Williams v. U.S., 1756
| Decision Date | 10 October 1991 |
| Docket Number | D,No. 1756,1756 |
| Parties | -5760, 91-2 USTC P 50,529 Beresford WILLIAMS, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. ocket 91-6065. |
| Court | U.S. Court of Appeals — Second Circuit |
Beresford Williams, Brooklyn, N.Y., pro se.
Shirley D. Peterson, Asst. U.S. Atty. Gen., Washington, D.C. (Andrew J. Maloney, U.S. Atty. E.D.N.Y., Brooklyn, N.Y., Gary R. Allen, David English Carmack, Curtis C. Pett, Tax Div., Dept. of Justice, Washington, D.C., of counsel), for defendant-appellee.
Before MINER, WALKER and McLAUGHLIN, Circuit Judges.
Plaintiff-appellant, Beresford Williams, appeals from a judgment entered on March 1, 1991 in the United States District Court for the Eastern District of New York (Nickerson, J.) dismissing an action commenced against defendant-appellee, the United States. In the suit, Williams sought to recover $30,563, plus interest and costs, which he alleged had been collected wrongfully by the Internal Revenue Service ("IRS") pursuant to a notice of levy issued to the New York City Police Department ("police department"). The district court found that the action was untimely under 26 U.S.C. § 6532(c) (1988). Williams contends that the district court applied the wrong statute of limitations and that, because he filed his complaint within ten months of the IRS's denial of his request for the levied money, the action is timely. We reject this argument and affirm the judgment of the district court.
In October 1982, Williams and one Dudley Pendley were arrested by a New York City police officer. Incident to the arrest, the officer seized $30,753 in cash, a large amount of marijuana and an automobile registered in the name of Pendley's wife, Vivian. Vivian Pendley filed a claim with the police department for the money and car.
In January 1983, the IRS assessed a $26,899 tax deficiency against Vivian Pendley for 1982, based on its determination that her reported taxable income for that year was insufficient to account for the automobile and the seized cash. The IRS also assessed additions to the tax deficiency for failure to pay, negligence and fraud, pursuant to 26 U.S.C. §§ 6651(a), 6653(a)(1), (2), 6654 and 6661. On July 22, 1983, the IRS issued to the police department a notice of levy on the cash, claiming the money for the purpose of satisfying Vivian Pendley's tax deficiency. Shortly thereafter, Vivian Pendley withdrew her claim.
In March 1987, Williams filed a claim for the seized money with the police department. The police department denied the claim in December 1987, informing Williams that the money had been forfeited. In January 1988, the police department turned over the money to the IRS pursuant to the notice of levy. In April 1988, Williams filed a claim for the money with the IRS, alleging that the money represented proceeds from his candy store and belonged to him. On November 21, 1988, the IRS issued a Notice of Disallowance denying his claim. Apparently, the Notice of Disallowance form received by Williams included language indicating that he had two years in which to commence a court action to recover the money.
When an action is brought against the United States government, compliance with the conditions under which the government has agreed to waive sovereign immunity is necessary for subject matter jurisdiction to exist. Long Island Radio Co. v. National Labor Relations Bd., 841 F.2d 474, 477 (2d Cir.1988). Accordingly, the statute of limitations may operate in suits against the United States not only as an affirmative defense, see Fed.R.Civ.P. 8(c), but also may deprive a court of subject matter jurisdiction over an action that is not timely filed. Dieckmann v. United States, 550 F.2d 622, 623 (10th Cir.1977) (per curiam); Carlos v. New York State Dep't of Taxation, 531 F.Supp. 359, 362 n. 6 (N.D.N.Y.1981). Although several district courts of this Circuit already have analyzed the issue of time limitations on suits against the United States for wrongful levy, we consider the issue for the first time.
Williams argues that a two-year statute of limitations, running from the date of the IRS's denial of his claim for the money, applies to this action. This contention confuses an action for wrongful levy with an action challenging the denial of a tax refund, which carries a two-year statute of limitations, see 26 U.S.C. § 6532(a)(1). It is undisputed that the IRS did not levy upon the seized money to satisfy any tax debts owed by Williams, and his standing to bring this suit is not predicated on his status as a taxpayer. Yet, apparently, Williams' claim filed with the IRS in April 1988 was denominated as a tax refund claim, and the IRS issued on November 21, 1988 a Notice of Disallowance denying the refund request.
In any event, notwithstanding the advisement on the form received by Williams, the two-year period set forth in section 6532(a)(1) for a refund of taxes does not apply here. The sole remedy available to an individual such as Williams, who claims an interest in property that has been levied upon by the IRS for the purpose of satisfying the tax liability of another person, is a wrongful levy action asserted under 26 U.S.C. § 7426(a)(1). See Winebrenner v. United States, 924 F.2d 851, 854-55 (9th Cir.1991); Trust Co. of Columbus v. United States, 735 F.2d 447, 448 (11th Cir.1984); United Sand & Gravel Contractors, Inc. v. United States, 624 F.2d 733, 739 (5th Cir.1980). Thus, the timeliness of Williams' action must be determined by 26 U.S.C. § 6532(c). See 26 U.S.C. § 7426(h).
"[N]o suit or proceeding under section 7426 shall be begun after the expiration of 9 months from the date of the levy...." Id. § 6532(c)(1). Where...
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