For tax professionals representing clients seeking refunds outside the standard statutory window, Internal Revenue Code Section 6511(h) offers a narrow path for relief through "financial disability." However, the mere existence of a medical condition is often insufficient to toll the statute of limitations. As the Court of Federal Claims recently illustrated in Goldman v. United States, No. 1:24-cv-01920 (Fed. Cl. 2026), the presence of an authorized representative can negate a claim of financial disability. This article examines the court’s rigorous application of the "authorized person" exception and the substantiation requirements of Revenue Procedure 99-21.

Facts of the Case

The plaintiff, Michael Goldman, sought a refund for the 2017 tax year. His 2017 income tax was "deemed paid" in April 2018. Goldman did not file his refund claim until October 2023, a gap of more than five years.

The IRS denied the claim based on Section 6511(b)(2), which restricts the amount of a credit or refund to the tax paid within the "lookback period"—generally three years plus the period of any extension regarding the filing of the return. Following an unsuccessful appeal within the IRS, Goldman filed suit in the Court of Federal Claims.

To overcome the statutory time bar, Goldman argued that the limitations period should be tolled under Section 6511(h). He asserted that he was "legitimately financially disabled" from November 2017 through February 2022. Goldman predicated this claim on two factors: first, that "his former accountant failed to file his tax return for 2017," and second, that he suffered from "major depressive disorder" during the relevant period.

The Court’s Analysis of the Law

Chief Judge Matthew H. Solomson focused his analysis on the interplay between the medical definition of financial disability and the statutory exclusion regarding authorized representatives.

Under Section 6511(h), the statute of limitations may be suspended if a taxpayer is unable to manage their financial affairs due to a medically determinable physical or mental impairment. However, the court highlighted the statutory exception found in Section 6511(h)(2)(B). Judge Solomson explained that "a taxpayer won’t be considered financially disabled if another person is authorized to act on their behalf in financial matters".

Furthermore, the court analyzed the substantiation requirements set forth in Revenue Procedure 99-21, 1999-1 C.B. 960. This procedure mandates that a taxpayer provide two specific items:

A physician’s statement describing the disability; and
A statement by the taxpayer certifying that no person was authorized to act on their behalf in financial matters during the disability period.

Crucially, if an authorized representative existed, Rev. Proc. 99-21 requires the taxpayer to disclose "the beginning and end date of that person’s authorization".

Application of Law to Facts

The court identified a fatal flaw in Goldman’s pleadings: the failure to define the timeframe of his professional relationship with his accountant. Judge Solomson noted that "a critical piece of information is missing," specifically "the precise duration of the accountant’s authorization".

This omission created significant legal hurdles for the taxpayer regarding the calculation of the tolling period. Goldman claimed disability only through February 2022. Because he did not file his claim until October 2023, the court observed that "for a year and nine months — from February 2022 through October 2023 — he wasn’t financially disabled".

Applying the three-year lookback period of Section 6511(b)(2), the court performed the necessary calculation: "That leaves Mr. Goldman with only approximately a year and three months of the three-year look-back period during which he may potentially qualify for tolling".

Consequently, the timing of the accountant’s authorization became the dispositive fact. The court reasoned that Goldman would be eligible for tolling "if and only if Mr. Goldman’s relationship with his accountant terminated less than approximately a year and three months after April 15, 2018". If the accountant was authorized to act for Goldman during that specific window, Section 6511(h)(2)(B) would preclude a finding of financial disability, regardless of Goldman’s medical condition.

Regarding the procedural requirements, Judge Solomson acknowledged that Goldman’s physician statement satisfied the first prong of Rev. Proc. 99-21. However, the taxpayer failed the second prong. Because Goldman "nowhere indicates the precise date of when he and his accountant terminated their professional relationship," the court held it was "unable to determine if Mr. Goldman qualifies for tolling".

Conclusion

The Court of Federal Claims did not immediately dismiss the case but rather issued a show cause order. Judge Solomson ruled that Goldman must provide "the exact date he and his accountant terminated their professional relationship" to demonstrate compliance with Rev. Proc. 99-21 and avoid dismissal.

Key Takeaway for Professionals

Goldman serves as a reminder that financial disability claims are strictly construed. Even when a medical impairment is well-documented, the existence of an accountant or agent with financial power of attorney can invalidate the tolling provision for the duration of that authorization. As Judge Solomson stated, the omission of dates regarding a representative’s authority creates a "potentially fatal problem" for a refund suit. Practitioners must ensure that any claim under Section 6511(h) includes a precise timeline of all authorized representations to withstand judicial scrutiny.

Prepared with assistance from NotebookLM.