Capital Tracing, Inc. v. United States

On January 6, 1992, Plaintiff/Appellant Capital Tracing, Inc. (“Capital”) filed a wrongful levy action against the United States under 26 U.S.C. § 7426 based on the Internal Revenue Service’s (“IRS”) notice of levy filed on August 22, 1985. The district court dismissed the action on May 8, 1992, for lack of subject matter jurisdiction, finding that the time for filing a wrongful levy action under § 7426 had expired on May 22, 1986, nine months after the IRS served its notice of levy. Capital appealed the district court’s decision.

Capital contends that the district court erroneously granted the government’s motion to dismiss, arguing that the limitations period did not commence until we issued our 1991 ruling in United States v. Badger, 930 F.2d 754 (9th Cir.1991) (Badger II). It is unnecessary for us to decide the disputed issue of when the limitations period began to run, as determined by the “date of the lev/’ on the cash bond. We assume, without deciding, that the IRS’ notice of levy served upon the clerk of the district court on August 22, 1985, triggered the limitations period. As a result, Capital’s wrongful levy action, filed on January 6, 1992, after the expiration of…