The More Specific Statute Controls the More General

EC Term of Years Trust v. United States

The IRS code provides that if someone fails to pay a demand made by the IRS, the IRS may impose a lien on their property. Where, as here, that lien is asserted against property in which a third party has an interest (in this case a trust), that party may bring a civil action against the IRS under §7426, but must do so within 90 days. The question in this case is whether, after that 90 day period, that third party can bring a different action under §1346. The lower court held that §7426is the exclusive remedy for third party challenges.

“A precisely drawn, detailed statute pre-empts more general remedies.” “Resisting the force of the better-fitted statute requires a good countervailing reason.” Here, Congress specifically tailored §7426 the third party claims for wrongful levy, and if third parties could avail themselves of the general tax refund jurisdiction of §1346 they could effortlessly evade the levy statute’s 9-month limitations. Cases holding that §1346 was expansive enough to cover third party claims were premised on the notion that no other remedy was available. The proposed distinction between classes of claims under the respective statues directly contravenes the express terms of the statute. Congress had a good reason for passing the 9 month limitation – to speedily settle tax levies and put the government in the position to act unhindered by concern that a third party claim would later arise.