s up to and during the collection due process hearings that we that my clients applied for and that they attended in this case we believe that the iris violated procedures under the internal revenue revenue code in the way that they conducted those hearings in the way that they treated the clients why is that a collection activity when the regulations seem to say that the i action or levy action taken that the iris doesn't go out and seize any action while you're appealing those actual collection actions are taken and why isn't that the same as saying that there are collection active if they can't be doing those things they're not engaging in collection activities which i think they sure are i think they're still engaging in collection activities or still trying to collect the tax it just through an alternative method because the taxpayer is going to propose other methods in which the tax can be collected for instance for example installment agreement some other type of payment plan those are methods of collection that the i r s as a gauge did i think what the regulations hit is is that while the tax payers trying to to work out in proposals other collection alternatives they don't get hit with a levy during that period i understand as a matter of common sense how we might come to the conclusion that you are arguing for but we're well maybe that's the problem we have is that anyone who's actually practiced in that area and gone to these hearings know that everything about them is collection that's what they're doing they're collecting the tax on me we're stuck with it whether we whatever we might think about that you know the common stance or that what we think from a another perspective well the regulations define it as a collection action but the statute itself section  six thirty six thirty three zero talks about collection action too and states was civically that a taxpayer is permitted during that hearing to challenge the appropriateness of the collection actions they wanted it would within that standard itself if there were collection actions and then the regulations that we've cited to also talk about the idea that the collection action or action generally includes any action taken by the i r s to collect the or i think this is important or any action taken by a taxpayer in response to the i r s is failure to act in connection with the collection i think back to that question actually included sort of an a misleading or inappropriate it's the fact that the regulation whether it does or does not apply to the statute in question is is the real what not have the regulations to be interpreted correct are you asking whether i'm just correcting my earlier question when traffic didn't make any sense in light of what the ultimate issue in the case when i was going to say that are you saying that the regulations under seven four three zero doesn't apply to the statutes we're dealing with is not the question the question has to do with whether the regulation which is point the question is whether seven four three zero applies to seven four three three i think yes and i think that's why don't you thank you and i think it does because they have to be read in conjunction with each other because seven four three three is the section that we brought the lawsuit under with seven four three zero is the section under which the penalties can be assessed so they have to be read together and the regulation under seven four three zero talks about collection actions generally it doesn't limit it to the section it talks about it generally and then when we look at the other sections that we're dealing with six three three zero those sections also have reference to the term collection action which brings us also back to seven the regulation under seven four three zero so yes i think they do apply i think they're connected and i think that's why the regulation specifically talks about collection action generally i'll also point out as it has been briefed the amendment talks about collection action generally though it plummets that this particular context though does in their life limiting language i think it  i don't think it limits it at all i think it talks about it generally in the term a what that that definition means and then the regulation says that for example a collection action for purposes of seven four three zero and this section includes any action taken by the i r s under sect chapter sixty four of some title left and that's all the sections we're talking we can't say that it's limited just to seven four three zero one it specifically references chapter sixty four within the regulation and that kicks in all the sections under so chapter after which include six six three zero four six three three zero i'm sorry and then when we look at the amendment to the regulation the amendment on march one two thousand and sixteen says collection actions also include collection due process hearings under six three two zero one six three three zero so now i don't know the regulations specifically brings those in  and i think that's sort of a wash though right i mean if they clarify it does that mean that before they clarified it it included the clarification i mean that's always you could always say well they changed it because before then it didn't say that or you could say they changed it because before then it did say that i would i left with i would say they changed it to go sure you would but i mean somebody else will say the opposite it's really kind of hard to but isn't it true that the regulation that we're talking about is is defining administrative proceeding for the purposes of section seventy four thirty it does that as well but i well but them and then then the definition of administrative proceeding you get to something that includes collection actions defined so that if you look at the overall limitation of the regulation it's it's limited for purposes of section seventy four thirty that's what i was asking about when i said limiting language wise and limiting language i don't think there is a limit and i understand what you're saying but in well i know you disagree with that i'm asking why well because the regulation specifically says that for example it gives an example of what a collection action isn't it says any action that it but that's for the purpose of outlining an exception to what amounts to administrative proceeding quote for purposes of section seventy four thirty is that right i think that's a you can look