Goldman v. United States, 172 Fed. Cl. 548 (2026), 2026 WL 2849033 (Fed. Cl. Sept. 1, 2026)

For tax controversy practitioners, navigating the intersection of a client’s severe medical hardships and the rigid statutory deadlines of the Internal Revenue Code (I.R.C.) represents one of the most challenging areas of practice. In the recent decision of Goldman v. United States, Chief Judge Matthew H. Solomson of the United States Court of Federal Claims addressed a scenario that is as tragic as it is instructive for CPAs and Enrolled Agents. While the court expressed deep sympathy for the taxpayer’s significant mental health struggles, it ultimately dismissed his refund claim for failure to state a claim under Rule 12(b)(6). The decision reinforces a critical controversy lesson: the “financial disability” tolling exception of I.R.C. § 6511(h) is strictly construed and is entirely unavailable if an authorized representative, such as an accountant or spouse, has authority to act on the taxpayer’s behalf during the period of disability.

Facts of the Dispute and Taxpayer’s Medical Impairment

In November 2017, the plaintiff, Mr. Michael Goldman, was diagnosed with major depressive disorder. Following his diagnosis, Mr. Goldman—who had historically managed all financial matters for both himself and his wife—became “severely impaired and was unable to manage” those financial affairs. The record established that this severe impairment persisted continuously from the date of diagnosis until at least February 2022.

Crucially, prior to and during the 2017 tax year, Mr. Goldman had retained an independent accountant who was “responsible for all bookkeeping and the filing of Corporate and Personal Tax Returns [sic].” Operating under this professional engagement, the accountant filed Mr. Goldman’s 2017 corporate tax returns, along with various state and local filings. However, the accountant failed to file Mr. Goldman and his wife’s joint 2017 personal income tax return (Form 1040). Although a 2017 Form 1040 had been prepared by the accountant—reflecting a claim for a refund in the amount of $7,977.00 due to overpayments made via estimated taxes—it was left unfiled.

Sometime in 2023, Mr. Goldman discovered that the joint 2017 personal return had never been submitted. On October 24, 2023, he filed the 2017 Form 1040 late-filed return with the Internal Revenue Service (IRS), seeking the $7,977.00 refund. The IRS denied the administrative claim as untimely, a decision subsequently sustained by the IRS Independent Office of Appeals. Mr. Goldman subsequently filed a pro se tax refund suit in the Court of Federal Claims on November 20, 2024.

Taxpayer’s Argument for Relief and Jurisdictional Prerequisites

Mr. Goldman sought a refund of the $7,977.00 overpayment, arguing that his severe medical condition entitled him to equitable tolling of the limitations and look-back periods under I.R.C. § 6511(h). The government moved to dismiss the complaint on two grounds: first, for lack of subject-matter jurisdiction under Court of Federal Claims Rule (RCFC) 12(b)(1); and second, for failure to state a claim under RCFC 12(b)(6).

To resolve the jurisdictional challenge, the Court of Federal Claims scrutinized several foundational tax controversy principles:

The Full Payment Rule: Under the long-standing rule established in Flora v. United States, 357 U.S. 63 (1958), a taxpayer must prepay the tax principal before the court has subject-matter jurisdiction over a refund action. Chief Judge Solomson noted that “The Flora full payment rule requires that taxpayers prepay the tax principal before the Court of Federal Claims will have subject matter jurisdiction over their tax refund action[.]” Because Mr. Goldman’s 2017 taxes were paid in full via estimated payments throughout 2017, he satisfied this rule.
The Administrative Claim Prerequisite: Under I.R.C. § 7422(a), no refund suit may be maintained until an administrative claim has been “duly filed” with the IRS. Because Mr. Goldman’s late-filed 2017 return (Form 1040) itself contained a refund claim, the return “simultaneously constituted the filing of a (timely) administrative refund claim.”
The Substantial Variance Doctrine: Under Treas. Reg. § 301.6402-2(b)(1), taxpayers are barred from raising new facts or legal theories in court that were not presented in their administrative claim. The government argued that because Mr. Goldman did not raise the “financial disability” argument in his initial administrative filing (only raising it during his IRS appeal), his court action varied from his administrative claim. However, Chief Judge Solomson rejected this, holding that the substantial variance doctrine is “inapposite to a financial disability claim” because financial disability does not relate to the underlying tax liability itself, but to the timing rules and the “form and manner” requirements of I.R.C. § 6511(h).
Statute of Limitations on Suits: Under I.R.C. § 6532(a)(1), a tax refund suit must be initiated within two years of the IRS mailing a notice of disallowance. Since the IRS mailed the notice on February 16, 2024, and Mr. Goldman filed suit on November 20, 2024, his suit was timely.

