Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.



November 3, 1971

Robert E. Iannelli and Dolores Iannelli, his wife, Plaintiffs,
H. Alan Long, District Director of Internal Revenue, Pittsburgh, Pennsylvania and Harold T. Swartz, Acting Commissioner of Internal Revenue of the United States of America, Defendants

Weis, District Judge.

The opinion of the court was delivered by: WEIS

WEIS, District Judge.

American preoccupation with due process and taxation goes back to the gestation of the Republic. It is not a purely historic interest but a continuing one because the harsh realities of the necessity of collecting revenue and the natural reluctance of the citizen to pay over to the government that which he considers his own has resulted in some rather arbitrary statutory methods of extracting that which is due Caesar.

 There is no doubt that Congress has the right to tax an occupation which in and of itself is illegal. But when collection methods and timing become such as to relegate the taxpayer to a choice between a forfeiture and the exercise of his constitutional privilege against self-incrimination, then due process demands cannot be ignored.

 Robert Iannelli was indicted in this Court on March 25, 1971 for conspiracy and violation of the gambling laws of the United States. *fn1" Disposition of preliminary motions in his case is under way and trial must necessarily be delayed because of involved questions raised by the many defendants indicted along with him.

 On May 7, 1971 Robert Iannelli received an assessment for wagering tax due for the period September, 1969 through June 30, 1971 in the amount of $712,064.41. *fn2" On May 10, 1971 the name of his wife, Dolores, was added to the assessment.

 When the assessments were not paid within ten days as demanded, liens were filed against all property of the plaintiffs, appropriate entries being made in the Prothonotary's Office of the Court of Common Pleas of Allegheny County, Pennsylvania on June 16, 1971. A week later there were seizures of the Iannelli's checking and savings accounts, and the safety deposit box in their names was sealed.

 On July 1, 1971 the realty management firm of Ligo & Miller Company was levied upon and ordered to turn over to the Internal Revenue Service all rents from apartment buildings owned by the plaintiffs. The realty firm had previously been employed by the plaintiffs to collect the rents and use the proceeds to pay current amounts due on the mortgages, real estate taxes, and maintenance charges on the property, the remainder to be disbursed to the Iannellis.

 An action for an injunction against the government was brought by the plaintiffs in this Court before the Honorable Wallace S. Gourley on July 8, 1971. It was dismissed on August 6, 1971, 329 F. Supp. 1241, by consent of the parties when the government conceded the addition of the wife's name to the assessment had not complied with appropriate regulations and that therefore the liens were not valid.

 On that same day, however, the government issued a "jeopardy assessment", renewed all the liens and relevied on the plaintiffs' various bank accounts. The net result is that the liens and levies have been continuous from the time when they were originally instituted in June and July and that the plaintiffs have had no opportunity to secure possession of their property since that time.

 On September 16, 1971, the Internal Revenue Service levied on the life insurance policy of the husband plaintiff, Robert Iannelli, and demanded payment from the insurance company of the cash loan value of the contract.

 The plaintiffs' home was also liened by the IRS, their automobiles have been made subject to seizure, and the government indicates that an inventory of the furniture in the Iannelli home will also be made preliminary to a tax sale.

 It now appears that foreclosure proceedings on the apartment buildings are imminent and although the first mortgage balance is approximately $500,000, there is a substantial equity in the properties above that figure.

 The plaintiffs say they do not owe $722,205.18 and cannot pay it. The assessment is based upon a projection of wagers allegedly accepted by Robert and Dolores Iannelli and rests upon records covering a period of seven days seized by the Pennsylvania State Police on September 20, 1969. In addition, through the use of a wiretap authorized in this Court and which is involved in the criminal proceedings, data was secured for a period of gambling operations between October 21, 1970 and November 2, 1970. A combination of the data for these two periods of time led the IRS to assume that the plaintiffs accepted the following wagers: Baseball $ 240,911.00 Football 5,250,696.00 Numbers 1,200,568.00 Horse Racing 1,870.00 $6,694,045.00


© 1992-2004 VersusLaw Inc.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.