Court Opinion

ID: 9457278
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:17:39.182957+00
Date Added: 2024-06-11T17:35:17.375880
License: Public Domain

RONEY, Circuit Judge
(dissenting):
I cannot agree that the statute of limitations has run against the collection of the taxes for which this assessment was made. The running of the statute is the basis upon which the plaintiff is held to have met the tests of Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1931), as to when an injunction can be entertained notwithstanding 26 U.S.C. § 7421(a), which provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” Cf. Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962).
An individual has no substantive or fundamental right to the shelter of a period of limitations. Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L.Ed. 1628 (1945). It has been held as a matter of constitutional law that statutes of limitations go to matters of remedy and do not involve the destruction of fundamental rights. Campbell v. Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 483 (1885); United States v. Nebo Oil Co., 190 F.2d 1003 (5th Cir. 1951).
Congress has the power to create a right without a time limitation in which it must be exercised. Anderson v. United States Atomic Energy Commission, 313 F.2d 313 (7th Cir. 1963); cf. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946).1 The power to *924tax is given to Congress by the United States Constitution, Article 1, Section 8, Clause 1.
In the absence of clear Congressional intent, the right to collect taxes will not be presumed to be barred by any statute of limitations. Limitation statutes against the collection of taxes otherwise due and unpaid must be strictly construed in favor of the government. Pacific Coast Steel Co. v. McLaughlin, 61 F.2d 73 (9th Cir. 1932); Loewer Realty Co. v. Anderson, 31 F.2d 268 (2nd Cir. 1929); McDonald v. United States, 315 F.2d 796 (6th Cir. 1963).
In effect, a period of limitations runs against the collection of taxes only because the government through Congress has consented to such a defense. Absent consent of the government, there is no defense.
Congress has determined that the period of limitations for collection of taxes does not begin to run until a return is filed. In the case of a false or fraudulent return with the intent to evade tax, a willful attempt in any manner to defeat the tax, or the failure to file a return for any reason, there is no time limit within which collection proceedings must be instituted. 26 U.S.C. § 6501. This pattern was chosen by Congress with the obvious purpose of making sure that the passage of time will not bar the collection of the tax until the government has been made aware by the taxpayer that there was, or might be, tax liability. This is in keeping with our tax system, which “is premised largely on the theory of self-assessment.” United States v. Gilmore, 222 F.2d 167 (5th Cir. 1955).
It is true that the recent eases of Marchetti,2 Grosso3 and United States v. United States Coin and Currency 4 have upset this fundamental system of self-assessment insofar as the wagering tax laws are concerned. However, there seems to be little basis for concluding that Congress intended that if the self-assessment system failed, the statute of limitations would nonetheless apply. In fact, the opposite intention seems to be clear. Cases of fraud, willful intent to evade, and failure to file a return are specific instances where the self-assessment system fails. In each such instance, Congress has provided that there is no statute of limitations defense.
The Supreme Court has carefully noted that there is no doubt that the government has the power to assess and collect taxes on unlawful gambling activities. United States Coin and Currency, supra. It has previously held that a tax does not cease to be valid merely because it regulates, discourages or even definitely deters the activities taxed or because it touches on activities which Congress might not otherwise regulate. United States v. Sanchez, 340 U.S. 42, 71 S.Ct. 108, 95 L.Ed. 47 (1950).
Any punishment of a taxpayer for failure to comply with the self-assessment method of tax collection has been foreclosed by Marchetti, supra, and Grosso, supra. However, I cannot agree that the collection of taxes legally owed is punishment within the concept of these decisions. Only taxes and interest were sought by the government against Lucia, no penalties, civil or criminal. Nor can I agree that the failure of Congress to provide a statute of limitations shelter against the collection of taxes, lawfully accrued, can be construed as a “punishment” for failure to file a return. Absent any substantive or fundamental right to a limitations defense, the taxpayer has been deprived of nothing to which he was constitutionally entitled.
*925Lucia argues that he has no remedy at law because the presumption of validity of tax assessments and the taxpayer’s burden in a refund suit place him in the position of being unable to effectively litigate without the risk of self-incrimination, against which Marchetti and Grosso seek to protect him.
It may well be that some of the presumptions and burdens in this field of civil tax collection will have to shift in order to accommodate the principles set forth in these recent cases. However, it seems to me that these matters can be fully worked out in the regular administrative bodies and the courts to which Congress assigned such matters, and that the problems which might be encountered there do not give us a basis for injunc-tive jurisdiction in the face of § 7421(a).
I would affirm the dismissal of the complaint. The granting of leave to amend a complaint is within the sound discretion of the trial court. Absent some representation by the plaintiff as to additional grounds that might be asserted as a basis for relief, it would seem that there was no abuse of discretion in denying the motion for leave to amend.

. The United States is not barred by the defense of laches in the enforcement of government claims and cannot be barred from prosecuting tax claims because of laches. Board of Com’rs of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313 (1940) ; United States v. Summerlin, 310 U.S. 414, 60 *924S.Ct. 1019, 84 L.Ed. 1283 (1940) ; Olshausen v. C.I.R., 273 F.2d 23 (9th Cir. 1960), cert. den. 363 U.S. 820, 80 S.Ct. 1256, 4 L.Ed.2d 1517, reh. den. 364 U.S. 855, 81 S.Ct. 34, 5 L.Ed.2d 79.

. Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968).

. Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968).

. United States v. United States Coin and Currency, 1971, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971).