J. JOSEPH SMITH, Circuit Judge:
This is an appeal from an order of the United States District Court for the Eastern District of New York, Mark A. Costantino, Judge, dismissing taxpayers' refund action on the grounds that the statute of limitations had expired. 365 F.Supp. 383 (1973). Because we agree with the taxpayers that the Commissioner is precluded from pleading the statute of limitations because he inadvertently led them to believe that their filing deadline had been extended, we reverse.
The relevant facts are unusual, but not unique. Taxpayers are husband and wife who elected to pay a contested deficiency of almost $38,000 and then seek a refund from the Commissioner or the courts. Following a timely claim, the Service — according to normal practice — requested that the taxpayers waive a formal notice of disallowance. As the waiver form — known in the trade as Form 2297 — clearly indicates, the effect of such an irrevocable waiver is to commence the two-year statute of limitations on refund actions.
Taxpayers apparently executed this form, for the Service's files contain a letter from taxpayers' attorneys dated November 7, 1966, which states:
We must say "apparently" because the Service has since misplaced the form. It is therefore forced to rely on the cover letter and consistent notations in its files to prove that the formal notice was waived.
Based on this circumstantial evidence the district court found that the waiver form had in fact been executed. While we recognize that the Commissioner has the burden of proving the affirmative defense of the statute of limitations, Fed.R.Civ.P. 8(c), and that here that burden is increased by his failure to produce the waiver form, we cannot say that the district court was "clearly erroneous" in reasoning that the cover letter must have been accompanied by the form.
Assuming then that the waiver was executed on or before November 7, 1966, the filing deadline for a timely claim would have been November 7, 1968. However the higher echelons in the Service apparently overlooked the cover letter and docket entries — the form presumably having been misplaced — for on May 20, 1968 the Service sent the taxpayers the very disallowance notice they had waived eighteen months before. That notice — which was but a form letter — was faithful to a different subsection of the statute of limitations in advising
Thus the unnecessary disallowance notice apparently extended the filing deadline from November 7, 1968 — as calculated according to the waiver form — to May 20, 1970. The taxpayers filed this action on June 20, 1969 — seven months after the original deadline, but eleven months before the new one.
The Commissioner, in arguing that the unnecessary disallowance notice should be disregarded, stresses the general rule that a statute authorizing an action against the government must be strictly construed as a waiver of sovereign immunity. United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941); Minnesota v. United States, 305 U.S. 382, 388, 59 S.Ct. 292, 83 L.Ed. 235 (1939); Hammond-Knowlton v. United States, 121 F.2d 192, 201-202 (2d Cir.), cert. denied, 314 U.S. 694, 62 S.Ct. 410, 86 L.Ed. 555 (1941). But see, Panella v. United States, 216 F.2d 622, 624 n. 3 (2d Cir. 1954) where then Judge Harlan noted that in the absence of specific congressional intent, the courts have vacillated between strict and liberal constructions of such statutes.
These cases, however, deal with the substantive nature of the authorization, and here there is no doubt that the taxpayers' refund action is authorized. 26 U.S.C. § 7422. Nor is this case controlled by United States v. Michel, 282 U.S. 656, 658-660, 51 S.Ct. 284, 75 L.Ed. 598 (1931), where the Court held that the statute of limitations on tax actions must similarly be narrowly construed. See also, Gallion v. United States, 389 F.2d 522, 523-524 (5th Cir. 1968) (citing numerous cases involving strict application of the statute); Wallace v. United States, 142 F.2d 240, 242-243 (2d Cir.), cert. denied, 323 U.S. 712, 65 S.Ct. 37, 89 L.Ed. 573 (1944) (reluctantly following this "niggardly rule"). Here the problem is not that there is one ambiguous statute that must be construed, but rather that there are two unambiguous subsections that appear to be equally controlling. That is, if we focus on the fact that the waiver was executed, § 6532(a) (3) clearly requires that the taxpayers' action be dismissed. But if we focus on the equally undeniable fact that the Commissioner sent the taxpayers a formal disallowance notice, the more general rule of § 6532(a) (1) applies and their action is timely.
The point, of course, is that these two subsections were intended to be mutually exclusive: And in the normal course of events, they are, as disallowance notices are not issued where a waiver has been excuted. But here — through an oversight in the Commissioner's office — both events occurred, and hence the problem remains as to which subsection applies.
