Source: https://procedurallytaxing.com/category/wrongful-levy/
Timestamp: 2019-04-22 16:24:52+00:00

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Sixth Circuit Remands Wrongful Levy SOL Dispute: Did IRS’s 2012 Levy Attach to 2016 Payments?
Plaintiffs often face difficulties in meeting the statute of limitation deadlines in civil suits against the United States for improper tax collection action. But recently, the Sixth Circuit, in Gold Forever Music, Inc. v. United States, landed a third party a victory on the statute of limitations for an IRC Section 7426(a)(1) claim, which is the Code provision that allows innocent third parties to seek a return of property wrongfully levied to satisfy the tax debts of another taxpayer. Here, the third party, Gold Forever Music (Gold Forever), persuaded the court to vacate a district court’s dismissal based on the limitations period having expired prior to filing of the lawsuit.
In fiscal year 2017, the IRS served almost 600,000 levy requests according to the IRS Data Book. While this number has decreased substantially in recent years (there were over 1.4 million such levy requests in FY2015), the levy power does provide many opportunities for the IRS to seize property not owned by the liable taxpayer, but instead by an innocent third party.
In the event the innocent third party is aware of the potential issuance of a notice of levy, that party can attempt to convince a Revenue Officer that such property does not belong to the taxpayer. However, until the issuance of a notice of levy, the innocent third party likely has no advance knowledge of the IRS’s plans.
Then, at the point the notice of levy is issued, it is likely fruitless for the innocent third party to attempt to convince the recipient of the levy to not turn over property to the government because Section 6332(d)(1) imposes personal liability on individuals who fail to remit property pursuant to a levy. As an additional incentive, Section 6332(e) provides the party surrendering the property with immunity against liability from any other party.
When a levy is issued, it attaches to a taxpayer’s entire interest in property unless the property is exempt. For payments that will arise after the issuance of the levy, the levy attaches to all amounts that are fixed and determinable at the time of levy. Examples of future payment streams that are potentially fixed and determinable include retirement benefits, pensions, interest payments, and—as in Gold Forever—royalty payments.
Once the levy is issued—regardless of whether property is actually surrendered—the third party has the option to file an administrative claim for wrongful levy with the IRS. Such a written request is required if damages beyond just a return of the levied property are sought. If the claim is unsuccessful or no claim is filed, the third party can bring a civil suit against the United States. For innocent third parties who have property levied by the IRS to satisfy another taxpayer’s liability, a suit against the United States under Section 7426(a) is the only judicial remedy available.
Prior to the 2017 tax act (a.k.a. TCJA), the limitations period (found in Section 6532(c)) for a return of wrongfully levied property action was a mere nine months from the date of the levy, which is the period applicable in Gold Forever. The TCJA extended this period to two years for new levies and for levies where the nine month period had not expired as of the date of the TCJA’s enactment. In cases where the third party makes a timely administrative claim for a return of levied property, the limitations period is extended until the earlier of twelve months from the date of filing the claim or six months from the IRS’s notice of disallowance.
Gold Forever is a music publisher owned by Edward Holland, Jr. Holland is famous for being a member of the Holland-Dozier-Holland songwriting and production team responsible for several hits from Motown’s top artists. Mr. Holland also owed the government over $19 million in unpaid taxes.
Gold Forever licensed its music catalog to Broadcast Music, Inc. (BMI) and Universal Music Publishing (Universal) and in exchange, received royalty payments. Due to this arrangement, the IRS issued notices of levy to BMI and Universal in August 2012 under the theory that Gold Forever was either the alter ego or nominee of Edward Holland. Soon after the notices of levy were issued, BMI and Universal began remitting payments to the IRS and this apparently continued for several years without any action by Gold Forever (although there was some dispute about the extent to which payments were made during this period).
In the present litigation, Gold Forever has denied ever being an alter ego or nominee of Mr. Holland and claimed that the majority of levied royalty payments were meant for other artists and not Mr. Holland. In addition, at oral argument before the Sixth Circuit, the attorney for Gold Forever speculated that the inaction on the levy from Gold Forever was due to a belief that the amounts due to it under the contracts with BMI and Universal were not worth litigating over.
However, by 2016 and 2017, when BMI and Universal made additional royalty payments totaling almost $1 million to the IRS pursuant to the levy, Gold Forever decided to bring the Section 7426(a)(1) challenge in the Eastern District of Michigan seeking a return of those 2016 and 2017 payments.
