Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-10-36059/USCOURTS-ca9-10-36059-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 

---

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DARYL J. KOLLMAN,

Defendant-Appellant,

and

MARTA C. CARPENTER, FKA Marta

C. Kollman; THE NEW ALGAE

COMPANY; CELL TECH

INTERNATIONAL, INC.; KAZI

MANAGEMENT VI, LLC,

Defendants.

No. 10-36059

D.C. No.

1:08-cv-03027-

PA

OPINION

Appeal from the United States District Court

for the District of Oregon

Owen M. Panner, Senior District Judge, Presiding

Submitted October 6, 2014*

Portland, Oregon

* The panel unanimously finds this case suitable for decision without

oral argument. Fed. R. App. P. 34(a)(2).

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2 UNITED STATES V. KOLLMAN

Filed December 16, 2014

Before: Alex Kozinski, Ferdinand F. Fernandez,

and Andre M. Davis,** Circuit Judges.

Per Curiam Opinion

SUMMARY***

Tax/Statute of Limitations

Affirming the district court’s judgment in an action by the

United States to reduce to judgment income tax assessments

and to foreclose on certain properties, the panel held that the

government’s action was not barred by the ten-year statute of

limitations because the running of the statute of limitations

had been tolled.

Applying the Chevron analysis, the panel concluded that

the tolling period provided for in 26 U.S.C. § 6330(e)(1)

includes the time during which a taxpayer could file an appeal

to the Tax Court, even if the taxpayer does not actually file

such an appeal.

** The Honorable Andre M. Davis, Senior Circuit Judge for the U.S.

Court of Appeals for the Fourth Circuit, sitting by designation.

 

*** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. KOLLMAN 3

COUNSEL

Bruce C. Moore, Moore & Associates, Eugene, Oregon, for

Defendant-Appellant.

Kathryn Keneally, Assistant AttorneyGeneral, Gilbert Steven

Rothenberg, Deputy Assistant Attorney General, Bridget M.

Rowan and Ellen Page DelSole, Attorneys, United States

Department of Justice, Tax Division/Appellate Section,

Washington, D.C., for Plaintiff-Appellee.

OPINION

PER CURIAM:

Daryl J. Kollman appeals the district court’s judgment in

an action by the United States to reduce to judgment income

tax assessments for the 1996 calendar year and to foreclose

on certain properties. The district court determined, among

other things, that the government’s collection suit was not

barred by the ten-year statute of limitations. See 26 U.S.C.

§ 6502(a)(1).1 The court did so on the basis that the running

of the statute of limitations had been tolled. See § 6330(e)(1). 

Kollman asserts that the district court erred. We disagree and

affirm.

 

1

 Hereafter, unless otherwise stated, references to section numbers will

be to sections of the Internal Revenue Code, Title 26 of the United States

Code.

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4 UNITED STATES V. KOLLMAN

BACKGROUND

On November 24, 1997, the Internal Revenue Service

(IRS) made an assessment against Kollman for the 1996 tax

year. On March 18, 1999, Kollman submitted a request for

a Collection Due Process (CDP) hearing. See § 6330(b). On

June 18, 1999, the IRS issued a notice of determination

regarding Kollman’s request for a CDP hearing. He then had

a right to appeal the CDP determination to the United States

Tax Court within thirty days. See § 6330(d)(1). However, he

did not do so. On March 12, 2008, the government filed a

complaint seeking to reduce the assessment to judgment and

to foreclose tax liens against two parcels of property.

The case went to trial, and at the close of evidence,

Kollman moved for a partial judgment as to the 1996 taxes

assessed on November 24, 1997, arguing that the suit was

filed beyond the ten-year limitations period because

§ 6330(e)(1) clearly provided that the tolling period ended

when the IRS issued its CDP hearing determination.

The district court denied the motion on the basis that the

language of § 6330(e)(1) was ambiguous and deferred to 26

C.F.R. § 301.6330-1(g)(1), the Treasury Regulation

interpreting the statutory language. It then ruled that the

government’s March 12, 2008, complaint to collect the 1996

taxes assessed on November 24, 1997, was timely because

the limitations period was tolled from March 18, 1999 (when

Kollman requested the CDP hearing) until thirty days

following the June 18, 1999, CDP determination.2Judgment

2 Without tolling, the ten-year limitations period set forth in § 6502(a)(1)

would have expired on November 24, 2007. The government filed its

collection suit on March 12, 2008, 110 days beyond the untolled

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UNITED STATES V. KOLLMAN 5

was entered against Kollman, and this timely appeal

followed.

JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction pursuant to § 7402 and

28 U.S.C. §§ 1340 and 1345. We have jurisdiction pursuant

to 28 U.S.C. § 1291.

We review the district court’s interpretation of the statute

de novo. See Texaco Inc. v. United States, 528 F.3d 703, 707

n.5 (9th Cir. 2008); Ann Jackson Family Found. v. Comm’r,

15 F.3d 917, 920 (9th Cir. 1994).

DISCUSSION

The central question before us is whether the tolling

period provided for in § 6330(e)(1) includes the time during

which a taxpayer could file an appeal to the Tax Court, even

if he does not actually file such an appeal. We answer that

question in the affirmative.

In doing so, we apply the familiar Chevron3approach. In

that case, the Supreme Court outlined our task as follows:

expiration of the limitations period. It is undisputed that § 6330(e)(1)

suspended the limitations period from March 18, 1999, through June 18,

1999 — a total of ninety-three days. The district court adopted the

regulatory interpretation in 26 C.F.R. § 301.6330-1(g)(1) and tolled the

limitations period for the additional thirty-day period for appealing — a

total of 123 days. Therefore, if the thirty-day period is included in the

tolling calculation, the government’s collection action was timely.

3 Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,

104 S. Ct. 2778 (1984).

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6 UNITED STATES V. KOLLMAN

When a court reviews an agency’s

construction of the statute which it

administers, it is confronted with two

questions. First, always, is the question

whether Congress has directly spoken to the

precise question at issue. If the intent of

Congress is clear, that is the end of the matter;

for the court, as well as the agency, must give 

effect to the unambiguously expressed intent

of Congress. If, however, the court

determines Congress has not directly

addressed the precise question at issue, the

court does not simply impose its own

construction on the statute, as would be

necessary in the absence of an administrative

interpretation. Rather, if the statute is silent

or ambiguous with respect to the specific

issue, the question for the court is whether the

agency’s answer is based on a permissible

construction of the statute.

The power of an administrative agency to

administer a congressionally created . . .

program necessarily requires the formulation

of policy and the making of rules to fill any

gap left, implicitly or explicitly, by Congress.

Id. at 842–43, 104 S. Ct. at 2781–82 (internal quotation marks

and footnotes omitted). We will proceed with this outline in

hand.

Once the assessment of a tax has been made, the

government may collect that tax “by levy or by a proceeding

in court” but, as relevant here, must do so “within 10 years

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UNITED STATES V. KOLLMAN 7

after the assessment of the tax.” § 6502(a)(1). However, the

law also provides for a CDP hearing,

4

 and the determination

by the appeals officer5can be appealed within thirty days

after that determination.6If the CDP hearing process is

initiated, the ten-year statute of limitations is tolled. See

§ 6330(e)(1). The § 6330(e)(1) tolling provision reads as

follows, in pertinent part:

[I]f a hearing is requested under subsection

(a)(3)(B), the levy actions which are the

subject of the requested hearing and the

running of any period of limitations under

section 6502 (relating to collection after

assessment) . . . shall be suspended for the

period duringwhich such hearing, and appeals

therein, are pending. In no event shall any

such period expire before the 90th day after

the day on which there is a final determination

in such hearing.

In due course, the United States Department of the

Treasury issued 26 C.F.R. § 301.6330-1(g)(1), which

provides as follows, in pertinent part:

The period[] of limitation under section 6502

(relating to collection after assessment) . . .

[is] suspended until the date . . . the

determination resulting from the CDP hearing

 

4

 § 6330(b).

 

5

 § 6330(c)(3).

 

6

 § 6330(d)(1).

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8 UNITED STATES V. KOLLMAN

becomes final by expiration of the time for

seeking judicial review or the exhaustion of

any rights to appeals following judicial

review. In no event shall [this] period[] of

limitation expire before the 90th day after the

date on which . . . the Notice of Determination

with respect to such hearing becomes final

upon either the expiration of the time for

seeking judicial review or upon exhaustion of

any rights to appeals following judicial

review.

A. Ambiguity

Kollman argues that it is perfectly clear that Congress’s

intent was that the clause “shall be suspended for the period

during which such hearing, and appeals therein, are pending”

means that the thirty-day period to appeal to the tax court is

excluded from the suspension time when the taxpayer does

not in fact appeal. But, contrary to Kollman’s assertion, it is

far from clear what Congress meant by that language.

