GEORG F. W. SCHAEFFLER; BERNADETTE SCHAEFFLER, Plaintiffs - Appellants
UNITED STATES OF AMERICA, Defendant-Appellee
from the United States District Court for the Northern
District of Texas
KING, HAYNES, and HIGGINSON, Circuit Judges.
and Bernadette Schaeffler were previously married and filed a
joint income tax return for the year 2002 on October 15,
2003. They later amended their 2002 tax return in April 2013
and claimed a refund for their overpayment. The Internal
Revenue Service denied their claim as untimely. The
Schaefflers then initiated this action, seeking the refund.
The Government filed a motion to dismiss, arguing that the
claim was filed after the general limitations period in
I.R.C. § 6511(a) and that the special limitations period
in I.R.C. § 6511(d)(3)(A) did not apply as the
overpayment was not attributable to foreign taxes for which
credit was allowed. The district court agreed with the
Government that the refund claim was untimely and dismissed
the suit. We AFFIRM.
and Bernadette Schaeffler were previously married and filed a
joint income tax return for 2002 on October 15, 2003.
Afterwards, they filed multiple amended returns for 2002. As
relevant here, they filed a second amended return for 2002 on
or around April 10, 2013. This return reflected two changes:
a net decrease in foreign tax credit of $1, 592, 765 and an
increase in minimum tax credit of $6, 763, 525. The net
reduction in foreign tax credit resulted from three changes
to their German tax liabilities: (1) an increase of $142, 902
in German tax liabilities for an entity through which Mr.
Schaeffler was conducting foreign rental activity; (2) an
increase of $1, 166, 186 in German personal income tax
liabilities; and (3) a decrease of $2, 901, 853 in German tax
liabilities for a foreign partnership with which Mr.
Schaeffler was involved.
increase in minimum tax credit of $6, 763, 525 was due to
changes made in the Schaefflers' third amended tax return
for 2001. The original tax return for 2001 showed that they
paid only a regular income tax. On or around April 7, 2012,
they filed their third amended return for 2001. The revisions
made in this return reflected a net increase in foreign tax
credit of $5, 621, 448 and a reduction in minimum tax credit
of $3, 146, 597. These changes resulted in the Schaefflers
being subject to an alternative minimum tax in the amount of
$2, 474, 851. The Schaefflers alleged that the changes
in the third amended return for 2001 "did not cause any
additional tax liability or payments" for that year.
Consequently, as reflected in the second amended return for
2002, the minimum tax credit for 2002 increased by $6, 763,
525-the sum of $2, 474, 851 (i.e., the minimum tax credit
generated by the alternative minimum tax in 2001) and $4,
288, 674 (i.e., the minimum tax credit carried forward from
years prior to 2001).
second amended return for 2002 showed that the net decrease
in foreign tax credit of $1, 592, 765 absorbed a portion of
the $6, 763, 525 increase in minimum tax credit, resulting in
an overpayment of $5, 170, 760. The Schaefflers requested a
refund for this overpayment. On January 6, 2014, the Internal
Revenue Service ("IRS") denied their refund claim
as untimely. On December 30, 2015, the Schaefflers initiated
this action, seeking their refund for 2002. In its answer,
the Government asserted that the court lacked subject matter
jurisdiction because the refund claim was untimely. The
district court ordered the Government to file a motion to
dismiss so that the issue of jurisdiction could be addressed
early in the litigation.
Government complied and filed a motion to dismiss for lack of
subject matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1) on September 9, 2016. It argued that (1)
the refund claim was subject to and filed after the
limitations period in I.R.C. § 6511(a) and therefore
untimely and (2) the overpayment was not attributable to the
allowance of a foreign tax credit and so the special ten-year
limitations period in § 6511(d)(3)(A) did not apply. The
Schaefflers then filed an amended complaint with no major
changes. On April 25, 2017, the district court dismissed the
Schaefflers' refund claim, agreeing with the Government
that the claim was untimely. The Schaefflers appealed.
review de novo a district court's dismissal under Rule
12(b)(1). See Lane v. Halliburton, 529 F.3d 548, 557
(5th Cir. 2008). "The district court  has the power to
dismiss for lack of subject matter jurisdiction on any one of
three separate bases: (1) the complaint alone; (2) the
complaint supplemented by undisputed facts evidenced in the
record; or (3) the complaint supplemented by undisputed facts
plus the court's resolution of disputed facts."
Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.
1981). "In the instant case, the district court
dismissed based upon the complaint and the undisputed facts
evidenced in the record . . . ." Barrera-Montenegro
v. United States, 74 F.3d 657, 659 (5th Cir. 1996).
"[O]ur review is limited to determining whether the
district court's application of the law is correct and,
if the decision is based on undisputed facts, whether those
facts are indeed undisputed." Williamson, 645
F.2d at 413.
case involves statutory interpretation of the Internal
Revenue Code, which is a matter of law that we review de
novo. See Howard Hughes Co., L.L.C. v. Comm'r,
805 F.3d 175, 180 (5th Cir. 2015). We begin "by
examining the plain language of the relevant statute."
Stanford v. Comm'r, 152 F.3d 450, 455-56 (5th
Cir. 1998) (citing G.M. Trading Corp. v. Comm'r,
121 F.3d 977, 981 (5th Cir. 1997)). "In the absence of
any ambiguity, our examination is confined to the words of
the statute, which are assumed to carry their ordinary
meaning." Id. at 456 (citing G.M.
Trading, 121 F.3d at 981). "We are authorized to
deviate from the literal language of a statute only if the
plain language would lead to absurd results, or if such an
interpretation would defeat the intent of Congress."
Kornman & Assocs., Inc. v. United States, 527
F.3d 443, 451 (5th Cir. 2008) (first citing Lamie v. U.S.
Tr., 540 U.S. 526, 534 (2004); then citing Johnson
v. Sawyer, 120 F.3d 1307, 1319 (5th Cir. 1997)).
"Only after application of the principles of statutory
construction, including the canons of construction, and after
a conclusion that the statute is ambiguous may the court turn
to the legislative history." Id. (quoting
Carrieri v. Jobs.com, Inc., 393 F.3d 508, 518-19
(5th Cir. 2004)).
are two issues in this case: (1) whether the Schaefflers'
refund claim for 2002 is timely under I.R.C. §
6511(d)(3)(A) because it relates to "an overpayment
attributable to any taxes paid or accrued to any foreign
country . . . for which credit is allowed against [income]
tax, " and (2) whether the Schaefflers' refund claim
for 2002 is timely under I.R.C. § 6511(a) because it was
filed within two years from the time any tax for 2002 was
paid. We first provide a legal background on time limitations
for tax refund claims and then proceed to address the issues.
United States, as sovereign, is immune from suit save as it
consents to be sued." United States v.
Sherwood, 312 U.S. 584, 586 (1941). The United States
has consented to be sued for "erroneously or illegally
assessed or collected" taxes. 28 U.S.C. §
1346(a)(1). But the plaintiff must comply with the
jurisdictional requirements in I.R.C. § 7422. See,
e.g., United States v. Clint wood Elkhorn Mining
Co., 553 U.S. 1, 4-5 (2008). Such requirements for tax
refund claims are set forth in § 7422(a). See
id. Section 7422(a) states that no suit for improperly
assessed or collected taxes shall be maintained "until a
claim for refund . . . has been duly filed with the
Secretary." Section 6511 sets time limitations for the
proper filing of a refund claim. See Duffie v. United
States, 600 F.3d 362, 384 (5th Cir. 2010) ("To
overcome sovereign immunity in a tax refund action, a
taxpayer must file a ...