Appeal from the United States District Court for the District of Minnesota.
The opinion of the court was delivered by: Colloton, Circuit Judge
Submitted: March 11, 2009
Before WOLLMAN, BRIGHT, and COLLOTON, Circuit Judges.
Elaine T. Pagonis brought this action against the United States seeking relief in a tax dispute with the government. The district court*fn1 dismissed the case for lack of subject matter jurisdiction. We affirm.
The Internal Revenue Service ("IRS") conducted a civil audit of Pagonis and issued a notice of deficiency on June 15, 1998. The notice stated that Pagonis owed additional income taxes and penalties totaling $550,900 for tax years 1992, 1993, and 1994. The notice was sent by certified mail, return receipt requested, to Pagonis at her last known address, which was her residence. Delivery was attempted and notices of the certified mail were left at Pagonis's residence on June 16 and June 22, 1998. Pagonis asserts that she does not know where she was on those days, although she speculates that she may have been visiting her mother in Florida. On July 2, 1998, the notice of deficiency was returned to the IRS as "unclaimed."
The IRS made no further attempts to notify Pagonis of its deficiency determination, and at least ninety days after the notice of deficiency was mailed, the IRS assessed the tax deficiencies and penalties stated in the notice. According to Pagonis, she did not know about the assessment until she began receiving collection notices from the IRS in the second half of 1999. Pagonis subsequently requested that the IRS abate her taxes, alleging that the assessment was incorrect. The IRS agreed to abate in part the tax deficiency assessments, eliminating completely the assessment for 1992 and reducing the assessments for 1993 and 1994. Nevertheless, as of 2007, Pagonis's total tax liability, including penalties and interest, was approximately $230,000.
In July 2007, Pagonis filed this action in the district court. In her amended complaint, she alleged that the IRS violated her rights to due process of law by assessing the taxes without taking additional steps, after the deficiency notice was returned unclaimed, to notify Pagonis of the deficiency determination. She sought an order setting aside the assessments, a permanent injunction against further assessment or collection of taxes for the years 1992, 1993, and 1994, and a refund of any taxes already collected.
In August 2007, while the suit was pending, the IRS filed a notice of a federal tax lien regarding the assessed deficiencies. Pagonis requested and received a collection due process hearing, which took place in November 2007. The IRS Appeals Office determined that the filing of the lien was appropriate, and refused to consider Pagonis's challenge to the underlying tax liability. The appeals office reasoned that the issue had been considered twice in administrative or judicial hearings -- in a bankruptcy proceeding and when Pagonis submitted an "Offer in Compromise for Doubt as to Liability." See generally 26 U.S.C. § 7122(a); Treas. Reg. § 301.7122-1(b); Speltz v. Comm'r, 454 F.3d 782, 784 (8th Cir. 2006).
In the district court, Pagonis and the government each filed motions for summary judgment. Pagonis urged that the Due Process Clause, as interpreted in Jones v. Flowers, 547 U.S. 220 (2006), required the IRS to make additional attempts beyond the unclaimed certified mailing to provide her with notice before the government assessed the taxes. The government asserted that the district court lacked subject matter jurisdiction over the suit.
The district court agreed with the government and dismissed the case for lack of jurisdiction. Pagonis v. United States, No. 07-3392, 2008 WL 2954761, at *2 (D. Minn. June 10, 2008).The court held that 26 U.S.C. § 7421(a), the Anti-Injunction Act, deprived it of jurisdiction, because Pagonis sought to restrain the assessment or collection of a tax. The court also held that it lacked jurisdiction over Pagonis's claims as a refund action under 28 U.S.C. § 1346(a)(1), because she had not paid the assessed taxes in full. We review the district court's decision de novo.
When the IRS determines that a taxpayer has an income tax deficiency -- i.e., that she owes additional tax beyond the amount that she self-reported on her income tax return or was otherwise previously assessed -- the IRS is authorized to send a notice of deficiency to the taxpayer by certified or registered mail. See 26 U.S.C. §§ 6212(a), 6211(a). A taxpayer located in the United States may dispute this determination by filing a petition in the United States Tax Court for a "redetermination of the deficiency" within ninety days of the mailing of the notice of deficiency. Id. § 6213(a). With exceptions not relevant here, the IRS may not assess or collect the tax before the notice has been sent, during the ninety-day period for filing a petition with the Tax Court, or if such a ...