We, of course, agree “that the first step in interpreting a

statute ‘is to determine whether the language at issue has a

plain and unambiguous meaning with regard to the particular

dispute in the case.’” Texaco, 528 F.3d at 707 (quoting

Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S. Ct 843,

846 (1997)). But the language in question does not, on its

face, speak to whether the statute of limitations is suspended

during the time to appeal in the event that an appeal is not

taken. It does not address what Congress meant when it used

the word “pending.” Nor does it address whether the phrase

“final determination” in the next sentence of § 6330(e)(1)

means that the determination by the IRS hearing officer is

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UNITED STATES V. KOLLMAN 9

final before the time to appeal runs. If anything, it is “silent

or [at most] ambiguous” on that subject. Chevron, 467 U.S.

at 843, 104 S. Ct. at 2782.

In fact, the Eighth Circuit Court of Appeals had occasion

to review similar language in § 7609(e), which provides that

the running of the period of limitations “shall be suspended

for the period during which a proceeding, and appeals therein,

. . . is pending.” It found that the language “does not

specifically address whether the period allowed for appeal is

to be included in the tolling period in the event an appeal is

not actually taken.” United States v. Meyer, 808 F.2d 1304,

1306 (8th Cir. 1987). Incidentally, it also declared that in

light of a Treasury Regulation so stating, the appeals period

was properly included. Id.; see also Hefti v. Comm’r,

983 F.2d 868, 871–72 (8th Cir. 1993); United States v.

Orlowski, 808 F.2d 1283, 1287 (8th Cir. 1986).

Kollman’s counterargument is that by setting off “and

appeals therein” in commas, Congress intended the term

“pending” to apply separately to the CDP hearing and the

appeal of a notice of determination. Thus, according to

Kollman, where no appeal is filed, the applicable tolling

period consists of the time that a CDP hearing is under

consideration, which concludes when the IRS issues a notice

of determination. But that same phrase, “during which [the

CDP] hearing, and appeals therein,” could just as plausibly be

read as encompassing the thirty days in which to appeal the

notice of determination, where no appeal is filed.

Kollman points to the fact that the term, “final

determination,” is used in the second sentence of § 6330(e)(1)

but not in the first sentence defining the tolling period, as

proof of Congress’s intent not to extend the tolling period

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10 UNITED STATES V. KOLLMAN

beyond the time when the IRS issues a notice of

determination, where no appeal is filed. But, contrary to

Kollman’s contention, the absence of “final determination”

from the first sentence does not unambiguously show that the

tolling period excludes the thirty-day period during which an

appeal may be filed. The language in the first sentence

stating that the tolling period consists of the time “during

which the [CDP] hearing, and appeals herein, are pending,”

does not preclude the interpretation that the tolling period

expires when the notice of determination becomes a “final

determination.” See Padash v. INS, 358 F.3d 1161, 1169 (9th

Cir. 2004) (unless Congress specifies otherwise, the

customary meaning of “final determination” is “a final

decision from which no appeal can be taken”).7It is entirely

reasonable to understand a proceeding as “pending”

8

until the

time to appeal has expired. See, e.g., Burnett v. N.Y. Cent.

R.R. Co., 380 U.S. 424, 435, 85 S. Ct. 1050, 1058 (1965).

Kollman’s additional reflection that statutes oflimitations

are designed to assure fairness to defendants9also fails to

advance his case. Kollman’s interpretation of the statute

leaves open whether the tolling period includes the time after

a notice of determination is issued and before the taxpayer

decides whether to appeal. Put another way, the government

 

7 Cf. Ariz. Electric Power Coop., Inc. v. United States, 816 F.2d 1366,

1375 (9th Cir. 1987).

8 The word “pending” is not without intrinsic ambiguity. See Int’l Union

of Elec., Radio & Mach. Workers, AFL-CIO, Local 790 v. Robbins &

Myers, Inc., 429 U.S. 229, 243, 97 S. Ct. 441, 450 (1976); Inda v. United

Air Lines, Inc., 565 F.2d 554, 560–61 (9th Cir. 1977).

9

See Burnett v. N.Y. Cent. R.R. Co., 380 U.S. 424, 428, 85 S. Ct. 1050,

1054 (1965).