In district court, Gold Forever alleged that the 2016 and 2017 royalty payments were not amounts that were fixed and determinable as of August 2012 levies. Thus, the 2012 notices of levy could not have attached to these payments. Therefore, the IRS’s seizure of the 2016 and 2017 royalty payments could not have been pursuant to the 2012 notices of levy. Instead, the seizure of these payments should be viewed as a new, constructive levy, starting the limitations period for a wrongful levy claim anew and making Gold Forever’s action timely (although this argument was framed in the somewhat confusing context of what is “the meaning of the word levy”). Gold Forever also noted the due process issues that would arise if the government were able to seize after-acquired property with no post-deprivation opportunity to dispute the taking.
The government also contended that whether the 2012 levy notices actually attached to the 2016 or 2017 royalties was irrelevant. According to the government, because the royalty payments were surrendered pursuant to the 2012 notices of levy, those notices of levy started the limitations period.
The district court appears to have missed the underlying substance of Gold Forever’s argument that the 2012 notices of levy did not attach to the 2016 and 2017 payments and the later seizure of those funds should be viewed as a separate levy distinct from the 2012 notices of levy. Instead, the district court summarized Gold Forever’s position as one that revolved around word meanings, stating “Plaintiff argues that ‘the date of the levy’ may also refer to the date of a seizure, namely the funds paid in 2016 and 2017.” Based on this understanding, the court easily found for the government and determined that a notice of levy, not the actual seizure, starts the limitations period. The court did not discuss whether the 2012 levies attached to the 2016 and 2017 payments and whether the remittance of those funds—if not reached by the 2012 levies—could constitute a new constructive levy.
At the appellate level, it appears the government began to appreciate that whether the 2012 levy attached to the 2016 and 2017 payments could actually matter. At oral argument, counsel for the government acknowledged that there was insufficient information in the record below to determine whether the 2016 and 2017 royalty payments were fixed and determinable at the time of the 2012 levies.
Nonetheless, the government contended that Gold Forever could have filed a wrongful levy suit within nine months of the 2012 notices of levy to determine “whether the levy attached to its royalty rights.” Gold Forever, quite rightly in my opinion, pointed out the problems of the government’s argument that taxpayers should litigate the scope of a notice of levy to avoid the possibility of the IRS wrongfully using that levy to seize property in the future to which the government was not entitled.
Alternatively, the government argued that if the levy did not reach the 2016 and 2017 payments to the government, then those amounts remitted to the IRS “were voluntary payments that cannot be recovered in a wrongful levy suit.” Instead of a wrongful levy suit, the government suggested Gold Forever’s only judicial remedy would be a third party civil action for release of an erroneous lien under Section 7426(a)(4), which would require a deposit by the taxpayer, contains much tighter deadlines, and – conveniently for the government in this case—would preclude the recovery of payments already made.
Again, this second argument from the government is quite troubling. Section 7426(h) authorizes additional damages in cases where an IRS employee negligently, recklessly, or intentionally takes a collection action in violation of the IRC. It would be an odd result if an IRS employee could knowingly demand after-acquired property be turned over pursuant to a notice of levy and then deprive the third party from being able to bring a suit for the return of the property because such payment was actually “voluntary.” It is further problematic in that the IRS would likely be using the carrot and stick provisions of immunity and personal liability under Section 6332 to convince parties to turn over property pursuant to a notice of levy and then later flip-flopping to argue it was not a levy at all.
Determining whether the 2012 levies attached to royalties acquired after the notices of levy is necessary to finding when the limitations period began to run for a wrongful levy action on those royalties. The government insists, without explanation, that determining the scope of the 2012 levies affects only the relief that could be awarded in the wrongful levy action and that considering the scope of the levies conflates “the statute of limitations with the merits of the claim.” The government’s concern is misplaced. Whether the levy attached to property is not part of the merits of a wrongful levy action—i.e., that the levy was made on property or a right to property in which the non-taxpayer has an interest. See Nat’l Bank of Commerce, 472 U.S. at 739 (quoting United States v. Rodgers, 461 U.S. 677, 695 (1983)). A levy attaching to property or the right to property is necessarily antecedent for the statute of limitations to begin running on a wrongful levy action concerning that property.
As for the government’s alternative argument that there could have been no levy if the 2012 notices did not attach to the 2016 and 2017 royalties, the court declined review since it was raised on appeal for the first time.
On remand, it will be interesting to see whether Gold Forever can convince the Court that the 2016 and 2017 royalty payments were not fixed and determinable at the time of the 2012 notices of levy. Nevertheless, it seems this is an issue a third party should have the opportunity to litigate. Otherwise, the possibility of improper IRS collection action pursuant to previously issued notices of levies would go potentially unchecked.
