A Virginia resident is taking on the United States government in a legal battle over tax refunds he claims were wrongfully denied. On January 29, 2026, Douglas C. Seal filed a complaint in the United States District Court for the Western District of Virginia against the United States of America, alleging that the Internal Revenue Service (IRS) erroneously collected federal income taxes for the years 2013 and 2014. Seal seeks to recover these overpayments along with statutory interest.
Douglas C. Seal’s case revolves around his assertion that he overpaid federal income taxes for the tax periods ending December 31, 2013, and December 31, 2014. According to the complaint, Seal was the sole breadwinner during these years and incurred all business and household expenses as well as tax-deductible itemized deductions. The situation took a turn when Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in response to the COVID-19 pandemic. This legislation allowed taxpayers to carry back net operating losses (NOLs) from certain years to previous tax years to claim refunds.
Seal’s story takes a complicated twist with his filing of a Form 1045 in June 2020 for tax year 2018, claiming an NOL carryback refund amounting to $1,059,190. However, due to changes in marital status between the NOL year (2018) and earlier eligible years (2013-2014), complications arose regarding income allocation between him and his former spouse. Despite submitting amended returns and additional documentation requested by the IRS multiple times throughout 2022 and early 2024, Seal alleges that his claims were improperly disallowed.
The plaintiff is seeking judgment against the United States for at least $290,261 related to his 2013 taxes and $7,333 related to his 2014 taxes. He also requests statutory interest on these amounts as allowed by law, litigation costs, attorney fees under IRC section 7430 and Title 28 U.S.C., section 2412, along with any other relief deemed just by the court.
Representing Douglas C. Seal are attorneys James A. Eastwood and Elizabeth K. Blickley from Fox Rothschild LLP based in Washington D.C., while Judge JHY-JCH presides over this case identified as Case No: _3:26CV7.
Source: 326cv00007_Seal_v_United_States_of_America_Complaint_Western_District_Virginia.pdf
