1

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CARRIE LOOMIS, as Trustee of the LOST 

CREEK TRUST

Plaintiff-Appellant, 

 v. 

UNITED STATES INTERNAL REVENUE 

SERVICE 

Defendant-Appellee, 

No. 22-36055 

D.C. No. 2:22-cv-00099-RCT

MEMORANDUM*

Appeal from the United States District Court

for the District of Idaho

Richard C. Tallman, Senior Circuit Judge Sitting by Designation, Presiding

Argued and Submitted March 28, 2024

Seattle, Washington

Before: WARDLAW, PARKER,**and MILLER, Circuit Judges.

Carrie Loomis, the trustee of the Lost Creek Trust (the “Trust”), appeals the

district court’s dismissal of her suit seeking a refund of taxes alleged to have been

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The Honorable Barrington D. Parker, Jr., United States Circuit Judge 

for the U.S. Court of Appeals for the Second Circuit, sitting by designation.

FILED

JUN 4 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2

improperly collected. See 28 U.S.C. § 1346(a)(1). We have jurisdiction pursuant 

to 28 U.S.C. § 1291, and we affirm.

In 2003, non-party Christopher Close and another individual purported to 

transfer property (the “Property”) to the Trust. Close was subsequently indicted 

and convicted of various crimes. In 2005 in a forfeiture proceeding, the district 

court concluded that Close had an interest in the Property, even though he had 

caused it to be held in the name of the Trust. United States v. Close, No. 3-cr-69 

(D. Idaho Mar. 11, 2005), Dkt. No. 176 at 10 (“Close I”). The district court

accordingly entered a preliminary order of forfeiture against the Property. Id. at 

15. In a Tax Court proceeding in 2014 against Close and his wife, the IRS

contended that the Trust was a sham and sought taxes on income derived from 

logging activities on the Property. Close v. Comm’r, 107 T.C.M. (CCH) 1124, *7, 

*10 (T.C. 2014) (“Close Tax Court”). Finding that the IRS failed to meet its 

burden of proof on the sham theory under federal tax law, the Tax Court rejected it

without deciding who, under Idaho law, owned the Property. Id. at *12. 

Shortly after the 2005 preliminary order of forfeiture, the Trust initiated an 

ancillary proceeding pursuant to 21 U.S.C. § 853(n) in the district court, 

contending that it had an interest in the Property. After an unexplained gap of 

eleven years, the district court held in 2016 that the Trust failed to allege any 

plausible facts or legal basis that established its ownership interest in the Property,
3

and that, under Idaho law, the transfer of the Property to the Trust was fraudulent 

because Close “had the actual intent to hinder, delay, or defraud creditors.” United 

States v. Close, No. 3-cr-69 (D. Idaho Nov. 30, 2016), Dkt. No. 376 at 17, 20

(“Close II”). We affirmed. United States v. Close, 755 F. App’x 626 (9th Cir. 

2018) (“Close III”). Following the conclusion of the forfeiture proceedings, the 

Property was sold, with $224,557.53 of the proceeds paid to the IRS to satisfy 

Close’s various outstanding tax obligations.

In 2022, Loomis commenced this action on behalf of the Trust, seeking a 

refund of proceeds collected by the IRS. She argued that the Trust, not Close, 

owned the Property. See 28 U.S.C. § 1346(a)(1). The government moved to 

dismiss on the basis of, inter alia, issue preclusion, contending that the Trust was 

barred from claiming it had an interest in the Property because that issue was 

litigated and decided against it in Close II. The district court granted the motion, 

holding that Close II precluded the Trust’s suit. 

1. The district court correctly concluded that issue preclusion applies 

against the Trust. “We review whether issue preclusion is available de novo and 

the district court’s decision to apply issue preclusion for abuse of discretion.” Love 

v. Villacana, 73 F.4th 751, 754 (9th Cir. 2023) (citing Sec. & Exch. Comm’n v. 

Stein, 906 F.3d 823, 828 (9th Cir. 2018)). 
4

Issue preclusion applies if: “(1) the issue at stake was identical in both 

proceedings; (2) the issue was actually litigated and decided in the prior 

proceedings; (3) there was a full and fair opportunity to litigate the issue; and (4) 

the issue was necessary to decide the merits.” Howard v. City of Coos Bay, 871 

F.3d 1032, 1041 (9th Cir. 2017) (quoting Oyeniran v. Holder, 672 F.3d 800, 806 

(9th Cir. 2012)). We conclude that each of the four factors was satisfied.

The Trust concedes that the second and third requirements are met but 

contends that the first and fourth are not met. As to the first, the district court 

properly concluded that the issues at stake in Close II and this case are the same. 

See id. In Close II, the Trust contended it had a legal interest in the Property, and 

in this case, the Trust contended that it was the owner of the Property. Further, 

both cases turned on the application of Idaho law. Additionally, pretrial 

preparation and discovery in Close II could have reasonably been expected to 

embrace the issue of whether the Trust owned the Property. Id.

As to the fourth requirement, the district court correctly determined that the 

Trust’s interest in the Property was necessary for deciding Close II because a

litigant proceeding under § 853(n) must be able to “assert[] a legal interest in [the 

forfeited] property[.]” 21 US.C. § 853(n)(2). Accordingly, the court appropriately 

applied issue preclusion against the Trust.
5

2. We also conclude that the district court correctly declined to apply issue 

preclusion against the government. As the district court noted in Close II, the Tax 

Court determined Close’s tax liability under the tax code, not his ownership interest

in the Property in relation to the interests of other parties. Close II at 11. 

Consequently, Close Tax Court did not provide a basis for precluding the 

government from arguing that Close owned the Property. 

AFFIRMED.