861 F. Supp. 2d 921
C.D. Ill.2012Background
- Bowers, a Pekin, Illinois resident, receives monthly Social Security benefits.
- In June 2010, the IRS levied $1,107.80 of each Social Security check to collect a tax debt, leaving $779.17 per month.
- Plaintiff contends the levy exceeds the 15% cap and that administrative remedies failed.
- Defendants move to dismiss; issue involves federal jurisdiction and statutory treatment of levies.
- Court analyzes whether §7442 grants jurisdiction and whether §7433 provides a private right of action in district court.
- Levy is 6331(a) administrative action; 42 U.S.C. § 407 and § 6334 exempt a portion of Social Security benefits; $779.17 is the 2009–2010 exempt amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over IRS actions in district court | Bowers relies on § 7433 for private damages. | § 7442 does not confer such jurisdiction; § 7433 provides remedy. | Court lacks jurisdiction under § 7442; § 7433 provides the proper basis for relief. |
| Applicability of the 15% cap on continuing levies | Levy on Social Security must be under § 6331(h) and capped at 15%. | Levy can be continuous under § 6331(a) with no mandatory 15% cap. | § 6331(h) cap inapplicable to this one-time levy context. |
| Characterization of the levy (one-time vs continuous) | Levy should be treated as continuous; affects cap and remedies. | Levy here is a one-time seizure of a fixed, vested benefit. | The levy is a one-time seizure, not a continuous levy, so 15% cap not triggered. |
| Plaintiff’s claim plausibility | Levy exceeds legal limits and violates statutory provisions. | Levy falls within permissible administrative action. | Complaint dismissed for failure to state a plausible claim. |
Key Cases Cited
- Conley v. Gibson, 355 U.S. 41 (Supreme Court 1957) (standard governing dismissal for failure to state a claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Supreme Court 2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court 2009) (plausibility required for facially plausible claims)
- Albright v. Oliver, 510 U.S. 266 (Supreme Court 1994) (pleading standards applied to plaintiff’s allegations)
- Hishon v. King & Spalding, 467 U.S. 69 (Supreme Court 1984) (reaffirmation of liberal pleading standard)
- Lanigan v. Village of East Hazel Crest, 110 F.3d 467 (7th Cir. 1997) (pleading standard applied in Seventh Circuit)
- M.C.M. Partners, Inc. v. AndrewsBartlett & Assoc., Inc., 62 F.3d 967 (7th Cir. 1995) (liberal construction of pleadings in corporate disputes)
- Early v. Bankers Life & Cas. Co., 959 F.2d 75 (7th Cir. 1992) (pleading requirements in civil actions)
- Hines v. United States, 658 F. Supp. 2d 139 (D.D.C. 2009) (continued levy not compelled when not strictly required by statute)
- United States v. Marsh, 89 F. Supp. 2d 1171 (D. Haw. 2000) (one-time levy cap analysis under §6331(h))