Opinion ID: 70400
Heading Depth: 2
Heading Rank: 4

Heading: liability under i.r.c. section 7432

Text: 41 The district court held that the IRS could not be held liable for damages arising from its failure to issue a certificate of release relating to the refiled notice of federal tax lien, Notice No. 3, because it concluded that the issue was so uncertain that IRS personnel could not have acted knowingly or negligently. The provisions requiring the IRS to act responsibly in identifying and releasing the liens are part of its own regulations and internal procedures and are fully consistent with Congress's general intent to make federal tax lien law coincide with general business practices. There is nothing novel in mandating that the IRS identify the lien being released and the notice of federal tax lien filed against the property sufficiently. The arguments advanced by the IRS appear to camouflage and to compound what may have been a simple mistake. Additionally, we note that, despite the IRS's arguments regarding the taxpayer's request to release the lien, 21 Griswold pursued all possible avenues to have a certificate of release issued in accordance with the IRS's procedures and still a release was not forthcoming until September, 1993. Consistent with our holding herein, we remand to the district court to determine whether the IRS personnel's actions in failing to release this lien in a timely manner were either knowing or negligent. 42 In its order denying Griswold's motion for reconsideration, the district court also denied Griswold relief with respect to the tardy release of the liens filed in Maricopa County and in Rutherford County. The parties do not dispute that these certificates of release were not issued and the releases effective until well past thirty (30) days after the underlying liabilities had been satisfied. This is prima facie evidence that the IRS violated section 6325. Upon Griswold's motion for reconsideration, the district court apparently found that Griswold abandoned any argument that the IRS was liable for its failure to release the liens in Maricopa County and in Rutherford County in a timely manner. Such a finding is clearly erroneous. As noted above, however, we cannot discern adequately whether Griswold exhausted his administrative remedies with respect to these liens. This is a prerequisite to maintaining a section 7432 action. I.R.C. Sec. 7432(d)(1). Therefore, we remand to the district court to determine whether Griswold exhausted his administrative remedies and, if so, whether he is entitled to damages.