Argument Preview

This week we are previewing three cases scheduled to be argued next week at the Federal Circuit that attracted amicus briefs. Today we highlight a tax case, Brown v. United States. In this case, George P. Brown and Ruth Hunt-Brown ask the Federal Circuit to overrule the holding of the Court of Federal Claims that it did not have subject matter jurisdiction over their case because the Browns did not attach a power of attorney to amended income tax returns filed by their agent. This is our argument preview.

In their opening brief, the Browns argue the Federal Circuit “should reverse the . . . conclusion [of the Court of Federal Claims] that it lacks subject matter jurisdiction over Appellants’ claims.” The Browns contend the statutory signature and verification requirements “delegate rule making authority to the Secretary [of the Treasury] to promulgate rules for how taxpayers can sign and verify their tax returns.” They contend this authority allows the Secretary both to create and waive the relevant requirements. Moreover, they contend, in this case the “Treasury intentionally waived its formal requirement of calling for a power of attorney to be attached to Appellants’ claims for refund . . . and chose to substantively investigate[] Appellants’ informal claims.”

In its response brief, the United States argues that “[t]he Browns’ refund claims admittedly violated the taxpayer signature and verification requirements.” Therefore, the government contends, “the Browns’ refund claims were not ‘duly filed’ with the IRS before the Browns sued.” Moreover, the United States argues, “[t]he IRS had no authority to waive the taxpayer signature and verification requirements, and it did not purport to waive them here.” According to the government, to waive the requirements would be “an effort that is inapt, unprecedented, and antithetical to good tax administration.” The government also contends that “the trial court correctly agreed with the Government (and the Browns below) that [the relevant statutory provision] is a jurisdictional statute.” The United States argues the Federal Circuit “should . . . decline to reexamine its longstanding precedent treating the requirements of [one of the statutory provisions in question] as jurisdictional.”

In their reply brief, the Browns make two arguments. First, they argue “[t]he signature and verification requirements are regulatory.” They argue the government’s position is incorrect because the language of the relevant statutory section states that “‘any return . . . shall be signed in accordance with forms or regulations prescribed by the Secretary.’” Even if the requirement of a signature cannot be waived, however, the Browns contend that the “details of how a refund claim should be signed and verified by the taxpayer are regulatory and Treasury can waive its regulatory rules.” Second, the Browns argue that “the claim filing requirement is not a jurisdictional requirement of a tax refund suit.” They contend that, “[s]ince neither the language of the statute nor the Supreme Court for over 100 years in multiple opinion[s] held that [the relevant statutory provision] is jurisdictional, such [a] claim processing requirement is non[-]jurisdictional and should have not resulted in dismissal.”

The Center for Taxpayer Rights filed an amicus brief in support of the Browns. The Center argues that the “court below was wrong to treat the signature and verification requirements as jurisdictional and not subject to waiver, whether or not the court was correct to conclude that the requirements are statutory and not regulatory.” Noting current Supreme Court holdings, the Center contends that the Federal Circuit’s “precedent that the claim-filing requirement is jurisdictional no longer represents good law and must be overruled.” The Center maintains the “case should be remanded for a determination of whether, in fact, the government waived or forfeited its usual ability to complain about any defects in signing or verifying the underlying claims.”

This case will be argued on Friday, November 5. We will report on developments.