Professional Tax Research Solutions from the Founder of Kleinrock. tax and accounting research
Parker Tax Pro Library
Accounting News Tax Analysts professional tax research software Like us on Facebook Follow us on Twitter View our profile on LinkedIn Find us on Pinterest
federal tax research
Professional Tax Software
tax and accounting
Tax Research Articles Tax Research Parker's Tax Research Articles Accounting Research CPA Client Letters Tax Research Software Client Testimonials Tax Research Software Federal Tax Research tax research

Accounting Software for Accountants, CPA, Bookeepers, and Enrolled Agents

Court Rejects Refund Claim Where POA Did Not Authorize Preparer to Sign the Claim

(Parker Tax Publishing March 2019)

The Court of Federal Claims dismissed for lack of subject matter jurisdiction a taxpayer's claim for refund of a penalty of over $3 million for untimely reporting his status as the beneficiary of a foreign trust because it found that (1) the taxpayer failed to sign the Form 843, Claim for Refund and Request for Abatement, and (2) the taxpayer's attorney, who signed the form in the Paid Preparer Use area, was not authorized under a power of attorney (POA) to sign a claim for refund on the taxpayer's behalf. The court found that the taxpayer failed to prove that Form 2848, Power of Attorney and Declaration of Representative, is a broad authorization that extends to the signing of a claim for refund and rejected the taxpayer's alternative theory that his refund claim qualified as an informal claim for refund. Wilson v. Comm'r, 2019 PTC 74 (Fed. Cl. 2019).


The IRS assessed a 35 percent penalty against Joseph Wilson under Code Sec. 6677(a) for failing to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Wilson paid the penalty, which totaled over $3 million, then filed a Form 843, Claim for Refund and Request for Abatement.

Wilson's refund claim was signed by his attorney, Robert Adler. The only signature on the Form 843 was that of Adler in the "Paid Preparer Use" area. The taxpayer normally signs in an area immediately above that under penalty of perjury, but that area was left blank. Adler attached a Form 2848, Power of Attorney and Declaration of Representative (POA) stating that Adler was authorized to perform acts regarding the following tax matters: income tax, civil penalties, and matters relating to foreign banks and financial account reports.

Line 4 of the POA directed Wilson to check a box if the authorization was for a specific use not recorded on the Centralized Authorization File. The instructions for Form 2848 state that the Centralized Authorization File system contains information regarding the authority of an individual appointed under a POA. According to the instructions, a specific-use POA is a one-time or specific-issue grant of authority to a representative or is a POA that does not relate to a specific tax period (except for civil penalties) that the IRS does not record on the system. Claims for refund are considered a specific use, and are not recorded on the system. The instructions further state that the POA authorizes the representative to perform all acts (including signing agreements, consents, waivers or other documents) that the representative can perform with respect to matters described in the POA.

Wilson filed a complaint in the Court of Federal Claims alleging that the IRS erroneously and unlawfully imposed the 35 percent penalty. He contended that the penalty should have been 5 percent for filing as an owner/grantor of a foreign trust under Code Sec. 6048(b). The IRS moved to dismiss the complaint for lack of subject matter jurisdiction on the basis that Wilson did not sign his Form 843.


Under Code Sec. 6532(a)(1), no suit or proceeding under Code Sec. 7422(a) for the recovery of a tax, penalty or other sum can begin before the expiration of six months from the date of filing a claim for refund, unless the IRS renders a decision within that time. Taxpayers are permitted two years to file a claim for refund from the time the tax is paid. Reg. Sec. 301.6402-2(b)(1) states that a taxpayer's refund claim must be verified by a written declaration that it is made under penalty of perjury, and that a noncompliant claim will not be considered for any purpose as a claim for refund or credit.

The IRS contended that the requirement that a refund claim be verified and signed by the taxpayer under penalty of perjury is jurisdictional. The IRS said that, had Adler been authorized to sign the Form 843 on Wilson's behalf, he would have signed Wilson's name on the penalty of perjury signature line as "/s Joseph Wilson / by Robert Adler." The IRS argued that the POA did not contain a clear expression of Wilson's intention concerning the scope of authority it granted because it did not list Form 843 or refund claims as matters for which Adler could represent Wilson. The IRS focused on the non-exhaustive list of illustrative documents in line 3 of Form 2848 (i.e., agreements, consents, or similar documents) and argued that these documents are not similar to refund claims, as they do not contain factual and legal assertions that are to be verified under penalty of perjury.

Wilson responded that Adler's signature in the paid preparer section of Form 843 incorporated the "under penalty of perjury" language, which includes the statement that "Declaration of preparer (other than taxpayer) is based on all information of which the preparer has any knowledge." Wilson contended that under Aronsohn v. Comm'r, 988 F.2d 454 (3d Cir. 1993), a Form 2848 POA does not require a more specific authorization for including refund claims. In Aronsohn, the Third Circuit affirmed a district court's ruling that the IRS form at issue could be properly executed by an agent acting pursuant to a general POA. Alternatively, Wilson contended that his refund claim qualified as an informal claim for refund, and that the IRS recognizes informal claims as valid even though not submitted under penalty of perjury.

