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FREISTAK v. EGGER

October 13, 1982

Daniel C. Freistak, Plaintiff
v.
Roscoe L. Egger, Jr., Commissioner, Internal Revenue Service, Defendant


Caldwell, District Judge.


The opinion of the court was delivered by: CALDWELL

CALDWELL, District Judge:

 Before us for disposition is defendant's motion to dismiss for lack of federal subject matter jurisdiction. For the reasons discussed hereinafter, the motion will be granted.

 I. Background.

 The situation from which the current matter developed began on March 3, 1982, when the Internal Revenue Service (IRS) notified Daniel C. Freistak of a balance due immediately on his federal tax return in the amount of $105,314.40. On the same date, the IRS sent Freistak a letter, accompanied by computations of the tax due. The letter also notified Freistak that his narcotics activities *fn1" were the basis for the government's conclusion that he would attempt to put his assets beyond the reach of collection unless the IRS moved quickly. Accordingly, plaintiff's 1972 Datsun automobile was seized as part of the termination assessment pursuant to section 6851 of the Internal Revenue Code of 1954, 26 U.S.C. § 6851.

 The IRS letter also advised Freistak of his rights to administrative and judicial review under section 7429 of the Internal Revenue Code, 26 U.S.C. § 7429. The paragraph of the letter relevant to the current proceeding is as follows:

 
You may request a judicial review of the assessment by bringing a civil suit against the United States in the U.S. District Court in the judicial district in which you reside or in which your principal office is located. However, in order to have this action reviewed by the District Court, you must first request administrative review within thirty days after the earlier of (1) the day the Service notifies you of its decision on your protest, or (2) the 16th day after your protest. The Court will make an early determination of the same points raised in your protest to determine whether the making of the assessment is reasonable under the circumstances or to determine whether the amount assessed or demanded as a result of the action is appropriate under the circumstances. The Court's determination is final and not reviewable by any other court.

 On March 18, 1982, Freistak, through counsel, filed a letter of protest against the jeopardy assessment. The letter acknowledged the criminal charges against Freistak and indicated that he had posted bail and, thus, was not incarcerated.

 Pursuant to 26 U.S.C. § 7429(b) (1), the filing of the protest triggered the period for requesting review by a United States District Court. The cut-offs delineated in the statute require that judicial review of the assessment must be sought within thirty days of the earlier of two periods: sixteen days after one protests the assessment or the day the Secretary gives his decision on the protest. Thus, the maximum time within which to seek judicial review is forty-six days, and a lesser period may be mandated.

 As applied to the current matter, sixteen days following the protest would be April 3, 1982, and the thirty day period in which to file for judicial review would expire May 3. Under the second time period, the filing deadline would have been August 16 *fn2" since the IRS decision on the protest was dated July 15, 1982. Because the statute requires a request for judicial review be sought before expiration of the earlier of the two time periods, Freistak's request was due by May 3. Freistak is incorrect in his allegation that the first administrative conference held on April 7, 1982, occurred "four days after the first period of permissible recourse to the District Court could be said to have run" [Brief for Plaintiff, p. 8]. The period for seeking judicial review did not run until May 3 as our prior discussion has indicated.

 On August 16, however, through new counsel, Freistak filed a petition to remove the assessment. The petition cited 26 U.S.C. § 7429(b) as authority for jurisdiction and venue in the court of the Middle District of Pennsylvania. The government responded with a motion to dismiss for lack of subject matter jurisdiction. Following a hearing on September 3, 1982, the court granted an extension pursuant to subsection (c) *fn3" of the statute in order to permit the taxpayer to research and address the jurisdictional issue. We have studied carefully the positions of both parties, as reflected in the briefs, and conclude that the untimeliness of Freistak's petition divests us of jurisdiction in this matter.

 II. The Section 7429 Jurisdictional Issue.

 Subsection (f) of 26 U.S.C. § 7429 provides that "any determination made by a district court under this section shall be final and conclusive and shall not be reviewed by any other court." Using this language, Freistak has attempted to persuade us that our acceptance of jurisdiction would be "absolutely nonreviewable," [Brief for Plaintiff, p. 11] and he has cited Nichols v. United States, 633 F.2d 829 (9th Cir. 1980), as supporting his position. Reliance on Nichols, however, is misplaced as the court therein was confronted with whether certain constitutional and evidentiary determinations were reviewable. The circuit court decided that subsection (f) should not be read so narrowly as to permit review of all matters other than reasonableness and appropriateness of the termination assessment. Instead it held that subject matter jurisdiction in the circuit court was lacking and that the determinations at issue were nonreviewable. Nothing in Nichols can be interpreted to infer that a district court's conclusion that it has subject matter jurisdiction cannot be reviewed.

 Federal Rule of Civil Procedure 12(h) (3) states: "Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." (emphasis supplied). Additionally, the case of Joyce v. United States, 474 F.2d 215 (3d Cir. 1973) expressly held that it is not within the discretion of a federal district court to ignore an absence of subject matter jurisdiction. Numerous cases have adhered to the ...


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