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Government acted with “affirmative negligence” in serving as
custodian of the levied-upon property.19 Id. at 948.
Whether Section 7433 Is the Exclusive Remedy
By failing to comply with section 6335(f), respondent denied
petitioners the benefit of the statutory remedy whereby they
sought to protect themselves against future losses in the stock’s
value. Respondent suggests, however, that because section
6335(f) specifies no remedy for respondent’s noncompliance, there
can be no remedy other than as might arise from a civil cause of
19 Citing United States v. Whiting Pools, Inc., 462 U.S. 198
(1983), the Court of Appeals analogized the remedies available to
the IRS under secs. 6331 and 6332 to the remedies available to
private secured creditors under Article 9 of the Uniform
Commercial Code. Stead v. United States, 419 F.3d at 948. The
Court of Appeals noted that U.C.C. sec. 9-207(a) requires a
secured creditor in possession to use “reasonable care in serving
as custodian of the property” and suggested that the taxpayers
might have been entitled to credit against their tax liability if
they could have shown “affirmative negligence” by the Government
in this regard. Id.
The Court of Appeals in Stead had no occasion to consider
the application of this standard of reasonable care to a
situation, like the instant case, where the debtor demands the
secured party to liquidate the collateral. We note, however,
that pursuant to U.C.C. sec. 9-207(a): “If the secured party
negligently fails to liquidate the collateral after a demand to
that effect has been made, the secured party will be held liable
for the resultant loss without regard to the presence in the
contract of a clause exempting the secured party from liability.”
9 Anderson, Uniform Commercial Code, sec. 9-207:10, at 11 (3d ed.
1999). Because we have grounded the specific relief in Zapara I
on respondent’s violation of sec. 6335(f), we need not and do not
decide whether respondent’s employees acted negligently in this
regard or whether such negligent conduct might constitute a
separate ground for providing petitioners credit against their
tax liability.
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