Complaint Seeking Tax Refund in U.S. District Court
(Federal)

Summary

This template addresses the tax considerations of a sample complaint that would be filed in a United States district court in connection with a disallowed refund claim. It contains practical guidance, drafting notes, and alternate clauses. I.R.C section 7422(a) requires that a taxpayer file a claim for refund before filing a suit for refund. Both the federal district courts and the Court of Federal Claims have jurisdiction for purposes of filing a suit for refund of a federal tax. See I.R.M. 34.5.2.1 "Part 34. Chief Counsel Directives Manual Litigation in District Court, Bankruptcy Court, Court of Federal Claims, and State Court, Refund Litigation." Pursuant to Treas. Reg. § 301.6402-2(b)(1), the claim for refund must include each ground upon which a credit or refund is claimed and facts sufficient to apprise the Internal Revenue Service (IRS) of the exact basis thereof. There may be grounds for a motion to dismiss if the taxpayer fails to adequately state a basis for relief in a refund claim. United States v. Felt & Tarrant Mfg. Co. 283 U.S. 269 (1931). The IRS cannot, however, determine that a claim is defective after disallowing the claim for refund on its merits. Ford v. United States, 402 F.2d 791 (6th Cir. 1968). There are formal and informal claims for refund. The following are examples of formal claims for refund: • Form 1120X, Amended U.S. Corporation Income Tax Return, or other appropriate amended return (for refund of income tax per Treas. Reg. § 301.6402-3) • Form 843, Claim For Refund and Request for Abatement The IRS can treat a taxpayer's claim on an improper form or a claim as an informal claim for refund. Some examples of informal claims are letters addressed to the IRS, protests, and petitions to the Tax Court. United States v. Kales, 314 U.S. 186 (1941). The taxpayer is required to file a separate claim for each type of tax (income, gift, federal unemployment) for each taxable period. See Treas. Reg. § 301.6402-2(d). For a full listing of key content covering general tax practice, procedure and controversy, see Tax Practice, Procedure and Controversy Resource Kit. For filing a suit protesting a tax deficiency, see Tax Court Litigation: Fundamentals.