Jonathan B. Cole Judith M. Cole v. United States

Jonathan and Judith Cole appeal the district court’s dismissal of their tax refund suit for failure to state a claim. The district court rejected the Coles’ contention that the IRS tax assessment was time barred. We affirm.

The Coles and the IRS entered into an extension agreement (IRS Form 872-R) giving the IRS until December 31, 1983 to assess a tax for the 1978 tax year. The agreement also provided:

On September 28, 1983, the IRS sent a notice of deficiency to the Coles. The Coles then petitioned the Tax Court for relief. The Tax Court entered a decision in favor of the IRS on December 28,1984, and the decision became final on March 28, 1985. See 26 U.S.C. § 7483 (providing for a 90 day period in which to petition for review of a Tax Court decision); 26 U.S.C. § 7481 (a) (Tax Court decision becomes final at the expiration of the statutory period for filing a petition for review). The IRS assessed a deficiency on May 13, 1985, 46 days after the decision became final.

The district court dismissed the suit because it concluded that the IRS assessment was timely. We review dismissal of a suit for failure to state a claim de novo. Fort Vancouver Plywood Co. v. United States, 747…