Ewing and Thomas, P.A. v. Heye, 85-3760
| Decision Date | 30 October 1986 |
| Docket Number | No. 85-3760,85-3760 |
| Parties | -6123, 86-2 USTC P 9768 EWING AND THOMAS, P.A., a Florida corporation, Plaintiff-Appellant, v. Merlin W. HEYE, District Director of the Internal Revenue Service, Roscoe L. Egger, Jr., Commissioner, Internal Revenue Service, the United States of America, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
J. Miles Buchman, Tampa, Fla., for plaintiff-appellant.
Michael L. Paup, Chief Appellate Section, Glenn L. Archer, Jr., Thomas R. Lamons, Gilbert S. Rothenberg, Tax Div., Dept. of Justice, Washington, D.C., for defendants-appellees.
Appeal from the United States District Court for the Middle District of Florida.
Before RONEY, Chief Judge, FAY, Circuit Judge and SIMPSON, Senior Circuit Judge.
Ewing and Thomas, P.A., filed suit in district court to obtain the release of a federal tax lien which had been filed against its property as well as attorneys fees and costs incurred in administrative proceedings 1 and in district court litigation.
The complaint alleged that the taxpayer had satisfied the obligation secured by the lien but was nevertheless unable to obtain a release of the lien through administrative processes despite the fact that 26 U.S.C. Sec. 6325(a)(1) requires the release of a lien within thirty days of satisfaction. After the suit was filed, the government attorney assigned to the case promptly investigated the taxpayer's complaint and initiated the process through which a release was filed. The taxpayer, after obtaining this partial settlement, refused to stipulate to a dismissal and moved for an award of attorney's fees and court costs pursuant to 26 U.S.C. Sec. 7430 (1984) which authorizes an award of fees and costs to a prevailing taxpayer if certain prerequisites are met, see 26 U.S.C. Sec. 7430(c)(2)(A). The district judge denied the award because he found that the taxpayer had failed to establish that "the position of the United States in the civil proceeding was unreasonable." 26 U.S.C. Sec. 7430(c)(2)(A)(i), 618 F.Supp. 648. The opinion explained that the government had unquestionably acted reasonably since the filing of the complaint and that an unreasonable position assumed by the I.R.S. in the administrative process could not satisfy the requirements of 26 U.S.C. Sec. 7430(c)(2)(A)(i) because the administrative actions were not a "civil proceeding" within the meaning of the statute. Consequently, the district judge dismissed the action. The sole question before the court is whether the district judge correctly determined that the government's position in the administrative proceedings could not be examined to determine the reasonableness of the government's position "in the civil proceeding."
The district court primarily rested its interpretation of Sec. 7430 upon Eleventh Circuit rulings which interpreted former 28 U.S.C. Sec. 2412(d)(1)(A)(1982) a subsection of the former Equal Access to Justice Act (EAJA) which allowed for the award of attorneys' fees incurred by a prevailing party ... "in any civil action ... brought by or against the United States ... unless the court finds that the position of the United States was substantially justified...." In Ashburn v. United States, 740 F.2d 843, 846-50 (11th Cir.1984) and White v. States, 740 F.2d 836, 842 (11th Cir.1984) this court held that the position to be examined in deciding whether to award fees was the government's in-court litigating position. The district court found no reason for reaching a different conclusion in an application for attorneys fees brought under the successor statute, 26 U.S.C. Sec. 7430:
The Petitioner distinguishes Ashburn and White on the basis that they were decided under a former provision of the Equal Access to Justice Act, not the Internal Revenue Code. However, there is no apparent basis in this circuit for assuming that the position of the United States in a "civil proceeding" under 26 U.S.C. Sec. 7430 would be interpreted more generously than the position of the United States in a "civil action" under the former 28 U.S.C. Sec. 2412(d)(1)(A)(1982) to include compensation for unreasonable agency action. Indeed, in view of the conflicting case law in analogous situations under seemingly similar federal legislation, this Court concludes that Congress would have been explicit if it had intended to provide attorney fee relief for proceedings prior to the "civil proceedings." (Order pp. 2,3).
