Gessert v. United States, No. 09-3380 (7th Cir. 2013)
Annotate this CaseThe pharmaceutical consulting group failed to pay taxes. By 2005, it accumulated over $1 million in unpaid liabilities. Revenue Officer Johnson pursued collection efforts, levied the group’s accounts, and sought to recover taxes withheld from employees (trust fund taxes) from Gessert personally. Gessert was the group’s creator, sole shareholder, and CEO, and presumably behind the refusal to pay. The group and Gessert sued, seeking refunds and abatements, and pursued damages under I.R.C. 7433 for improper collection efforts. They claimed that the group directed Johnson to apply a few voluntary payments toward its trust fund liability, but that Johnson applied the payments to the non-trust fund portion, increasing Gessert’s personal liability; that Johnson violated Internal Revenue Code and Treasury provisions; and that she improperly levied the accounts. The district court rejected the claims. The Seventh Circuit affirmed. Gessert lacked standing under I.R.C. 7433 because Johnson sought collection from the group. The group failed to allege economic harm, prerequisite to standing under I.R.C. 7433. Concerning the refund claim, the district court properly concluded the group filed its administrative claim too late. Gessert’s refund-and-abatement claim failed because the group did not provide specific written direction to the IRS effectuating a directed payment.
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