The opinion of the court was delivered by: JAMES F. MCCLURE, JR.
Plaintiff Robert E. Hillyer filed this action to enjoin the Internal Revenue Service (IRS) from levying on plaintiff's real estate for federal income taxes assessed against him from 1970 through 1976. Federal tax liability was assessed against plaintiff on June 14, 1979. The IRS obtained a judgment against plaintiff for the unpaid taxes on September 16, 1983 in an action filed to United States v. Hillyer, Civil No. 83-1339 (Muir) (M.D.Pa.). Judgment was entered against plaintiff on July 3, 1984 in the amount of $ 215,649.81. On August 6, 1984, the court entered an order foreclosing the tax liens on Hillyer's real property and, on October 5, 1984, ordered the sale of the property.
No further action was taken by the IRS until November 7, 1991. On that date, the IRS issued a levy on all property owned by plaintiff pursuant to 26 U.S.C.A. § 6331.
Hillyer was notified on October 16, 1992 that the real property was to be seized. The IRS issued a notice of seizure on November 12, 1992.
The real estate subject to seizure consists of three parcels located in Clinton County, Pennsylvania. Plaintiff's home is located on one of the parcels. The other two parcels (parcels 1 and 2 on the property description attached to plaintiff's complaint as exhibit "B") are unimproved. Plaintiff has no other assets of value, and currently, no source of income other than loans from his family.
In a letter dated October 26, 1992, the IRS established a minimum bid price of $ 110,000.00, based on a forced sale value of $ 66,000.00, reduced by prior claims.
Plaintiff's property has been advertised for sale. Sale was initially scheduled for January 27, 1993, then rescheduled for February 25, 1993.
Plaintiff filed this action on December 4, 1992 seeking a preliminary and a permanent injunction barring the proposed sale of his property (Count I) and a writ of mandamus directing the Commissioner of the Internal Revenue Service to issue a certificate of discharge pursuant to 26 U.S.C. § 6325 (Count II). Plaintiff argues that any action on the 1979 assessment is barred by the six year statute of limitations then in effect, 26 U.S.C. § 6502(a).
The government filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction on the ground that this action is barred by the Anti-Injunction Act, 26 U.S.C.A. § 7421(a).
The court held an evidentiary hearing on December 28, 1992. At the conclusion of the hearing, the parties were given additional time to brief the issues. All briefs have now been submitted, and the claims are ripe for disposition.
For the reasons discussed below, defendant's motion to dismiss for lack of subject matter jurisdiction is granted in part. Plaintiff's request for relief with respect to the two unimproved parcels (described as parcels # 1 and # 2 on the notice of seizure filed by the IRS on November 12, 1991) is dismissed for lack of subject matter jurisdiction. Plaintiff's request for a preliminary injunction to halt the proposed sale of the improved parcel (described as parcel #3 on the notice of seizure filed by the IRS on November 12, 1991) is granted. The IRS will be enjoined temporarily from proceeding with any further action on the levy filed November 7, 1991 with respect to parcel # 3.
The court will consult with counsel regarding disposition of plaintiff's request for a permanent injunction to halt the sale of the improved parcel (parcel # 3) and his request for a writ of mandamus directing the Commissioner of the Internal Revenue Service to release the lien on parcel # 3.
The Anti-Injunction Act, 26 U.S.C.A. § 7421(a)
bars the courts from entertaining any action filed for the purpose of "restraining the assessment or collection of any tax" by the IRS. The purpose of the Act is to permit the government "to assess and collect taxes as expeditiously as possible with a minimum of preenforcement judicial interference, 'and to require that the legal right to the disputed sums be determined in suit for a refund.'" Bob Jones University v. Simon, 416 U.S. 725, 736, 40 L. Ed. 2d 496, 94 S. Ct. 2038 (1974), overruled on other grounds, South Carolina v. Regan 465 U.S. 367, 379, 79 L. Ed. 2d 372, 104 S. Ct. 1107 (1984), quoting Enochs v. Williams Packing & Navigation Company, 370 U.S. 1, 7, 8 L. Ed. 2d 292, 82 S. Ct. 1125 (1962). The Act deprives federal courts of jurisdiction to entertain an action to enjoin the IRS from assessing or collecting taxes.
The Supreme Court has carved out a narrow exception to the literal language of the Act. In Williams Packing, supra, the Court held that federal courts have jurisdiction to entertain an action to enjoin the assessment or collection of taxes if the taxpayer can demonstrate: 1) that the government cannot prevail on the merits even if the facts and law are examined in the light most favorable to it and 2) that equitable jurisdiction otherwise exists, i.e. the taxpayer can prove that he will suffer irreparable harm and is, therefore, entitled to equitable relief. Id. at 7. Accord: Flynn v. United States by and Through Eggers, 786 F.2d 586, 591 (3d Cir. 1986). "Unless both conditions are met, a suit for preventive injunctive relief must be dismissed." Alexander v. "Americans United", 416 U.S. 752, 758, 40 L. Ed. 2d 518, 94 S. Ct. 2053 (1974). If the record presents "'material issues of ...