EC Term of Years Trust v. United States - Brief (Merits)

No. 05-1541

 

In the Supreme Court of the United States

EC TERM OF YEARS TRUST, PETITIONER

v.

UNITED STATES OF AMERICA

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

PAUL D. CLEMENT
Solicitor General
Counsel of Record
EILEEN J. O'CONNOR
Assistant Attorney General
THOMAS G. HUNGAR
Deputy Solicitor General
DEANNE E. MAYNARD
Assistant to the Solicitor
General
BRUCE R. ELLISEN
TERESA T. MILTON
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTION PRESENTED

Whether a party who would have been entitled to commence a timely action under 26 U.S.C. 7426(a)(1) to challenge an allegedly wrongful Internal Revenue Ser vice levy upon its property to collect taxes owed by another, but failed to commence such an action within the applicable limitation period, may seek a refund of the amount collected by the levy through a tax-refund action under 28 U.S.C. 1346(a)(1).

In the Supreme Court of the United States

No. 05-1541

EC TERM OF YEARS TRUST, PETITIONER

v.

UNITED STATES OF AMERICA

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-7a) is reported at 434 F.3d 807. The opinion of the district court (Pet. App. 8a-18a) is not published in the Federal Supplement. An earlier opinion of the district court (J.A. 11-22) is not published in the Federal Supplement but is available at 2004 WL 911307.

JURISDICTION

The judgment of the court of appeals was entered on January 3, 2006. A petition for rehearing was denied on March 2, 2006 (Pet. App. 19a). The petition for certio rari was filed on May 31, 2006, and granted on October 27, 2006. The jurisdiction of this Court rests on 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

The pertinent statutory provisions are set forth in an appendix to this brief. App., infra, 1a-15a.

STATEMENT

1. a. If a person liable to pay any tax fails to pay the tax, the Internal Revenue Service (IRS) may collect the tax by levy upon all property or rights to property be longing to that person, including property nominally held by a third party. 26 U.S.C. 6330, 6331. If a third party claims an interest in the levied property, the third party may bring an action for wrongful levy under 26 U.S.C. 7426. Section 7426(a)(1) creates a specific remedy for "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 prop erty" to challenge an allegedly wrongful IRS levy. 26 U.S.C. 7426(a)(1).1 A wrongful-levy action under Section 7426(a)(1) may be brought "without regard to whether such property has been surrendered to or sold" by the IRS. Ibid.

Such actions, however, are subject to the statute of limitations contained in 26 U.S.C. 6532(c). A wrongful- levy action under Section 7426(a)(1) must generally be brought before "the expiration of 9 months from the date of the levy." 26 U.S.C. 6532(c)(1). If a third party makes a proper administrative request for the return of the levied property, the limitation period is extended for a period no more than 12 months from the date of the request. 26 U.S.C. 6532(c)(2).

b. Section 1346(a)(1) of Title 28 grants district courts jurisdiction, concurrent with the United States Court of Federal Claims, over "[a]ny civil action against the United States for the recovery of any internal-reve nue tax alleged to have been erroneously or illegally assessed or collected." 28 U.S.C. 1346(a)(1). Such a tax- refund action cannot be brought "until a claim for refund or credit has been duly filed" with the IRS. 26 U.S.C. 7422; United States v. Dalm, 494 U.S. 596, 601-602 (1990). Section 6511(a) provides that an administrative refund claim must be filed within two years from the date a tax is paid or three years from the time the re turn was filed, whichever is later. 26 U.S.C. 6511(a). Section 6532(a), in turn, generally requires that any tax- refund action under Section 1346(a) must be filed within two years after the date of the IRS's disallowance of the refund claim, although that period can be extended by agreement. 26 U.S.C. 6532(a)(1) and (2).

2. Petitioner is one of several trusts created by Elmer and Dorothy Cullers. J.A. 29. In 1986, the IRS disallowed loss deductions reported by the Cullers on their income tax returns for the tax years 1981 through 1984 arising out of their investment in MidContinent Drilling Associates, a partnership. J.A. 28. In subse quent litigation, the Tax Court found that the partner ship was an abusive tax shelter and disallowed deduc tions claimed by its partners. Ibid.; see Webb v. Com missioner, 60 T.C.M. (CCH) 1085 (1990); Midcontinent Drilling Assocs. v. Commissioner, 67 T.C.M. (CCH) 2453 (1994). The IRS then made assessments in 1993 and 1994 of the Cullers's resulting additional income tax liabilities. J.A. 30-33.

In April 1991 and thereafter, the Cullers transferred a substantial portion of their property to petitioner. J.A. 29. In 1999, the IRS filed a tax lien against peti tioner for the Cullers's unpaid 1981 through 1984 income taxes, based on the IRS's position that the Cullers had transferred property to petitioner in an effort to avoid paying their federal income taxes. Pet. App. 2a; J.A. 28- 32. Although petitioner disagreed with the IRS's con tentions, in August 1999, it opened a bank account for the purpose of satisfying the Cullers's unpaid tax liabili ties. The IRS then levied on the account, and the bank issued a check for $3,389,426.37 on October 5, 1999, to satisfy the levy. Pet. App. 2a; J.A. 30-34.

Almost one year later, on September 7, 2000, peti tioner (and other trusts created by the Cullers) filed an action against the United States pursuant to both 26 U.S.C. 7426(a)(1) and 28 U.S.C. 1346(a)(1). Pet. App. 2a, 9a. The district court dismissed the Section 7426 wrong ful-levy claim, concluding that it was time-barred. The court reasoned that the action had not been filed within nine months after the challenged levy, as required by 26 U.S.C. 6532(c)(1), and that petitioner had not made a proper request for return of the property that could have extended the nine-month limitation period pursu ant to 26 U.S.C. 6532(c)(2). BSC Term of Years Trust v. United States, No. EP-00-CA-270-H, 2000 WL 33155870, at *2-*3 (W.D. Tex. Dec. 28, 2000). In addition, the dis trict court held that it lacked jurisdiction under 28 U.S.C. 1346(a)(1) because 26 U.S.C. 7426(a)(1) "affords the exclusive remedy for an innocent third party whose property is confiscated by the IRS to satisfy another person's tax liability." 2000 WL 33155870, at *2 n.1 (quoting Texas Commerce Bank Fort Worth, N.A. v. United States, 896 F.2d 152, 156 (5th Cir. 1990)); see Pet. App. 3a n.3. Petitioner and the other trusts volun tarily dismissed their appeal from the district court's decision. See BSC Term of Years Trust v. United States, No. 01-50127, 2001 WL 722022 (5th Cir. Apr. 25, 2001).