This case stands as good reminder for anyone who has a stream of payments currently being levied (and who might believe the applicable limitations period has passed) to take a closer look to confirm whether property levied today was a fixed and determinable amount at the date of the notice of levy.
Additionally, when the IRS issues a notice of levy, parties should carefully evaluate what property is fixed and determinable at the time of the levy. And Gold Forever’s current litigation should cause third parties to at least consider proactive litigation under Section 7426(a)(1), even when the monetary amounts at stake appear small, if there is a possibility of increased payments at a future date. After all, if Gold Forever had prevailed in a suit in 2012 or 2013 under the theory that it was not an alter ego or nominee of Mr. Holland, the company would have avoided the after-acquired property issue of the 2016 and 2017 payments altogether.
Finally, if you happen to find yourself streaming Motown classics on your favorite streaming service, you can feel a little extra patriotic knowing that—at least for the time being—some of those royalties payments are going to help put a dent in those ever-increasing annual federal deficits.
Ninth Circuit Denies En Banc Rehearing In Volpicelli v. U.S.
On January 30, in Volpicelli v. United States, 777 F.3d 1042, the Ninth Circuit reaffirmed its previous precedents from 20 years ago that held that the 9-month period at section 6532(c) in which to file a wrongful levy suit was not jurisdictional and was subject to equitable tolling. See our post of that date summarizing the holding. On March 16, the DOJ requested en banc rehearing — alleging a Circuit split and an unmanageable parade of future wrongful levy cases alleging equitable tolling. See our post of March 18 for an analysis of how the DOJ may have exaggerated both the Circuit split and the administrative problems. On April 8, the Ninth Circuit denied the request for an en banc rehearing. The ball is now in the Solicitor General’s court to ask for cert. or not. We will keep you posted.
In a previous post, I noted how on January 30 of this year a 3-judge panel of the 9th Circuit in Volpicelli v. U.S., 777 F.3d 1042, reaffirmed what the Circuit had held 20 years before in Capital Tracing, Inc. v. U.S., 63 F.3d 859, 861-62 (9th Cir. 1995), and Supermail Cargo v. U.S., 68 F.3d 1204, 1206-07 (9th Cir. 1995) — (1) that the 9-month period in section 6532(c) in which to bring a wrongful levy suit under section 7426 is not “jurisdictional” and (2), applying the presumption in favor of tolling non-jurisdictional statutes of limitations involving the government announced in Irwin v. Dept. of Veterans Affairs, 498 U.S. 89 (1990), the 9-month period at section 6532(c) was subject to equitable tolling. Irwin had overturned long-standing Supreme Court precedent holding that time limits, as parts of waivers of sovereign immunity, must be construed to exclude equitable tolling. Irwin held, instead, that the same rebuttable presumption in suits among private litigants that statutes of limitations could be subject to equitable tolling applied in analogous suits involving the United States. In my post, I predicted that the government would not want to live with the Volpicelli panel’s ruling and would try to take the Volpicelli case to the Supreme Court. Keith was quoted in an article in Tax Notes Today to the effect that “the allegations in Volpicelli, should they be proven or accepted as true, make it a potentially challenging case for the government. The government might prefer to find a case with more favorable facts to take to the Supreme Court.” 2015 TNT 22-9 (Feb. 3, 2015). I agree with Keith. But, the government did not listen to Keith. Instead, it has embarked on a road likely leading to the Supreme Court. On March 16, it filed a request for an en banc rehearing of Volpicelli by the 9th Circuit, a copy of which can be found here. The grounds for rehearing are a nominal Circuit split on this issue and the alleged administrative nightmare for the government if it had to deal with so many suits that would be triggered by this ruling where plaintiffs would now argue for equitable tolling.
I have been an amicus in support of the plaintiff in the Volpicelli case, so I am tempted to refute, point-by-point, all the arguments made by the government in seeking rehearing. I will resist that temptation, but only say that any arguments the government made in its rehearing request are not new, and though the panel did not address all of the arguments in its opinion, answers to all those arguments can be found in the plaintiff’s briefs (ably done pro bono by Brian Goldman and colleagues at Orrick).
There are two points that I want to address, though: The administrative nightmare argument and the existence of a live Circuit split. In fact, neither argument really holds water.
