Agility Network Services, Inc. v. United States

After receiving notices of federal tax lien and of intent to levy, the taxpayers requested that the IRS hold a Collection Due Process hearing. The IRS took five months to process the request. At the hearing, the presiding agent refused to discuss multiple issues. The taxpayers were still dissatisfied after a second hearing before a different agent and sued the government for the agents’ alleged misbehavior under 26 U.S.C. 7433. They also requested a temporary restraining order against further tax-collection efforts. The district court dismissed, finding that the challenged activity did not fall within the scope of section 7433, and the Tax AntiInjunction Act, 26 U.S.C. 7431(a) precluded a restraining order. The Sixth Circuit affirmed. The government has not consented to being sued in this case, so the district court lacked jurisdiction. A person may sue the federal government for damages under 26 U.S.C. 7433 “[i]f, in connection with any collection of Federal tax with respect to [the] taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence, disregards any provision of” the tax code or any regulation promulgated thereunder. This suit falls outside this waiver of sovereign immunity because the challenged conduct did not occur in connection with tax collection. View "Agility Network Services, Inc. v. United States" on Justia Law