3. On September 6, 2001, petitioner filed an adminis trative claim for refund of the amount that the IRS had collected by levy. Pet. App. 9a; J.A. 27-31. After the claim was denied, petitioner filed this second action, al leging jurisdiction under 28 U.S.C. 1346(a)(1). Pet. App. 9a; J.A. 23-25.2 The district court dismissed the com plaint on the ground that a wrongful-levy action under 26 U.S.C. 7426(a)(1) is the "exclusive remedy for those in [petitioner's] circumstances." Pet. App. 17a. The district court rejected petitioner's claim that the deci sion in United States v. Williams, 514 U.S. 527 (1995), overruled the "longstanding exclusivity rule" with re spect to wrongful-levy claims. Pet. App. 17a. In Wil liams, this Court held that a party "who paid a tax un der protest to remove a lien on her property, ha[d] standing to bring a refund action under 28 U.S.C. § 1346(a)(1), even though the tax she paid was assessed against a third party," where she had "no realistic alter native to payment of a tax she did not owe" and would otherwise have been left "without a remedy." 514 U.S. at 529. The district court distinguished Williams from the facts of this case, because here petitioner could have availed itself of a wrongful-levy action under 26 U.S.C. 7426(a)(1) but failed to bring a timely claim. Pet. App. 17a. The court declined to read Williams as holding that "third-parties, under ordinary circumstances, are no longer required to bring a wrongful levy action as such would create instability in federal government property resolutions inherent in the shortened statute of limitation applicable to such claims." Ibid.

4. The court of appeals affirmed. Pet. App. 1a-7a. The court noted its prior decisions holding "that if § 7426 is available to an individual, then it is his sole and exclusive remedy," and it observed that the "short stat ute of limitations governing claims under § 7426 allows for the expeditious resolution of tax liability." Id. at 4a. The court concluded that Williams should not be read to suggest "that a refund action under § 1346 is available in addition to a wrongful levy action under § 7426." Id. at 5a. The court further observed that "to allow an al ternative remedy under § 1346, with its longer statute of limitations period, see 26 U.S.C. §§ 6511(a), 6532(a)(1), would undermine the surety provided by the clear ave nue to recovery under § 7426." Ibid.

SUMMARY OF ARGUMENT

The court of appeals correctly held that petitioner cannot seek relief from an allegedly wrongful tax levy through the general tax-refund mechanism authorized by 28 U.S.C. 1346(a)(1) and thereby circumvent the limi tation period applicable to wrongful-levy actions under 26 U.S.C. 7426(a)(1). Congress created a specific and carefully drawn remedy under Section 7426(a)(1) pre cisely for parties in petitioner's situation, and that provi sion constitutes the exclusive remedy for third parties whose property is levied upon to collect taxes assessed against another.

This Court has held, in a variety of contexts, that Congress's creation of a specific remedy tailored to a particular set of circumstances will foreclose resort to a more general remedy. That result is clearly appropriate when, as here, the "balance, completeness, and struc tural integrity" of the specific remedy suggests that it was intended by Congress to be the exclusive avenue of relief. Creation of a shorter statute of limitations for a specific remedy is a powerful indicator that Congress intended that remedy to be exclusive of other potentially available remedies with longer limitation periods. That is particularly true when the provisions at issue autho rize suits against the United States, because in those circumstances the shorter limitation period de fines the scope of the waiver of the United States' sover eign immunity.

Section 7426(a)(1) is a carefully drawn remedy de signed explicitly for parties in petitioner's situation. The "balance, completeness, and structural integrity" of Section 7426 indicate that Congress did not intend that remedy merely to supplement other potential remedies, such as a tax-refund suit. To hold otherwise would per mit petitioner to circumvent the terms and limitations of the specific remedy that Congress created precisely for third parties subjected to an IRS levy to collect the taxes of another.

Most significantly, allowing third parties to pursue a tax-refund action in addition to a wrongful-levy action would effectively "render[] nugatory" the shorter limita tion period that Congress placed on wrongful-levy ac tions, by permitting challenges to levies to be brought well after the expiration of that statutory period. Sec tion 7426 is part of an elaborate and comprehensive tax collection scheme that, among other things, is designed to facilitate expeditious resolution of challenges to IRS tax collection activities and to work in harmony with other, related provisions. Many courts have recognized that the short statute of limitations for wrongful-levy actions by third parties ensures that the IRS will learn promptly whether it needs to continue to pursue collec tion efforts against the taxpayer. Moreover, Section 7426(a)(1) was enacted by a Congress that, despite the existence of a tax-refund remedy against the United States, perceived no existing remedy directly against the United States for third parties in petitioner's situa tion, and that considered other potential remedies to be problematic.

The conclusion of the court of appeals here that Sec tion 7426(a)(1) is the exclusive remedy available in peti tioner's situation accords with the decisions of other appellate courts, with the sole exception of the Ninth Circuit. Although petitioner asserts that this Court's decision in United States v. Williams, 514 U.S. 527 (1995), changed this longstanding precedent and created a right for it to seek relief by means of a tax-refund suit, petitioner's reading of that decision is incorrect. Wil liams establishes only the scope of the tax-refund rem edy for third parties who have no other statutory rem edy; it does not speak to the exclusivity of the specific wrongful-levy action that Congress created precisely for third parties in petitioner's situation.

ARGUMENT

AN ACTION UNDER 26 U.S.C. 7426 IS THE EXCLUSIVE REM EDY AVAILABLE TO A THIRD PARTY WHOSE PROPERTY WAS LEVIED UPON TO SATISFY THE TAX DEBT OF AN OTHER

The court of appeals correctly held that the wrong ful-levy provisions of 26 U.S.C. 7426(a)(1), as restricted by the applicable statute of limitations (26 U.S.C. 6532(c)), afforded the exclusive remedy available to peti tioner to assert its claim. Having failed to bring a timely claim under Section 7426(a)(1), petitioner cannot circum vent the limitation period applicable to such actions by pursuing a tax-refund suit under 28 U.S.C. 1346(a)(1).

