Judge Jesse Furman
RCN Telecom Corp. is a designated collector of federal excise tax (FET) under 26 USC §4291. Purporting to represent a class of subscribers to RCN’s long-distance and “bundled” phone services on or after Aug. 1, 2006, Matthew sued RCN to recover allegedly “improperly collected” FET. Despite instructing carriers to cease collecting and remitting FET on time-only long distance services and “bundled service” as of Aug. 1, 2006, the IRS’ May 2006 notice 2006-50 reaffirmed FET applied to “local only service.” In addition to arguing Matthew’s action was a tax refund suit, RCN argued Matthew’s noncompliance with Internal Revenue Code §7422(a)’s exhaustion requirement deprived the court of jurisdiction. Instructed by the Seventh Circuit’s decision in Kaucky v. Southwest Airlines and distinguishing In re Air Transportation Excise Tax Litigation, district court—finding his claims “for disguised refund of taxes”—dismissed Matthew’s complaint. In addition to failing to exhaust remedies under §7422(a), he violated §7422(f)(1) by failing to name the United States as defendant. Even if the notice relieved Matthew of his duty to exhaust administrative remedies, his sole remedy, under §7422(f)(1) was to sue the United States.