Decided: November 8, 1994; As Corrected November 9, 1994.
Appealed from: U.S. Court of Federal Claims. Judge Gibson.
Before Newman, Plager, and Rader, Circuit Judges.
Chicago Milwaukee Corporation (CMC) sought a refund of railroad retirement tax overpayments it made on behalf of itself and former employees. CMC did not certify that it had first repaid the employees, or obtained their consent to seek a refund. The United States Court of Federal Claims dismissed, holding that it had no jurisdiction absent this certification. Because CMC need not repay the employees, or obtain their consent, until the Court of Federal Claims evaluates CMC's claim, this court reverses and remands.
CMC is the successor in interest to a railroad that went bankrupt in 1977. During reorganization, the railroad's employees agreed to wage concessions in return for proceeds from any sale of the railroad's assets. CMC's predecessor sold the assets in 1985. Some eight thousand employees received their share of the proceeds in distributions in 1985 and 1986.
CMC or its predecessor paid taxes on both distributions under the Railroad Retirement Tax Act (RRTA), I.R.C. §§ 3201-3233 (1988 & Supp. V 1993). RRTA tax is similar to the tax imposed by the Federal Insurance Contributions Act (FICA), I.R.C. §§ 3101-3128 (1988 & Supp. V 1993). RRTA tax is an employment excise tax on the employer and the employee. The employer pays both portions, withholding the employee's portion from his wages. I.R.C. §§ 3201, 3202(a), 3221 (1988 & Supp. V 1993). CMC paid RRTA taxes on the distributions totalling $7.5 million on its own behalf and $3.6 million on behalf of the employees.
Later, CMC decided that it was no longer an RRTA "employer" after the assets sale. CMC concluded that RRTA did not apply to the resulting distributions. CMC filed a refund claim with the Internal Revenue Service (IRS) in 1988 for both its and the employees' portions of the RRTA payments. CMC did not repay the employees or obtain their consent before filing the claim.
The IRS did not act on CMC's claim. In 1992, CMC filed a refund suit in the Court of Federal Claims. That court dismissed for lack of subject matter jurisdiction. Chicago Milwaukee Corp. v. United States, 29 Fed. Cl. 777 (1993). CMC appeals.
This court reviews a dismissal for lack of subject matter jurisdiction de novo. Booth v. United States, 990 F.2d 617, 619 (Fed. Cir. 1993).
CMC brought suit under I.R.C. § 7422(a) (1988). Section 7422(a) waives the United States' sovereign immunity from refund suits, United States v. Michel, 282 U.S. 656, 658, 75 L. Ed. 598, 51 S. Ct. 284 (1931), provided the taxpayer has previously filed a qualifying administrative refund claim. To qualify, the refund claim must accord with "the provisions of law [regarding refund claims], and the [Treasury] regulations . . . established in pursuance thereof." I.R.C. § 7422(a).
Section 7422(a) thus imposes, as a jurisdictional prerequisite to a refund suit, filing a refund claim with the IRS that complies with IRS regulations. Burlington Northern, Inc. v. United States, 231 Ct. Cl. 222, 684 F.2d 866, 868 (Ct. Cl. 1982). For example, the refund claim must detail each claimed ground for a refund, and provide sufficient facts to apprise the IRS of its basis. Treas. Reg. § 301.6402-2(b)(1) (1994). See, e.g., Boyd v. United States, 762 F.2d 1369, 1371-72 (9th ...