A. The Availability Of A Precisely Drawn, Specific Remedy Precludes Resort To A General Remedy

1. This Court has long recognized and "applied the rule that a precisely drawn, detailed statute pre-empts more general remedies." Block v. North Dakota, 461 U.S. 273, 285 (1983); see, e.g., Brown v. GSA, 425 U.S. 820, 834-835 (1976) (citing cases); see also City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 121 (2005). In particular, the Court has found that rule to be controlling when the "balance, completeness, and struc tural integrity" of the specific remedy suggests that it was not merely a supplement to a more general remedy but was intended by Congress to be the exclusive avenue of relief. Brown, 425 U.S. at 832. In determining con gressional intent in that regard, this Court has looked to the detailed nature of the specific remedy and how it interacts with other provisions. See, e.g., id. at 831 (not ing that the specific remedy included "complementary administrative and judicial enforcement mechanisms").

As this Court has explained, Congress's creation of a shorter statute of limitations for a specific remedial scheme strongly suggests that Congress intended the remedy to be exclusive of other potentially available remedies with longer limitation periods. See Block, 461 U.S. at 285; accord Abrams, 544 U.S. at 122-125. That is particularly true when the remedy is against the United States. In that context, the shorter limitation period limits the waiver of the United States' sovereign immunity with respect to the type of action covered by the specific remedy, and it indicates a congressional in tent that such actions must be brought expeditiously. See Block, 461 U.S. at 283-285. If claimants neverthe less could pursue the general remedy, the shorter stat ute of limitations "could be avoided, and, contrary to the wish of Congress, an unlimited number of suits involving stale claims might be instituted." Id. at 285.

Although a specific statutory remedy may preclude resort to more general remedial statutes even when a broader remedy would otherwise clearly apply, see, e.g., Preiser v. Rodriguez, 411 U.S. 475, 488-490 (1973), a further consideration that can buttress the exclusivity of a specific remedy is Congress's understanding, at the time it created the remedy, that claimants "had no effec tive judicial remedy." Brown, 425 U.S. at 828. Even if that understanding turns out to be "in some ultimate sense incorrect," the "relevant inquiry is not whether Congress correctly perceived the then state of the law, but rather what its perception of the state of the law was." Ibid. Thus, if Congress believed that it was pro viding a remedy where none previously existed, or where any potential remedies were "problematic," the inference to be drawn is that the specific remedy is ex clusive. Block, 461 U.S. at 285; see Brown, 425 U.S. at 826-828.

Accordingly, despite the "broad language" of a gen eral remedy and "the literal applicability of its terms," this Court has repeatedly held that a remedy that has been "explicitly * * * designed" for a specific situation "must be understood to be the exclusive remedy avail able in a situation" where it "clearly applies." Preiser, 411 U.S. at 488-490 (holding that, despite the broad lan guage of 42 U.S.C. 1983, a writ of habeas corpus was the "sole federal remedy" for challenges to the fact or dura tion of a state prisoner's confinement). When Congress enacts a specific remedy subject to particular limitations and requirements, it would frustrate congressional in tent to permit litigants to "evade [such] requirement[s] by the simple expedient of putting a different label on their pleadings." Id. at 489-490.

2. Applying those principles, the Court in Block held that Congress intended the Quiet Title Act, 28 U.S.C. 2409a, "to provide the exclusive means by which adverse claimants could challenge the United States' title to real property." 461 U.S. at 286. In so doing, the Court re jected the availability of a so-called "officer's suit" against the federal officials who oversaw the disputed land. Id. at 284-285. The Court placed great weight on the fact that Congress included a twelve-year statute of limitations and other restrictions on its waiver of the United States' sovereign immunity in the Quiet Title Act, restrictions that would be "rendered nugatory" if an officer's suit was an available alternative remedy. Id. at 285. The Court also pointed to Congress's under standing that officer's suits were not an available rem edy, id. at 282, or at least that "it was 'problematic' whether any judicial relief at all was available" before passage of the Quiet Title Act, id. at 285. See also United States v. Mottaz, 476 U.S. 834, 841-848 (1986) (holding that a Native American could not avoid the statute of limitations applicable to an action under the Quiet Title Act by characterizing her suit as a claim un der the General Allotment Act of 1887, 25 U.S.C. 331 et seq., because the Quiet Title Act provided the exclusive remedy).

Similarly, in Brown, the Court held that Section 717 of the Civil Rights Act of 1964, 42 U.S.C. 2000e-16 (Supp. IV 1974), is the sole remedy available to a federal employee claiming to have been the victim of racial dis crimination in the workplace. The Court in Brown con cluded that, when Congress enacted Section 717, Con gress was "persuaded that federal employees who were treated discriminatorily had no effective judicial rem edy." 425 U.S. at 828. The Court also relied upon Sec tion 717's "rigorous administrative exhaustion require ments and time limitations," observing that "[i]t would require the suspension of disbelief to ascribe to Con gress the design to allow its careful and thorough reme dial scheme to be circumvented by artful pleading." Id. at 833. See, e.g., Abrams, 544 U.S. at 127 (holding that the judicial remedy in 47 U.S.C. 332(c)(7) precluded re sort to an action under 42 U.S.C. 1983 because enforce ment of Section 332(c)(7) through Section 1983 "would distort the scheme of expedited judicial review and lim ited remedies created" by Section 332(c)(7)); Great Am. Fed. Sav. & Loan Ass'n v. Novotny, 442 U.S. 366, 375- 376, 378 (1979) (holding that "deprivation of a right cre ated by Title VII cannot be the basis for a cause of ac tion" under 42 U.S.C. 1985(3) because otherwise "a com plainant could avoid most if not all of these detailed and specific provisions of the law").

The "rule that a precisely drawn, detailed statute pre-empts more general remedies," Block, 461 U.S. at 285, is fully applicable in the context of challenges to the government's tax collection efforts. Indeed, given the "carefully articulated and quite complicated structure of tax laws," allowing circumvention of a specific remedy risks "destroying the existing harmony of the tax stat utes." Flora v. United States, 362 U.S. 145, 157-158 (1960).

Thus, in United States v. A.S. Kreider Co., 313 U.S. 443 (1941), this Court rejected a taxpayer's attempt to avoid the then-applicable statute of limitations specific to tax-refund actions. See id. at 446. Having failed to file a timely tax-refund action in compliance with that provision, the taxpayer sought to rely upon the longer, six-year statute of limitations in the Tucker Act, which applied generally to "suit[s] against the Government," including but not limited to suits "for the recovery of any internal-revenue tax alleged to have been errone ously or illegally assessed or collected." 28 U.S.C. 41(20) (1940). The Court rejected that attempt, reason ing that the shorter and more specific limitation period for tax-refund actions would have "no meaning" if the general Tucker Act limitation period governed such ac tions. 313 U.S. at 448. Noting that the six-year limita tion was phrased in the negative (i.e., providing that "[n]o suit * * * shall be allowed" unless brought within six years of accrual), the Court held that "nothing in that language precludes the application of a different and shorter period of limitation to an individual class of ac tions." Id. at 447. In so holding, the Court noted the strong federal policy behind the shorter limitation pe riod: Congress "[r]ecogniz[ed] that suits against the United States for the recovery of taxes impeded effec tive administration of the revenue laws." Ibid.

