c. Cases where IRS violates permanent discharge
Held, party seeking damages under § 7344 must exhaust administrative remedies. Kovacs, Debtor v. United States of America, In re Kovacs, 383 B.R. 90 (Bankr. E.D. Wis. 2007). David V. Meany, Timothy M. Van de Kamp, Dewitt Ross & Stevens, S.C., Brookfield, WI, Douglas H. Frazer, for Plaintiff. James E. Shapiro, Bankruptcy Judge.
Sections 7430(b) and 7433(d) of the Internal Revenue Code both require that a party seeking to recover damages must first exhaust such administrative remedies available to that party within the IRS. Kovacs has complied, having first submitted an administrative claim to the IRS. That claim was never responded to, and Kovacs then filed this adversary proceeding after the 6-month period to respond expired following the date that her administrative claim was filed. The IRS has not disputed this requirement. The court concludes that Kovacs did exhaust her administrative remedies.
Held, where there is insufficient evidence as to whether the debtor did or did not exhaust administrative remedies the matter is remanded for further evidentiary proceedings. Dorminy v. United States of America. In re Dorminy, 301 B.R. 599 (Bankr. M.D. Fla., 2003). B. Gray Gibbs, B. Gray Gibbs, P.A., St. Petersburg, FL, for Debtor/Plaintiff. Paul M. Glenn, Chief Judge.
The IRS seeks a determination that the Bankruptcy Court lacks jurisdiction over the Debtor's claim for damages, since the Debtor did not exhaust his administrative remedies by filing a claim with the Internal Revenue Service before commencing this action. The IRS next asserts that this Court lacks jurisdiction over the Debtor's claim for damages, because the Debtor did not first exhaust his administrative remedies by filing a claim with the Internal Revenue Service. The IRS cites § 7433(d)(1) of the Internal Revenue Code to support its proposition in this regard.
(d) Limitations. -
(1) Requirement that administrative remedies be exhausted. - A judgment for damages shall not be awarded under subsection (b) unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.
In response, the Debtor asserts that his action actually arises under § 7432 of the Internal Revenue Code, rather than § 7433 of the Code. (Doc. 38). Section 7432 provides in part:
§ 7432. Civil damages for failure to release lien
(a) In general. - If any officer or employee of the Internal...
