Court Opinion

ID: 9460104
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:41:24.965278+00
Date Added: 2024-06-11T17:36:28.808100
License: Public Domain

VAN DUSEN, Circuit Judge
(dissenting) :
Since the majority opinion seems to me inconsistent with this court’s recent decision in Iannelli v. Long, 487 F.2d 317 (3d Cir. 1973), as well as with the great majority of federal cases 1 considering 26 U.S.C. § 6861(a)2 and 26 U.S. C. § 7421,3 I respectfully dissent. In Iannelli, Judge Hastie recognized a narrow exception to the prohibition of suits restraining the assessment or collection of taxes in 26 U.S.C. § 7421, using this language:
“ . . . if a levy on property is in formal guise an effort to collect taxes but in fact is only a device for harassing and punishing a wrongdoer without honest anticipation that the levy may yield money owed for taxes, it is arguable that a suit to restrain the tax collector’s enterprise is not in reality a suit to restrain the collection of taxes. .
“Though one of the government’s objectives in this undertaking to seize all of the taxpayers' discoverable property may have been to put economic pressure upon persons believed to be engaged in large scale criminal activities, the jeopardy assessment and consequent levies also appear to have been bona fide and potentially productive attempts to collect revenue. And bona fide efforts to collect taxes through lawful procedure are the very *1086undertakings that Congress has protected through the enactment of section 7421(a) against frustration or delay by litigation.”
The majority relies on the conclusory allegations in paragraph 19 of the complaint4 that the jeopardy assessment “is illegal, arbitrary and unreasonable” and that “the only reason” for such assessment “has been an attempt to harass and coerce the plaintiffs for improper purposes.” Contrary to these general allegations, the record contains the memorandum of an interview by Richard T. Phillips with the husband taxpayer on March 30 and 31, 1971, in Nassau, Bahamas, quoted in note 5 of the majority opinion, in which such taxpayer conceded that “he was aware of the income tax investigation being conducted and thought he could be financially ruined by the results of this investigation.” Further, he stated that “he was contemplating moving himself and his family to the Republic of Ghana, Africa, where, he stated, he would be safe from any further proceeding.”
On such a record, the income tax authorities were, at the least, entitled to issue the prompt jeopardy assessment of early April 1971. The good faith of the authorities is indicated by the decrease of the amount of the assessment several times since early April 1971. The failure of the authorities to withdraw the jeopardy assessment because the husband taxpayer returned to this country in mid-April 1971 and filed in November 1971 an affidavit saying he “stood ready to pay any deficiency properly determined to be due from me” (16a) but that his tax returns were correct as filed, does not justify the issuance of an order vacating the jeopardy assessment, which is what appellants seek. This is particularly true where the district court made a finding that “I don’t think there is any irreparable injury here” (20a).
I would affirm the district court order of April 18, 1972, dismissing the action insofar as it was 'brought by the husband and wife plaintiffs.

. See, e. g., Enoch v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962) ; Flora v. United States, 362 U.S. 145, 175-177, 80 S.Ct. 630, 4 L.Ed. 2d 623 (I960) ; Transport Manufacturing and Equipment Co. v. Trainor, 382 F.2d 793, 799 (8th Cir. 1967) ; Johnson v. Wall, 329 F.2d 149 (4th Cir. 1964). In the Transport Manufacturing case, the court said :
“ . . . we believe that the same principles that govern the validity of the District Director’s imposition of a jeopardy assessment should also apply to and control his refusal to abate that assessment. Under Section 273(a) of the Internal Revenue Code of 1939, which gives to the District Director broad discretionary power to make jeopardy assessments, the single limitation on the exercise of the Director’s authority is that he must believe that the ultimate collection of the tax will be jeopardized by delay. For this reason the courts have refused to scrutinize the grounds underlying the Director’s determination of jeopardy and have accordingly declined to substitute their judgment for that of the Director. Field v. United States, 263 F.2d 758, 763 (5th Cir. 1959), cert. denied, 360 U.S. 918, 79 S.Ct. 1436, 3 L.Ed.2d 1534 (1959) ; Lloyd v. Patterson, supra, 242 F.2d [742] at 744 [5th Cir. 1957] ; Publisher’s New Press, Inc. v. Moysey, 141 F.Supp. 340, 343 (S.D. N.Y.1956) ; Communist Party, U. S. A. v. Moysey, 141 F.Supp. 332, 336 (S.D.N.Y. 1956). The corresponding authority to abate jeopardy assessments, conferred upon the District Director under Section 273 (k) of the 1939 Code, is of a similar discretionary character, and does not impose a mandatory duty on the Director to abate a particular jeopardy assessment. Cf. Poretto v. Usry, 295 F.2d 499 (5th Cir. 1961), cert. denied, 369 U.S. 810, 82 S.Ct. 687, 7 L.Ed. 2d 612 (1962). Absent some patent showing of illegality and other extraordinary or exceptional circumstances, we will not intercede to compel the abatement of an otherwise proper jeopardy assessment.”

. See footnote 19 of majority opinion.

. See footnote 6 of majority opinion.

. This paragraph reads as follows :
“19. The jeopardy assessment made by the defendant is illegal, arbitrary and unreasonable. The collection of any tax which may be determined against the plaintiffs has never been and is not now jeopardized by any delay in assessment. There is no evidence whatsoever to legally justify the aforesaid wrongful assessment made by the defendant, and there is no legal basis for the continued imposition of the said jeopardy assessment against the plaintiffs herein. The only reason for defendant’s action has been an attempt to harass and coerce the plaintiffs for improper purposes.”