filed: October 18, 1994; As Amended October 25, 1994.
On Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. Civil No. 92-1991).
Before: Becker and Alito, Circuit Judges and Brody, District Judge*fn*
Plaintiff, David Venen, appeals from the district court's grant of summary judgment for the defendant United States in this suit for damages Venen claims resulted from unauthorized tax collection actions, failure to release a tax lien, and unauthorized disclosure of tax return information. This appeal presents two issues.
The first issue is whether the plaintiff exhausted his administrative remedies before seeking relief from the district court for damages from unauthorized tax collection actions and failure to release a tax lien. We hold that plaintiff's failure to comply with the regulations constitutes a failure to exhaust and, therefore, the grant of summary judgment on these claims is proper.
The second issue arises in the claim for unauthorized disclosure of tax return information. Although the Tax Code generally prohibits the disclosure of tax return information, it authorizes disclosure when the tax return information relates to collection activity, including a levy on assets to satisfy an outstanding tax liability. Plaintiff contends that the levies against his assets were unlawful and therefore the information relating to the levies was impermissibly disclosed. The question is whether it is relevant that the levy is unlawful. We hold that it is not and, therefore, that the grant of summary judgment on the disclosure claim is proper.
28 U.S.C. § 1291 gives us jurisdiction.
Venen's Amended Complaint asserts claims for unauthorized tax collection actions under 26 U.S.C. § 7433 (Counts I, III and IV); failure to release a tax lien under 26 U.S.C. § 7432 (Counts II and V); and unauthorized disclosure of tax return information under 26 U.S.C. § 7431 (Count VI). The district court granted summary judgment for defendant on Counts I-V on the ground that Venen had failed to exhaust administrative remedies as required by sections 7432 and 7433. The court also granted summary judgment for defendant on Count VI, holding that the disclosures did not give rise to damages under section 7431 because the Internal Revenue Service of the United States (IRS) made the disclosures to obtain information to collect taxes.
The district court's grant of summary judgment is subject to plenary review. American Medical Imaging Corp. v. St. Paul Fire ad Marine Ins. Co., 949 F.2d 690, 692 (3d Cir. 1991). Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Defendants are entitled to summary judgment only if no reasonable resolution of the conflicting evidence and the inferences that could be drawn from that evidence could result in a judgment for plaintiffs. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). "The mere existence of a scintilla of evidence in support of plaintiffs['] position will be insufficient[;] there must be evidence on which the jury could reasonably find for the plaintiffs." Id. at 252. Since the district court made no findings of fact, we will state the facts from the record viewed in the light most favorable to Venen, the non-moving party.
Venen's claims result from efforts by the IRS to collect the federal income taxes he owed for a ten-year period, from 1977 through 1986. In July 1979, Venen filed his tax returns for years 1977 and 1978. In March 1985, Venen filed federal tax returns for years 1979 through 1983. Shortly thereafter, Venen entered into an agreement with the IRS to pay his taxes in installments. The installment agreement covered tax years 1977 and 1978 as well as 1979 through 1983.*fn1
On November 27, 1987, while Venen was complying with the installment agreement, the IRS issued to Venen's employer the first of four disputed Notices of Levy to collect taxes. This Notice of Levy was for the collection of taxes for the years 1980 through 1984 and 1986. After that notice was issued but before the IRS issued a second notice, Venen met with IRS Agent Argento, who placed the account on "non-collectible status." Appendix at 118a (Affidavit of David Venen P 10).
On September 25, 1990 the IRS issued a second Notice of Levy to Venen's employer for tax years 1977 and 1978. In October 1990, IRS Agent Gregorakis "reviewed the file at Venen's request and told Venen that the levy should not have been issued in view of Venen's 'non-collectible' status, apologized, and said the levy would be released." Appendix at 118a (Venen Affidavit P 12). On January 15, 1991, the IRS issued a third Notice of Levy to Venen's employer for tax years ...