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Tax — income tax — exhaustion of remedies

United States Court of Appeals For the Seventh Circuit


Tax — income tax — exhaustion of remedies

26 U.S.C. 7433 requires a taxpayer to exhaust administrative remedies before filing suit.

“On appeal, Gray argues that the regulation requiring exhaustion before suit contradicts the statutory text, which she says allows her to go to court first and exhaust administrative remedies later. The IRS counters that Gray’s failure to exhaust before suit not only doomed her claims but also deprived the court of jurisdiction. We view the case slightly differently. In our view, § 7433’s exhaustion requirement is not actually jurisdictional, but it is still mandatory. The IRS is entitled to insist that a plaintiff comply with its exhaustion procedures. In creating these procedures, the IRS permissibly interpreted the statute to require exhaustion of administrative remedies before suit was filed. Because Gray did not exhaust administrative remedies, we affirm the dismissal of her suit under § 7433.”


12-3523 Gray v. U.S.

Appeal from the United States District Court for the Northern District of Illinois, Coleman, J., Hamilton, J.

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