United States Court of Appeals

for the Fifth Circuit

No. 22-10993

Summary Calendar

William Jeffrey Gilliam, 

Plaintiff—Appellant, 

versus

United States of America, 

Defendant—Appellee. 

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:20-CV-2366

Before Davis, Smith, and Douglas, Circuit Judges.

Per Curiam:*

Plaintiff-Appellant, William Jeffrey Gilliam, proceeding pro se, 

appeals the district court’s judgment dismissing his claims against the 

Government forlack of jurisdiction based on failure to exhaust administrative 

remedies and for failure to state a claim. For the reasons set forth below, we 

AFFIRM AS MODIFIED. 

* This opinion is not designated for publication. See 5th Cir. R. 47.5. 

United States Court of Appeals

Fifth Circuit

FILED

March 23, 2023

Lyle W. Cayce

Clerk

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I. BACKGROUND

Beginning in 1995 and spanning two decades, Gilliam became involved 

in a series of lawsuits in multiple courts within the Fourth and Ninth Circuits. 

The lawsuits involved Gilliam’s tax liability and bankruptcy. The litigation 

ended with a judgment against Gilliam for millions of dollars in tax liability.

1

In August 2020, Gilliam filed the instant action against the 

Government. Gilliam asserted he was entitled to (1) damages under 26 

U.S.C. § 7433 of the Internal Revenue Code for unlawful tax collection 

practices, specifically a tax levy on his social security retirement benefits; 

(2) damages under 26 U.S.C. § 7432 for wrongfully reinstating Government 

liens after they were released; (3) relief from any and all orders and 

judgments obtained through alleged fraud on multiple courts; and (4) tax 

mitigation relief under 26 U.S.C. §§ 1311-1314. In response, the Government 

filed a motion to dismiss, arguing that Gilliam’s complaint was barred by res 

judicata. The Government alternatively argued that Gilliam’s § 7433 claim 

for unlawful tax collection should be dismissed for failure to exhaust 

administrative remedies and his claim of alleged fraud on the court should be 

dismissed for failure to state a claim. 

The magistrate judge determined that two of Gilliam’s claims—his 

claim of wrongful reinstatement of Government liens and his tax mitigation 

claim—were barred by res judicata and recommended dismissal with 

prejudice. As to Gilliam’s § 7433 claim for unlawful tax collection of his 

social security retirement benefits, the magistrate judge found that Gilliam 

had failed to exhaust his administrative remedies. And, as to Gilliam’s claim 

1 The litigation history is detailed in the district court’s opinion in United States v. 

Gilliam, No. 2:154064-MBS, 2017 WL 2417923 (D.S.C. May 5, 2017), aff’d, 737 F. App’x 

660 (4th Cir. 2018) (per curiam) (unpublished).

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of alleged fraud on the court, the magistrate judge determined that Gilliam 

had failed to state a claim. She recommended that those claims be dismissed 

without prejudice and that Gilliam be allowed to amend his complaint to 

demonstrate exhaustion of administrative remedies and to state a claim for

alleged fraud on the court. Over Gilliam’s objections, the district court 

adopted the magistrate judge’s report and recommendation. 

Gilliam thereafter filed an amended complaint, which the 

Government again moved to dismiss. The magistrate judge determined that 

Gilliam’s amended complaint showed that he did not fulfill the mandatory 

exhaustion requirement with respect to his § 7433 claim for unauthorized tax 

collection and that the court consequently lacked jurisdiction over that claim. 

The magistrate judge further determined that Gilliam failed to state a claim 

for fraud on the court. The magistrate judge recommended dismissal of both 

claims with prejudice. Over Gilliam’s objections, the district court adopted 

the magistrate judge’s report and recommendation and issued a judgment 

dismissing Gilliam’s claims with prejudice. Gilliam moved for relief from the 

judgment under Federal Rules of Civil Procedure 59(e) and 60(b)(3). The 

district court denied the motion, and Gilliam filed a timely notice of appeal. 

II. DISCUSSION

We review de novo the district court’s judgment dismissing Gilliam’s 

claims for lack of jurisdiction based on failure to exhaust administrative 

remedies and for failure to state a claim.

2 

2 Ernst v. Methodist Hosp. Sys., 1 F.4th 333, 337 (5th Cir. 2021) (applying de novo 

review to dismissal for failure to exhaust administrative remedies); Armstrong v. Ashley, 60 

F.4th 262, 269 (5th Cir. 2023) (applying de novo review to dismissal under Rule 12(b)(6) 

for failure to state a claim). Gilliam has not briefed the issue whether res judicata barred 

his claims for wrongful reinstatement of Government liens and tax mitigation. He therefore 

has forfeited any challenge to the district court’s dismissal of those claims. Stevens v. St. 

