Agility Network Services, Inc. v. United States, 021717 FED6, 15-2599

Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
Attorney:ARGUED: Matthew S. DePerno, DEPERNO LAW OFFICE, PLLC, Kalamazoo, Michigan, for Appellants. Gretchen M. Wolfinger, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Matthew S. DePerno, DEPERNO LAW OFFICE, PLLC, Kalamazoo, Michigan, for Appellants. Gretchen M. Wolfinger...
Judge Panel:Before: GIBBONS, ROGERS, and McKEAGUE, Circuit Judges.
Opinion Judge:ROGERS, Circuit Judge.
Party Name:Agility Network Services, Inc., an Illinois Corporation; Chandler Denny; Cinnamon Denny, Plaintiffs-Appellants, v. United States of America, Defendant-Appellee.
Case Date:February 17, 2017
Docket Nº:15-2599
 
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Agility Network Services, Inc., an Illinois Corporation; Chandler Denny; Cinnamon Denny, Plaintiffs-Appellants,

v.

United States of America, Defendant-Appellee.

No. 15-2599

United States Court of Appeals, Sixth Circuit

February 17, 2017

          Argued: January 31, 2017

          Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. No. 1:14-cv-01310-Robert J. Jonker, Chief District Judge.

          ARGUED: Matthew S. DePerno, DEPERNO LAW OFFICE, PLLC, Kalamazoo, Michigan, for Appellants.

          Gretchen M. Wolfinger, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

          ON BRIEF: Matthew S. DePerno, DEPERNO LAW OFFICE, PLLC, Kalamazoo, Michigan, for Appellants.

          Gretchen M. Wolfinger, Bruce R. Ellisen, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

          Before: GIBBONS, ROGERS, and McKEAGUE, Circuit Judges.

          OPINION

          ROGERS, Circuit Judge.

          After receiving a notice of federal tax lien and a notice of intent to levy, taxpayers Agility Network Services, Inc., Cinnamon Denny, and Chandler Denny requested that the IRS hold a Collection Due Process hearing. The IRS took five months to process the request, and when the Office of Appeals finally held a hearing, the presiding agent refused to discuss multiple issues with the taxpayers. They were still dissatisfied after a second hearing before a different agent and sued the Government for the IRS agents' alleged misbehavior under 26 U.S.C. § 7433, which provides a damages remedy against the United States for certain actions of IRS officers or employees "in connection with any collection of Federal tax." The taxpayers also requested a temporary restraining order against further tax-collection efforts. The district court properly dismissed all claims because the activity challenged in this case did not fall within the scope of § 7433, and because the Tax Anti-Injunction Act precludes the court from issuing a restraining order.

         Before the federal government levies a tax against someone or files a lien on a taxpayer's property, the IRS must notify the taxpayer that he has a right to a Collection Due Process (CDP) hearing. 26 U.S.C. §§ 6320(a)(3)(B), 6330(a)(1). If the taxpayer requests one, an impartial officer from the IRS Office of Appeals will conduct the hearing. Id. §§ 6320(b), 6330(b). While CDP proceedings are pending, the IRS must suspend its collection efforts. Id. § 6330(e)(1). The taxpayer "may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including . . . challenges to the appropriateness of collection actions" and "offers of collection alternatives." Id. § 6330(c)(2)(A). The taxpayer may also challenge the underlying tax liability if he "did not receive any statutory notice of deficiency . . . or did not otherwise have an opportunity to dispute" the liability. Id. § 6330(c)(2)(B). When making a determination based on the hearing, the presiding officer must consider the issues raised by the taxpayer and "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary." Id. § 6330(c)(3)(B), (C). If after the hearing the Office of Appeals decides to uphold the proposed levy or sustain the notice of federal tax lien, it will issue a notice of determination to that effect. Treas. Reg. § 301.6330-1(f)(1) (as amended in 2016).

         The plaintiffs in this case, Cinnamon Denny, Chandler Denny, and their company, Agility Network Services, Inc., have alleged that the IRS mistreated them during the CDP hearing process. Cinnamon Denny owns Agility, and her husband, Chandler Denny, is an employee at Agility (collectively, the taxpayers). On April 17, 2012, the IRS filed a notice of federal tax lien against Agility for overdue employment taxes. On May 21, 2012, the IRS filed a notice of intent to levy based on the same overdue taxes. On May 23, Agility requested a CDP hearing in connection with the proposed lien and levy. Despite the May request, the IRS did not hold the hearing until December 20. According to the taxpayers, Revenue Officer McKinzie intentionally caused the delay by refusing to forward the hearing request to the Office of Appeals in an ...

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