Moy v. United States

Background

Michelle Y Moy sued the United States under 26 U.S.C. § 7422 seeking a refund of federal income tax payments for tax year 2008. She alleged that the Internal Revenue Service failed to include a foreign tax credit for $20,447 in taxes she paid to the United Kingdom. In May 2011, the IRS assessed her $32,507.30 because she had not timely filed tax returns for 2008.

Moy submitted a tax-refund claim to the IRS in April 2018. The IRS denied that claim as time-barred on August 1, 2018, and later rejected her administrative appeal. Moy then sent a protest letter to the IRS Appeals Office in November 2019. The office responded in December 2019, February 2020, and March 2020, each time stating that it was looking into the matter. Moy filed this lawsuit on June 27, 2023.

Motion and arguments

The United States moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which allows a court to consider whether it has authority to hear a case. The government argued that the lawsuit was filed more than two years after the IRS mailed notice denying Moy’s refund claim, exceeding the deadline in 26 U.S.C. § 6532(a)(1). It argued that the deadline preserved the United States’ sovereign immunity, meaning the government had not consented to be sued on this claim.

Moy argued that the three Appeals Office letters were “stalling tactics” that justifiably misled her and delayed her filing in federal court. She contended that the filing deadline should therefore be extended through equitable tolling, a legal doctrine that can sometimes pause or extend a deadline.

Court’s analysis

The parties agreed that Moy filed her 2023 complaint more than two years after the IRS’s August 2018 denial. The court did not decide the broader question of whether § 6532(a)’s deadline can ever be subject to equitable tolling. Instead, it held that even if equitable tolling could potentially apply, § 6532(a)(4) barred using the later IRS consideration or reconsideration of Moy’s claim to extend the time for filing suit.

The court concluded that the three Appeals Office letters concerned consideration or reconsideration after the August 2018 denial. Under § 6532(a)(4), that later activity could not extend the period for filing the lawsuit. Because Moy did not file a timely lawsuit and Congress had prohibited extending the deadline for the reason she offered, she had not satisfied the conditions on the United States’ waiver of sovereign immunity for tax-refund claims.

Disposition

The court granted the United States’ Rule 12(b)(1) motion to dismiss and ordered the Clerk to close the file.