The Court of Federal Claims dismissed Wilson's complaint without recourse for lack of subject matter jurisdiction. The court said that Wilson had time to re-file his refund claim, wait the necessary six months to allow the IRS to act on it, then file a new complaint if his claim was rejected. In that event, the court would clearly have jurisdiction to act on the merits of Wilson's refund claim.

Scope of POA

The Court of Federal Claims found that Wilson failed to demonstrate that Form 2848 is a broad authorization that extends to the signing of a claim for refund. In the court's view, the issue was whether the authority granted to Adler in the POA to perform all acts (including signing documents) that Wilson could perform with respect to IRS civil penalties gave Adler the power to sign a claim for refund.

The court distinguished Aronsohn by pointing out that the POA in this case was not a general power but a limited one. The court noted that Form 2848 expressly includes the box "Sign a return" but does not mention refunds. In the court's view, refund claims and returns are different in various aspects. The court concluded that Wilson failed to show why Form 2848 would require a taxpayer to indicate expressly that his representative is empowered to sign a return under penalty of perjury on his behalf, but would not require as much for a refund claim, which is also to be signed under penalty of perjury. Because the court found that Adler did not have the proper authorization, the court did not address the propriety of his signature on the refund claim.

Informal Claim Doctrine

The court rejected Wilson's informal claim theory because it found that the informal claim doctrine is used to satisfy the timeliness requirement under Code Sec. 6511, not the validity requirement of Code Sec. 7422. The court noted that in U.S. v. Kales, 314 U.S. 186 (1941), the Supreme Court explained that a notice fairly advising the IRS of the nature of a taxpayer's claim which does not comply with the formal requirements, is nevertheless treated as a claim where the defects or lack of specificity have been remedied by an amended filing after the lapse of the statutory period. The court found that the focus of the informal claim in Kales was to address the issue of timeliness, where the taxpayer seeks to remedy a timely defective claim after the statute of limitations has lapsed.

The court also found that the court in Anuforo v. Comm'r, No. 05-2156, 2007 WL 2695805 (D. Minn. 2007) considered a claim similar to Wilson's and held that the law does not confer subject matter jurisdiction when the suit is commenced prior to the filing of a valid Form 843. Like Wilson, the taxpayer in Anuforo had not signed his refund claim before filing in court and had corrected the defect after filing by re-sending singed forms to the IRS. That court rejected the taxpayer's informal claim argument and ruled that, because the forms were not valid, they could not satisfy the jurisdictional prerequisite of making a claim to the IRS before initiating a suit in court.

For a discussion of filing a claim for refund or credit of a tax overpayment, see Parker Tax ¶261,110.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

Parker Tax Pro Library - An Affordable Professional Tax Research Solution.

Professional tax research

We hope you find our professional tax research articles comprehensive and informative. Parker Tax Pro Library gives you unlimited online access all of our past Biweekly Tax Bulletins, 22 volumes of expert analysis, 250 Client Letters, Bob Jennings Practice Aids, time saving election statements and our comprehensive, fully updated primary source library.

Parker Tax Research

Try Our Easy, Powerful Search Engine

A Professional Tax Research Solution that gives you instant access to 22 volumes of expert analysis and 185,000 authoritative source documents. But having access won’t help if you can’t quickly and easily find the materials that answer your questions. That’s where Parker’s search engine – and it’s uncanny knack for finding the right documents – comes into play

Things that take half a dozen steps in other products take two steps in ours. Search results come up instantly and browsing them is a cinch. So is linking from Parker’s analysis to practice aids and cited primary source documents. Parker’s powerful, user-friendly search engine ensures that you quickly find what you need every time you visit Our Tax Research Library.

Parker Tax Research Library

Dear Tax Professional,

My name is James Levey, and a few years back I founded a company named Kleinrock Publishing. I started Kleinrock out of frustration with the prohibitively high prices and difficult search engines of BNA, CCH, and RIA tax research products ... kind of reminiscent of the situation practitioners face today.

Now that Kleinrock has disappeared into CCH, prices are soaring again and ease-of-use has fallen by the wayside. The needs of smaller firms and sole practitioners are simply not being met.

To address the problem, I’ve partnered with a group of highly talented tax writers to create Parker Tax Publishing ... a company dedicated to the idea that comprehensive, authoritative tax information service can be both easy-to-use and highly affordable.

Our product, the Parker Tax Pro Library, is breathtaking in its scope. Check out the contents listing to the left to get a sense of all the valuable material you'll have access to when you subscribe.

Or better yet, take a minute to sign yourself up for a free trial, so you can experience first-hand just how easy it is to get results with the Pro Library!


James Levey

Parker Tax Pro Library - An Affordable Professional Tax Research Solution.

    ®2012-2019 Parker Tax Publishing. Use of content subject to Website Terms and Conditions.

IRS Codes and Regs
Tax Court Cases IRS guidance