But the mention of this 2 million annual levies is misleading. The real issue is how many additional wrongful levy suits would be filed if equitable tolling continued to be allowed in the 9th Circuit, as it has been over the last 20 years. The statement of the question indicates the answer: There will be no additional suits in the 9th Circuit raising equitable tolling, since equitable tolling has been permitted there all along this past 20 years.
Then, the next question should be: If the 9th Circuit’s holding were spread countrywide, would there be more wrongful levy suits brought in other Circuits where equitable tolling was sought? Well, the plaintiff’s lawyers in Volpicelli looked into how many wrongful levy suits were brought countrywide in the five calendar years preceding the filing of the plaintiff’s opening brief in 2014 (i.e., for the calendar years 2009-2013). They found an average of 37 wrongful levy suits annually in the whole country. Opening brief at 32 n. 5. They also found that in the 20 years after the Capital Tracing and Supermail Cargo rulings allowing for tolling in the 9th Circuit, only 5 reported district court opinions in the 9th Circuit (one of them being Volpicelli) considered equitable tolling — or about one opinion every 4 years in the 9th Circuit’s district courts. Id. at 35-36 (citing opinions). If we were to assume that the 9th Circuit had only 10% of the country’s population (it has more, in fact), then this would suggest that one could expect 10 times as many such suits if the rest of the country allowed equitable tolling like the 9th Circuit — i.e., 50 suits in 20 years or 2.5 suits raising equitable tolling in the whole country, on average, in any year. Does 2.5 more suits a year constitute a “parade of lawsuits . . . alleging stale claims”? I think not.
Not only is the panel’s holding in substantial tension with United States v. Brockamp, . . ., but it is also in direct conflict with Becton Dickinson and Co. v. Wolckenhauer, 215 F.3d 340 (3d Cir. 2000), where the Third Circuit, relying on Brockamp, held that § 6532(c) is jurisdictional and cannot be equitably tolled. The panel’s decision also conflicts with the decisions of a host of other circuits which have refused to consider wrongful levy claims brought more than 9 months after the levy was made. See Miller v. Tony & Susan Alamo Found., 134 F.3d 910, 916 (8th Cir. 1998); Amwest Sur. Ins. Co. v. United States, 28 F.3d 690, 691 (7th Cir. 1994); Williams v. United States, 947 F.2d 37, 39-40 (2d Cir. 1991); Diekmann v. United States, 550 F.2d 622, 623 (10th Cir. 1977). Accord Compagnoni v. United States, 173 F.3d 1369, 1370 n. 3 (11th Cir. 1999).
Moreover, Becton Dickinson, which was decided after Irwin, and held that the section 6532(c) time period is jurisdictional, did so by using the expansive version of “jurisdictional” that the Supreme Court has more recently rejected. In recent cases, the Supreme Court has admitted that both it and lower courts previously overused the word “jurisdictional”, and henceforth “jurisdictional” should be reserved for subject-matter and personal jurisdiction, but not claims processing rules — unless Congress makes very clear that it, unusually, wants a claims processing rule like a time period to be jurisdictional. See, e.g., Henderson v. Shinseki, 131 S. Ct. 1197, 1202-03 (2011) (“Because the consequences that attach to the jurisdictional label may be so drastic, we have tried in recent cases to bring some discipline to the use of this term. We have urged that a rule should not be referred to as jurisdictional unless it governs a court’s adjudicatory capacity, that is, its subject-matter or personal jurisdiction. Other rules, even if important and mandatory, we have said, should not be given the jurisdictional brand.” Citations omitted).
The “jurisdictional” aspect of Becton Dickinson is clearly incompatible with current Supreme Court case law.
This reasoning has also been rejected by the Supreme Court more recently. In Scarborough v. Principi, 541 U.S. 401, 422 (2004), the Supreme Court suggested that Irwin does not “demand a precise private analogue” for its presumption to apply to suits against the government. The Court wrote that “[l]itigation against the United States exists because Congress has enacted legislation creating rights against the Government, often in matters peculiar to the Government’s engagements with private persons . . . Because many statutes that create claims for relief against the United States or its agencies apply only to Government defendants, Irwin‘s reasoning would be diminished were it instructive only in situations with a readily identifiable private-litigation equivalent.” Id. For this reason, the Supreme Court more recently found — applying the Irwin presumption — that a one-year period in which to file in federal court for habeas review in death penalty cases was subject to equitable tolling — even though such a suit could naturally only be brought against the government. Holland v. Florida, 560 U.S. 631 (2010).
