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DETWILER v. UNITED STATES

November 18, 1975

JOHN W. DETWILER
v.
UNITED STATES OF AMERICA and ALFRED L. WHINSTON, DISTRICT DIRECTOR, INTERNAL REVENUE SERVICE and DONALD C. ALEXANDER, COMMISSIONER OF INTERNAL REVENUE



The opinion of the court was delivered by: GORBEY

 GORBEY, J.

 This action is brought by the plaintiff against the United States of America; Alfred L. Whinston, District Director of Internal Revenue Service; and Donald C. Alexander, Commissioner of Internal Revenue.

 It appears that plaintiff previously operated a business as an electrical contractor. The Internal Revenue Service made certain tax assessments against him for employment and Social Security taxes in 1972 and 1973, he having filed returns but making no payment. Notices of federal tax liens were filed in Montgomery County, Pennsylvania, and steps authorized by the Revenue Code were taken with the result that certain of plaintiff's receivables under a contract for electrical work were attached, resulting in the loss of the contract. Thereafter, plaintiff being forced out of business, obtained employment only to have his wages attached.

 As a consequence, plaintiff seeks a mandatory injunction against the United States of America, the Internal Revenue Service, its officers and agents, restraining the continued violation of the plaintiff's constitutional rights; also, a mandatory injunction restraining the defendants from further efforts to collect the tax, and to order a return of money and other property which had been "confiscated". In addition, plaintiff asks for punitive damages for the violations of his rights. The net result of the actions which defendants are alleged to have committed is claimed to have reduced plaintiff to a state of peonage, contrary to the Thirteenth Amendment, and to have violated his rights under the Fifth Amendment.

 Plaintiff's original request for the convocation of a Three-Judge Court has been withdrawn, thus, the attack is not against the constitutionality of the Internal Revenue Code, but against the manner of its administration as to the plaintiff.

 While plaintiff has been most generous in the use of superlatives describing the acts of certain Revenue agents, not parties to this suit, as involving "harassments, oppressions, discriminations, confiscations and unconstitutional deprivations", an examination of the pleadings, memoranda, and particularly the depositions of the plaintiff and his wife, who is not a party to this suit, conclusively shows that the dispute arises out of the ordinary collection activities of the Internal Revenue Service. Accordingly, the statutory limitations of the Internal Revenue Code of 1954, are applicable. LEWIS v. SANDLER, 498 F.2d 395, 399 (4th Cir. 1974).

 A seizure of salary or wages is authorized by statute, 26 U.S.C. § 6331, and it is well settled that the enforced collection of federal taxes by seizure is constitutional, since the statutes provide an adequate remedy by which liability may be contested. PHILLIPS v. COMMISSIONER, 283 U.S. 589, 75 L. Ed. 1289, 51 S. Ct. 608 (1931); BULL v. UNITED STATES, 295 U.S. 247, 259, 55 S. Ct. 695, 79 L. Ed. 1421 (1935); IANNELLI v. LONG, 487 F.2d 317 (3d Cir. 1973); COMMONWEALTH DEVELOPMENT ASS'N. OF PA. v. UNITED STATES, 365 F. Supp. 792 (M.D. Pa. 1973). In this case plaintiff admits his liability for the taxes sought to be collected pursuant to statute (Stipulated Facts, No. 4).

 The request for injunctive relief is barred by 26 U.S.C. § 7421(a), plaintiff not having alleged any facts to bring him within the exceptions to the statute that: "No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed."

 With respect to a judicial exception to the bar of Section 7421(a) whereby the district court may enjoin collection of taxes, the exception has been applied in cases where the complaint shows that in addition to the illegality of an exaction in the guise of a tax, there exists special and extraordinary circumstances sufficient to bring the case within some acknowledged head of equity jurisprudence. MILLER v. STANDARD NUT MARGARINE CO. OF FLORIDA, 284 U.S. 498, 76 L. Ed. 422, 52 S. Ct. 260 (1932).

 In the case sub judice, there is no contention that the Social Security taxes involved are illegal. Plaintiff's injuries alleged to have been sustained as a result of the attempts to collect Social Security taxes include, inter alia, embarrassment resulting from his wife being told the extent of his financial obligations over and beyond his tax liability. This is akin to the allegation, in a tax case, of irreparable injury consisting of damage to one's reputation, which has been held insufficient to justify equitable relief. HUDSON v. CRENSHAW, 224 F.2d 324, 325 (4th Cir. 1955); LIPSIG v. UNITED STATES, 187 F. Supp. 826 (E.D. N.Y. 1960).

 His claim of undue hardship, similar to that of thousands of individuals who accumulate debts beyond their ability to pay conveniently without adverse consequences, is not a sufficient reason to grant relief. In MORTON v. WHITE, 174 F. Supp. 446 (E.D. Ill. 1959), plaintiff contended that:

 
"If the defendant is permitted to enforce the collection prior to suit, an undue hardship would result in that the plaintiff would lose his home, his business and all worldly possessions if the deficiency assessment is collected prior to determination of the questions the court is asked to decide, and that ...

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