at it their way i'd rather write them as and why no there is the language there that could be looked at that way you agree actually brings in all the sections it was limited strictly under seven three four three zero we would have language in there we wouldn't refer back to six three three zero and collection due process hearing there be no need if you take that out of context you're here you're  reading it absolutely correctly but you're taking you're reading the section that says includes any action taken by the internal revenue service what that's modifying is the words quote a collection action for purposes of section seventy four thirty so it's saying that actions under chapter sixty four of subtitle f to collect a tax are collection actions for purposes of seven d for thirty that's that's that doesn't mean simply because seventy four thirty three is also under chapter sixty four that that it included encompasses that it specifically narrows it doesn't but i think in their context under six seven four three zero we don't get to seven four three zero unless we go through through seven four three three you've got to get to seven four three zero through seven four three three i don't understand what that means well the seven four three zero is the section that applies the the  the the penalties that you get through through once you make the claim under seven four three three and i think our claim in this lawsuit i think was under seven three four three three and some four three zero is the is  penalty provision but you're using seven four three zero which defines collection action to say that the proceeding under seven four three three is a collection action right yes and the language that you're looking at says that the words any action under chapter sixty four that's what you were relying upon a moment ago modifies a collection action for purposes of seventy four thirty it's in other words what you rely upon is limited to seventy four thirty and it doesn't it doesn't seem to be expansive enough to also include seventy four thirty three i understand that argument so what so why is that right or i think that c r s is arguments why is that right or wrong because it's just an example that's just one example of what a collection action is but when you look above it says the collection action generally includes any action or any action taken by the taxpayer in response to the collection action so that section right the first sentence where we start out says a collection action generally that's how it defines it generally which we then use i believe the rug all these sections of the internal revenue code to define collection action because i don't find another th been maybe i got the number wrong you're saying under some four three three right those has that ever applied to these collection due process hearings as any court ever held that there have been a number of cases that have talked about collection due process hearings well that's not what he asked you what about what i asked you know i don't know if i understand your question if you're seeing your challenge you're saying some things that were done in the collection  due process hearing are are subject to sued under the statutory provisions seven four three three you go in and you sue you get relief from the government fifty dollars for being insulted or whatever and then he two cases that were cited to us have reached the opposite conclusion which are those cases that is an seventy four thirty three correct that's what answer you go said so in answer to judge rogers question there are cases that have come to the opposite conclusion of the one you want us to reach i'm not suggesting these are binding us but the morning your honour's finger for the united states the section under which the appellants have brought suit seventy four thirty three provides for damages in a limited category of cases in connection with any collection of federal tax and as i'm sure the panel is well aware that's a waiver of sovereign immunity and the language in that statute is narrowly construed the cases that have considered seventy four thirty three in connection with c d p proceedings and we've cited you four cases which judge mckeague has has noted two or more have all found that c b p proceedings are not collection action but there are a predicate to collection action or there precaution action there are no cases that have been cited to the contrary this is  consistent with the interpretation of seventy four thirty three narrowly as a waiver of sovereign immunity it's also consistent with the c d p statute itself which is the court has noted specifically says that collection action will be stayed during the pen d p proceedings or any appeals therefrom which some limited exceptions i think the odd part about this that i'd like you to comment on is that i want to focus for a moment on what generates the taxpayer request for one of these hearings the i r s is actually doing things to try to collect the tax prior to the taxpayer then having a right to one of these hearings right broadly speaking yes there is in at a minimum you've  account so if the statute requires you to send out a notice before you actually levy it yes you're saying the levy is the collection activity but notice telling the taxpayer hey i'm going to do this is not part of the collection activity that would be in connection with the case we have here we would call that pretty cool action activity i know you call it i'm just trying to figure out it's here here's the what i was trying to allude to it at the beginning it seems to me sending out a notice of intent to levy is a is part of a collection activity so it seems to me just logically speaking during gauging in collection activity by complying with the statute that says that's what you got to do before you levy then if you're almost saying it pause when the taxpayer requests this hearing so it's set aside there's then you're saying there's no collection activity during the hearing and then if they don't reach a compromise then the collection activity starts again that's what i thought you were going to say you actually said there isn't any collection activity until after the hearing is over which frankly seems to stretch things i will just say that that for purposes your honor on and honestly i don't know how to respond to that because my reluctance in responding to that is it may call into question other statutes and other provisions of the internal revenue