B. Section 7426(a)(1) Is A Precisely Drawn, Specific Rem edy For Wrongful Levy And Is Therefore Exclusive

A straightforward application of the principles set forth in this Court's cases demonstrates that Section 7426(a)(1) is the exclusive remedy for third parties to challenge a wrongful levy. Petitioner could have availed itself of that remedy if it had filed its first suit in a timely fashion. It cannot now circumvent Congress's restrictions on that specific remedial scheme by resort ing to a tax-refund suit.

1. Congress provided for expeditious resolution of Sec tion 7426 (a)(1) actions, including a short limitation period

The provisions requiring expeditious resolution of wrongful-levy actions demonstrate Congress's intent to make Section 7426(a)(1) the exclusive remedy for third parties whose property has been subjected to an alleg edly wrongful levy to collect the taxes of another.

a. In creating the wrongful-levy remedy in 1966, Congress selected a new, shortened limitation period that applies exclusively to suits under Section 7426. See Federal Tax Lien Act of 1966 (1966 Act), Pub. L. No. 89- 719, § 110(a) and (b), 80 Stat. 1142, 1144. Section 6532(c) generally requires that actions under Section 7426(a)(1) must be commenced within "9 months from the date of the levy." 26 U.S.C. 6532(c)(1) (cross-referenced by 26 U.S.C. 7426(i)). That limitation period can be extended if the third party makes a proper request to the IRS for return of the property, but only for (at most) an addi tional 12 months. 26 U.S.C. 6532(c)(2).

Congress placed the limitation provision for wrong ful-levy actions under Section 7426 not in Section 7426 itself, but rather in a new subsection (c) of Section 6532, which already housed the longer statute of limitations applicable to tax-refund suits generally. See 26 U.S.C. 6532(a). Thus, Congress plainly was aware of the longer statute of limitations for tax-refund actions, but inten tionally chose to impose a shorter limitation period on wrongful-levy actions by third parties. Further indica tion that Congress viewed wrongful-levy actions as dis tinct from tax-refund actions and sought more expedi tious resolution for the former is provided by Section 7426(f), which specifies that, unlike tax-refund suits, exhaustion of an administrative refund remedy is not required before bringing an action under Section 7426(a)(1). 26 U.S.C. 7426(f).3

b. At the time it enacted Section 7426 and Section 6532(c), Congress also created other provisions that work in harmony with Section 7426 to ensure, among other things, that the IRS's collection efforts are not prejudiced by the pendency of third-party challenges to IRS levies. In particular, Congress added a provision, codified at 26 U.S.C. 6503(f)(1), that suspends the run ning of the otherwise applicable ten-year collection pe riod (see 26 U.S.C. 6502(a)(1)) from the date that the IRS seizes property by levy until "the date on which a judgment secured pursuant to section 7426 with respect to such property becomes final, and for 30 days thereaf ter." See 1966 Act, § 106(c), 80 Stat. 1140. But there is no comparable statutory provision that similarly sus pends the collection period during the pendency of a tax- refund suit.

Accordingly, as the facts of this case illustrate, allow ing a challenge to an IRS levy to be brought as a tax- refund suit may impede the tax collection process and disrupt Congress's carefully integrated statutory scheme. The IRS generally may collect a tax by levy or judicial proceeding within ten years after assessment. See 26 U.S.C. 6502(a)(1). Here, for example, the IRS levied on petitioner's property in 1999 to collect taxes assessed in 1993 and 1994 for the Cullers's 1981 through 1984 tax years. J.A. 30-32. It is now more than ten years since the assessments were made. If petitioner were to prevail in this action by obtaining a refund of the amounts collected by levy, it could potentially be too late for the IRS to collect the Cullers's unpaid taxes from other sources.

c. The carefully reticulated statutory provisions creating the wrongful-levy remedy thus reflect a legisla tive recognition that protracted disputes over tax collec tion impair the government's ability to protect its reve nues. Congress enacted those provisions in light of the Treasury Department's expressed concern that, "[s]ince after seizure of property for nonpayment of taxes a dis trict director [of Internal Revenue] is likely to suspend further collection activities against the taxpayer, it is essential that he be advised promptly if he has seized property which does not belong to the taxpayer." Hear ings on H.R. 11256 and H.R. 11290 Before the House Comm. on Ways and Means, 89th Cong., 2d Sess. 36, 57- 58 (1966) (House Hearings) (statement of Stanley S. Surrey, Assistant Secretary of the Treasury). The Trea sury Department sought the provision suspending its limitation period on collection actions against the tax payer during the pendency of a wrongful-levy action for a similar reason. Id. at 56.4

Courts have repeatedly recognized that the nine- month limitation period for a wrongful-levy suit reflects Congress's concern that challenges to the IRS's tax col lection efforts from third-party sources must be promptly resolved. See, e.g., Dahn v. United States, 127 F.3d 1249, 1253 (10th Cir. 1997) (nine-month limitation "effectuated Congress' judgment" that government needs to know quickly if it must collect from an alter nate source); Gordon v. United States, 649 F.2d 837, 843 (Ct. Cl. 1981) ("Congress was clearly concerned that levy contests more than 9 months after the levy would prevent ultimate collection of the tax, thereby endanger ing the federal treasury."); United Sand & Gravel Con tractors, Inc. v. United States, 624 F.2d 733, 739 (5th Cir. 1980) ("[Section] 6532(c) protects the legitimate interest of the United States in requiring other claim ants of the seized property to bring their claims quickly."). As the Tenth Circuit reasoned in Dieckmann v. United States, 550 F.2d 622 (1977) (per curiam), the nine-month period balances the "rights and duties of the individual" and the "needs of the government" by pro viding a sufficient window of opportunity for owners of property who "exercise reasonable diligence in looking after it" while mandating relatively prompt filings so as "to permit the [IRS] to function with some reasonable dispatch." Id. at 624.

d. Petitioner suggests (Pet. Br. 21) that the respec tive limitation periods for bringing a wrongful-levy ac tion and a tax-refund suit are not "materially different." That suggestion is at odds with the facts of this case; the difference is obviously "material" here, because peti tioner's action is barred under one limitation period but not the other. More generally, there is in fact a signifi cant difference between the limitation periods for tax- refund and wrongful-levy actions. Under 26 U.S.C. 6532(c), a wrongful-levy suit generally must be brought within nine months after the levy. That period can be extended by at most 12 additional months if the claimant properly puts the IRS on notice that it disputes the levy within the initial nine-month period. 26 U.S.C. 6532(c)(2). That provision underscores that, in all events, the IRS needs notice of the dispute within nine months.

