HOFF STAUFFER, Administrator of the Estate of Carlton Stauffer, Plaintiff, Appellant,
INTERNAL REVENUE SERVICE, Defendant, Appellee.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Mark L. Wolf, U.S. District Judge]
E. Crice, for appellant.
Ciamporcero Avetta, Attorney, Tax Division, Department of
Justice, with whom Richard E. Zuckerman, Principal Deputy
Assistant Attorney General, Travis A. Greaves, Deputy
Assistant Attorney General, Andrew E. Lelling, United States
Attorney, Gilbert S. Rothenberg, Attorney, and Joan I.
Oppenheimer, Attorney, were on brief, for appellee.
Howard, Chief Judge, Torruella and Selya, Circuit Judges.
TORRUELLA, CIRCUIT JUDGE
case concerns Internal Revenue Code ("IRC")
provisions governing the timeliness of a claim for refund of
overpaid federal taxes and the renunciation of a durable
power of attorney under Pennsylvania law. Hoff Stauffer
("Hoff") filed suit on behalf of his father's
estate (the "Estate") against the Internal Revenue
Service ("IRS"), alleging that the agency
improperly denied his April 2013 claim for his father's
2006 tax refund as untimely, see I.R.C. §
6511(a) (2018) . The Estate averred that the applicable
statute of limitations for the filing of a tax refund claim
was tolled due to Hoff's father's financial
disability, see id. § 6511(h) (1) . The
district court dismissed the Estate's complaint, holding
that the limitations period was not tolled because Hoff held
a durable power of attorney authorizing him to act on his
father's behalf in financial matters. See
Stauffer v. Internal Revenue Serv.,
No. CV 15-10271-MLW, 2018 WL 5092885 (D. Mass. Sept. 29,
2018); see also § 6511(h)(2)(B). After careful
review, we affirm.
October 2005, Hoff and his father, Carlton Stauffer
("Carlton"), executed a written durable power of
attorney (the "DPA")- Hoff requested the DPA to better
assist Carlton in the management of his finances because
Carlton was both elderly and mentally ill. The DPA granted
Hoff broad powers over Carlton's finances, including the
authority to "prepare, execute and file in
[Carlton's] behalf . . . any and all income tax
declarations and returns . . . and to represent [Carlton]
before the Internal Revenue Service . . . with respect to any
claim or proceeding having to do with [his] tax
the DPA came into effect, Hoff discovered that Carlton had
lost track of millions of dollars in assets in the form of
uncashed checks, matured bonds, and stocks. Hoff began
recovering these assets and opened an investment account in
Carlton's name at T. Rowe Price to deposit the recovered
funds. In lieu of the existing DPA, T. Rowe Price required
its own standardized, limited power of attorney form (the
"TRP POA"), which Carlton executed on January 5,
2006. The TRP POA only authorized Hoff to conduct
transactions within Carlton's T. Rowe Price account
(e.g., to buy, sell and trade account assets, and to
make withdrawals) .
Hoff's financial management efforts, the father-son
relationship began to deteriorate in March 2006. During a
face-to-face meeting (the "March 15 meeting"),
Carlton and Hoff had an argument regarding Hoff's
management of his father's financial affairs. Part of the
tension resulted from Hoff's insistence that, as a
condition of his continued assistance, Carlton stop
permitting his girlfriend to overspend his
money. To control Carlton's girlfriend's
excessive spending, Hoff suggested that Carlton limit her
expenses to a monthly allowance. A falling out ensued.
claims to have told Carlton at the March 15 meeting that he
would no longer be exercising any rights granted to him under
the DPA. Then, Carlton drafted three notices revoking the
DPA. However, he never sent these notices, and Hoff never
received them. Carlton and Hoff also stopped talking. Carlton
would not pick up Hoff's calls or return his calls or
messages. The fallout led Hoff to tell his sister
(Carlton's daughter), Carlton's accountant, and
Carlton's attorneys that he was no longer acting as his
father's agent under the DPA.
father and son, however, reconciled approximately four years
later as reflected by a series of financial transactions. In
May or June 2009, Carlton loaned Hoff $1.25M to purchase a
home. With Carlton's permission, Hoff withdrew this
amount from the T. Rowe Price account. Then, in 2012, Carlton
asked Hoff for $100, 000, which Hoff withdrew from the same
account at his father's request.
