Bilzerian v. United States

Terri Steffen appeals the district court’s order granting summary judgment to the Internal Revenue Service (“IRS”) on her claim for damages under 26 U.S.C. § 7432. We reverse and remand for a determination of damages, if any.

Background

Steffen and her husband Paul Bilzerian (“Plaintiffs”) timely filed their 1985 joint tax return. In October 1989, the IRS sent Plaintiffs a notice of deficiency, informing Plaintiffs that the IRS proposed to assess additional income tax liabilities against Plaintiffs for 1985. Plaintiffs did not file a petition contesting the proposed assessment in the Tax Court.

I…