                                                                                                                           Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-6-2006

Asemani v. IRS
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-4144




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                                                         NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT

                                      NO. 04-4144
                                   ________________

                                 BILLY G. ASEMANI,

                                             Appellant

                                              v.

                          INTERNAL REVENUE SERVICE
                      ____________________________________

                    On Appeal From the United States District Court
                        for the Middle District of Pennsylvania
                               (D.C. Civ. No. 04-cv-00846)
                      District Judge: Honorable William J. Nealon
                    _______________________________________

                       Submitted Under Third Circuit LAR 34.1(a)
                                  November 14, 2005

          BEFORE: McKEE, FUENTES and NYGAARD, CIRCUIT JUDGES

                                (Filed: January 6, 2006)


                              _______________________

                                     OPINION
                              _______________________

PER CURIAM

      Pro se appellant Billy G. Asemani appeals an order of the United States District

Court for the Middle District of Pennsylvania dismissing his complaint seeking judicial

review of the Internal Revenue Service’s (“IRS”) denial of a stand-alone offer-in-
compromise that was tendered under circumstances where the IRS had neither issued a

levy notice nor commenced collection proceedings. We will affirm.

       In August 2001, Asemani submitted an offer-in-compromise on IRS Form 656

attempting to settle his outstanding liabilities for tax years 1997 and 1998, that were

estimated to exceed $500,000. In the offer, Asemani represented that there was “doubt as

to collectability,” because his imprisonment rendered him financially unable to pay the

total amount owed but that he could offer $20,000 in satisfaction of his obligations for tax

years 1997 and 1998. The IRS rejected the offer-in-compromise, finding that although

circumstances rendered Asemani temporarily unable to pay, ultimately he would be

capable of paying the entire obligation especially if he remained in the United States.1

Asemani’s administrative appeal was denied. Asemani then sought review of the IRS’s

denial of his offer-in-compromise in the District Court. He alleged that the IRS’s denial

of the offer-in-compromise was an abuse of discretion because it was based on the

erroneous conclusion that he had an ability to pay.

       The Government moved to dismiss the complaint for lack of subject matter

jurisdiction, claiming that Asemani’s only recourse in obtaining judicial review of the

denial of the offer-in-compromise was in the context of a collection due process (“CDP”)

proceeding pursuant to 26 U.S.C. §§ 6330(c)(2)(iii) and 6320(c). The Government


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      Asemani, a native of Iran, became a legal permanent resident of the United States in
1994. Upon his voluntary return from Iran in 2000, Asemani pled guilty to federal
criminal charges relating to fraud in his dentistry practice and was sentenced by a federal
district court in Mississippi to thirty months in prison.

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argued that because the offer-in-compromise was made before the IRS issued a notice of

levy to collect on Asemani’s tax liabilities pursuant to §§ 6330 and 6320, and because no

CDP proceeding had commenced, the District Court lacked jurisdiction to review the

administrative denial of Asemani’s offer. Asemani responded, claiming that jurisdiction

existed because sovereign immunity was waived in his case pursuant to the

Administrative Procedures Act, 5 U.S.C. § 701, et seq., and the Federal Tort Claims Act,

28 U.S.C. § 2671, et seq. In the alternative, Asemani sought mandamus relief seeking an

order compelling the IRS to reverse its denial of the offer-in-compromise.

       The District Court granted the Government’s motion and dismissed the complaint.

The District Court held that the IRS’s denial of Asemani’s premature submission of an

offer-in-compromise, where no collection proceedings under §§ 6330(c) and 6620(c) had

commenced, was not subject to judicial review. The District Court rejected Asemani’s

contention that jurisdiction existed under the APA because the APA was not an

independent source of jurisdiction and because the APA did not apply to the IRS’s

discretionary action in denying Asemani’s offer. As for the Federal Tort Claims Act

(“FTCA”), the District Court found that 28 U.S.C. § 2680(c) expressly provides that the

waiver of sovereign immunity does not apply to “[a]ny claim arising in respect of the

assessment or collection of any tax...,” and thus the waiver of sovereign immunity did not

apply to Asemani’s offer to settle the collection of unpaid taxes for years 1997 and 1998.

