EC Term of Years Trust v. United States (2006)
- Docket
- 05-1541
- Decided
- 2006-01-01
Summary
Question: Can a party challenge, under 28 U.S.C. 1346(a)(1), an Internal Revenue Service tax levy on its property intended to collect taxes owed by another party, even if the party could have sued under 26 U.S.C. 7426 but failed to file the suit before the time limit expired? Conclusion: No. In a unanimous decision written by Justice David Souter, the Court ruled that "Resisting the force of the better-fitted statute [28 U.S.C. 7426] requires a good countervailing reason, and none appears here." The Court held that Section 7426 is the exclusive legal vehicle for challenging a wrongful tax levy, so after having missed the deadline EC Term of Years Trust could not bring its suit as a tax refund claim under 1346(a)(1). The Court acknowledged that in United States v. Williams it had allowed liens to be challenged under 28 U.S.C. 1346(a)(1), but the Court held that the principle in Williams was limited to cases in which there is no other remedy available. The Justices ruled that it would not make sense to allow claims under 28 U.S.C. 1346(a)(1), which has a 9-month limitations period, to be duplicated under 26 U.S.C. 7426, which has a time limit of four years.