By contrast, a tax-refund suit may be brought many years after a challenged tax is paid. Section 6511(a) al lows an administrative refund claim to be filed up to two years after a tax is paid or up to three years after a re turn is filed, whichever is later, and 26 U.S.C. 6532(a) permits the filing of a tax-refund suit up to two years after the IRS disallows the refund claim. The combined effect of those provisions is to create a limitation period of at least four years, plus the additional time period during which the IRS is considering the administrative refund claim. The limitation period for tax-refund suits is therefore at least twice as long as the limitation pe riod for wrongful-levy suits, a difference that courts have consistently recognized as significant.

2. Congress understood that the availability of any other remedy to third parties was "problematic"

Congress enacted Section 7426 to fill a perceived gap in the then-existing remedial scheme for wrongful levies. Congress believed that the existence of any effective remedy for third parties whose property had been levied upon to collect the taxes of another was, at a minimum, "problematic." See Block, 461 U.S. at 285; Brown, 425 U.S. at 828. Section 7426 resolved that problem, provid ing a specific mechanism to implement Congress's view that "where the Government levies on property which, in part at least, a third person considers to be his, he is entitled to have his case heard in court." S. Rep. No. 1708, 89th Cong., 2d Sess. 29 (1966).

Section 7426 was enacted in 1966 against a back ground understanding that no tax-refund remedy ag ainst the government was available for third parties who sought to challenge tax levies as wrongful. Although tax-refund suits by taxpayers were permitted directly against the government under Section 1346(a)(1) at that time, see Flora, 362 U.S. at 148-156, the Committee Re ports explained that "[u]nder present law * * *, the United States cannot be sued by third persons where its collection activities interfere with their property rights." S. Rep. No. 1708, supra at 29; H.R. Rep. No. 1884, 89th Cong., 2d Sess. 27 (1966) (same). That rule was under stood to apply when "the Government wrongfully levies on one person's property in attempting to collect from a taxpayer," because courts had not found a waiver of sov ereign immunity that allowed a nontaxpayer to sue the United States for an allegedly wrongful tax levy. Ibid.; see, e.g., Phillips v. United States, 346 F.2d 999, 1000 (2d Cir. 1965); First Nat'l Bank v. United States, 265 F.2d 297, 300 (3d Cir. 1959).

Petitioner claims (Pet. Br. 17-19) that the legislative history of Section 7426 "cannot be fairly read" to demon strate that Congress enacted the statute to provide a remedy in situations where wronged parties had previ ously been without relief. To be sure, the Senate Report acknowledged that actions against individual IRS em ployees were available in at least some jurisdictions, noting that "some courts" had allowed "suits to be brought against [IRS] district directors." S. Rep. No. 1708, supra, at 29; accord H.R. Rep. No. 1884, supra, at 27. But such suits were viewed as both inadequate and inappropriate mechanisms for challenging IRS levies. S. Rep. No. 1708, supra, at 29 (noting that "present law does not adequately take into account rights of third parties"); accord H.R. Rep. No. 1884, supra, at 27. Thus, the Senate Report concluded that it is "more ap propriate" to bring such an action "directly against the Government," S. Rep. No. 1708, supra, at 29, and Con gress replaced any remedy against individual IRS em ployees with an exclusive remedy directly against the United States under Section 7426. See 26 U.S.C. 7426(d) and (e). That was the Treasury Department's understanding at the time, and it so informed Congress. See House Hearings 57 (statement of Stanley S. Surrey, Assistant Secretary of the Treasury) ("The remedy pro vided by new section 7426 will be the exclusive means of redress for actions which may be brought under this section.").5

3. Congress created a detailed, comprehensive scheme

Other provisions of the 1966 Act confirm that Con gress intended Section 7426 to be a comprehensive sch eme providing the sole remedy for wrongful levies on the property of third parties. Section 7426 provides both pre- and post-deprivation relief, allowing a party to file suit "without regard" to whether the property in which it claims an interest "has been surrendered to or sold by" the government. 26 U.S.C. 7426(a)(1). Section 7426 also delineates the only forms of relief that a court has jurisdiction to provide, authorizing an injunction against a levy or sale, recovery of the property, or a money judgment in an amount determined in accordance with specific statutory rules, 26 U.S.C. 7426(b), plus in terest. 26 U.S.C. 7426(g).6 In addition, Section 7426 restricts the issues that a third party can litigate: for claims under Section 7426, "the assessment of tax upon which the interest or lien of the United States is based shall be conclusively presumed to be valid." 26 U.S.C. 7426(c).

Further evidence that Congress viewed the remedy in Section 7426(a)(1) as exclusive is Congress's creation of distinct jurisdictional and venue provisions for actions brought under Section 7426. Congress did not rely upon the pre-existing jurisdictional grant in Section 1346(a)(1) over civil actions for the recovery of errone ously collected taxes. See 28 U.S.C. 1346(a)(1). Instead, Congress created a new subsection (e) within Section 1346 to grant district courts jurisdiction over "any civil action against the United States provided in section 7426." See 1966 Act, § 202(a), 80 Stat. 1148, codified, as subsequently amended, at 28 U.S.C. 1346(e). Moreover, Congress created a specific venue provision for Section 7426 actions. § 202(b), 80 Stat. 1149. In contrast to the venue provision for tax-refund actions, which generally allows a plaintiff to sue the government "in the judicial district where the plaintiff resides," 28 U.S.C. 1402(a), Congress permitted the United States to be sued under Section 7426(a)(1) "only in the judicial district where the property is situated at the time of levy." § 202(b), 80 Stat. 1149, codified at 28 U.S.C. 1402(c). Allowing a third party to choose between a tax-refund suit or a wrongful-levy action would permit the circumvention of that restriction in cases where the two venues are distinct.7

4. Principles of sovereign immunity dictate that Sec tion 7426 is an exclusive remedy

Under principles of sovereign immunity, any doubt about whether Section 7426(a)(1) is an exclusive remedy must be resolved in favor of the government. See BP Am. Prod. Co. v. Burton, 127 S. Ct. 638, 646 (2006). It is axiomatic that the United States cannot be sued unless Congress has waived the government's sov ereign immunity, and such waivers are strictly con strued. See, e.g., United States v. Nordic Vill., Inc., 503 U.S. 30, 33, 34, 37 (1992); United States v. Dalm, 494 U.S. 596, 608 (1990). Terms and conditions that Con gress attaches to the legislative waiver of sovereign im munity are also strictly construed. Block, 461 U.S. at 287. "A statute of limitations requiring that a suit against the Government be brought within a certain time period is one of those terms." Dalm, 494 U.S. at 608; see Block, 461 U.S. at 287.