Both the Commissioner and the court below rely on § 6532(a) (4) and its attendant regulation, § 301.6532-1(d), in arguing that the earlier date should control:
Again we must disagree. Rather it seems clear that this regulation — in keeping with § 6532 as a whole — merely nullifies any informal reconsideration after a formal disallowance notice or waiver. Here there was no such reconsideration, but rather two equally formal events. Cf. Beardsley v. United States, 126 F.Supp. 775, 776-777 (D.Conn. 1954).
Nor do we find any merit in the Commissioner's reliance on the line of cases holding that a taxpayer cannot extend the statute by filing successive claims. See Stratmore v. United States, 463 F.2d 1195, 1196-1197 (3d Cir. 1972); Einson-Freeman Co. v. Corwin, 112 F.2d 683, 684 (2d Cir.), cert. denied, 311 U.S. 693, 61 S.Ct. 75, 85 L.Ed. 449 (1940); Fajardo Sugar Growers Ass'n v. United States, 161 F.Supp. 912, 916 (S.D.N.Y.1958), aff'd per curiam, 264 F.2d 671 (2d Cir. 1959). Here, of course, it was not the taxpayers' unilateral filing of a second claim, but rather the Commissioner's error in sending the unnecessary disallowance notice that arguably extended the critical deadline.
Finally, we are faced with the somewhat more troublesome question of whether in any event such inadvertence can estop the government. Here we are not unmindful of the line of cases — declining in force, but nevertheless still with us — holding that the government is not estopped by an unauthorized act of one of its agents. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 383-385, 68 S.Ct. 1, 92 L.Ed. 10 (1947); Wilber National Bank v. United States, 294 U.S. 120, 123-124, 55 S.Ct. 362, 79 L. Ed. 798 (1935); Yuma Water Ass'n v. Schlecht, 262 U.S. 138, 144, 43 S.Ct. 498, 67 L.Ed. 909 (1923); Utah Power & Light Co. v. United States, 243 U.S. 389, 408-409, 37 S.Ct. 387, 61 L.Ed. 791 (1917); Posey v. United States, 449 F.2d 228, 233-234 (5th Cir. 1971); Bornstein v. United States, 345 F.2d 558, 562-563, 170 Ct.Cl. 576 (1965); Walsonavich v. United States, 335 F.2d 96, 101 (3d Cir. 1964); Goldstein v. United States, 227 F.2d 1, 4 (8th Cir. 1955); United States v. Globe Indemnity Co., 94 F.2d 576, 578 (2d Cir.), cert. denied, 304 U.S. 575, 58 S.Ct. 1047, 82 L.Ed. 1538 (1938).
But while the issuance of the disallowance notice was obviously erroneous, we cannot say that it was "unauthorized" or even that it was contrary to congressional intent. Rather we believe that the alternative subsections of § 6532 demonstrate a flexible approach. As another court has held in a case where the Service similarly issued a disallowance notice after a waiver had been executed:
We would note in this regard that our holding does no violence to the fundamental purpose of any statute of limitations — the barring of stale claims. Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-349, 64 S.Ct. 582, 88 L.Ed. 788 (1944). The statutory limit of two years remains the same whichever triggering event is chosen, and the timing of that critical event remains completely within the control of the Commissioner. Indeed it is difficult to see how the Commissioner will be prejudiced by a seven-month "extension" on a claim which he did not disallow until four years after the contested taxes were paid and the initial refund claim was filed. The Commissioner must merely defend one more refund action for a not insubstantial amount.
In sum, given that the relevant statute of limitations is by its very terms rather flexible, that there is no suggestion that anyone in the Service acted in collusion with the taxpayers to defraud the federal fisc, and that the taxpayers' reliance on the erroneously issued disallowance notice was not unreasonable, we conclude that the government is estopped from raising the earlier deadline as a bar to this action.
We reverse and order that the case be restored to the district court's docket.
We cannot agree. In view of the latitude given the Commissioner in developing the regulations which provide the intricate — some would say labyrinthian — detail of our tax laws, Bingler v. Johnson, 394 U.S. 741, 749-751, 89 S.Ct. 1439, 22 L.Ed.2d 695 (1969), we do not think that the extension here was "arbitrary" or "patently inconsistent with congressional intent." Indeed, we find the addition quite consistent with our holding that Congress intended the execution of a waiver and the issuance of a disallowance notice to be treated as equally significant events.
While we doubt that either is very likely, we trust that most in our profession would judge legal competency more by an ability to read than by a photographic memory. Thus while we cannot endorse the rather lax filing system of taxpayers' attorneys — who apparently also misplaced the waiver form — we cannot say that their reliance on the subsequent disallowance notice was so unreasonable that their clients should be denied their day in court.