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Sequoia Property & Equipment, Ltd. Partnership v. United States
Citation: 100 F. App'x 638Docket: No. 02-17432, 02-17500; D.C. No. CV-97-05044-LJO
Court: Court of Appeals for the Ninth Circuit; May 25, 2004; Federal Appellate Court
Mark and Rhonda Crisp, along with their partnerships Sequoia Property and Equipment Limited Partnership and Hyper-Jean Property and Limited Partnership, appealed a district court judgment related to federal income tax assessments. The court affirmed the lower court's decision, confirming that it had jurisdiction over the claims. Sequoia and Hyper-Jean argued that the government lacked authorization to initiate a collection action under 26 U.S.C. § 7401, but the court maintained that authorization is presumed unless contested, and since they did not challenge this in the district court, the presumption of regularity stood. The Crisps also challenged the district court's denial of their motion for judgment as a matter of law under Fed. R. Civ. P. 50(b), claiming tax deficiencies were assessed beyond the three-year limit set by 26 U.S.C. § 6501(a). However, the court found that the Crisps had omitted over 25% of their income, extending the limitations period to six years under § 6501(e)(1)(A). They failed to provide necessary documentation to qualify for a safe harbor exemption from this rule. Additionally, the court ruled that the government's fraudulent conveyance claim against Hyper-Jean and Sequoia was not barred by the FDCPA's statute of limitations. The FDCPA is not the exclusive mechanism for debt collection, and the government’s claims were based on the Internal Revenue Code. The district court properly used state law to address the fraudulent transfer, making FDCPA time limits inapplicable. The court also noted that Hyper-Jean lacked standing to advance claims on behalf of Wanda Crisp due to her failure to appeal. Ultimately, Hyper-Jean’s quiet title action was dismissed on the grounds of fraudulent transfer, reinforcing the legitimacy of the collection action against Wanda Crisp. The ruling is not to be published or cited in future cases according to Ninth Circuit Rule 36-3.