Pub.L. 100-647 as providing that the 1988 amendment "shall apply to levies issued after the date of the enactment of this Act [Nov. 10, 1988]."
Another amendment, in 1990, extended the six-year limitations period to ten years.
The 1990 amendment applies "to taxes assessed after Nov. 5, 1990, unless the period for collection of taxes has not expired." Pub. L. No. 101-508, § 11317(c).
The government argues that the 1991 levy against plaintiff's property is enforceable because the 1988 amendment operated to make the time for imposing a levy coextensive with that for executing on a judgment if court proceedings had been filed and a judgment obtained. Since a judgment was obtained against plaintiff in 1983, it argues, and judgments obtained in favor of the IRS are enforceable for an indefinite period (See: Chevron, U.S.A., Inc. v. United States, 705 F.2d 1487 (9th Cir. 1983), the period of time for levying on plaintiff's property pursuant to the 1979 assessment was extended to an indefinite period (coextensive with the time for executing on the judgment obtained in 1983) by the 1988 amendment to section 6502.
That argument fails for two reasons. The government's right to levy on the 1979 assessment expired June 14, 1985, six years after the date of assessment. An amendment to section 6502 which became effective more than three years later did not breathe new life into a right that no longer existed.
While we agree with the government's assertion that the changes wrought by the 1988 amendment to section 6502(a) can be and have been interpreted to extend the life of liens enforceable as of its effective date, the 1988 and 1990 amendments have not been interpreted to extend the life of a right no longer in existence as of the amendment's effective date. See, e.g., In re Rassi, 140 Bankr. 490 (Bankr. C.D.Ill. 1992) (1990 amendment applied if period specified in prior version of the statute had not expired as of effective date of amendment) and In re Dakota Industries, Inc., 131 Bankr. 437 (Bankr. S.D. 1991).
The government's right to levy on the 1979 assessment expired in 1985 and cannot be revived under any reasonable or plausible application of existing law, even when all facts and law are interpreted in the light most favorable to the government. The levy imposed against plaintiff's real property in November, 1991, was, therefore, null and void from its inception. Plaintiff is, therefore, certain to succeed on the merits in proving non-viability of the 1991 levy. South Carolina v. Regan, 465 U.S. 367, 374-75, 79 L. Ed. 2d 372, 104 S. Ct. 1107 (1984). He has, therefore, satisfied the first prong of Williams Packing, supra.
Under the stringent Williams Packing test, plaintiff is still required to prove entitlement to equitable relief before this court can exercise jurisdiction. Plaintiff seeks a preliminary injunction halting the scheduled sale of his real estate.
To obtain a preliminary injunction, a civil litigant must demonstrate: 1) a likelihood of success on the merits; 2) that he will suffer irreparable harm if an injunction does not issue; (3) granting the injunction would impose no greater harm on the non-moving party than would be imposed on the moving party if the injunction were denied; and (4) the public interest would be best served by granting the injunction. Opticians Association of America v. Independent Opticians of America, 920 F.2d 187, 192-96 (3d Cir. 1990).
Irreparable harm and likelihood of success on the merits are essential elements. Absent a showing of either one, the petitioner is not entitled to injunctive relief. To prove irreparable harm, the petitioner must show that the harm threatened by the defendant's conduct, in this case by the seizure and sale of petitioner's property, cannot be compensated by money damages. If the threatened harm is compensable with monetary damages, the petitioner has not demonstrated irreparable harm and is not entitled to a preliminary injunction. Frank's GMC Truck Center, Inc. v. G.M.C., 847 F.2d 100, 102-03 (3d Cir. 1988) and Morton v. Beyer, 822 F.2d 364, 371-72 (3d Cir. 1987).
Our discussion of the first prong of Williams Packing, supra establishes that plaintiff has established a likelihood of success on the merits. Based on the testimony presented during the December 28, 1992 hearing stating, inter alia, that the sale of plaintiff's home will leave him, his wife and child without a place to live, and that he is without funds or income to obtain another place to live, we are likewise satisfied that plaintiff has established that granting the injunction would impose no greater harm than denying it and that the public interest would be served by granting partial injunctive relief to halt the sale of plaintiff's home.
The government argues that the plaintiff cannot demonstrate irreparable harm because he has a remedy for the seizure of his property--an action for a refund against the IRS. Church of Scientology, supra, 920 F.2d at 1489.
