U.S. District Court Holds Taxpayer Stated Claim for Improper Collection, Bars Challenge to Underlying Assessment

The U.S. District Court held that a taxpayer adequately stated a claim for damages under I.R.C. §7433 based on the IRS’s alleged failure to suspend collection activities after a timely request for a collection due process hearing, but dismissed the taxpayer’s challenge to the underlying tax assessment as barred by sovereign immunity. The taxpayer, an individual, alleged that the IRS assessed tax liabilities for two years and engaged in improper collection activities. For the first year, the taxpayer made a timely payment and requested an extension, but the IRS later asserted unpaid liabilities based on a cryptocurrency exchange form, which ...