Joan Pansier v. United States
20-2847
| 7th Cir. | Nov 12, 2021Background
- Gary Pansier owed unpaid federal taxes for 1995–1998; the IRS pursued collection via a suit, liens, and a levy on his pension (the pension fund notified Gary).
- Gary filed an administrative complaint in Sept. 2017 alleging lack of formal notice and that collections were time-barred; the IRS denied relief in Jan. 2018.
- The Pansiers filed bankruptcy in 2018; the bankruptcy stay interrupted the IRS collection suit but the pension levy continued; their bankruptcy petition for relief was denied and the 7th Circuit later held further relief was unavailable for untimely challenges.
- The Pansiers sued the United States in Dec. 2019 under 26 U.S.C. §§ 7432 and 7433 alleging financial harm from collection methods and post-bankruptcy violations.
- Gary died while the government’s motion to dismiss was pending; the district court dismissed the case reasoning the statutory waivers of sovereign immunity extend only to the taxpayer and the suit did not survive his death.
- The Seventh Circuit affirmed on alternative grounds: claims were time-barred, barred by bankruptcy-exclusive remedies for post-stay conduct, or unexhausted for claims not raised administratively.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-taxpayer spouse (Joan) may pursue §§ 7432/7433 claims after taxpayer (Gary) died | Joan sought substitution and argued she suffered financial harm and could pursue the claims | Government argued the statutory waivers of sovereign immunity apply only to the taxpayer and the suit did not survive Gary's death | Court assumed (without deciding) Joan could pursue claims but affirmed dismissal on other grounds |
| Whether claims were time-barred under §§ 7432/7433 two-year limit | Pansier argued accrual occurred in Apr. 2019 when they received documents, within two years | Government argued accrual occurred at latest by Sept. 2017 (administrative complaint date) under the reasonable-discovery accrual rule | Held: Claims covered by the 2017 administrative complaint accrued by Sept. 2017 and were untimely when filed in Dec. 2019 |
| Whether alleged post-bankruptcy violations (stay violations) can be litigated in tax suit | Pansier sought relief in district court for alleged 2018 bankruptcy-stay violations | Government argued exclusive remedy was to petition the bankruptcy court under § 7433(e) and bankruptcy route was pursued and rejected | Held: Exclusive bankruptcy remedy applies; Pansiers already sought bankruptcy relief and cannot relitigate in this tax suit |
| Whether claims not included in the administrative complaint are actionable in district court | Pansier invoked other, later-discovered collection misconduct | Government argued such claims are unexhausted and barred because administrative remedies were not timely invoked | Held: Claims omitted from the administrative complaint are unexhausted and cannot now be pursued |
Key Cases Cited
- Kovacs v. United States, 614 F.3d 666 (7th Cir. 2010) (establishes accrual standard: claim accrues when plaintiff had a reasonable opportunity to discover all essential elements)
- Keohane v. United States, 669 F.3d 325 (D.C. Cir. 2012) (applies reasonable-discovery accrual standard to IRS collection claims)
- Goldberg v. United States, 881 F.3d 529 (7th Cir. 2018) (requires exhaustion of administrative remedies under §§ 7432/7433)
- Pansier v. United States, [citation="821 F. App'x 642"] (7th Cir. 2020) (prior appeal concerning bankruptcy relief and timeliness)
- Pansier v. Comm'r, [citation="623 F. App'x 809"] (7th Cir. 2015) (background on Pansiers' long-running tax disputes)