Canada, Jr. v. United States (Internal Revenue Service), No. 18-11398 (5th Cir. 2020)Annotate this Case
After plaintiff successfully challenged in bankruptcy court a tax penalty assessed against him by the IRS that exceeded $40 million, plaintiff filed suit against the IRS and three IRS agents, in their individual capacities, pleading a claim for damages against the individual defendants under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), for allegedly violating his Fifth Amendment right to procedural due process. Plaintiff also sought attorney's fees he incurred litigating the penalty issue in his Chapter 11 bankruptcy case under 26 U.S.C. 7430 and the Equal Access to Justice Act.
The Fifth Circuit affirmed the district court's grant of defendants' Federal Rule of Civil Procedure 12(b)(6) motion and dismissal of the action with prejudice. The court held that the district court properly concluded that this case was a new Bivens context and that special factors existed under Ziglar v. Abbasi, 137 S. Ct. 1843 (2017). The court also held that plaintiff was not entitled to recover attorney's fees because his request was untimely under 28 U.S.C. 2412(d)(1)(B) and he was not a "prevailing party" under 26 U.S.C. 7430(c)(4)(A)(ii).