Court Opinion

ID: 4710869
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:29:31.159748+00
Date Added: 2024-06-11T08:07:05.630903
License: Public Domain

Dore, J.
(concurring in part, dissenting in part) — I concur in the majority, however, I would reverse the trial court's denial of interest to the Internal Revenue Service. *304In affirming it, the majority violates the long-standing rule that a court's powers of equity do not permit it to disregard statutory directives.
The Internal Revenue Code expressly provides that: "If any amount of tax imposed by this title ... is not paid . . . interest on such amount at an annual rate established under section 6621 shall be paid ..." 26 U.S.C. § 6601(a) (1982). A long line of cases establishes that this requirement cannot be waived by a court in the exercise of its general equity powers. In re Fulghum Constr. Corp., 706 F.2d 171, 173 (6th Cir. 1983); Johnson v. United States, 602 F.2d 734 (6th Cir. 1979); United States v. Los Angeles Soap Co., 153 F.2d 320 (9th Cir. 1946); Cibelli v. United States, 585 F. Supp. 799, 800 (D. Conn. 1984); United States v. Augspurger, 508 F. Supp. 327 (W.D.N.Y. 1981). This rule applies here, and the IRS was entitled to interest on the tax money interpleaded.
The rule of Fulghum is merely an instance of the general rule that a court may not employ its equitable powers in order to override the command of a statute. To permit such an exercise would be to give the courts unwarranted power over the political branches of government and would invite extreme judicial activism. This has long been recognized.
Accordingly, where any penalty or forfeiture is imposed by statute upon the doing or omission of a certain act, there courts of equity will not interfere to mitigate the penalty or forfeiture, if incurred, for it would be in contravention of the direct expression of the legislative will. . . .
In Powell v. Redfield, 4 Blatchford, 45, an application was made in equity to restrain suits upon a bond given in pursuance of the revenue laws of the United States, which was denied on the ground that a court of equity had no right to interfere and, by injunction or decree, to virtually repeal the express provisions of a positive statute, or defeat their operation in the particular case.
(Italics mine.) Clark v. Barnard, 108 U.S. 436, 457, 27 L. Ed. 780, 2 S. Ct. 878 (1883). The fact that the interest due *305here is not a penalty or forfeiture does not remove this case from Clark's logic. The trial court here has exercised its equitable powers "in contravention of the direct expression of the legislative will." That cannot be condoned.
I would therefore reverse the trial court with regard to awarding interest to the IRS out of the interpleaded fund. With respect to the other issues, I am in agreement with the majority.
After modification, further reconsideration denied June 30, 1988.