Memorandum Withdrawn: May 10, 1992 Submission withdrawn and resubmitted May 1, 1992. Memorandum Filed: August 30, 1991. Appeal from the United States District Court for the District of Oregon. D.C. No. CV-87-952-FR. D.C. No. CV-89-512-FR. Helen J. Frye, District Judge, Presiding. Original Opinion Reported at,
Before: Eugene A. Wright, Cecil F. Poole and David R. Thompson, Circuit Judges. Opinion by Judge Thompson.
Order AND AMENDED OPINION
Appellant Gordon E. Powelson sued the government in the district court in Oregon, seeking a refund of federal estate taxes under 26 U.S.C. § 7422. Powelson argued that the Internal Revenue Service (IRS) improperly seized and sold his property to satisfy the tax liability of his mother's estate without first complying with the mandatory notice requirements of 26 U.S.C. § 6335 (b). After satisfying the estate's tax liability, the IRS remitted the excess proceeds of the sale to Powelson.
Powelson also filed an action in the district court for a declaratory judgment and to quiet title to the property. He sought to have the sale set aside and the property returned to him. In that action he asserted substantially the same facts and contentions he had asserted in the refund action.*fn1
The district court granted summary judgment in favor of the government in the refund action and dismissed the declaratory judgment and quiet title action for lack of subject matter jurisdiction. Powelson appeals. We have jurisdiction under 28 U.S.C. § 1291. We reverse the district court's grant of summary judgment in the refund action, and remand that action to the district court for further proceedings. We affirm the district court's dismissal of the declaratory judgment and quiet title action.
Under 26 U.S.C. § 6335(b), a taxpayer must be notified of the sale of his property in the manner prescribed by 26 U.S.C. § 6335(a). Section 6335(a) provides:
(a) Notice of seizure. - As soon as practicable after seizure of property, notice in writing shall be given by the Secretary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description with reasonable certainty of the property seized.
26 U.S.C. § 6335 (a). "The language and purpose of § 6335(a) and § 6335(b) require that the government be held accountable for failure to strictly comply with the procedures prescribed by the two provisions." Goodwin v. United States, 935 F.2d 1061, 1065 (9th Cir. 1991). "Absent literal compliance with [these] provisions, the government sale of land cannot stand." Reece v. Scoggins, 506 F.2d 967, 971 (5th Cir. 1975).
It is undisputed that two IRS agents went to Powelson's residence to serve him with notice of the sale of his property. The agents had been to Powelson's residence before and knew he lived there. Powelson was not at home. The agents returned to their office without leaving the notice. The IRS made no further attempt to personally serve Powelson with notice of the sale. Instead, it mailed the notice to him by both regular and certified mail. Powelson received this notice.
The IRS contends giving Powelson notice by mail was permissible under sections 6335(a) and (b) because he could not be readily located for personal service. Powelson argues the government's ...