Finally, the District Court denied mandamus relief because Asemani had no clear and

indisputable right to settle his tax liability. Asemani timely appealed.

                                              3
       We have jurisdiction pursuant to 26 U.S.C. § 7482(a). The standard of review is

plenary where the District Court dismisses for lack of subject matter jurisdiction. See

Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). We will affirm for

substantially the same reasons set forth in the District Court’s opinion.

       Asemani does not quibble with the extent of judicial review provided under the

Internal Revenue Code, §§ 6330(c) and 6320(c). According to Asemani, however, the

Code’s silence with respect to judicial review of the IRS’s denial of offers-in-compromise

made in advance of any collection action taken by the IRS pursuant to §§ 6330 and 6320,

should not be construed as prohibiting judicial review by the district court, but rather as

allowing it. Asemani is wrong.

       The IRS possesses the discretionary authority to accept or reject a compromise

offer for the payment of unpaid taxes before or after it issues a notice of levy pursuant to

§ 6330. See 26 U.S.C. § 7122. In cases like Asemani’s, where the offer-in-compromise

is made prior to the commencement of CDP proceedings, the Internal Revenue Code

expressly provides “for an independent administrative review of any rejection of a

proposed offer in compromise or installment agreement made by a taxpayer under this

section...,” allowing the taxpayer “to appeal any rejection of such offer or agreement to

the Internal Revenue Service Office of Appeals.” § 7122(d). There is no provision for

judicial review in district court under § 7122. As the District Court correctly found, the

Code provides for judicial review only in instances where an offer-in-compromise has

been tendered in the context of CDP proceedings. Specifically, § 6330(d) provides for an

                                              4
appeal to the Tax Court or, if the Tax Court does not have jurisdiction of the underlying

tax liability, to a district court of the United States. Because the Code does not provide

for judicial review of the IRS’s denial of Asemani’s offer-in-compromise under § 7122,

the District Court lacked jurisdiction to consider it.

       With respect to the tax exemption to waiver of sovereign immunity under the

FTCA, Asemani asserts that the absence of CDP proceedings against him means that his

offer-in-compromise cannot be viewed as a claim “arising in respect to the assessment or

collection of any tax” under 28 U.S.C. § 2680(c). Specifically, he contends that § 2680(c)

is inapplicable in his case because he is not challenging the assessment of tax liability for

tax years 1997 and 1998, nor is he contesting the “collection” of monies owed. We

disagree. The offer-in-compromise to settle the payment of unpaid taxes due to “doubt as

to collectability,” is in respect of the collection of taxes owed. See e.g., Aetna v. Casualty

& Surety Co. v. United States, 71 F.3d 475, 478 (2d Cir. 1995) (explaining that § 2860(c)

covers “claims arising out of the operation of the government’s mechanism for assessing

and collecting taxes”). Moreover, the fact that Asemani decided to submit an offer-in-

compromise before CDP proceedings commenced against him does not make his offer to

settle the payment of unpaid taxes any less connected with “collection of any taxes” under

§ 2680(c). We agree with the District Court that suit is barred under the FTCA.

       Finally, to the extent that Asemani sought a declaration that the offer in

compromise was reasonable and requested an order directing the IRS to accept the offer,

we agree with the Government that such relief is barred by the Anti-Injunction Act, I.R.C.

                                               5
§ 7421(a), and the tax exception to the Declaratory Judgment Act, 28 U.S.C. § 2201(a).

Moreover, because the Anti-Injunction Act and the Declaratory Judgment Act both

preclude the relief Asemani seeks, the Administrative Procedures Act, 5 U.S.C. § 701(a),

does not confer jurisdiction to review Asemani’s case.

         We have thoroughly reviewed the remaining arguments Asemani makes on appeal

and find them to be meritless. Accordingly, we will affirm the judgment of the District

Court.




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