Opinion ID: 3011357
Heading Depth: 3
Heading Rank: 3

Heading: The Underlying Subject Matter

Text: Finally, like the time limitation at issue in Brockamp, [t]he nature of the underlying subject matter--tax collection--underscores the linguistic point. Brockamp, 519 U.S. at 352. In light of the more than 200 million tax returns and 90 million refunds that the IRS processes annually, the Brockamp Court was clearly concerned about the administrative burden the IRS would face if the Court permitted section 6511 to be equitably tolled. Id. While 18 wrongful levy claims undoubtedly compose a much smaller subset of taxpayer suits brought against the IRS than do claims for credit or refund of an overpayment of any tax imposed by the IRS,15 equitably tolling the time limitation in section 6532(c) could nevertheless pose serious administrative problems because anyone, not just the taxpayer in question, can bring a wrongful levy suit against the IRS. 26 U.S.C. S 6511(a) (1996); see Brockamp, 519 U.S. at 352 (The nature and potential magnitude of the administrative problem suggest that Congress decided to pay the price of occasional unfairness in individual cases (penalizing a taxpayer whose claim is unavoidably delayed) in order to maintain a more workable tax enforcement system.). Compare 26 U.S.C. S 7422 (creating a cause of action for taxpayers seeking a refund from the IRS) (emphasis added), with 26 U.S.C. S 7426 (If a levy has been made on property or property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.) (emphasis added). Holding that section 6532(c) can be equitably tolled could open the floodgates to countless suits brought under section 7426 against the government by various third-party creditors laying claim to assets seized by the IRS many years after the expiration of the time limitation set forth in section 6532(c). Cf. Brockamp, 519 U.S. at 352. Thus, the potential for administrative problems alluded to by the Brockamp Court is arguably at least as, if not more acute in our case than in Brockamp because equitable tolling could lead to myriad, stale wrongful levy claims by various third parties. Cf. id. at 352-353. In addition to potential administrative problems associated with countless wrongful levy suits brought against the IRS, we are mindful of the IRS's need for _________________________________________________________________ 15. The time limitation at issue in Brockamp , set forth in section 6511, applies to claims for credit or refund of an overpayment of any tax imposed by the IRS. 26 U.S.C. S 6511(a) (1996). 19 certainty and finality when imposing a levy on the assets of a delinquent taxpayer. We also acknowledge that third parties with an interest in assets owned by delinquent taxpayers should be able to sue the IRS if it wrongfully imposes a levy on those assets. Nevertheless, in situations where the IRS imposes a levy on the assets of a delinquent taxpayer, only to discover that another party has a superior claim to the assets, the IRS will be forced to seek other assets to satisfy the tax liability in question. Were we to hold that section 6532(c) can be equitably tolled, we would delay the final disposition of competing claims in cases like this one and would jeopardize, perhaps even destroy, the IRS's ability to impose a levy on other assets owned by a delinquent taxpayer. Such an outcome is not only at odds with purpose behind 26 U.S.C. S 7426, but also the thrust of the Supreme Court's holding in Brockamp. See Brockamp, 519 U.S. at 352.16 D. Other Courts' Analysis of Equitable Tolling and Section 6532 Although the issue of whether the time limitation in section 6532(c) is a statute of limitations, which can be equitably tolled, or a jurisdictional bar, which cannot be _________________________________________________________________ 16. Like the time limitation at issue in Irwin, but unlike the time limitation at issue in Brockamp, section 6532(c) uses fairly simple language, rather than highly detailed,technical language. Brockamp, 519 U.S. 350. Viewed in isolation, this fact suggests that like the time limitation at issue in Irwin, section 6532(c) can be equitably tolled. However, when the fairly simple language of section 6532(c) is considered in the context of the other facts discussed above, all of which indicate that Congress did not intend for section 6532(c) to be equitably tolled, it seems fairly clear that section 6532(c) cannot be equitably tolled. A holding to the contrary would be tantamount to concluding that if Congress were not to set forth [] time limitations in a highly detailed technical matter, id., all time limitations applicable to lawsuits against the government, which are, as a matter of law, condition[s] to the waiver of sovereign immunity, could be equitably tolled. Irwin, 498 U.S. at 94. Such a conclusion is untenable and is at odds with the Irwin Court's acknowledgment that statutes that are a condition to the waiver of sovereign immunity must be strictly construed. Id.; see also, e.g., Lane v. Pena, 518 U.S. 187, 192 (1996) ([A] waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign.). 