Plaintiff contends that a refund action is no remedy at all, because the loss of his home and his land, his only assets, will financially ruin him and his family. He is currently unemployed, has no income, other than loans from his family, and he and his family will have nowhere to live and no money to rent a place in which to live if their home is seized and sold by the IRS.
Although economic harm alone is usually insufficient to establish irreparable harm, (See: Church of Scientology, supra, 920 F.2d at 1489 and Bob Jones University, supra, 416 U.S. at 745) it can in some cases be sufficient if the threatened harm is a type from which the plaintiff will be unable to recover and for which monetary damages can never adequately compensate, e.g. the impoverishment or certain hopelessness of the taxpayer's family. Such extreme financial consequences provide a basis for the exercise of a court's equity powers. Williams Packing, 370 U.S. at 6. See also Pizzarello v. United States, 408 F.2d 579, 587 (2d Cir.), cert. denied 396 U.S. 986, 24 L. Ed. 2d 450, 90 S. Ct. 481 (1969).
Here, plaintiff testified at the December 28, 1992 hearing that he is currently unemployed and has been so for some time; has been unable to work since sustaining an injury in a truck accident in the 1980's; the real estate subject to the levy is his only asset; that his home is located on one of the three parcels; and that if the home is sold, he and his family will become homeless because they have no money or income to purchase or rent another home. Monetary damages cannot compensate plaintiff for the homelessness of himself and his family. See, e.g. Jensen v. Internal Revenue Service, 835 F.2d 196 (9th Cir. 1987) (Based on evidence of taxpayer's monthly income, the portion of his income being seized by the IRS, and the amount left to support the taxpayer and his family, the court found that the taxpayer would suffer more than monetary harm if he were deprived of the ability to give his family the necessities of life and found such a deprivation sufficient to support a claim for injunctive relief). Cf. Elias v. Connett, 908 F.2d 521 (9th Cir. 1990) (Taxpayer did not prove inadequacy of refund action as an alternative remedy and failed to substantiate allegations that he was destitute-- record contained no evidence of his income, the portion of his income subject to the IRS's levy or the amount which he would be left with after the levy--offered no evidence to support his allegations of irreparable harm--failed to show that he will suffer more than mere monetary harm or financial hardship if denied relief.) and Brewer v. United States, 764 F. Supp. 309 (S.D.N.Y. 1991) (Generalized contentions by the plaintiff that he and his family will be thrown out into the streets and that his medical condition is being aggravated by the stress of his prolonged struggle with the IRS are insufficient to support allegations of irreparable harm.)
Plaintiff has demonstrated irreparable harm, however, only with respect to the threatened sale of the parcel containing his house (described as parcel # 3 on the notice of seizure filed by the IRS on November 12, 1991). There has been no such showing with respect to the other two, unimproved parcels (described as parcels # 1 and # 2 on the notice of seizure filed by the IRS on November 12, 1991). We, therefore, have no jurisdiction, under the Anti-Injunction Act, to halt the proposed sale of the unimproved parcels and will grant defendant's motion to dismiss with respect to the relief sought on the levy filed against those parcels.
James F. McClure, Jr., United States District Judge
February 24, 1993
For the reasons discussed in the accompanying memorandum, IT IS ORDERED THAT:
1. The government's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction is granted in part. Plaintiff's claims for relief from the levy imposed November 12, 1991 by the Internal Revenue Service (IRS) on parcels described as parcels # 1 and # 2 on the notice of seizure filed by the IRS that date are dismissed for lack of subject matter jurisdiction under the Anti-Injunction Act, 26 U.S.C.A. § 7421(a).
2. The government's motion to dismiss is denied with respect to the claim for relief from the levy imposed November 12, 1991 by the IRS on the parcel described as parcel # 3 (the improved parcel) on the notice of seizure filed by the IRS that date.
3. The IRS is enjoined from proceeding with the proposed sale of parcel # 3 on February 25, 1992 and from taking any further action whatsoever to enforce the levy imposed November 12, 1992 on parcel # 3 until further order of this court.
4. This injunction has no effect on the government's ability to proceed with the scheduled sale of the two unimproved parcels (parcels # 1 and 2).
5. The court will schedule a telephone conference call with counsel to discuss scheduling of disposition of remaining claims--i.e. 1) request for permanent injunction barring sale of parcel # 3 and 2) request for writ of mandamus requiring IRS Commissioner to release lien on that parcel.
6. The Clerk of Court is directed to fax a copy of this order to counsel for all parties before 1:00 p.m. today.
James F. McClure, Jr., United States District Judge