We have considered all of the taxpayer's arguments in this appeal and found that the court committed no reversible error below. We limit our discussion to the arguments which are supported by case law from other circuit courts. The circuit courts which have reviewed this question are divided. The District of Columbia and the Tenth Circuits agree that the "position of the United States" which must be examined is the government's in-court litigating position. Baker v. Commissioner, 787 F.2d 637, 641-42 (D.C.Cir.1986); United States v. Balanced Financial Management, Inc. 769 F.2d 1440 (10th Cir.1985). The First and Fifth Circuits, on the other hand, interpret Sec. 7430 as allowing fees in cases in which the I.R.S. has taken an unreasonable stance in administrative proceedings yet acted reasonably in litigation before the district court. Kaufman v. Egger, 758 F.2d 1, 3-4 (1st Cir.1985); Powell v. Commissioner, 791 F.2d 385, 388-92 (5th Cir.1986). We agree with the District of Columbia and Tenth Circuits.
The Fifth Circuit, which has reached a contrary conclusion in Powell, recognizes that Congress had no intention of defining a "civil proceeding" so broadly as to include administrative actions when it limited the application of Sec. 7430 to "any civil proceeding ... brought in a court of the United States" in Sec. 7430(a) or when it referred to the award of "reasonable litigation costs ..." incurred in connection with the "civil proceeding" in Sec. 7430(c)(1)(A)(ii) & (iv). Powell v. Commissioner, 791 F.2d at 388-89. That court noted "It is reasonable to assume that the phrase 'civil proceeding' in Sec. 7430(c)(2)(A)(i) ... has the same meaning as it does in Sec. 7430(a)", or in the other subsections cited above, but found that the conclusion " 'while reasonable ... is not a necessary conclusion.' " Powell, 791 F.2d at 388 quoting from Finney v. Roddy, 617 F.Supp. 997, 1000 n. 4 (E.D.Va.1985).
The Fifth Circuit reached its expansive reading of Sec. 7430 by reference to the legislative history of changes which were made in the Equal Access to Justice Act which was amended in 1984 approximately a year after Sec. 7430 was drafted in order to provide that a court must look at " ... the action or failure to act by the agency upon which the...
To continue reading
Request your trial
-
Ardestani v. U.S. Dept. of Justice, I.N.S.
...of a congressional or constitutional waiver of sovereign immunity which grants it the authority to do so." Ewing & Thomas, P.A. v. Heye, 803 F.2d 613, 616 (11th Cir.1986). Since EAJA waives sovereign immunity in allowing attorney fees against the United States, it must be construed strictly......
-
Sokol v. Comm'r of Internal Revenue
...States, 860 F.2d 841 (8th Cir. 1988); Wickert v. Commissioner, 842 F.2d 1005, 1008 (8th Cir. 1988); Ewing and Thomas, P.A. v. Heye, 803 F.2d 613, 615-616 (11th Cir. 1986); Baker v. Commissioner, 787 F.2d 637, 641 and n.8 (D.C. Cir. 1986); United States v. Balanced Financial Management, Inc.......
-
U.S. v. Certain Real Property, Huntsville, al
...with it, because the role of the judicial branch is to apply statutory language, not to rewrite it."); see also Ewing & Thomas, P.A. v. Heye, 803 F.2d 613, 616 (11th Cir.1986), superseded by statute, Act of July 30, 1996, Pub.L. No. 104-168, Title VII, secs. 701(a)-(c), 702(a), 703(a), 704(......
-
Autrey v. U.S., 87-8916
...be judged is solely that taken in the civil litigation, and does not include prior administrative positions or conduct. Ewing v. Heye, 803 F.2d 613 (11th Cir.1986). The district court concluded that the government's position during litigation was reasonable, a conclusion that our analysis s......