Tammany Par. Gov’t., 17 F.4th 563, 574 (5th Cir. 2021) (appellant forfeits challenge to 

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A.

Gilliam first argues that the district court erred in determining that his 

claim for damages for unlawful tax collection practices should be dismissed 

because he failed to exhaust administrative remedies. 

Under 26 U.S.C. § 7433, entitled “civil damages for certain 

unauthorized collection actions,” a taxpayer may bring a civil action for 

damages against the Government “[i]f, in connection with any collection of 

Federal tax . . . any officer or employee of the [Internal Revenue Service 

(IRS)] recklessly or intentionally, or by reason of negligence, disregards any 

provision of [the Internal Revenue Code], or any regulation promulgated 

under[it].”3

 The statute requires that administrative remedies be exhausted. 

Specifically, it provides that “[a] judgment for damages shall not be awarded 

. . . unless the court determines that the plaintiff has exhausted the 

administrative remedies available to such plaintiff within the [IRS].”4

Gilliam argues that he was not required to exhaust administrative 

remedies because the Government waived its sovereign immunity under 11 

U.S.C. § 106 of the Bankruptcy Code when it filed proofs of claim for 1993 

and 1995 taxes in Gilliam’s 1996 bankruptcy proceeding. Under § 106, when 

a governmental unit “has filed a proof of claim” in a bankruptcy proceeding, 

it “is deemed to have waived sovereign immunity with respect to a claim 

against such governmental unit that is property of the estate and that arose 

district court’s holding on an issue when appellant does not raise and argue the issue on 

appeal). Gilliam does argue that res judicata is not a defense to his claim of fraud on the 

court, but for the reasons described below, he has failed to state such a claim.

3 § 7433(a). Except as provided in 26 U.S.C. § 7432, entitled “civil damages for 

failure to release lien,” the civil action allowed by § 7433 is “the exclusive remedy for 

recovering damages resulting from such actions.” Id.

4 § 7433(d)(1).

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out of the same transaction or occurrence out of which the claim of such 

governmental unit arose.”5

 Gilliam calls our attention to a district court 

opinion which held that the plaintiffs (taxpayers) did not have to exhaust 

administrative remedies to assert a claim for damages under § 7433 because 

the IRS had filed a proof of claim in the plaintiffs’ bankruptcy proceeding.6

We find that case inapposite for several reasons. First, as the 

Government points out, the instant action is not part of a bankruptcy 

proceeding. The bankruptcy proceedings involving Gilliam and his 

company, wherein the Government filed proofs of claim, were concluded in 

2009. Furthermore, the claim for § 7433 damages that Gilliam has asserted 

is based on actions allegedly taken by the IRS in 2019 and 2020. Specifically, 

Gilliam asserts that the IRS wrongfully levied 100 percent of his social 

security retirement income from May 2019 through April 2020. Considering 

that Gilliam alleges the unlawful actions occurred in 2019 and 2020, the 

Government could not have waived its sovereign immunity for any claim 

based on those actions by filing proofs of claim in bankruptcy proceedings 

that were concluded ten years before. For these reasons, Gilliam’s argument 

that the Government waived its sovereign immunity under § 106 of the 

Bankruptcy Code has no merit.

Gilliam also argues that he, in fact, exhausted his administrative 

remedies. The specific steps a taxpayer must follow when filing an 

administrative claim (prior to filing a § 7433 action for unauthorized tax 

collection in district court) are set forth in 26 C.F.R. § 301.7433-1(e).7

 As the 

5 § 106(b).

6 See Cunningham v. United States, 165 B.R. 599, 604 (N.D. Tex. 1993).

7 Specifically, an administrative claim must be “sent in writing to the Area 

Director, Attn: Compliance Technical Support Manager of the area in which the taxpayer 

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magistrate judge determined, the documents upon which Gilliam relies do 

not show that he complied with the requirements of § 301.7433-1(e).

Specifically, Gilliam has identified no document addressed to the appropriate 

official setting forth the injuries he sustained from the alleged wrongful levy 

of his social security retirement income and the dollar amount of his claimed

damages. 

Although we agree with the district court that Gilliam’s § 7433 claim 

should be dismissed for lack of jurisdiction based on failure to exhaust 

administrative remedies, the dismissal should have been without prejudice.8 

Consequently, we AFFIRM the judgment AS MODIFIED to reflect that 

the dismissal of Gilliam’s § 7433 action for wrongful levying of his social 

security retirement income is without prejudice.

B.

Gilliam next argues that the district court erred in determining that he 

failed to state a claim under Rule 12(b)(6) for fraud on the court. 