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UNITED STATES V. KOLLMAN 11

would have to determine whether to proceed with a levy

action as soon as the IRS issues the notice of determination,

or suffer the running of the limitations period while it awaits

the taxpayer’s decision. Indeed, Kollman’s reading could

even turn out to be quite unfair to the taxpayer if the

government initiated levy proceedings prior to the expiration

of the thirty-day period to appeal.

In short, despite Kollman’s efforts to persuade us

otherwise, we are satisfied that the provision in question is

ambiguous. With that, we are led to the second part of the

Chevron analysis.

B. Reasonable Construction

Having determined that § 6330(e)(1) is ambiguous, we

must now consider whether the Treasury Regulation, 26

C.F.R. § 301.6330-1(g)(1), sets forth a permissible

construction of the statute. It does.

There is no dispute that Congress has delegated the power

to “prescribe all needful rules and regulations” pertaining to

internal revenue to the Secretary of the Treasury. See

§§ 7701(a)(11)(B), 7805(a); see also Mayo Found. for Med.

Educ. & Research v. United States, 562 U.S. 44, __, 131 S.

Ct. 704, 714 (2011). Where such delegation exists, we “may

not substitute [our] own construction of a statutory provision

for a reasonable interpretation made by the administrator of

an agency.” See Chevron, 467 U.S. at 844, 104 S. Ct. at

2782. Moreover, we “need not conclude that the agency

construction was the only one it permissibly could have

adopted to uphold the construction.” Chevron, 467 U.S. at

843 n.11, 104 S. Ct. at 2782 n.11.

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12 UNITED STATES V. KOLLMAN

The Treasury Regulation easily meets the permissible

construction test. First, as discussed earlier, before this

regulation was adopted, a court of appeals had determined

that a similar statute, § 7609, was ambiguous and relied on

another Treasury regulation, 26 C.F.R. § 301.7609-5(b),

which stated that the limitations period is tolled until the

expiration of the time to file an appeal. See Meyer, 808 F.2d

at 1306; see also Hefti, 983 F.2d at 871–72; Orlowski,

808 F.2d at 1287. We are not aware of any determination to

the contrary. It is reasonable to assume that Congress was

aware of and content with that result when it incorporated

nearly identical language into § 6330(e)(1). See Northcross

v. Bd. of Educ., 412 U.S. 427, 428, 93 S. Ct. 2201, 2202

(1973) (per curiam); see also Schnall v. Amboy Nat’l Bank,

279 F.3d 205, 218–19 (3d Cir. 2002).

Second, in other contexts, courts have considered actions

to be “pending” until the expiration of the time to file an

appeal. See Burnett, 380 U.S. at 435, 85 S. Ct. at 1058

(Federal Employer’s Liability Act); Knights of the Ku Klux

Klan Realm of La. v. E. Baton Rouge Parish Sch. Bd.,

679 F.2d 64, 67–68 (5th Cir. Unit A 1982) (Equal Access to

Justice Act); Perzinski v. Chevron Chem. Co., 503 F.2d 654,

657–58 (7th Cir. 1974) (Wisconsin evidence rules).

Third, legislative history supports the Treasury’s reading

of § 6330(e)(1). The House Conference Report regarding the

statute states that:

The taxpayer may contest the determination of

the appellate officer in Tax Court by filing a

petition within 30 days of the date of the

determination. The IRS may not take any

collection action pursuant to the determination

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UNITED STATES V. KOLLMAN 13

during such 30-day period or while the

taxpayer’s contest is pending in Tax Court.

H.R. Rep. No. 105-599, at 264 (1998) (Conf. Rep.). True,

this report only addresses the period during which collection

by levy — and not the ten-year statute of limitations — is

suspended. But, § 6330(e)(1) addresses both in the same

sentence, which provides that “levy actions . . . and the

running of any period of limitations under section 6502 . . .

shall be suspended.” § 6330(e)(1). It is unlikely that

Congress intended the sentence to have two different

meanings — one for levy, and another for the limitations

period.

In fine, the regulation’s method of illuminating the

somewhat tenebrous language of § 6330(e)(1) was a

permissible construction of that language.

CONCLUSION

The Treasury Department’s issuance of 26 C.F.R.

§ 301.6330-1(g)(1) was a permissible construction of

§ 6330(e)(1). Thus, the government’s collection action

against Kollman was not barred by the statute of limitations.

AFFIRMED.

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