Rudy Castaneda v. United States

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 3, 2020
• Docket: 19-16372
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 3 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

RUDY CASTANEDA; JULIA No. 19-16372 CASTANEDA, D.C. No. 2:18-cv-02809-ESW Plaintiffs-Appellants,

v. MEMORANDUM*

UNITED STATES OF AMERICA; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the District of Arizona Eileen S. Willett, Magistrate Judge, Presiding**

Submitted October 26, 2020**

Before: McKEOWN, RAWLINSON, and FRIEDLAND, Circuit Judges.

Rudy and Julia Castaneda appeal pro se from the district court’s order

dismissing for lack of subject matter jurisdiction their action arising from levies

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The parties consented to proceed before a magistrate judge. See 28 U.S.C. § 636(c). ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). imposed by the Internal Revenue Service (“IRS”) to collect unpaid taxes. We have

jurisdiction under 28 U.S.C. § 1291. We review de novo. Dexter v. Colvin, 731

F.3d 977, 980 (9th Cir. 2013). We affirm.

The district court properly dismissed for lack of subject matter jurisdiction

the Castanedas’ refund claim for the 2004 tax year. The Castanedas failed to

allege that the taxes were paid in full prior to filing suit. See Flora v. United

States, 362 U.S. 145, 146, 177 (1960) (full payment of assessment is a

jurisdictional prerequisite to suit).

The Castanedas seek damages under 26 U.S.C. § 7433(a) for mental anguish

stemming from their receipt of notices from the IRS. The district court properly

dismissed the Castanedas’ claim for damages. Under 26 U.S.C. § 7433(a), the

district court lacked subject matter jurisdiction because the Castanedas’ complaint

failed to allege facts sufficient to show that they exhausted their administrative

remedies as required under § 7433(d)(1). See Conforte v. United States, 979 F.2d

1375, 1377 (9th Cir. 1992) (failure to exhaust administrative remedies deprived the

court of jurisdiction over a taxpayer’s damages claims regarding improper tax

collection under § 7433(a)); see also 26 C.F.R. § 301.7433-1(e) (specifying

required administrative remedies).

The Castanedas seek damages under 26 U.S.C. § 7433(e) alleging the IRS

sought to collect tax liabilities that were discharged in bankruptcy. The district

2 19-16372 court properly dismissed the Castanedas’ claim for damages. Under 26 U.S.C.

§ 7433(e), the district court lacked subject matter jurisdiction because the

bankruptcy courts have exclusive jurisdiction over suits for damages relating to

automatic stays or the effects of a bankruptcy discharge. See 26 U.S.C.

§ 7433(e)(2).

The district court properly dismissed the Castanedas’ request for injunctive

relief. The Anti-Injunction Act (“the Act”) bars attempts to restrain the IRS’s tax

assessment and collection activities, and no exception to the Act applies. See 26

U.S.C. § 7421(a) (listing statutory exceptions); Elias v. Connett, 908 F.2d 521,

523, 525 (9th Cir. 1990) (explaining that the district court “must dismiss for lack of

subject matter jurisdiction any suit that does not fall within one of the exceptions to

the Act” and setting forth limited judicial exception).

We reject as meritless the Castanedas’ contention that the IRS violated their

due process rights.

AFFIRMED.

3 19-16372