Megan H. Cowden v. United States Department of the Treasury; Internal Revenue Service; United States of America

Background Megan Cowden appealed after the district court dismissed her civil action challenging a federal tax lien. The court of appeals reviewed the dismissal and addressed whether the judgment properly reflected the consequence of a lack of subject matter jurisdiction. The court’s reasoning The panel stated that, after careful review, it agreed with the district court that jurisdiction was lacking. It then modified the judgment because courts generally may not dismiss with prejudice when subject matter jurisdiction is absent. On that basis, the court affirmed the judgment as modified to reflect a dismissal without prejudice. However, the judgment is modified to reflect that the dismissal is without prejudice. What it means going forward Cowden’s challenge to the federal tax lien remains dismissed, but the dismissal does not operate as a merits-based bar because it is without prejudice.