Opinion ID: 596389
Heading Depth: 3
Heading Rank: 4

Heading: Tax Assessment and Collection Exception

Text: 67 The government urges yet another exception to the FTCA's waiver of sovereign immunity, one that purports to eschew governmental liability under the FTCA for [a]ny claim arising in respect of the assessment or collection of any tax or customs duty. 56 The district court rejected the [g]overnment's position that any misdeeds committed by the individual defendants in this case ... were sufficiently related to the assessment or collection of taxes to fall under § 2680(c). 57 68 Again, we review such factual findings for clear error. But even if this issue were one of law, and thus subject to plenary review, we would agree with the district court. To argue that the actions of the IRS officers involved with the Johnson news release were causally connected to the tasks of assessing or collecting taxes strains credulity beyond the breaking point. The government informs us that the purpose of the instant publication effort was to deter potential tax evaders and thus was in furtherance of the more general efforts of the IRS to collect taxes. Therefore, argues the government, publicity aimed at deterring future evasion should be included within the assessment and collection exemption of § 2680(c). We find the government's position untenable. 69 A determination that the ambit of the assessment and collection exception is so all-embracing as to cover the news releases about Johnson's conviction would extend the exception to the point that the FTCA's waiver of sovereign immunity vis-a-vis the IRS would be wholly subsumed in that exception. Such an extension would effectively exempt every act of every IRS agent whatsoever. No case law cited to this court supports such a pervasive immunity for the IRS, and we have found none independently. 58 True, the jurisprudence in this area supports the conclusion that the exemption is quite broad as it relates to agents engaged in activities with a realistic nexus to the functions of assessing or collecting taxes. But in the instant case, accepting the government's argument would stretch the assessment and collection exemption to cover all general deterrent activities of the IRS even though, as here, the taxpayer may have long since paid the tax deficiency as well as penalties and interest. 70 It is axiomatic that not every employee of the IRS is engaged in assessing or collecting taxes even though those are the primary functions and missions of the Service. It is equally true that not every official act of those agents who are thus engaged is sufficiently related to assessing or collecting taxes to have the nexus required to enjoy the protection of § 2680(c). We refuse to expand this exemption as far beyond its already broad range as the government suggests. 71 In Cappozzoli v. United States, we stated that 72 an IRS agent could engage in tortious conduct sufficiently removed from the agents official duties of assessing or collecting taxes as to be beyond the scope of Section 2680(c), and at the same time sufficiently within the scope of his employment to give rise to an action against the United States. 59 73 Today we consider just such a situation. Even accepting for the sake of argument that the actions of the subject IRS agents were directed at deterring future tax evasion by others, those actions were not sufficiently related to assessing or collecting taxes to be immune from responsibility under § 2680(c). The attenuation of those acts from the outer limits of the exemption is too great to appertain. One of the agents was a publication relations officer; the others were special agents whose jobs comprehend criminal tax violations and violators. Off hand, we can think of no two IRS jobs with less nexus to the functions of assessing or collecting taxes. We are satisfied by the plain language of § 2680(c) that its tax assessment and collection exception was never intended to include deterrent publicity within its ambit of that exemption. We therefore reject the government's exemption argument.