.C. \\u00a7 6511(d)(3)(A): Special period of limitation with respect to foreign taxes paid or accrued.\\nIf the claim for credit or refund relates to an overpayment attributable to any taxes paid or accrued to any foreign country or to any possession of the United States for which credit is allowed against the tax imposed by subtitle A in accordance with the provisions of section 901 or the provisions of any treaty to which the United States is a party, in lieu of the 3-year period of limitation prescribed in subsection (a), the period shall be 10 years from the date prescribed by law for filing the return for the year with respect to which the claim is made.\\n. 26 U.S.C. \\u00a7 6532(a)(2): The 2-year period prescribed in paragraph (1) shall be extended for such period as may be agreed upon in writing between the taxpayer and the Secretary or his delegate.\"}"