On October 7, 2019, the United States District Court for the District of Colorado in Estate of Daniel B. Culver and ANB Bank v. United States 11 became the second court to determine that jurisdiction over overpayment interest claims belongs exclusively with the Court of Federal Claims. The district court concluded that the taxpayer was precluded from bringing the suit under 28 U.S.C. §1346(a) (1), which provides the district courts and the federal claims court with concurrent jurisdiction over civil actions against the United States for the recovery of wrongfully collected tax, penalties, or any sum that is excessive or wrongfully collected under the internal revenues laws. Culver is one of four federal court cases that have considered this issue, and is the second to determine that the federal claims court has exclusive jurisdiction to hear such claims. The Second Circuit similarly rejected the taxpayer’s jurisdictional argument in Pfizer Inc. v. United States. 12 On the other hand, the Sixth Circuit ruled in favor of the taxpayer in E.W. Scripps Co. v. United States, 13 which was followed by Paresky v. United States,14 a district court decision in the Eleventh Circuit. 


The taxpayers in Culver brought a lawsuit against the government in federal district court seeking to recover interest based on overpayment of taxes. For a federal district court to have jurisdiction, the taxpayer’s claim for overpayment interest must be an action seeking recovery of: (1) an internal revenue tax alleged to have been erroneously or illegally collected; (2) a penalty claimed to have been collected without authority; or (3) a sum alleged to have been excessive or wrongfully collected.15 According to the district court, there was no dispute that overpayment interest is not a tax or penalty under the first two categories and discussed only whether overpayment interest qualifies under the third category.

District Court Opinion

The district court adopted the reasoning of the Second Circuit in Pfizer, concluding that interest based on an overpayment of taxes is not excessive or wrongfully collected and, thus, a federal district court does not have jurisdiction over a suit seeking to recover overpayment interest. In reaching its conclusion, the court rejected the Sixth Circuit’s analysis, because it relied on a strained reading of section 1346(a)(1) and an overbroad reading of dictum in Flora v. United States, which stated that a “sum” under the third category could include interest.16 In Flora, the Supreme Court reasoned that “any sum” must mean “amounts which are neither taxes nor penalties,” stating that “[o]ne example of such a ‘sum’ is interest.”17 The Culver court did not find this compelling as the Flora court was not addressing a claim for overpayment interest nor did it recognize how different types of interest are treated differently under tax law. 

Relying on Pfizer, the Second Circuit focused on the plain text of section 1346(a)(1) and concluded that the “sum” referenced in category three must be related to an amount previously paid to the government by the taxpayer.18 Because “overpayment interest is not a sum that, at some point in the past, was either excessive or wrongfully collected,” the court concluded that “[t]o find that overpayment interest qualifies as the type of ‘sum’ encompassed by §1346(a)(1) strains the plain text of the statute beyond what it can bear.”19 The Second Circuit concluded that overpayment interest is a straightforward money claim against the federal government and therefore covered by the Tucker Act, which vests exclusive jurisdiction in the United States Court of Federal Claims to hear any non-tort claim against the United States founded upon any Act of Congress.20

Culver found the Second Circuit’s approach to be rooted in the text of the statute and appropriate considerations regarding the broader context of tax law.21 Accordingly, the Culver court directed the case be transferred to the Court of Federal Claims.


The differing court opinions provide no clear path going forward in determining jurisdiction in cases of overpayment interest claims. While Culver’s foundation rests on the sound analysis of the Second Circuit’s decision in Pfizer, it would not be surprising if the issue of whether district courts can hear suits for overpayment interest under section 1346(a)(1) eventually ends up before the U.S. Supreme Court.


To be eligible to apply for the CAP program, applicants must: • Have assets of $10 million or more; • Be a U.S. publicly traded corporation with a legal requirement to prepare and submit SEC Forms 10-K, 10- Q, and 8-K; and • Not be under investigation by, or in litigation with, any government agency that would limit the IRS’s access to current tax records.