Norman E. Anderson the Zeitgeist Co. v. United States

The Internal Revenue Service (“IRS”), in an internal manual, has created a means of delaying the sale of seized property beyond what the statute, 26 U.S.C. § 6335 , and associated regulations allow. The additional delay is impermissible.

I. FACTS

The IRS assessed Mr. Anderson in 1984 for unpaid income taxes for tax years 1978 and 1979. It did not proceed with the collection efforts at issue in this case until the statute of limitations was about to run, in 1990. On October 24, 1990, five days before the limitations period would have expired on the assessments, the IRS seized a five acre parcel of land in California in which Mr. Anderson apparently owned the beneficial interest. The revenue officer was unable to locate the property, a remote parcel in the Santa Cruz mountains, so he accomplished the seizure by filing a notice of hen and mailing notices of levy and seizure. The IRS did not attempt to sell the property until almost a year later.

On August 21, 1991, the assigned revenue officer established that the minimum acceptable bid would be $61,807.43, much less than fair market value of the land. Title was clouded because Mr. Anderson had conveyed the land to his companion…