United States v. 87 Skyline Terrace

Opinion by Judge WIGGINS.

The Internal Revenue Service (IRS) initiated forfeiture proceedings against two properties owned by appellants. The IRS failed to obtain prior authorization from the Treasury Secretary, as it was statutorily required to do. The district court dismissed with prejudice for lack of subject matter jurisdiction. Appellants moved for both attorneys’ fees and restoration. The district court granted attorneys’ fees, but awarded a significantly lower amount than appellants requested. The district court denied the motion for restoration. We have jurisdiction pursuant to 28 U.S.C. § 1291 . We affirm in part, and reverse and remand in part.

I.

Between 1983 and 1988, appellants built and sold a number of expensive homes in Mill Valley, CA. In December of 1986, the IRS began to investigate appellants for tax fraud. The IRS believed that appellants had devised a scheme to evade taxes on the proceeds from the sales of the homes. The scheme included filing fraudulent deeds of trust with the County Recorder’s Office and paying “a fair amount” of the contractors’ costs in gold coins. Appellants had not filed a tax return since 1983. The IRS alleged that it obtained a…