This morning, the Federal Circuit released two nonprecedential opinions and an errata. Both opinions come in pro se appeals from the Court of Federal Claims in related tax refund cases. Here are the introductions to the opinions and a link to the errata.
Biestek v. United States (Nonprecedential)
This is a tax refund case. Like two cases previously before this court, Koopmann v. United States, No. 2021- 1329, 2022 WL 1073340 (Fed. Cir. Apr. 11, 2022), and Royall v. United States, No. 2021-1746, 2022 WL 1073341 (Fed. Cir. Apr. 11, 2022), and a companion case now pending before the court, Beavis v. United States, No. 2023-2222, this litigation was initiated by a number of retired United Airlines pilots who have sought refunds of Federal Insurance Contribution Act (“FICA”) taxes. The taxes were paid at the time each of the pilots retired and began receiving retirement benefits under United’s nonqualified deferred compensation plan. Pursuant to the special timing rule of 26 U.S.C. § 3121(v)(2) and the governing regulations promulgated under that statute, 26 C.F.R. § 31.3121(v)(2)-1, the tax for each pilot was paid in a lump sum when each pilot began receiving benefits under the plan. The amount of the tax paid for each pilot was based on the calculated present value of each pilot’s benefit package. See 26 C.F.R. § 31.3121(v)(2)-1(c)(2).
After the pilots retired, United entered bankruptcy. At the conclusion of the bankruptcy proceeding, the pilots’ deferred compensation plan was terminated, and the pilots stopped receiving benefits under the plan. Because the plan was terminated, the total amount that each pilot had received in benefits under the plan was less than the value of the expected benefits at the time each pilot retired. For that reason, the amount each pilot paid in FICA taxes was greater than each would have paid if the FICA tax had been paid only on benefits actually received.
The pilots individually sought refunds of what they characterized as overpayments of the FICA taxes. When those refund claims were denied, the pilots sought relief in the Court of Federal Claims (“the Claims Court”). However, they have run into several procedural barriers in their effort to obtain partial refunds of the FICA taxes paid at the time of their retirement. As a result, the Claims Court dismissed all of their claims without reaching the merits of their requests for refunds. The plaintiffs, all of whom are proceeding pro se, have appealed to this court. We affirm.
Beavis v. United States (Nonprecedential)
This tax refund case is a companion to Biestek v. United States, No. 2023-1467, decided today. The cases are factually similar in some respects and raise some similar issues. The most significant difference between the two cases is that while the plaintiffs in the Biestek case failed to file timely refund claims or failed to file a timely complaint in the Court of Federal Claims (“the Claims Court”), each of the plaintiffs in this case (with one exception) filed timely refund claims with the Internal Revenue Service (“IRS”) and filed timely complaints with the Claims Court.