code that i don't want to make a misstatement here that would affect those i would say that our position is that the cd be proceedings are not collection activity that and if you want to phrase it well you've gone further than that you've said that  yes because of other provisions in the internal revenue code and i don't want to get into right now but we would certainly say that in the context that with i'll just leave it there you are just very quickly to finish up so i want you to assume for a second without agreeing that the pre hearing activities that resulted in the request for a hearing are collection activity does that change the analysis at all as to whether the the hearing itself is a collection activity or in other words a continuation of what had previously started or would do would we look at it as pausing your collection activities and  of itself is not a collection activity i think you have to look at the c d p p hearing itself without what comes before comes after and that is a pretty collection and certainly pretty collection with what comes after  there when anything that's before something is pre what comes after that does does that help us i think it does for the question that you have here your honor we're just looking at what happens i'm trying to think of your hypothetical even if even if it's a pause according to your theory it's not collection activity whether it's paused under your theory or whether under my theory it's something completely separate it's not collection activity does that answer your question by theory i'm just saying that if it if there was collection activity going on a hearing is requested and held the only way that that wouldn't be collection activities then is if it paused there earlier collection activities i'm not saying that's a theory it just seems to me to be logical if my hypothetical script well under sixty three thirty any collection activity is stayed and i'm trying to think of where their collection activity could have proceeded prior to c d p hearing and i i don't know if that's the case are there i'm sorry  sort of a general question seventy four thirty three that's in order to richie to get compensation for stuff that's illegal or improper in the collection of taxes right i mean that's the whole yes i r s does something they shouldn't do you should be able to get money from it all right so let's assume something that we all agree they can't do let's say they call up and say we see a lot of money in the i r s we're going to stop your mail and snow going to we're going to shoot your dog  that's covered right i mean if they do that you can sue under seventy four thirty three is that the workers that is that not collection activity because it's illegal and therefore you can't sue that would be strange when are you with me i hope so seventy four thirty three would pertain to collection activity so if i'm trying to think of an example if for example they  happened with that be covered as well why not it would seem strange that wasn't what if they just what if you had sort of a rogue i r s i know it's hard to imagine and and they just call up and threaten them with some sort of thing that they have no right to threaten them with and it will will will you know it would have to draft your kid or so within the parameters of seventy four thirty three that's what i'm asking you if it's within the parameters is that a collection activity to do something illegal to try to understanding seventy four thirty three says i believe i'm looking for the exact language of the statute it says it has to be  three recklessly or intentionally or reason of negligence disregards any provision of this title which title twenty six or any regulation promulgated promulgated under this title so that's that's what you have to be violating something specifically prohibited yes in doing something that's not authorize yes but what are all those things cover i mean what are those things protect what does seventy four thirty three protect you have to be in seventy four thirty three allows for a cause of action when you're in violation of any provision of this title which would be title twenty six edition of the i r s or any regulation promulgated under this another way to look at this case is ignoring whether this is or is not a collection activity what provision of the tax code or tax regulation did an i r s agent violate here that would then fall within the provision that gives damages for they don't really cite i don't think what what code provision is violated in other words back to drivers example being mean at a hearing probably it seems a stretch to say that being mean at a hearing or being disrespectful at a hearing violates the tax code or violates a tax regulation correct so what what tack what provision of the tax code or what regulation do you believe they are claiming the arris violated that would entitle them to damages assuming that a hearing is a collection activity well your honor i don't know if it's either bester or proof for me from the perspective of my client's interest to answer that question but i didn't ask i ask you what do you think they're arguing i'm not asking you to make up an argument for oh i think that i am in two respects your honor number one we would first dispute  quite strongly that anything happened here that was actionable because it hasn't been addressed yet the government hasn't and the political procedure posture of this case been able to rebut what's been alleged in the complaint but i don't know what they've alleged and i would  says they did i got that what provision of the tax code or regulation do you understand them to be saying assuming that what they claim is true was violet i would presume that since everything in the complaint pertains to the c d p proceeding that it's something that occurred during the c d p proceeding and sixty three twenty sixty three thirty and the regulations they were under but if with all due respect you're still not answering the question because to say it occurred we all know what occurred during the hearing that we have to figure out what regulations says they had to do something they didn't do during the hearing or they couldn't do something they did during the hearing i don't know that they have identified anything the the primary allegations they make is that and installing the plane was not accepted well that's a discretionary decision under the regulations so they're talking about things that appear to be