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In Computervision Corp. v. United States, a tax case, the Federal Circuit affirmed a decision by the U.S. Court of Federal Claims holding that Computervision is not entitled to a refund of interest assessed and paid anent to its 1982 tax year and that Computervision failed to state a claim for interest netting. Reading the case made me dizzy, but here are the facts--

Computervision overpaid the IRS by nearly $5 million in 1982 and by over $7 million in 1983. The IRS gave Computervision a refund without interest. Later, the IRS conducted an audit. It concluded that Computervision had underpaid its taxes in 1982. Computervision, the IRS, and the Justice Department litigate the IRS' findings for years. In the meantime, Congress added a provision to the tax code that requires interest netting, that is, requiring the IRS to apply a zero net interest rate to overlapping periods of mutual indebtedness between a taxpayer and the IRS.  Two years after Congress amended the tax code, Computervision first asserted a claim for refund of interest. That was more than ten years after its claim accrued.

Both the trial and appellate courts agreed that Computervision waited too long to assert the claim. The Federal Circuit identified the various ways around the statute of limitations, but held that none of them applied. The court also agreed that Computervision had failed to state a claim for interest netting, which would allow the rival interest claims to offset each other. The court held that because the statute of limitations had expired on both the underpayment and overpayment interest claims, Computervision could not state a claim for interest netting.