Thus, when a party fails to commence a suit against the United States within the limitation period, the gov ernment has not waived its sovereign immunity, and the courts lack jurisdiction to entertain the suit. Dalm, 494 U.S. at 608-610. And even when Congress has provided one statute of limitations for a general class of actions, it nevertheless can "provide less liberally for particular actions which, because of special considerations, re quire[] different treatment." A.S. Kreider Co., 313 U.S. at 447. Congress has done precisely that with respect to wrongful-levy actions under Section 7426(a)(1). To allow parties in petitioner's situation to avoid that limitation on Congress's waiver of the United States' sovereign immunity by filing a tax-refund action, would improperly permit Congress's "careful and thorough remedial scheme to be circumvented by artful pleading." Brown, 425 U.S. at 833.

5. The court of appeals correctly held that Section 7426(a)(1) provides petitioner's exclusive remedy

Given the "balance, completeness, and structural in tegrity" of the wrongful-levy remedy, the court of ap peals correctly held that Section 7426(a)(1) afforded the exclusive remedy available to petitioner to assert its claim, and that petitioner could not circumvent the limi tation period applicable to such actions by pursuing a tax-refund suit under 28 U.S.C. 1346(a)(1). That deci sion is in accord with a substantial line of precedent in which courts of appeals have rejected claims, including tax-refund claims, by property owners who were subject to an IRS levy to collect another's taxes, but who failed to challenge the levy within the limitation period pro vided by 26 U.S.C. 6532(c). See, e.g., Audio Invs. v. Rob ertson, 67 Fed. Appx. 795, 797 (4th Cir. 2003) (per curiam) (unpublished) (holding that a third party who "failed to timely file a wrongful levy action * * * can not circumvent this exclusive remedy by filing a quiet title action"); Miller v. Tony & Susan Alamo Found., 134 F.3d 910, 916-917 (8th Cir. 1998) (holding that, where Section 7426(a)(1) applies, a garnishment action premised on 28 U.S.C. 2410 is foreclosed); Dahn, 127 F.3d at 1253 (rejecting "attempt to circumvent the § 7426/§ 6532 time-bar" by invoking other "remedial sources," including Section 1346(a)(1));8 Williams v. United States, 947 F.2d 37, 39 (2d Cir. 1991) (holding that the "two-year period set forth in section 6532(a)(1) for a refund of taxes does not apply" and that a wrong ful-levy action is the "sole remedy available to an indi vidual * * * who claims an interest in property that has been levied upon by the IRS for the purpose of satis fying the tax liability of another person"), cert. denied, 504 U.S. 942 (1992); United Sand, 624 F.2d at 738-739 (rejecting quiet-title claim brought by property owner under 28 U.S.C. 2410 more than nine months after a challenged levy on the ground that his "exclusive rem edy" was a wrongful-levy action under Section 7426). But see WWSM Investors v. United States, 64 F.3d 456 (9th Cir. 1995) (discussed at pp. 30-32, infra).9

C. This Court's Decision In United States v. Williams Does Not Affect The Exclusivity Of The Section 7426(a)(1) Remedy

1. Petitioner errs in contending (Pet. Br. 10-12, 22- 23) that a different result is required by this Court's decision in United States v. Williams, 514 U.S. 527 (1995). In that case, the Court held that Williams, who had paid under protest a tax that the IRS had assessed against her ex-husband, had standing to bring a refund action under 28 U.S.C. 1346(a)(1). The Court rejected the government's argument that tax-refund suits were available only to "taxpayers" against whom the taxes at issue had actually been assessed. 514 U.S. at 532-536.

In so holding, the Court concluded that none of the remedies that are potentially available to a third party when the IRS pursues her assets to satisfy the tax liabil ity of another was "realistically open to Williams." Wil liams, 514 U.S. at 536. In particular, the Court ob served that she could not have filed a wrongful-levy ac tion under Section 7426, because the collection measure at issue was a tax lien rather than a levy: "[i]f the Gov ernment has not levied on property-as it has not levied on Williams' home-the owner cannot challenge such a levy under 26 U.S.C. § 7426." Ibid. Thus, emphasizing that Williams was otherwise "without a remedy," the Court concluded that "Congress did not intend refund actions under § 1346(a)(1) to be unavailable to persons situated as Lori Williams is." Ibid.; see id. at 529 ("[Williams] had no realistic alternative to payment of a tax she did not owe, and we do not believe Congress in tended to leave parties in respondent's position without a remedy.") (footnote omitted).10

Petitioner contends (Pet. Br. 12) that Williams "must * * * stand for the proposition that Congress did not generally intend for 28 U.S.C. § 1346 to be un available to third parties." But the Williams Court did not address the question whether third parties could sue under Section 1346(a)(1) in circumstances other than those presented in that case. And in particular, Wil liams sheds no light on the question whether a tax-re fund suit would be available to a third party who, unlike Williams herself, did have an opportunity to seek relief under a separate statutory scheme specifically created to remedy the type of alleged wrong at issue. As the Tenth Circuit explained in Dahn, the Williams Court "was concerned solely with the reach of § 1346 per se; the exclusivity of a concurrent § 7426 claim was never in issue." 127 F.3d at 1253.

Petitioner thus errs in contending that Williams pro vides support for its effort to evade the constraints im posed by Congress on the wrongful-levy remedy. In deed, this Court rejected a similar argument in United States v. Demko, 385 U.S. 149 (1966). In that case, the Court held that 18 U.S.C. 1426 provides the exclusive remedy for injuries suffered by a federal prisoner while performing work in prison, and precludes a prisoner's resort to the general remedy of the Federal Tort Claims Act, 28 U.S.C. 1346(b), 2671 et seq. See Demko, 385 U.S. at 383-385. The Court reached that result notwithstand ing its earlier holding in United States v. Muniz, 374 U.S. 150 (1963), that two prisoners who were not cov ered by the prison compensation law could seek relief under the Federal Tort Claims Act. Id. at 160 & n.17. The Demko Court reasoned that "[t]he decision in Muniz could not possibly control our decision here be cause [the prisoner-claimant here] is protected by the prison compensation law." 385 U.S. at 153. That rea soning applies equally to this case as well.