discretionary and not mandatory they say we came to a hearing and we had a whole list of things that we wanted to talk about and they were rude and mean and they wouldn't let us talk about all the things on our list just stop so just cabinet to just t hat what regulation does as in other words what regulation says you get to come with a list and you get talk about everything on the list that's the purpose of a c d p hearing but i don't know if it's specifically prevented or or provided that you have to be able to discuss everything on your list it's like any other hearing it's like this court hearing i may not get to all my arguments but i have an opportunity to present my arguments ok wait and ask here i'd like to ask another question about the other part because really the issue as i take it is is not the portion of seventy four thirty three the relates  tax so this has to be those words in other in order to fall under this waiver of sovereign immunity right has to be in connection with the collection of yes text and that's  what that the lower court threw this out on that said it wasn't it didn't meet that standard of being in connection with the collection of attacks correct so that's what i'm trying to get out what the what congress may have meant by those words would it be in connection with the collection of attacks to threaten somebody or to do something against some other inches thick there must be all kinds of limitations on what you can do in there but this isn't for violation of any of those various limitations it's only a limit on on on those words there in connection with the collection of attacks so i'm having trouble seeing apart from whether bullying somebody or threatening to cut off their mail is a violation of some other part of the i r s is it in actually living on a bank account taking money out of someone's bank account to pay taxes foreclosing on a lien taking title to property and selling the property auction to collect someone's tax liability those are collection actions being mean to someone threatening someone is not a collection action per se i wonder about that but anyway well i'm not sure it matters so much to my question my question really get i will what i was trying to lay the foundation for was it seems to me that what makes a c d p not a collection action is that it's not part of what the i r s is doing to get money it's something that they've set up as a hurdle before they get it set up as a protection that was the whole thrust of your position not that it was before a collection but rather that it goes in the opposite direction from a collection they are as is moving forward to collect that fits within the language of in connection with the collection but hurdle but set up or protection that's set up in order to stop a collection it's that's not sort of intuitively part of a collection it's something it's a protection against collecting it's going in the other direction but that's not the content of your distinction then and it's less than it's less clear to me what the distinction is again we are continuing to yes that's what that's what we're arguing that the c d p proceeding is pretty collection in this it which is causing some of it's not collection in the sense that a number of things could  happen there could end up being no collection of taxes because this is a result of the c d p proceeding they determine that there's no tax liability there could be you have to have an amount of taxes you want to collect and it could be as a i was focusing on this case in a slightly different way assuming that one of these hearings is a collection activity all seventy four thirty three says is that you can bring an action a civil action for damages if in collection with and we're going to assume that this hearing is a collection activity an employee of the i r s next recklessly negs intentionally or by reason of negligence disregards any provision of this title or any under this title so what title or regulation are you saying that they violated assuming it is a collection activity with a title is the internal revenue code  there's multiple sections within the internal revenue code which we collectively refer to as the taxpayer bill of rights that are incorporated within the interim room a new code the taxpayer bill of rights states that  taxpayers are entitled to fear treatment if you give me any citations at all to either the internal revenue code itself or regulations under the internal revenue code that you say were violated during the hearing assuming it's a collection activity sixty three twenty is a section that entitle taxpayer to a fair hearing without expert a communications i believe sixty three thirty itself entitle the taxpayer to a fair hearing and then generally the taxpayer bill of rights which as i said is incorporated within the tax code i can't give you every citation as to what that encompasses but ok if you've answered the question i'll look at those ok problem we have with this area law as it stands with with some of these court cases these all these court cases that have come out the shah case some of the other cases all deal with the assessment of tax people challenging the assessment of tax we don't have that in our case our case i think is distinct in that area we already had an assessment these were these were tax returns that the taxpayers actually filed their nine forty one tax returns there's no dispute over the amount of tax to what happened then was the i r s came in and started collecting those taxes they issued a notice of levy you know they they they took her business card put it in the lobby of the building for the taxpayers which denoted you know you need to call me immediately for taxes do you can't disclose that to the general world in the lobby these are all things that violate the tax code that they did and they were actively engaged in collection action then they filed the c d p hearing which suspends some collection action if you look at the actual section that talks about state suspending collection action it doesn't suspend every action say for instance the i r s it is has a garnishment out there against somebody and issues a notice of intent to levy on property which give someone the right to a c d p hearing what the c d p hearing may do is suspend that levy as to the property but it doesn't suspend the collection actions that's already occurring so it does it's not as though it's a pause in the sense of everything the i r s is doing is suspended