Court Opinion

ID: 9488732
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:54:28.889501+00
Date Added: 2024-06-11T17:53:04.632178
License: Public Domain

JACOBS, Circuit Judge,
dissenting:
I respectfully dissent again.
In Kaggen v. IRS, 57 F.3d 163 (2d Cir.1995) (“Kaggen II”), the majority excused the IRS’s failure to send a statutorily-required Notice of Seizure by holding that the plaintiffs’ bank statements constituted actual notice of the seizure. In the absence of record evidence as to whether the plaintiffs received bank statements and, if so, what information such statements contained, the majority assumed its conclusion:
In the normal course of events all of us know that depositors are sent monthly bank statements by banks. Thus, it is only reasonable for this Court to proceed in this appeal upon the understanding that ... taxpayers did in fact and effect learn from the banks of the levies and of the honoring of each of the same; thus, taxpayers were informed by the banks that their funds at the said banks had been seized.
Id. at 165. In dissent, I argued that this statement constituted an impermissible taking of judicial notice. Id. at 166-67. The Panel granted rehearing on this issue, and afforded the parties an opportunity to be heard, as required by Rule 201 of the Federal Rules of Evidence. After reviewing the parties’ submissions on rehearing, the majority concludes that judicial notice may be taken of the relevant “facts” under Rule 201, and I conclude that it may not.
The majority takes judicial notice of several things. Kaggen I stated that “all of us know that depositors are sent monthly bank statements by banks.” Id. at 165. However, that modest observation, even if appropriate for judicial notice, does not fully reflect the several assumptions that are necessary if a bank statement is to be deemed the functional equivalent of an IRS Notice of Seizure. Thus, the majority necessarily relies on the judicially-noticed bank statement to satisfy the elements of 26 U.S.C. § 6335(a): namely, that before the April 12, 1992 cut-off date, the statement conveyed notice of “the sum demanded” and provided “an account of the *1023property seized.”1
In sum, the majority takes judicial notice that bank statements are timely, accurate, timely received and read by depositors, and that they reveal, in accordance with the express statutory purpose, that a particular withdrawal represents a seizure by the IRS. Some of these facts are more intuitively reliable than others, but none meets the judicial notice standard under Rule 201: that facts must be “either (1) generally known ... or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R.Evid. 201(b). The majority relies on the general knowledge category.2
I do not believe it to be generally known that bank statements are reliably accurate or that they are timely sent and timely examined. It is true that the Uniform Commercial Code furnishes an incentive to read bank statements: after thirty days, a customer is barred (under certain circumstances) from seeking recovery against a bank for an improperly cashed check. U.C.C. § 4-406(d)(2). Thus, people who choose to ignore their bank statements accept incremental risks of bank error. That choice, however, has nothing to do with the IRS’s attempts to collect back taxes.
Even if one could take judicial notice that people read their bank statements within 30 days (as prudent depositors should), that assumption does not satisfy the April 12, 1992 cut-off date as to one of the plaintiffs. According to the majority opinion, “[t]he IRS levied upon the National Westminster Bank account in the name of Mr. Sferrazza on January 2, 1992 and the bank honored that levy on or about February 17, 1992.... Even if the banks did not notify taxpayers until a full thirty days after they honored the levies and allowing five days for mailing, taxpayers received their bank statement reflecting satisfaction of the levies before April 12, 1992.” Maj. op. at [1021], Given these assumptions, the bank statement would have reached the depositor on March 23; however, since the UCC affords the depositor up to thirty days to detect serial forgeries, the prudent depositor had no need or obligation to look at the bank statement by April 12.
This delay is important. Persons who have an interest in the property seized have the right to contest the seizure under 26 U.S.C. § 7426(a). In at least some circumstances, the statute of limitations for filing such a cause of action is tied to the date the Notice of Seizure is received. Thus, persons bringing suit under § 7426 must do so within nine months of the date Notice of Seizure is given. See 26 U.S.C. §§ 6532(c).
Even if we assume that bank statements are accurate, timely sent, and timely read, it is implausible (and certainly not generally known) that all bank statements actually indicate that a particular withdrawal is the result of a seizure by the IRS. Banks may or may not give explanatory information concerning all non-check debits. Depending on what bank regulations provide, banks might understandably conclude that no detailed explanation is needed for funds seized by the IRS, on the assumption that the IRS will follow the statute and provide a Notice of Seizure. After all, the Internal Revenue Code places the burden for notifying taxpayers of a seizure on the tax collector, not the banks.
On the motion for rehearing, we have had the opportunity to look at the IRS Notice of Seizure forms. They disclose, inter alia, the Internal Revenue District that took the money, the name of the IRS officer who made the seizure, the name of any accompanying employee, and the statutory authority for the seizure — all very useful information for a taxpayer who may want the money back. (I suppose that people who learn of the IRS seizure via a bank statement could attempt to gather this information by calling an IRS *1024Helpline, but I hold out little hope for them.) I do not believe it generally known that a monthly bank statement includes any of this information.3
The majority takes the plaintiffs to task for two supposed omissions in their papers on rehearing. Maj. op. at [1020]. True, plaintiffs did not say whether their banks sent monthly statements, and do not argue that “banks do not generally” do so. But the judicial notice issue is not affected by whether banks “generally” send statements to their customers, or whether these plaintiffs use a full-service bank. The sending of statements “generally” is insufficient to support judicial notice that they are sent invariably, and does not recommend the monthly bank statement as a surrogate for official government notice of the seizure of property.
The Second Circuit cases relied upon by the majority are readily distinguishable. In United States v. Ricciardi, 357 F.2d 91, 97 (2d Cir.1966), the court took judicial notice of the fact that “a slow-down or strike by the [apartment building] superintendents who run the [fuel-powered] heating systems would affect the amount of fuel used in the buildings in a significant way.” If the superintendents did not work, or worked part-time, the heating systems they ran would have run for less time, if they ran at all. Less fuel would therefore be used. Judicial notice in that case was employed to draw a natural conclusion from facts that were already part of the record. Here, in contrast, the court has no facts regarding statements from the plaintiffs’ banks or any other bank.
In United States v. Mauro, 501 F.2d 45 (2d Cir.1974), the court took judicial notice of the fact that the indictment sufficiently identified the “First National City Bank” as a “national” bank merely by giving its name, because it was illegal for a bank to use the word “national” in its name unless the bank was actually a “national bank” under federal law. Id. at 49. Here, the majority cites no law requiring banks to send out error-free monthly statements that specify which withdrawals are attributable to IRS seizures.
Because I adhere to the view that judicial notice was improperly taken, I would hold that the IRS’s failure to serve the plaintiffs with a timely notice of seizure, as required by 26 U.S.C. §§ 6502(b) and 6335(a), makes the collection of the tax assessment invalid.

. Of course, § 6335(a)’s requirement that the notice of seizure "be given by the Secretary” cannot possibly be satisfied by a bank statement. See 57 F.3d at 166.

. The majority cites the 1933 Supreme Court case, Texas & Pac. Ry. Co. v. Pottorff, 291 U.S. 245, 54 S.Ct. 416, but judicial notice in that case was based on official government reports and scholarly treatises, id. at 254 n. 4, 54 S.Ct. at 417 n. 4, a "resort to sources whose accuracy cannot reasonably be questioned.” Pottorff therefore does not bear upon what is “generally known.”

. The IRS argues that these forms are useful only for saleable assets, as opposed to cash. The form itself refutes the IRS's position. Form 2433, revised as of March 1988, has a series of boxes to reflect the "Disposition of Property & Date”. The last check-box signifies "Disposition unnecessary (cash applied directly to account)”.