In short, the opinions from other Circuits that the DOJ cites to create a Circuit split in Volpicelli have been completely sapped of their vitality, such that even a 3-judge panel in each of those other Circuits would be able to ignore the cited opinions as incompatible with current Supreme Court case law. How do these ghost opinions create a Circuit split?
Now, don’t get me wrong: I regret that Logan Volpicelli is being delayed in getting his college money back, but I actually am happy that the government is continuing to pursue this case — probably to the Supreme Court. Unless the Supreme Court overturns a decade of its recent case law, I am pretty sure that the Supreme Court will rule that section 6532(c) is subject to equitable tolling. I would love such a holding — not because I think it will benefit many people bringing wrongful levy suits, but because such a ruling will call into question whether many other time periods in the Internal Revenue Code are subject to equitable tolling.
Indeed, I think this is the government’s real fear about Volpicelli. It isn’t the fear of lots of late wrongful levy suits worrying the government, but of late other suits — such as refund lawsuits brought after the end of the 2-year period after claim disallowance found in section 6532(a) and maybe some late suits brought in the Tax Court. The government doesn’t want equitable tolling to spread throughout the Tax Code, so it is making a stand here with Volpicelli. We’ll now see if this is a Last Stand, like Custer’s.
Volpicelli v. US — is the 6532(c) 9-month period to bring wrongful levy suits “jurisdictional”?
There are many court of appeals opinion from a decade or more ago holding the 6532(c) 9-month period in which to file a wrongful levy suit and the 6532(a) 2-year post-disallowance period in which to file a tax refund suit “jurisdictional”. However, in recent years, the Supreme Court, in non-tax cases, has severely narrowed the instances in which mere “claims processing rules” — such as time periods in which to file in courts — are jurisdictional. See Sebelius v. Auburn Regional Medical Center, 133 S. Ct. 817 (2013) (holding a 180-day period in which Medicare providers had to file an administrative review board action not jurisdictional, though also not subject to equitable tolling); Henderson v. Shinseki, 131 S. Ct. 1197 (2011) (holding a 120-day period in which veterans were required to file in an Article I veteran’s court to complain of benefits denials not jurisdictional). Also see my article in Tax Notes, “Cracks Appear in the Code’s ‘Jurisdictional’ Time Provisions”,2012 TNT 210-4 (10/30/12). Will this trend in non-tax cases extend to the tax refund and wrongful levy suit statutes of limitations?
A case pending in the Ninth Circuit, Volpicelli v. U.S., 2011 U.S. Dist. LEXIS 140827 (D. Nev.2011), on appeal as 9th Cir. Docket No. 12-15029, is set to decide the issue of whether the wrongful levy statute of limitations is jurisdictional and, if not, whether it may be equitably tolled. Since the Third Circuit and a few others have previously held that the 6532(c) period is not subject to tolling, and the Ninth Circuit has previously held that the period is both not jurisdictional and is subject to equitable tolling, a conflict may be shaping up that winds up in the Supreme Court.
If it gets there, the Supreme Court will no doubt grapple with how its recent non-tax “jurisdictional” precedents apply to IRC time limits and whether any other time limits in the Code may be equitably tolled. It was in 1997 that the Supreme Court — without discussing whether the administrative refund claim filing periods under 6511(a) or (b) were jurisdictional — ruled in U.S. v. Brockamp, 519 U.S. 347 — that the periods were not subject to equitable tolling. Since then, the DOJ and IRS have usually argued in court that Brockamp stands for the proposition that no IRC time periods are subject to tolling and all are jurisdictional. Recognizing the importance of the Volpicelli case, the Ninth Circuit a few weeks ago assigned a pro bono counsel to the previously-pro se Mr. Volpicelli in both redoing his briefing and conducting the oral argument. The counsel appointed is Brian Goldman of Orrick’s San Francisco office. Mr. Goldman’s specialty is appellate litigation, and during the October 2013 Term of the Supreme Court, he clerked for Justice Sotomayor, after having previously clerked for a judge on the Ninth Circuit. Below is a description of Volpicelli’s facts and a little of the relevant law.
Logan Volpicelli was a minor child in 2003, when the Reno police were investigating his father for theft. Logan’s father, Ferrill, has had many run-ins with the law (see on www.PACER.gov Ferrill’s many cases in the Ninth Circuit) and is currently incarcerated in Lovelock, Nevada. After getting a search warrant for Ferrill’s safe deposit box, the police found two checks totaling around $10,000 that were made out to Ferrill from Ferrill’s parents. The police turned these over to the IRS, since Ferrill owed the IRS over $150,000 in back taxes. Within the 9-month period in section 6532(c) to bring a wrongful levy suit, Ferrill brought suit on behalf of Logan, arguing that the funds for the checks were intended as gifts from Logan’s great-grandparents, so were not really Ferrill’s property. However, the district court told Ferrill that he could not, as a parent, represent his minor son. He had to hire a lawyer for Logan’s suit to proceed. Ferrill lacked money to hire a lawyer, so the suit was dismissed without prejudice.