Petitioner also attributes significance (Pet. Br. 11) to the Court's observation in Williams that a tax-refund suit is a post-deprivation remedy, while wrongful-levy, quiet-title, and separate-fund actions are pre-depriva tion remedies. 514 U.S. at 538. The distinction between pre- and post-deprivation remedies was significant in Williams because Williams had no "realistic[]" opportu nity for pre-deprivation relief (id. at 536), and the Court declined in those circumstances to deny her post-depri vation relief. That distinction has no force here, how ever, where petitioner had available to it both a pre- and post-deprivation remedy under Section 7426(a)(1). As noted, the owner of property subject to levy may chal lenge the levy either before or after the property has been surrendered to (or sold by) the IRS, 26 U.S.C. 7426(a)(1), as long as it does so within the limitation pe riod set forth in 26 U.S.C. 6532(c).11

Furthermore, nothing in Williams calls into question the long line of authorities recognizing the need for a speedy resolution of property disputes where the IRS levies on a third party's property for the collection of another's unpaid taxes. See pp. 17-18, supra. Despite the general language of Section 1346(a)(1), Congress "provid[ed] less liberally" for parties whose property has been subjected to such a levy because of "special considerations, requir[ing] different treatment." A.S. Kreider Co., 313 U.S. at 447; see, e.g., United Sand, 624 F.2d at 738. As the court below and the Tenth Circuit have properly recognized, Williams did not "overturn, sub silentio, the separate and well-established principle that § 7426 provides the exclusive remedy for a wrongful levy." Dahn, 127 F.3d at 1253; accord Pet. App. 5a-6a. Moreover, Congress's response to Williams only under scores the need for prompt notice to the IRS when third parties challenge the IRS's collection efforts. See note 10, supra.

2. As petitioner notes (Pet. Br. 12-14), in WWSM Investors, supra, the Ninth Circuit interpreted this Court's decision in Williams to open the door to tax-re fund actions for third parties, like petitioner, who could avail themselves of the Section 7426(a)(1) remedy. That decision is incorrect.

In WWSM Investors, a third party subject to an IRS levy filed an untimely wrongful-levy action, and then moved for leave to amend the complaint to include a claim for a tax refund under 28 U.S.C. 1346(a)(1). Al though the Ninth Circuit held that the Section 7426 claim was time-barred, it held that WWSM Investors "may file suit for a refund under 28 U.S.C. § 1346(a)(1)." 64 F.3d at 459. The Ninth Circuit believed that this Court's decision in Williams "control[led]" the case be cause it viewed the levy in WWSM Investors as "func tionally equivalent" to Williams's payment to discharge the lien in Williams. Ibid. As the dissent in WWSM Investors correctly observed, however, this Court's deci sion in Williams acknowledged the critical difference between liens and levies and "recognized that Williams could not use the remedy of 26 U.S.C. § 7426 because there was no levy." Id. at 459 (Brunetti, J., dissenting). As such, the decision in Williams "did not allow that a non-levy remedy under § 1346(a)(1) was available when the exclusive levy remedy under § 7426 was barred by the statute of limitations." Id. at 459-460 (Brunetti, J., dissenting).

WWSM Investors was decided shortly after this Court's decision in Williams.12 No other court of ap peals has followed the Ninth Circuit in reading Williams to open federal courts to tax-refund suits by parties who could have brought a timely wrongful-levy action but failed to do so. To the contrary, both the Fifth Circuit in this case and the Tenth Circuit in Dahn have noted, but have declined to follow, the Ninth Circuit's approach. Pet. App. 6a; Dahn, 127 F.3d at 1253 & n.2.13 Moreover, apart from refund actions, courts of appeals (including the Ninth Circuit) have continued to reject attempts to circumvent the limitation period on wrongful-levy ac tions through the use of other types of claims. See Au dio Invs., 67 Fed. Appx. at 797 (rejecting a quiet-title action); Miller v. Tony & Susan Alamo Found., 134 F.3d 910, 916 (8th Cir. 1998) (rejecting garnishment ac tion); Fidelity & Deposit Co. v. City of Adelanto, 87 F.3d 334, 335 (9th Cir. 1996) (rejecting quiet-title action).

CONCLUSION

The judgment of the court of appeals should be af firmed.

Respectfully submitted.

PAUL D. CLEMENT
Solicitor General
EILEEN J. O'CONNOR
Assistant Attorney General
THOMAS G. HUNGAR
Deputy Solicitor General
DEANNE E. MAYNARD
Assistant to the Solicitor
General
BRUCE R. ELLISEN
TERESA T. MILTON
Attorneys

JANUARY 2007

1 In addition to a wrongful-levy action, Section 7426(a) creates three other types of actions. Two of those actions-to obtain surplus pro ceeds (see 26 U.S.C. 7426(a)(2)) or substituted sale proceeds (see 26 U.S.C. 7426(a)(3)) after property has been sold pursuant to a levy- were enacted at the same time as the wrongful-levy provisions in Sec tion 7426(a)(1). The fourth type of action, under Section 7426(a)(4), was created in the wake of this Court's decision in United States v. Wil liams, 514 U.S. 527 (1995), to provide a specific remedy for certain third parties whose property is subject to an IRS lien. See note 10, infra.

2 The district court denied (J.A. 11-22) the government's motion to dismiss the second action on "res judicata" grounds. The government raised both claim and issue preclusion on appeal (Gov't C.A. Br. 37-44), but the court of appeals did not address either argument. As noted in the government's response to the petition for a writ of certiorari, see U.S. Cert. Br. 3 n.2, the government does not press either preclusion theory in this Court.

3 If, however, a third party seeks additional damages (pursuant to a provision added by Congress in 1998, see Internal Revenue Service Restructuring and Reform Act of 1998 (IRS Reform Act), Pub. L. No. 105-206, § 3102(b), 112 Stat. 730), based on allegedly reckless, inten tional, or negligent disregard by the IRS of the provisions of the Inter nal Revenue Code, a party must exhaust the administrative remedies set forth in 26 U.S.C. 7433(d). See 26 U.S.C. 7426(h)(2).

