United States v. Clintwood Elkhorn Mining Co.
Issues
Must a taxpayer seek repayment and interest of unconstitutionally levied taxes only through IRS Tax Code administrative remedies, or may a taxpayer alternatively bring claims for damages and interest under the Tucker Act, which applies a less restrictive statute of limitations?
The Clintwood Elkhorn Mining Company sought to recover export tax payments after a federal court found the 1978 tax unconstitutional. Clintwood filed timely administrative refund claims under the IRS Tax Code within its three-year statute of limitations, and received repayments with interest for 1997 to 1999. However, Clintwood also filed an Export Clause damages claim for tax payments from 1994 to 1996 under the Tucker Act, which has a longer six-year statute of limitations. The government argued that the Tax Code provides the exclusive remedy for such refunds, while Clintwood argued that the Tucker Act alternative best remedies the government's unconstitutional taxation. The Court of Federal Claims found that Clintwood was entitled to receive damages, but not interest, under the Tucker Act. On appeal, the Federal Circuit awarded Clintwood both damages and interest for its 1994 to 1996 payments. The Supreme Court will determine whether Clintwood can file claims for repayment of unconstitutional taxes under the Tucker Act, and whether these alternative claims include interest awards. In addition to affecting the outcome of similar pending cases, the Court's decision will likely affect all taxpayers by determining the amount of reimbursement for taxes later found to be unconstitutional.
Questions as Framed for the Court by the Parties
Whether a taxpayer who would have been entitled to file a tax refund action in federal court to seek a refund of taxes (and interest thereon), but who failed to satisfy a statutory prerequisite to such an action (namely, the filing of a timely administrative refund claim) and is therefore barred from bringing such an action, may obtain a refund, and interest thereon, through an action directly under the Constitution pursuant to the Tucker Act, 28 U.S.C. 1491(a)?
In 1978, Congress passed a law taxing coal exports from United States mines. Clintwood Elkhorn Mining Company v. United States, 473 F.3d 1373, 1374 (Fed. Cir. 2007); 26 U.S.C.
Additional Resources
- Federal Agency website: Internal Revenue Service (IRS): www.irs.gov
- Wex: Law about Taxation
- American Bar Association (ABA) Section on Taxation
- Annotated Constitution: Taxes on Exports
- Tax Code ยง 4121: CRS Report for Congress on The Black Lung Excise Tax on Coal