October 2012, Carlton passed away. Hoff was named the
personal representative of the Estate the following month. As
representative of the Estate, Hoff filed his father's tax
returns for the tax years 2006 through 2012 in late April
2013. The 2006 return reported a tax overpayment of $137,
403, of which the Estate claimed a refund of $97, 364 and
requested that $40, 000 of the remaining $40, 039 be applied
to Carlton's 2007 tax liability. The IRS denied the claim
for the 2006 tax refund as untimely pursuant to I.R.C. §
6511(a), which establishes the statutory timetable for filing
tax refund claims. After an internal appeal, the IRS issued
its final denial of the Estate's refund claim on January
February 5, 2015, the Estate filed suit in the U.S. District
Court for the District of Massachusetts against the
seeking a refund of Carlton's 2006 tax overpayment. The
Estate's complaint alleged that its refund claim (filed
in 2013) was timely because Carlton's financial
disability tolled the three-year statutory period to file the
claim under I.R.C. § 6511(h)(1). On September 29, 2018,
the district court dismissed the Estate's complaint,
finding that: (1) Carlton had the capacity to execute the
DPA; (2) Hoff was, as of 2005, authorized under the DPA to
act on behalf of Carlton in financial matters for the
purposes of I.R.C. § 6511(h) (2) (B); (3) Hoff did not
renounce the DPA; and (4) Carlton did not effectively revoke
the DPA. Stauffer, 2018 WL 5092885, at *6-11.
Accordingly, the court held that the statutory period for the
filing of Carlton's 2006 tax refund claim was never
tolled under § 6511(h)(1) and thus had expired in
October 2010, which consequently deprived the court of
subject matter jurisdiction over the Estate's suit.
See Muskat v. United States, 554
F.3d 183, 194 (1st Cir. 2009) ("[A] district court has
jurisdiction to adjudicate only those refund claims that have
first been 'duly filed' with the Secretary of the
Treasury." (citing 26 U.S.C. § 7422(a))). This
appeal ensued thereafter.
Estate's attack on the district court's decision is
two-pronged: its first swing is directed at the court's
factual finding that Hoff never renounced the DPA, while the
second takes aim at the court's legal conclusion that the
DPA qualified Hoff as a person authorized to act on behalf of
Carlton in financial matters for the purposes of I.R.C.
§ 6511(h) (2) (B) . The Estate misses on both swings. We
address the Estate's arguments in inverse order,
directing our attention first to its challenge of the
district court's interpretation of I.R.C. §
Hoff's Qualification as a Person Authorized to Act on
Behalf of Carlton in Financial Matters Pursuant to §
review the district court's interpretation of I.R.C.
§ 6511(h) (2) (B) -- the legal basis for the court's
decision to dismiss the Estate's complaint for lack of
subject matter jurisdiction -- de novo.
Muskat, 554 F.3d at 194.
states that "[n]o suit for a tax refund may be
maintained in a United States district court 'until a
claim for a refund . . . has been duly filed.' 26 U.S.C.
§ 7422(a). Thus, timely filing of a refund claim is a
jurisdictional prerequisite to a tax refund suit."
Me. Med. Ctr.v.United States,
675 F.3d 110, 114 (1st Cir. 2012) (citing Phila. Marine
Trade Ass'nv. Comm'r, 523 F.3d 140,
146 (3d Cir. 2008)). The timeliness of a refund
claim is governed by I.R.C. § 6511(a),
which provides that a "[c]laim for credit or refund of
an overpayment of any tax imposed" must be filed
"within 2 years from the time the tax was paid"
when, as here, "no return was filed by the
taxpayer." This two-year statute of limitations is
commonly referred to as a "look-back period."
Comm'r of Internal Revenuev.Lundy, 516 U.S. 235, 239 n.1, 240 (1996). ...