4 See House Hearings 72 (statement of Laurens Williams, Chairman, Special Committee on Federal Liens, American Bar Association) ("A short (9 month) statute of limitations is provided, because it is impor tant to get such controversies decided quickly so the Government may pursue the taxpayer's own property if it made a mistake the first time. The statute of limitations for collecting a corresponding amount from the taxpayer would be suspended during the pendency of such a controversy.").

5 The cases to which petitioner cites (Pet. Br. 6-7) for the proposition that third parties affected by allegedly wrongful levies had an available remedy even before the enactment of Section 7426 are, with one exception, cases brought against individual officers of the IRS, and thus are the types of actions that the drafters of Section 7426 considered insufficient. The sole exception, United States v. Worley, 213 F.2d 509 (6th Cir. 1954), cert. denied, 348 U.S. 917 (1955), provides no support for petitioner, because in that case the court of appeals ultimately found that there was no jurisdiction to enter judgment against the United States. Id. at 512. In any event, to the extent that a handful of courts had allowed actions directly against the government despite the established principle that the United States cannot be sued absent an applicable waiver of sovereign immunity, the important point for present purposes is that Congress did not believe such suits were available at the time it enacted Section 7426. See Brown, 425 U.S. at 828.

6 As noted, see note 3, supra, in 1998 Congress provided for addi tional damages if the court finds that any officer or employee of the IRS "recklessly or intentionally, or by reason of negligence, disregarded any provision" of Title 26. 26 U.S.C. 7426(h)(1); see IRS Reform Act, § 3102(b), 112 Stat. 730.

7 Petitioner's reliance (Pet. Br. 20) on Radzanower v. Touche Ross & Co., 426 U.S. 148 (1976), and Morton v. Mancari, 417 U.S. 535 (1974), is misplaced. In both cases, the Court held that subsequently-enacted general statutes did not impliedly repeal earlier, more specific statutes. See Radzanower, 426 U.S. at 153-154, 158; Morton, 417 U.S. at 550- 551. If anything, those cases support the exclusivity of the more speci fic provision in Section 7426(a)(1).

8 See Dahn v. United States, No. 93-C-953, 1996 WL 652787, at *4 (D. Utah Aug. 30, 1996) (stating that Dahn invoked 28 U.S.C. 1346(a)(1)).

9 Even those courts that have suggested that challenges to levies by third parties may be labeled as other types of actions have nevertheless applied the statute of limitations for wrongful-levy actions. See Gor don, 649 F.2d at 843-844 (refusing to apply six-year statute of limita tions generally applicable to claims brought under the jurisdiction of the Tucker Act, 28 U.S.C. 1491); Dieckmann, 550 F.2d at 623-624 (hold ing that an equitable action brought against the government 14 months after a levy on plaintiffs' property was barred by the nine-month limita tion period of 26 U.S.C. 6532(c)).

10 In the wake of Williams, Congress enacted 26 U.S.C. 6325(b)(4)(A) and 7426(a)(4), which give persons in Williams' situation a remedy apart from a tax-refund suit. See IRS Reform Act, § 3106(a) and (b)(1), 112 Stat. 732-733. Section 6325(b)(4)(A) allows a third party whose prop erty is subject to a tax lien to request a certificate of discharge of the lien on his property and provides that the IRS shall issue such a certi ficate if the property owner provides a deposit or a bond for an amount equal to the government's interest in the property. Section 7426(a)(4) allows a property owner who receives a certificate of discharge to file a civil action against the government in federal district court within 120 days after the certificate is issued "for a determination of whether the value of the interest of the United States (if any) in such property is less than the value determined by the Secretary." 26 U.S.C. 7426(a)(4).

Section 7426(a)(4) further provides that "[n]o other action may be brought by such person for such a determination." 26 U.S.C. 7426(a)(4). To the extent that this language reflects Congress's intent to make the remedy under Section 7426(a)(4) an exclusive one, that does not suggest that the pre-existing wrongful-levy remedy in Section 7426(a)(1) is not exclusive in situations to which it applies. Congress may have thought it necessary to include an exclusivity provision in Section 7426(a)(4) to address the situation in Williams; no such express provision was necessary in Section 7426(a)(1) because Williams does not suggest that a third party may pursue a tax-refund remedy in situations, like allegedly wrongful levies, for which Congress has provided a specific remedy. Moreover, Section 7426(a)(4), enacted in 1998 in direct response to this Court's decision in Williams, sheds no light on the intent of the 1966 Congress. In 1966, Congress clearly was not legislat ing against the backdrop of a Supreme Court case finding a remedy. If anything, Congress's preference for a relatively short statute of limita tions in this context is consistent with the basic judgment reflected in 26 U.S.C. 6532(c) that the IRS needs relatively prompt notice of third- party challenges to its collection efforts.

11 As petitioner suggests (Pet. Br. 22; see id. at 12), because Section 7426(a)(1) is both a pre- and post-deprivation remedy, it would not be rendered altogether "superfluous" if a post-deprivation tax-refund remedy were also available, because the restrictions applicable to wrongful-levy actions would continue to apply to third parties seeking a pre-deprivation remedy. But rendering a statute superfluous in fully half its applications is no small feat. Allowing third parties to resort to the Section 1346(a)(1) post-deprivation remedy would permit them to circumvent the restrictions of Section 7426 in post-deprivation situations, thereby rendering the restrictions superfluous in cases such as this one, notwithstanding Congress's unambiguous decision to en compass post-deprivation relief within the wrongful-levy remedial scheme.

12 This Court decided Williams on April 25, 1995. 514 U.S. 527. The Ninth Circuit issued its initial decision in WWSM Investors on May 31, 1995; after the government filed a petition for rehearing, the court replaced its initial opinion with a majority opinion and a dissent on August 22, 1995. See 64 F.3d at 456-457.

13 The IRS has issued a Revenue Ruling agreeing with Dahn and the approach taken below, and rejecting the Ninth Circuit's holding in WWSM Investors. See Rev. Rul. 05-49, 2005-30 I.R.B. 126 (2005). The IRS reasons that this Court's decision in Williams was premised on the Court's conclusion that "in the absence of a refund suit, the third person would have no meaningful judicial remedy." Ibid. Noting "the established principle that section 7426 is the exclusive remedy in the case of a wrongful levy," the IRS indicated its intent to continue to hew to that longstanding view. Ibid.; see House Hearings 57 (statement of Stanley S. Surrey, Assistant Secretary of the Treasury).