In 2010, when Logan reached the age of majority (18), he promptly brought a new wrongful levy suit in the Nevada district court. In two Ninth Circuit opinions from 1995, Supermail Cargo, Inc. v. U.S., 68 F.3d 1204, and Capital Tracing v. U.S., 63 F.3d 859, the court had held that the 6532(c) time period was not jurisdictional and could be equitably tolled under the rebuttable presumption in favor of tolling that the Supreme Court had announced in Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990). Citing these Ninth Circuit authorities, Logan asked the court to toll the 6532(c) time period. However, the district court dismissed this second suit for lack of jurisdiction as untimely. After noting the single exception in 6532(c) for tolling the 9-month period, the court wrote: “Because the limitations do not provide for an implicit reading of an equitable exception due to the age of majority, Plaintiff is barred by the statute of limitations pursuant to Brockamp.” In 1995, the Ninth Circuit, in Brockamp, had also held that the 6511 time periods for filing administrative refund claims could be equitably tolled under the Irwin presumption — a ruling the Supreme Court rejected two years later. Among the reasons why the Supreme Court rejected tolling for 6511 were the complexity of the numerous other exceptions in the statute, the possible administrative nightmare involved in reviewing late refund claims on tens of millions of tax returns, and the fact that (so the court said), “Tax law, after all, is not normally characterized by case-specific exceptions reflecting individualized equities.” In my article, I criticize this last comment of the Court and point out over a dozen instances in the tax collection process where equity determinations are made — e.g., equitable recoupment, suits in equity to foreclose on property, and, arguably, the Collection Due Process provisions.
there is any “clear” indication that Congress wanted the rule to be “jurisdictional”.
Last year, the Federal Circuit held that the 6511(b) lookback tax payment periods were not jurisdictional (though, citing Brockamp, held that no equitable tolling could apply to those periods). Boeri v. U.S., 724 F.3d 1367, 1369, cert. denied 2013 U.S. LEXIS 8950 (Dec. 9, 2013). And the year before, the D.C. Circuit, citing Henderson, held that the time period in which to bring a wrongful collection activity damages suit under 7433 was not jurisdictional. Keohane v. U.S., 669 F.3d 625, 630.
But, of course, if a time period is not jurisdictional, that does not mean that it is necessarily subject to equitable tolling. It just means that the inquiry can proceed to the equitable tolling issue and the Irwin presumption in favor of tolling. See the Auburn Regional Medical Center opinion from the Supreme Court last year, which held that a time period was not jurisdictional, but also was not subject to tolling. If 6532(c)’s wrongful levy time period is not jurisdictional, there are good reasons for holding it subject to tolling in the appropriate case. For example, the 9-month period is relatively short and has only one exception (if one files an administrative claim first) — not complicated with multiple exceptions like 6511. Since there are very few wrongful levy lawsuits, there would be no administrative nightmare if tolling were allowed of the period.
There is no pending challenge that I am aware of in the courts of appeal over whether the 6532(a) 2-years-from-disallowance period to bring a tax refund lawsuit under 28 USC 1346(a)(1) is jurisdictional or subject to equitable tolling. In the past, all Circuits to consider the question — usually in cases quite old — have held the 6532(a) period to be jurisdictional and not subject to tolling. See, e.g., RHI Holdings, Inc. v. U.S., 142 F.3d 1459 (Fed. Cir. 1998). Surprisingly, recent lower court opinions facing this issue seem not to discuss the recent changes in Supreme Court case law on what is jurisdictional. For example, last year, in Aljundi v. U.S., 112 AFTR 2d 2013-7297 (C.D. Cal.) (cited in Stephen Olsen’s post earlier this week), the district court did not cite any Supreme Court or Ninth Circuit authority, but merely cited the RHI opinion of the Federal Circuit for the court’s holding that the 6532(a) period was jurisdictional.
It is time for the courts in tax cases to consider at length the recent Supreme Court opinions both on what is jurisdictional and what is subject to equitable tolling. Perhaps the Volpicelli case in the Ninth Circuit will bring some clarity to this issue — particularly if it goes further on to the Supreme Court.

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