When the IRS executed a search warrant at the home of “plaintiffs,” agents seized 364 boxes of rolled $1 presidential coins, each containing 1,000 coins. The armored truck company that transported the coins removed them from the rolls and put the coins into counting machines. The company then wired the funds to the IRS but kept the coins. The plaintiffs were credited with $364,000 (the face value of the coins). They contended, however, that in the condition they were in when seized, they were worth much more (collector’s value).
The plaintiffs sued the IRS to recover the value of the coins. The government argued that they lacked standing to bring any action because once the coins were put into general circulation, the government could not return them even if a court ordered such action. And even if the plaintiffs were seeking monetary compensation, an action should be barred by sovereign immunity.
A district court agreed with the IRS (Bobby L. Willis, DC MO, 12/21/18). The federal government cannot be sued without its consent (the doctrine of sovereign immunity). Under the Administrative Procedure Act, the government has waived this protection in some situations, but not for money damages. The court held that the claim in this case is essentially for money damages, which is outside the scope of the government’s waiver of sovereign immunity.