Cases
Baldwin v. U.S.
CASE: Howard and Karen Baldwin v. United States
STATUS: Closed
NCLA ROLE: Counsel
COURTS HEARD IN: SCOTUS, 9th Cir.
ORIGINAL COURT: U.S. Court of Appeals for the Ninth Circuit
DECIDING COURT: U.S. Supreme Court
OPENED: September 23, 2019
AGENCIES: Internal Revenue Service
FOCUS AREAS:
CASE SUMMARY
Did we achieve our litigation objective? No. The IRS was allowed to keep $168,000 in taxes overpaid by the clients, even though the common law mailbox rule would have allowed them to prove they filed their refund request on time.
Court Outcome: The Supreme Court denied certiorari. Justice Thomas authored a dissent from the denial of cert lamenting administrative absolutism and inviting his colleagues to step back from the abyss.
Larger Impact: Brand X deference (the worst deference doctrine you’ve probably never heard of) remains in force, leading to bizarre outcomes like this one, where agencies like the IRS can simply ignore a Ninth Circuit precedent it didn’t like and appellate courts are forced to go along.
Summary: Hollywood producers Howard and Karen Baldwin mailed their tax refund claim months before the October 15th filing deadline in 2011. But the IRS claimed they never received it and refused to pay the couple. The Baldwins decided to take their case to court to recover approximately $168,000 in overpaid taxes.
The Baldwins proved at trial that they had mailed the claim in June 2011. Current law, Ninth Circuit precedent and the common-law mailbox rule, clearly allowed the them to prove the postmark date, which is deemed the date of delivery, by using extrinsic evidence such as witness testimony. The district court sided with the Baldwins, entering judgment against IRS.
But on appeal, the Ninth Circuit Court concluded that a new interpretation of the rules issued by the IRS in August 2011, trumped all that under the Brand X deference doctrine. IRS’s new interpretation of the law did not allow use of extrinsic evidence to prove the postmark date of a tax document sent by regular U.S. mail.
Thanks to Brand X, the court had reversed the favorable outcome the Baldwins had obtained after trial, depriving them of a roughly $168,000 tax refund, statutory interest and attorneys’ fees.
The Baldwins subsequently took their case to the Supreme Court, asking the Justices to overrule the Brand X doctrine, or determine whether Brand X permits an agency to uproot the common law and plug the hole with its own rule.
Brand X essentially allows agencies to undercut predictability, stability, fair notice to parties like the Baldwins, reasonable reliance, and settled expectations. It also violates due process. The government’s backwards idea that it should be able to ignore federal court decisions it dislikes under Brand X has made the doctrine a game-changer in favor of government litigants since its 2005 Supreme Court creation.
ADDITIONAL VIDEOS
Brand X Tips the Scales in the Government's Favor
Brand X Doctrine Brings Bias into U.S. Courts
RELEVANT MATERIALS
NCLA FILINGS
Supreme Court Order: The Petition for a Writ of Certiorari is Denied with Justice Clarence Thomas authoring a Dissent from Denial
February 24, 2020 | Read More
Petitioner’s Reply Brief - Baldwin v. US
December 20, 2019 | Read More
Brief of Amicus Curiae - New England Legal Foundation in Support of Petitioners
October 25, 2019 | Read More
Brief of the Cato Institute and NFIB Small Business Legal Center as Amici Curiae Supporting Petitioners
October 25, 2019 | Read More
Brief of the National Right to Work Legal Defense Foundation, Inc. as Amicus Curiae Supporting Petitioners
October 25, 2019 | Read More
PRESS RELEASES
Justice Thomas Repudiates Brand X Decision He Authored, but High Court Denies Cert
February 24, 2020 | Read More
NCLA Reply Brief Calls on U.S. Supreme Court to Overrule Brand X Judicial Deference Doctrine
December 23, 2019 | Read More
Eight Amici Join NCLA’s Cert. Petition With the Supreme Court to Nix Brand X Deference
October 31, 2019
NCLA Files Petition with the U.S. Supreme Court Seeking to Abolish Brand X Deference
September 23, 2019
IN THE MEDIA
Supreme Court upholds decision to abide by IRS on mailbox rule for tax refund claims
Accounting Today
February 7, 2023
Thomas Dissent Latest Sign in Battle Over Chevron Deference
Bloomberg Tax
February 7, 2023
Justice Thomas, in Lone Dissent, Thrashes Chevron and His Own Brand X Decision
Law.com
February 7, 2023
Thomas Pushes High Court to Revisit Agency Deference
Courthouse News Service
February 7, 2023
Justices Ceded Too Much Power To Agencies
Law360
February 7, 2023
CASE HIGHLIGHTS
Media Mention
February 7, 2023
Justices Eyeing More Challenges To Agency Deference
Source: Law360
Media Mention
February 7, 2023
Thomas Dissent Latest Sign in Battle Over Chevron Deference
Source: Bloomberg Tax
Press Release
February 24, 2020
Justice Thomas Repudiates Brand X Decision He Authored, but High Court Denies Cert