Under Rule 12(b)(6), “a complaint must contain sufficient factual 

matter, accepted as true, to ‘state a claim to relief that is plausible on its 

face.’”9 “To establish fraud on the court, it is necessary to show an 

unconscionable plan or scheme which is designed to improperly influence the 

currently resides” and must include, inter alia, “the grounds for the claim,” “description 

of the injuries,” and “[t]he dollar amount of the claim.” § 301.7433-1(e)(1)-(2).

8 See Wright v. Hollingsworth, 260 F.3d 357, 359 (5th Cir. 2001) (modifying 

judgment to reflect that a dismissal for failure to exhaust administrative remedies should 

be without prejudice).

9 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 570 (2007)).

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court in its decision.”10 “Generally speaking, only the most egregious 

misconduct, such as bribery of a judge or member of a jury, or the fabrication 

of evidence by a party in which an attorney is implicated, will constitute fraud 

on the court.”11 “Less egregious misconduct, such as nondisclosure to the 

court of facts allegedly pertinent to the matter before it, will not ordinarily 

rise to the level of fraud on the court.”12 

Gilliam argues that the district court did not consider certain 

documents he submitted in support of his opposition to the Government’s 

motion to dismiss. He contends that had the district court done so, it would 

have determined he stated a claim for fraud on the court. These documents 

include his declaration in support of his opposition to the Government’s 

motion to dismiss, the numerous documents submitted with his opposition, 

and his motion requesting the district court to take judicial notice of his 

requests for assistance and/or investigation sent to various federal agencies.

In these documents, which contain the same allegations as his 

amended complaint, Gilliam alleges that a bankruptcy trustee committed 

fraud on the court by not adhering to 26 U.S.C. § 1398(j)(2), relating to the 

treatment of “carrybacks”; that the IRS issued letters containing “false” 

information; that a bankruptcy judge assisted the IRS and the Department of 

Justice in misconduct; and that attorneys made false statements or presented 

false evidence in the proceedings before bankruptcy courts, district courts, 

and courts of appeals.

10 First Nat’l. Bank of Louisville v. Lustig, 96 F.3d 1554, 1573 (5th Cir. 1996) (internal 

quotation marks and citations omitted).

11 Id. (internal quotation marks and citations omitted).

12 Id. (internal quotation marks and citations omitted).

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Although in conducting a de novo review of a Rule 12(b)(6) dismissal, 

we “accept[] all well-pled facts as true, drawing all reasonable inferences in 

favor of the nonmoving party,” we do not “presume true . . . legal 

conclusions; mere labels; threadbare recitals of the elements of a cause of 

action; conclusory statements; and naked assertions devoid of further factual 

enhancement.”13 As the Government rightly contends, when Gilliam labels 

a statement as “false” or “fraudulent,” he is describing his disagreement 

with the legal merit of various arguments and positions taken by the 

Government and other parties in the multitude of proceedings that have 

occurred since his tax troubles began. Gilliam lists as the “facts constituting 

fraud on the court”: (1) the failure of the IRS to amend its proof of claim and 

the bankruptcy trustee’s failure to object to the accuracy of the IRS’s 1993 

tax claims; (2) the bankruptcy trustee’s filing of an “ultra vires” tax return 

and the IRS’s acceptance of the return; and (3) a bankruptcy judge’s

intentional disregard of one of its prior orders and misstatement on the record 

that the IRS had previously addressed many of Gilliam’s claims and defenses. 

These allegations do not plausibly set forth “an unconscionable plan or 

scheme which is designed to improperly influence the court in its decision.”14

Gilliam attempts to set forth allegations showing “the fabrication of 

evidence by a party in which an attorney is implicated.”15 He describes the 

actions of a Government attorney during a bankruptcy hearing in August 

2015. He alleges that the attorney lied when she stated that certain tax liens 

were still in effect when the IRS had released the liens. Gilliam further 

asserts that the attorney, along with a bankruptcy trustee, made “false 

13 Armstrong, 60 F.4th at 269 (internal quotation marks and citations omitted).

14 First Nat’l. Bank of Louisville, 96 F.3d at 1573 (internal quotation marks and 

citations omitted).

15 Id. (internal quotation marks and citations omitted).

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statements/arguments” to the bankruptcy court, district court, and court of 

appeals. Finally, Gilliam alleges that a bankruptcy trustee’s final accounting 

was “false and fraudulent.” Here again, Gilliam is simply labeling as “false” 

and “fraudulent” legal positions advanced by the Government and other 

parties on various issues. We agree with the district court that Gilliam has 

failed to state a claim for fraud on the court.

III. CONCLUSION

Based on the foregoing, we AFFIRM AS MODIFIED the district 

court’s judgment dismissing Gilliam’s claims. 

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