20 equitably tolled, is one of first impression in our circuit, four of our sister circuits have addressed this issue since the Supreme Court's holding in Irwin, with three of these circuits concluding that the time limitation set forth in section 6532(c) is a jurisdictional bar.17 The Second, Seventh, and Eighth Circuits have each concluded that section 7426(a)(1) is the exclusive remedy available to third parties asserting claims to property levied by the IRS and that the failure to file a timely claim as required by section 6532(c) deprives a federal district court of subject matter jurisdiction. See Miller v. Tony & Susan Alamo Found., 134 F.3d 910, 916 (8th Cir. 1998) (The Millers do not dispute they failed to assert a timely S 7426(a)(1) wrongful levy claim on the Fort Smith/Nashville property, [and t]hus, the Millers' claim to the Fort Smith/Nashville property is outside the subject-matter jurisdiction of the district court.); Amwest Sur. Ins. Co. v. United States, 28 F.3d 690, 691 (7th Cir. 1994) (affirming the district court's dismissal of a wrongful levy action, untimely under section 6532(c), for lack of subject matter jurisdiction); Williams v. United States, 947 F.2d 37, 40 (2d Cir. 1991) (same). Several district courts have also held that section 6532(c) acts not as a statute of limitations but as a jurisdictional bar. See Compagnoni v. United States, No. 94-0813-CIV-MARCUS, 1997 WL 416482, at  (S.D. Fla. May 13, 1997) (denying a motion for reconsideration of the district court's earlier order dismissing a wrongful levy claim, untimely under section 6532(c), for lack of subject matter jurisdiction), aff'd on other grounds, 173 F.3d 1369 (11th Cir. 1999); Fanning v. United States, No. 1:95-CV-222-RCF, 1996 WL 343462, at  (N.D. Ga. Apr. 30, 1996) (As the government points out, the statute of limitations set forth in I.R.C.S 6532(c) `acts not only as an affirmative defense, but also as a _________________________________________________________________ 17. Ninth Circuit opinions on this issue are inconsistent. Compare Maraziti v. Thorpe, 52 F.3d 252, 255 (9th Cir. 1995) (Hawkins, J.) (affirming the District Court's dismissal of a section 7426(a)(1) claim, untimely under section 6532(c), for lack of subject matter jurisdiction) with Supermail Cargo, Inc. v. United States, 68 F.3d 1204 1206 n.2 (9th Cir. 1995) (Reinhardt, J.) (The district court erroneously believed the statute of limitations contained in S 26 U.S.C. 6532(c)(1) to be a jurisdictional prerequisite and, accordingly, dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction.). 21 restriction of the district court's subject matter jurisdiction over an action that is untimely filed.' ) (citations omitted), aff'd mem., 117 F.3d 1432 (11th Cir. 1997); Hanna Coal Co., Inc. v. Internal Revenue Service, No. CIV.A.92-0071-B, 1994 WL 666928, at  (W.D. Va. Oct. 12, 1994) (Therefore, if the statute of limitations espoused in 26 U.S.C. S 6532(c) has expired, then the United States' limited consent to be sued has also expired and this Court would not have proper subject matter jurisdiction over this matter.), vacated on other grounds, 1994 WL 762188, at  (W.D. Va. Nov. 18, 1994). But cf. Gothenburg State Bank & Trust Co. v. United States, No. 7:98CV5026, 1999 WL 314928, at  (D. Neb. Apr. 9, 1999) (stating without explanation that failure to file a timely wrongful levy claim deprives the court of subject matter jurisdiction but holding that section 6532(c) can be equitably tolled). Thus, the vast majority of federal courts to address squarely this issue have concluded that the time limitation in section 6532(c) is a jurisdictional bar that cannot be tolled, regardless of the equities in a given case, and that the failure to file a claim under section 7426(a)(1) prior to the expiration of the time limitation in section 6532(c) deprives the district court of subject matter jurisdiction. Reinforcing the conclusion that a district court lacks subject matter jurisdiction to entertain a wrongful levy action that is untimely under section 6532(c) are decisions in four sister circuits holding that the failure tofile a timely claim as required by section 6532(a)18 deprives a federal court of subject matter jurisdiction. See RHI Holdings, Inc. v. United States, 142 F.3d 1459, 1461-63 (Fed. Cir. 1998) (holding that a taxpayer's failure to file a timely claim pursuant to section 6532(a) deprives the court of subject matter jurisdiction); Marcinkowsky v. United States, 206 F.3d 1419, 1421-22 (Fed. Cir. 2000) (same); Bartley v. United States, 123 F.3d 466, 471-72 (7th Cir. 1997) (stating that unless the taxpayer files a timely claim under section 6532(a), a court lacks subject matter jurisdiction over a suit for refund); Miller v. United States , No. 96-2787, 1997 _________________________________________________________________ 18. Section 6532(a) governs claims under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum. 26 U.S.C. S 6532(a) (1996). 