Am I Entitled to a Jury in an IRS Tax Lien Foreclosure Action?
No, a jury demand is not proper for a federal tax lien foreclosure action. Typically, an action for money damages, such as a refund claim or action to reduce an assessment to judgment, qualifies for a jury in federal district court tax cases.
A jury demand is not proper for a federal tax lien foreclosure action under Section 7403, because it is not an action for monetary damages at common law. As stated in United States v. Annis, 634 F.2d 1270, 1272 (10th Cir. 1980), in a foreclosure action, “[t]he government seeks only to enforce its tax lien, which action sounds in equity and does not give rise to the right of a jury trial.” Id., citing Gefen v. United States, 400 F.2d 476 (5th Cir. 1968); Damsky v. Zavatt, 289 F.2d 46 (2d Cir. 1961).
If, as is often the case, the government brings a concurrent action for reduction of tax assessments to judgment, the taxpayer (but not a third party owner of the property) will standing to demand a jury based upon the monetary action. See United States v. Malakie, 188 F Supp 592 (E.D. N.Y. 1960) (defendants who are not the taxpayer were not entitled to jury in foreclosure action); Allen v. Wright, 468 U.S. 737, 752, 104 S. Ct. 3315, 3325 (particular plaintiff was only entitled to adjudication of particular claims). However, the jury will only adjudicate the monetary issue and not the foreclosure.
If a jury demand is made in an answer to a foreclosure action, the defendant should expect the government to file a motion to strike the demand. Motions to strike are commonly used for improper prayers for relief as well as jury demands. See Tapley v. Lockwood Green Engineers, Inc., 502 F.2d 559, 560 (8th Cir. 1974) (striking prayer for damages exceeding statutory limit); Miller v. Runyon, 88 F. Supp. 2d 461 (M.D.N.C. 2000) (striking jury demand).
Posted 05/01/2019 by Daniel Layton.