that's in what happened between the iris and your client did not occur during a hearing other than the leaving the business card yeah yeah absolutely i mean up into that before even had the c d p hearing my clients sent in their notice for the collection due process hearing and as we describe in the complaint in our brief the iris to put that aside they violated the law they're required to to kick that notice up to the appeals section and schedule a hearing they didn't do it they essentially deep sixed it for ninety or one hundred twenty days the taxpayers had to file a nine eleven form which is  a to the taxpayer advocate office asking for assistance it was then the taxpayer advocate office that got involved got a hold of appeals and said you can't her and they have about the time crying within which  have to schedule a hearing and what happened in this case of the i r s agent said i'm not scheduling the hearing because she wanted to go after the denny's personally and assess the trust fund recovery penalty against them before she  allowed the c d p hearing to happen as to the corporation and she wanted to use that personal assessment to jam him up in in terms of collecting it was all about collecting everything was about collecting and she tried to use that personal assessment against them to leverage the business we know it's what we know because we had those hearings and the taxpayer advocate office then instructed them that th schedule that c d p hearing and then we had that c d p hearing and then the district council or do the district office in detroit got involved and then later determined after she got involved that that ira agent in chicago that him a live cd hearing was biased she looked at the you know you got another hearing we did but all that up to that point i have never been tony i have never in twenty some years i've never seen a district there got further questions of a question that finally have the statute before me it says doesn't say collection action it says in connection with any collection of a federal tax understanding the district court the lower court to have said this isn't in connection with the collection of a federal tax it's rather in connection with something set up to limit the collection of attacks well and that i think where we get into some of the cases that have come in like showing some of these other cases that have said that that c d p hearing is it's not a collection it's out of bein connection with a collection of an abstraction they're saying it in terms of the assessment and what i point to you in every case that the i r s cites here i understand it's not soley with respect to assessment it also includes a way in which you can the taxpayer can contest i guess the way in which collection is going to happen it's right it's  a contest the collection proceeding yeah it can be yes you're contesting the collection argument is that that's that's something that's not collection it's something that's potentially stopping it's got to be limited congress has to be very crisp and it allows the public purse to be open for people who don't like what's happening to say if the government is collecting taxes from you and violates a law you can get damages but if the government is providing protections and doesn't do it in a right fashion you get damages is a little bit more than that is saying more than the literal language of the statute says that's what it seems to me the lower court held in effect that's how i read it and i'm wondering what the answer to that is are you with me i think i'm with you and i think the answer is yes i think the lower court error in two ways number one i think that he didn't examine the in the complaint in terms of the the allegations we made about the collection actions that occurred even before the was actual collection going on as you said there's a collection going and then into what they what are the allegations before they are the issues that the i r s did with providing declaring here and providing notification anybody who saw the notice that was taped to the wall at the in the lobby of the office the the you know all this presumes that the word collection which is what judge rogers is asking you to focus on includes what you then go on do it describe as collection activities or collection actions or or other things in other words is posting a business card in a lobby is that collection as opposed to a collection activity and if there is a difference did congress intend to waive it savva an immunity for one but not the other that's really what this comes down to yes and i think there is definitely collection when the iris is saying you need to know that's what you think but what authority do you have i think we would all agree that a levy which which results in the iris getting money that's collection now what authority do you have that that things that are precursors to that that are required by the code are in turn collection as opposed to a color to an activity leading up to a collection well i  think when an iris give somebody you notice and says or a letter and says you need to call me right away you need to make arrangements to pay this right away or something bad's going to happen to you that's collection well that's it's not collection just because you say it's collect i think it what authority do you have that says that sort of thing is collection as opposed to a collection activity if there is a meaningful difference i'm not i don't think there is a meaningful difference if there is a meaningful difference is what you described a collection activity or is it a collection because it didn't result in any money it does it well i think it's both but i don't think it has to result in money to be collection or a collection activity  so in other words or in any authority i mean making a good argument but you know having authority well the authority i would say to you is that the internal revenue people they use what they call the collection manual there's sections within the internal revenue code in the regulations and i can't cite every one of them you know they all you know you can't predicate your claim on a man right or standing what i'm saying it's evidence as to what evidence what they're using to do their work and the sections within the internal revenue code provide for them to do their work in that fashion we thank you both for your argument will consider the case carefully and i believe the rest of the guys on the brief say you ma