22 WL 381958, at - (4th Cir. July 11, 1997) (unpublished opinion) (Miller appeals from the district court's order dismissing his tax refund suit for lack of subject matter jurisdiction because he failed to file his suit within the twoyear statute of limitations provided by I.R.C. S 6532(a)[; w]e affirm.); Oatman v. Department of Treasury-Internal Revenue Service, 34 F.3d 787, 789 (9th Cir. 1994) (The district court lacks jurisdiction over claims for refunds pressed by any potential class members who have not satisfied the procedural requirements of 26 U.S.C.SS 6532 and 7422.). While 26 U.S.C. S 6532(c) is less detailed and less complex than 26 U.S.C. S 6532(a),19 in all other relevant respects, 26 U.S.C. S 6532(c) is more like 26 U.S.C. _________________________________________________________________ 19. Section 6523(a) states:
(1) General rule.--No suit or proceeding under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall be begun before the expiration of 6 months from the date of filing the claim required under such section unless the Secretary renders a decision thereon within that time, nor after the expiration of 2 years from the date of mailing by certified mail or registered mail by the Secretary to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates. (2) Extension of time.--The 2-year period prescribed in paragraph (1) shall be extended for such period as may be agreed upon in writing between the taxpayer and the Secretary. (3) Waiver of notice of disallowance.--If any person files a written waiver of the requirement that he be mailed a notice of disallowance, the 2-year period prescribed in paragraph (1) shall begin on the date such waiver is filed. (4) Reconsideration after mailing of notice.--Any consideration, reconsideration, or action by the Secretary with respect to such claim following the mailing of a notice by certified mail or registered mail of disallowance shall not operate to extend the period within which suit may be begun. (5) Cross reference.--For substitution of 120-day period for the 6- month period contained in paragraph (1) in a title 11 case, see section 505(a)(2) of title 11 of the United States Code. 26 U.S.C. S 6532(a) (1986). 23 S 6532(a) than 42 U.S.C. S 2000e-16(c). Like section 6532(a), section 6532(c) applies only to suits brought against the government, sets forth its time limitations in unusually emphatic form, sets forth explicit exceptions to its basic time limitations (exceptions which do not include equitable tolling), and is a provision of the Internal Revenue Code set forth in Title 26, Subtitle F, Chapter 66, section 6532, entitled Periods of limitations on suits. Moreover, like section 6532(a), were section 6532(c) equitably tolled, the IRS could be forced to litigate countless, stale claims, thus creating serious administrative problems. These similarities suggest that like the time limitation set forth in section 6532(a), the time limitation set forth in section 6532(c) cannot be equitably tolled. For the foregoing reasons, we conclude that a careful reading of Irwin and Brockamp leads ineluctably to the conclusion that Congress did not intend for the time limitation in section 6532(c) to be equitably tolled. Consistent with opinions in our sister circuits, we hold that the failure to file a timely wrongful levy claim prior to the expiration of the time limitation in section 6532(c) deprives the district court of subject matter jurisdiction. Cf. Irwin, 498 U.S. at 91 (We granted certiorari to determine when the 30-day period under S 2000e-16(c) begins to run and to resolve the Circuit conflict over whether late-filed claims are jurisdictionally barred.); Perez v. United States, 167 F.3d 913, 915-18 (5th Cir. 1999) (noting that the Brockamp Court concluded that section 6511 was a jurisdictional time limitation that could not be equitably tolled); RHI Holdings, Inc. v. United States, 142 F.3d 1459, 1461-63 (Fed. Cir. 1998) (holding that like the time limitation in Brockamp, a taxpayer's failure to file an timely claim pursuant to section 6532(a) deprives the court of subject matter jurisdiction); Calderon v. United States District Court for the Central District of California, 128 F.3d 1283, 1288 n.4 (9th Cir. 1997) (In [United States v. ]Brockamp , the [Supreme] Court held that a time-limit on filing tax refund claims was a jurisdictional bar, not a tollable statute of limitations.).