Consequently, the court determined it possessed subject-matter jurisdiction and denied the government’s RCFC 12(b)(1) motion, routing the case to be decided under the substantive look-back standard of RCFC 12(b)(6).

Statute of Limitations and the Substance of the Look-Back Provision

While Mr. Goldman’s administrative refund claim was “timely” under the technicality of I.R.C. § 6511(a) (which permits a refund claim to be filed within three years of filing a return, regardless of whether that return is timely or late, as held in Boeri v. United States, 724 F.3d 1367 (Fed. Cir. 2013)), his claim ran headfirst into the strict look-back limitations of I.R.C. § 6511(b)(2)(A).

Under I.R.C. § 6511(b)(2)(A), the amount of any credit or refund is strictly limited to the portion of the tax paid during the three years immediately preceding the filing of the administrative claim. Chief Judge Solomson clarified that this look-back provision “is not a [jurisdictional] ‘statutory time . . . limitation[ ]’ but rather a ‘substantive limitation[ ] on the amount of recovery.’” As a result, “even when a plaintiff has satisfied the timeliness requirement in §6511(a), no recovery is possible unless that plaintiff has also paid taxes during the relevant ‘look-back’ period.”

In Mr. Goldman’s case, his 2017 personal income taxes were paid via estimated payments throughout 2017. Under I.R.C. § 6513(b)(2), estimated tax payments are “deemed paid” on April 15 of the succeeding tax year—meaning Mr. Goldman’s taxes were deemed paid on April 15, 2018. However, his administrative refund claim was not filed until October 24, 2023—more than five years after his taxes were paid. Because the look-back period of I.R.C. § 6511(b)(2)(A) only captured taxes paid on or after October 24, 2020 (three years prior to the filing), the recoverable amount was mathematically capped at “zero dollars,” requiring dismissal under RCFC 12(b)(6) unless tolling applied.

Application of Law to Facts: The Accountant’s Fatal Authorization

To overcome the look-back cap, Mr. Goldman relied on I.R.C. § 6511(h), which suspends the running of the § 6511(a), (b), and (c) limitations during any period of a taxpayer’s life that they are “financially disabled.” Under § 6511(h)(2)(A), an individual is financially disabled if they are “unable to manage [their] financial affairs by reason of a medically determinable physical or mental impairment...”.

However, I.R.C. § 6511(h)(2)(B) contains a critical carve-out: “An individual shall not be treated as financially disabled during any period that such individual’s spouse or any other person is authorized to act on behalf of such individual in financial matters.”

Chief Judge Solomson analyzed the plain language of this carve-out, concluding that “the plain text of the financial disability provision contemplates that even though a taxpayer may be financially disabled in general, the taxpayer will ‘not be treated’ as such, so long as there is another ‘person [ ] authorized to act on behalf of [that taxpayer] in financial matters.’”

Recognizing that the complaint omitted the exact date on which Mr. Goldman and his accountant terminated their professional relationship, the court issued an order to show cause to clarify this factual point. In response, Mr. Goldman confirmed that he had authorized his accountant to file his 2017 return, and had further authorized her to late-file his 2018 tax return on April 25, 2022. It was only after she refused to file the 2018 return subsequent to that date that they officially parted ways.

This factual admission was fatal. By his own admission, Mr. Goldman’s accountant was authorized to act on his behalf in tax and financial matters from April 15, 2018, through at least April 25, 2022. This continuous period of authorization completely enveloped Mr. Goldman’s entire period of claimed medical disability (November 2017 through February 2022).

As a matter of law, the court held that because he had authorized a professional representative during this period, he could not be treated as “financially disabled” under I.R.C. § 6511(h). Thus, no tolling occurred, and the look-back provision barred recovery of his overpayments.

Details of the Arrangement with the Accountant

In Goldman v. United States, the Court of Federal Claims scrutinized the exact scope and duration of the accountant’s professional engagement to determine whether the taxpayer had an authorized representative acting on his behalf under I.R.C. § 6511(h)(2)(B).

