Adam R. F. Gustafson has posted An “Outside Limit” on Refund Suits: The Case Against the Tax Exception to the Six-Year Bar on Claims Against the Government on SSRN. Here is the abstract:

Longstanding judicial precedent and the official position of the I.R.S. agree that federal tax refund suits are limited only by the Internal Revenue Code’s two-year statute of limitations, which is triggered only when the I.R.S. mails the claimant a notice of disallowance. 26 U.S.C. § 6532(a)(1). This article contends that tax refund litigation is also governed by the six-year limitation on “[e]very civil action commenced against the United States,” which is triggered upon the accrual of a claim. 28 U.S.C. § 2401(a). The Supreme Court recently alluded to this dual-limitation scheme, stating in dicta that the six-year bar places an “outside limit” on the tax-specific limitation. United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 9 (2008).

Applying the six-year bar as a backstop to tax refund suits would enforce its plain meaning, would accord with multiple canons of statutory construction, would promote timely resolution of tax refund claims, and would bring tax refund litigation into line with the rest of federal claims jurisprudence, thereby eliminating one manifestation of the tax exceptionalism that the Supreme Court recently criticized in Mayo Foundation for Medical Education & Research v. United States, No. 09-837, slip op. at 9 (U.S. Jan. 11, 2011).

Even while abandoning its tax-exceptional doctrine, the I.R.S. may be able to soften the blow to potential claimants’ reliance interests by systematically granting extensions of the limitation period pursuant to 26 U.S.C. § 6532(a)(2). This would buy time for attentive taxpayers to file suit while putting future claimants on notice that they must pursue their claims in court within six years of accrual.