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BRUNWASSER v. JACOB

June 29, 1978

A. N. BRUNWASSER, Plaintiff,
v.
HERBERT JACOB, Acting Chief, Office Collection Branch, Internal Revenue Service, JOHN W. MAMULA and NED SPELLS, Revenue Collection Officers, MARLENE A. GAYSEK, Internal Revenue Service Public Relations Officer and CORNELIUS J. COLEMAN, District Director of Internal Revenue, Defendants. A. N. BRUNWASSER in his own right and as a Representative of other persons similarly situated as permitted by Federal Rule of Civil Procedure 23, Plaintiff, v. HERBERT JACOB, Acting Chief, Office Collection Branch, Internal Revenue Service, JOHN W. MAMULA, Revenue Collection Officer, JOHN PIDO, Branch Manager, Collection Division, Internal Revenue Service and CORNELIUS J. COLEMAN, District Director of Internal Revenue, Defendants


Cohill, J.


The opinion of the court was delivered by: COHILL

Seeking injunctive relief and damages, plaintiff, A. N. Brunwasser, has brought two related actions against the District Director of the Internal Revenue Service (the "IRS") and certain employees of the IRS in connection with the IRS's assessment and levies to collect certain taxes, additions to taxes, additional amounts and penalties.

 I.

 The 1974 Suit

 In C.A. 74-849 (the "1974 suit"), Brunwasser requests an order enjoining a levy executed on August 30, 1974 against all accounts and other property controlled by the plaintiff at Mellon Bank, N.A., Pittsburgh, Pennsylvania. Brunwasser requests that a three-judge court decide the constitutionality of the summary administrative procedure for the collection of taxes under 26 U.S.C. ("Code") § 6331, and the addition to tax authorized by Code § 6653(a) for failure to pay due to negligent or intentional disregard of rules and regulations. He contends further that the IRS failed to follow the mandatory provisions for notice of tax deficiency, Code § 6212(a), and for demand and notice of tax liability before levy, Code § 6331(a). In addition, he argues that the District Director abused his discretion in failing to take a releasing bond pursuant to Code § 6325(a)(2). Also, Brunwasser seeks damages under Code § 7214. Finally, Brunwasser asks the IRS to provide him with relevant information pursuant to the Freedom of Information Act, 5 U.S.C. § 552.

 The IRS opposed the requested three-judge court and moved to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, the IRS by affidavit providing an accounting of Brunwasser's tax accounts involved in the litigation. Pursuant to court order, Brunwasser replied that the accounting was incorrect and insufficient to explain his accounts.

 The 1976 Suit

 C.A. 76-203 (the "1976 suit") contains six causes of action regarding two levies served on Mellon Bank, N.A., on January 26, 1976 (Complaint, Exhibits 2 and 5) to collect unpaid penalties, interest and costs arising from Brunwasser's 1974 income tax liability and 1974 third quarter employment tax liability. The first cause of action seeks injunctive and mandamus relief to prevent the IRS from taking further action on the two levies. The second cause of action requests an injunction terminating an audit of Brunwasser's 1972 and 1973 taxable years. The third cause of action challenges the constitutionality of the negligence penalty of Code § 6653(a) and requests that a three-judge court be convened to hear a due process attack on the distraint provisions of Code § 6331(a). The fourth cause of action seeks an order in the nature of mandamus directing the District Director of the IRS to commence disciplinary proceedings against the other three defendants. Citing 42 U.S.C. § 1985(3), the fifth cause of action, framed as a class action for injunctive relief and damages, alleges the existence of a conspiracy to discriminate against "small taxpayers and small businessmen and against taxpayers who resist summary and arbitrary procedures." (Complaint at 15). In addition, Brunwasser requests various documents under the Freedom of Information Act, 5 U.S.C. § 552. The sixth cause of action, also framed as a class action, seeks damages for allegedly improper conduct of the defendants.

 The IRS moved to dismiss the 1976 suit for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, and it opposed the convening of a three-judge court. The IRS also filed an affidavit disclosing Brunwasser's alleged unpaid tax liability.

 II.

 Brunwasser's requests to enjoin the IRS from utilizing the levies in the 1974 suit and the 1976 suit are governed by the so-called Anti-Injunction Act, Code § 7421(a), which, at the same time these suits were filed, provided in relevant part:

 
"Except as provided in sections . . . 6213(a) . . ., 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."

 The Anti-Injunction Act protects "the Government's need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement judicial interference" and requires that the right to the disputed sums be determined in a suit for refund in the District Courts or Court of Claims, or in a pre-assessment suit in the Tax Court. Bob Jones University v. Simon, 416 U.S. 725, 736-37, 40 L. Ed. 2d 496, 94 S. Ct. 2038 (1974).

 At the outset, we note that in neither suit does Brunwasser come within the Code § 6213(a) exception to the Anti-Injunction Act, which is the only statutory exception arguably applicable. In the 1976 suit, he complains (1) that the IRS deprived him of Code § 6212(a) notice of deficiency and the 90 day period in which to petition the Tax Court as authorized by Code § 6213(a); (2) that the levy was without demand and notice required by Code § 6331(a); and (3) that "a penalty" was assessed without compliance with Code § 6659(a)(1). However, with certain exceptions not relevant here, Code § 6659(b) excludes from income tax deficiency procedures the additions to tax for failure to pay the tax that Brunwasser presently contests. Part of the deficiency procedures are found in Code §§ 6212 and 6213. Furthermore, Brunwasser has not controverted in the Affidavit that Walter M. Alt, Acting District Director, filed on June 2, 1976, that notice and demand was given on January 31, 1975 for the employment tax-related liability and on September 12, 1975 for the income tax-related liability. Thus, Brunwasser's first and third objections have no merit. As for the second, he has admitted receiving notice and demand regarding his income tax liability and related interest and additions on September 15, 1975 (Complaint, P.14) and receiving notice and demand for penalties and interest due concerning his ...


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