In a recent case out of the United States District Court in the Western District of Washington, the Court granted the Department of Justice’s (“DOJ”) Motion to Dismiss, dismissing the case on multiple fronts.[1] The plaintiff, Ferdinand Hafner (“Hafner”) sought to recover refunds on taxes paid by his late father, recoup amounts he claimed were wrongfully levied from his father, obtain damages for the alleged unauthorized collection of taxes from his father, and obtain damages for alleged unauthorized disclosure of his father’s returns. In addition, he sought to recoup fees and costs. Hafner sought to recover the various refunds and damages on the basis that he was the beneficiary of his father’s estate and thus would be entitled to such funds were they paid to the estate.
Hafner represented himself in the matter. The DOJ was represented by two attorneys from the Tax Division out of Washington, DC.
In the DOJ’s Motion to Dismiss, the DOJ sought to dismiss all claims pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure alleging that Hafner lacked standing. Even accepting all the facts as true, Hafner was not the aggrieved party, but rather it was his father, and thus Hafner himself lacked standing. As stated below, the Court agreed with the DOJ as to each allegation.
First, Hafner sought to recover refunds of overpayments by his father under IRC 6402, which provides for a refund of “any balance to such person”. Accordingly, Hafner had to show that he made the overpayments for the statute to apply. He never made any overpayments, nor did he claim to have done so. Instead, he alleged that his father and his father’s estate made such overpayments, and that he was entitled to the refund as a beneficiary of his father’s estate. Based on this, the Court concluded Hafner lacked standing to claim refunds since Hafner did not make the payments he sought to be refunded.
Next, Hafner sought to recover amounts that were wrongfully levied from his father. Under IRC 7426, any person other than the taxpayer may file a civil action where property in which such person had “an interest” was wrongfully levied. As the Court noted, the determination of whether Hafner had an interest is a matter of state law. The levies occurred while his father was still alive, and thus the DOJ alleged that Hafner did not have an interest at the time of the levies. Hafner did not provide citation to Washington state law which would support his claim that he had an interest in the property as a potential beneficiary of an estate. Since the levies were carried out against Hafner’s father while his father was living, the Court concluded that Hafner did not have any interest and thus could not claim under IRC 7426.
Third, the Court next addressed Hafner’s claim of damages for unauthorized collection of taxes under IRC 7433, which provides that “such taxpayer may bring a civil action for damages” where an IRS employee disregards any statutory law or regulations in collecting from a taxpayer. Since Hafner was not the taxpayer from whom the alleged wrongful collection took place, the Court again concluded he lacked standing, as the alleged wrongful collection took place from Hafner’s father while he was still living.
Fourth, Hafner sought damages for alleged unauthorized disclosure of returns or return information under IRC 7431. As with the previous IRC sections discussed, IRC 7431 requires the “taxpayer” to make the claim. Hafner was not the taxpayer whose information was wrongfully disclosed. The Court cited to prior case law addressing the statute on similar facts, which also concluded that a beneficiary of an estate was not the taxpayer for purposes of applying IRC 7431.[2] As such, Hafner again lacked standing here.
Finally, Hafner sought declaratory and injunctive relief, as well as costs and fees for a prevailing party under IRC 7430. As with the others, Hafner was unable to show that any of the actions had been taken against him, and thus he lacked standing here as well.
As noted at the beginning, Hafner was unrepresented and filed his case pro se. Since the Court did not address the facts of any of the allegations but assumed them as true for purposes of the DOJ’s Motion to Dismiss, we are not given any indication of whether any of the alleged wrongs were actually committed. However, if they were, Hafner could likely seek some relief as the administrator of his father’s estate. Perhaps seeking the advice of competent legal counsel could have saved him a lot of time and effort and perhaps even have led to the proper procedural steps to recover some of the alleged wrongful collections and/or levies.
[1] Hafner v. US, 2026 WL 412288 (USDC WA 2026).
[2] Clark v. IRS, 2007 WL 1374742 (USDC WA 2007).
