“Notwithstanding the fact that appellant’s tax was erroneously paid and not owed in the first place, we must nevertheless find that appellant is not entitled to a refund of taxes paid for 2013 due to the expiration of the statute of limitations,” the Office of Tax Appeals wrote in its 3-0 opinion in The Appeal of W. Keller.
Keller lived in California in part of 2012 and filed a resident return with a California address. In 2013, he did not reside in California and did not earn California source income, but the FTB assumed he did based on information that he paid mortgage interest on a California residence in 2013. Beginning in February 2015, the FTB sent numerous notices to the California address on his 2012 return, but he did not receive the notices, as he now lived in Maryland.
In November 2015, the FTB discovered an address for Keller in Maryland. He confirmed the address, using the FTB’s electronic system, on January 12, 2016. A few months later, the FTB issued an order to a bank to seize $6,734 from an account presumed to be Keller’s, and the bank complied. Almost three years later, Keller filed a 2013 non-resident return claiming no tax was owed, and requesting a refund of the funds seized by the FTB.
Keller argued that the money was taken out of his mother’s bank account, and that he was unaware of this until after she passed away, when he was handling her estate. (The ownership of the bank account was not an issue before the OTA, and the opinion states that the OTA had no evidence showing the names of the account holders on the levied account.)
Keller additionally argued that due to privacy concerns, neither the FTB nor the bank would provide information regarding the levy. Because the FTB would not provide the information, Keller argued that the agency was responsible for his delay in seeking a refund.
The OTA ruled that the 2019 claim for refund was filed after the expiration of two statutory periods in 2017 and 2018, and that the statute “must be strictly construed even if the tax was collected erroneously, illegally, or wrongfully.” The OTA additionally opined that it was “more likely than not” that Keller received notices in Maryland in 2016, and could have researched the issue and filed for a refund before the statute of limitations expired.