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.



April 22, 1982

John Berkery
United States of America

The opinion of the court was delivered by: LUONGO

LUONGO, Judge.

 On or before December 14, 1981, James T. Rideoutte, District Director of Internal Revenue for Philadelphia, made a termination assessment of federal income tax liability against plaintiff, John Berkery, pursuant to 26 U.S.C. § 6851(a)(1). *fn1" Plaintiff now brings this civil action pursuant to 26 U.S.C. § 7429 seeking judicial review and abatement of the termination assessment.

 As gleaned from the pleadings, affidavits and testimony submitted by the parties, *fn2" the relevant facts are as follows. On December 11, 1981 Berkery was stopped by United States Customs officials in Baltimore, Maryland. Berkery had two passports in his possession. The first, a United States passport issued to John Berkery, revealed that Berkery had been admitted to England on December 7, 1981. (Government Exhibit 1). The second was an Ireland passport issued to John Carlyle, which is an alias used by Berkery (see Government Exhibit 10). *fn3" The Ireland passport revealed that Berkery entered Bermuda on December 10, 1981. In addition to the passports, Berkery also had in his possession records of five bank accounts held in foreign countries. Three of the accounts were with Allied Irish Bank Limited in Dublin, Ireland, and the other two were with Barclays Bank Limited, a British bank. Two of the accounts held with Allied Irish Bank were issued to K. Jane Horan, Avonmore Mews, Seafield Road, Killiney County, Dublin. (Government Exhibits 4 and 6). The third Allied Irish Bank account was issued to John Carlyle, Esquire of the same address (Government Exhibit 5). Both of the accounts with Barclays were issued to Mrs. K. J. Horan, 40 Clarges Mews, London (Government Exhibits 7 and 8). K. Jane Horan is the name previously used by Berkery's wife, Kathleen Berkery. (Affidavit of Harry J. Schmidt, para. 10). Although it was not known to IRS at the time it made the termination assessment, on two occasions a person purporting to be John Carlyle directed the New York Branch of Allied Irish Banks Limited to transmit funds "by way of mail payment (bank draft) from New York to an account at a branch bank of the Bank in the Republic of Ireland." (Government's Exhibit 19).

 Customs officials also found that Berkery was carrying electric bills for the residence at Avonmore Mews in Dublin, and a number of other documents including certificates recording events in his family's history. Finally, Berkery was carrying a document acknowledging receipt from John Carlyle of Avonmore Mews in Dublin, of nine hundred and seventy-eight pounds and seventy-eight pence ($ 1,547.60) for the formation of three Panama corporations.

 The Customs Service provided IRS with copies of the documents Berkery was carrying. Revenue Agent Harry J. Schmidt was assigned the task of conducting an examination to determine whether the circumstances surrounding Berkery's tax liability warranted a termination assessment. (Schmidt Affidavit, para. 2). Schmidt is the coordinator of the Special Enforcement Program of IRS in Philadelphia and, over the past one and one-half years, he has successfully completed over thirty-five jeopardy and termination assessments.

 On analysis of the bank records Schmidt concluded that deposits totalling 50,160.31 pounds or $78,988.04 *fn4" were made into the accounts in 1981 and treated this sum as income to Berkery. In addition, Schmidt added to Berkery's income $ 3,810.00 which represented the cost of living expenditures as determined by the Bureau of Labor Statistics for a family of four. Schmidt concluded that Berkery's total income for 1981 was $ 82,808.00, and he calculated Berkery's tax liability for 1981 as $ 43,392.79.

 Schmidt also reviewed Berkery's prior tax records and found that Berkery had not filed an estimated tax return for 1981. (Schmidt Affidavit, para. 24). In addition, he learned that, as of December 14, 1981, Berkery had outstanding federal income tax liabilities totalling $ 65,221.87 for tax years 1972, 1975 and 1980. (Id. P 20). On review of Berkery's 1979 and 1980 tax returns, Schmidt found that in neither of these returns did Berkery list his profession. Further, in 1979 Berkery listed adjusted gross income of $ 21,176 and in 1980 he listed an adjusted gross income of $ 44,800. As Schmidt noted in his affidavit, however, these figures combined were less than the amount Schmidt calculated as Berkery's income for 1981. (Id. P 23).

 Schmidt also found that, other than the foreign bank accounts, no other real or personal assets could be traced to John Berkery. (Id. P 25). On the basis of the facts stated above, Schmidt concluded that "the circumstances were such that they tended to prejudice or render wholly or partially ineffectual normal proceedings to collect the outstanding income tax due and thereby warranted a termination assessment." (Id. P 25).

 On December 14, 1981, District Director James T. Rideoutte informed Berkery by letter that


Under section of 6851 of the Internal Revenue Code, you are notified that I have found you appear, by the nature of your activities, to be designing quickly to place your property beyond the reach of the Government, either by transferring or dissipating it, thereby tending to prejudice or render ineffectual collection of income tax for the current taxable year. Accordingly, the income tax, as set forth below, is due and payable immediately.

  Taxable Year Tax Jan. 1, 1981 to Dec. 11, 1981 $43,392.79


© 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.