Courts are reluctant to award damages for aggressive IRS collection actions, as this case shows. A woman who owed back taxes offered to repay the debt in monthly installments. But the collections officer said no, erroneously accusing her of fraud.
After the Tax Court held that he abused his discretion, she sued for damages in a district court, alleging misconduct by the IRS during the tax collection process. But the court threw out her lawsuit, saying that the agency employee’s wrongdoing took place during the assessment, and not the collection, of taxes (Antioco, D.C., Calif.).