The nature of the accountant’s authority was characterized by several key aspects:

General Bookkeeping and Tax Filing Responsibility

Prior to and during the 2017 tax year, Mr. Goldman retained an independent accountant who was “responsible for all bookkeeping and the filing of Corporate and Personal Tax Returns”. Under this general professional arrangement, the accountant was fully empowered to handle tax matters, as evidenced by the fact that she prepared and filed Mr. Goldman’s 2017 corporate returns along with various state and local filings.

Specific E-File Authorization for the 2017 Return

For the joint 2017 personal income tax return (which contained the unfiled $7,977.00 refund claim), Mr. Goldman had provided his accountant with express e-file authorization to submit the return to the IRS. Although the return was prepared, the accountant ultimately failed to transmit it.

Specific Late-Filing Authorization for the 2018 Return

The accountant’s filing authority extended into later tax years. On April 25, 2022, Mr. Goldman provided his accountant with specific authorization to late-file his 2018 tax returns. When the accountant subsequently refused to file the 2018 returns after that date, the professional relationship was finally severed, and they parted ways.

Legal Classification under I.R.C. § 6511(h)(2)(B)

Under the tax code, the “financial disability” tolling exception is entirely disqualified during any period that a spouse or “any other person is authorized to act on behalf of such individual in financial matters”. The court clarified how this applied to the accountant’s authority in two important ways:

Broad Financial Authority Is Not Required: The court ruled that a taxpayer does not need to grant a third party “broad authority to act in all other financial matters” to trigger this disqualifying exception.
Tax-Filing Authority Suffices: The “critical question” is simply whether the taxpayer authorized a third party to file the tax return/refund claim. Retaining a professional accountant to prepare and file tax returns legally “qualifies as a third person with authority to act on behalf of [a taxpayer] in financial matters” under § 6511(h)(2)(B).

Because Mr. Goldman’s accountant possessed this filing authority from the onset of his depression in 2017 until their relationship terminated after April 25, 2022, the court ruled that he could not be treated as “financially disabled” for statutory tolling purposes during that period.

Conclusion and Key Controversy Takeaways for CPAs and EAs

The Court of Federal Claims dismissed Mr. Goldman’s complaint under RCFC 12(b)(6). While Chief Judge Solomson was highly sympathetic to the taxpayer’s mental health struggles, he emphasized the rigid boundaries of the court’s power:

“While this Court is sympathetic to Mr. Goldman’s predicament, this Court is ultimately bound by the statutes Congress has enacted. Here, those laws — as interpreted by the United States Supreme Court, and our appellate court, the United States Court of Appeals for the Federal Circuit — preclude Mr. Goldman’s tax overpayment claim here as a matter of law.”

The judge further reiterated that “this Court ‘lack[s] any discretion to suspend the [I.R.C. §6511 limitation periods] for a reason other than financial disability’ of the taxpayer,” and that “‘[s]ympathy by the court for plaintiff’s situation is not a basis to supersede the limited waiver of sovereign immunity under §6511(h).’”

For CPAs and Enrolled Agents, this case serves as a sobering reminder of several critical practice management and controversy lessons:

Third-Party Authorization is an Absolute Bar: Under I.R.C. § 6511(h)(2)(B), authorizing any person to act in financial matters—such as retaining an accountant to handle bookkeeping or tax filings—fully disqualifies a taxpayer from the financial disability exception. As established in Pull v. I.R.S. (E.D. Cal. 2015), simply retaining a CPA to file returns qualifies as a third person with authority to act in financial matters.
The Accountant-Client Relationship Must be Formally Managed: Practitioners must ensure that engagements are tightly defined, and if a client is unable to participate or provide information, formal procedures should be initiated rather than letting deadlines slip. An accountant’s failure to file is not an excusable “financial disability” for the taxpayer if the accountant was authorized to act.
Controversy Timelines are Inflexible: Estimated tax payments are deemed paid on April 15 of the succeeding year under I.R.C. § 6513(b)(2). If a client is late in filing, the three-year look-back clock under I.R.C. § 6511(b)(2)(A) is ticking. CPAs must prioritize securing and filing late returns as quickly as possible to protect the client’s right to claim overpayment refunds before they are reduced to zero.

Ultimately, Goldman underscores that while mental health crises are tragic and severely impairing, the Internal Revenue Code leaves no room for equity or judicial discretion when a professional representative remains authorized on the account.

Prepared with assistance from Gemini Notebook.