Tempelman v. USA ( 1993 )


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  • USCA1 Opinion









    June 3, 1993
    [NOT FOR PUBLICATION]



    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    ____________________


    No. 92-2280

    ANDREW TEMPELMAN AND PRISCILLA TEMPELMAN,

    Plaintiffs, Appellants,

    v.

    UNITED STATES OF AMERICA, ET AL.,

    Defendants, Appellees.


    ____________________

    APPEAL FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF NEW HAMPSHIRE


    [Hon. Joseph A. DiClerico, U.S. District Judge]
    ___________________

    ____________________

    Before

    Torruella, Cyr and Boudin,
    Circuit Judges.
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    ____________________

    Andrew Tempelman and Priscilla Tempelman on brief pro se.
    ________________ ___________________
    Peter E. Papps, United States Attorney, James A. Bruton, Acting
    ______________ ________________
    Assistant Attorney General, Gary R. Allen, William S. Estabrook, and
    _____________ _____________________
    Doris D. Coles, Attorneys, Tax Division, Department of Justice, on
    _______________
    brief for appellees.


    ____________________


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    Per Curiam. Andrew and Priscilla Tempelman (the
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    taxpayers) filed a pro se action in federal district court

    seeking to enjoin the Internal Revenue Service (IRS) from

    collecting back taxes. The lower court denied relief,

    concluding that the suit was barred by the Anti-Injunction

    Act, 26 U.S.C. 7421(a). We agree with this determination

    and therefore affirm.

    I.

    The taxpayers own and operate a small inn and restaurant

    in Milford, New Hampshire. In 1990, the IRS served them with

    notices of deficiency pursuant to 26 U.S.C. 6212 claiming

    that approximately $130,000 in taxes, interest and penalties

    were owed for the years 1984 and 1985.1 The taxpayers

    thereafter filed a timely petition under 26 U.S.C. 6213 for

    redetermination in tax court. On October 4, 1991, the

    taxpayers and the IRS presented the court with a stipulated

    agreement calculating a total liability for those years of

    approximately $35,000 plus interest. The tax court judge

    adopted this agreement in a decision dated November 27, 1991.

    The taxpayers filed an appeal from this decision on May 20,

    1992, claiming inter alia that they had been coerced by the
    __________

    IRS and the tax court into signing the stipulation. Because

    their notice of appeal was filed well past the 90-day period

    prescribed by Fed. R. App. P. 13(a), we dismissed the appeal

    for lack of jurisdiction on September 1, 1992. We thereafter





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    1. While the IRS also alleged deficiencies for the years
    1983 and 1986-88, the instant case pertains only to the years
    1984-85.















    denied their motion for reconsideration and for permission to

    file late.

    Under 26 U.S.C. 6213(a), the IRS is prohibited from

    making any assessment or levy or otherwise initiating

    collection efforts until the decision of the tax court "has

    become final"--which in this case occurred on February 25,

    1992. See 26 U.S.C. 7481(a). In the stipulated decision
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    adopted by the tax court, however, the taxpayers expressly

    agreed to waive this restriction. Accordingly, in December

    1991, the IRS made assessments for the years 1984-85 in

    accordance with that decision. Upon taxpayers' failure to

    pay, the IRS in August 1992 levied upon their New Hampshire

    bank account and filed a notice of tax lien against their

    property. Taxpayers responded by filing their complaint for

    injunctive relief.

    II.

    The Anti-Injunction Act provides, with certain

    enumerated exceptions, that "no suit for the purpose of

    restraining the assessment or collection of any tax shall be

    maintained in any court by any person ...." 26 U.S.C.

    7421(a). In Enochs v. Williams Packing Co., 370 U.S. 1
    ______ ______________________

    (1962), the Court fashioned an additional exception to this

    provision, holding that a suit for injunctive relief may lie

    where (1) the taxpayer will suffer irreparable harm absent an

    injunction, and (2) it is clear that "under no circumstances



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    could the Government ultimately prevail" on the underlying

    dispute. Id. at 7; accord, e.g., South Carolina v. Regan,
    ___ ______ ____ _______________ _____

    465 U.S. 367, 374 (1984); Commissioner v. Shapiro, 424 U.S.
    ____________ _______

    614, 627 (1976); Bob Jones Univ. v. Simon, 416 U.S. 725, 737
    _______________ _____

    (1974); Lane v. United States, 727 F.2d 18, 20 (1st Cir.),
    ____ _____________

    cert. denied, 469 U.S. 829 (1984). The taxpayers here seek
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    to invoke this exception, arguing that they satisfy both of

    the Enochs criteria. The district court (adopting the
    ______

    recommendations of a magistrate-judge) disagreed, finding

    that the taxpayers had established irreparable harm but had

    failed to show that the government would under no

    circumstances prevail. This determination is plainly

    correct. The Enochs Court elaborated on the latter
    ______

    requirement as follows:

    [T]he question of whether the Government has a
    chance of ultimately prevailing is to be determined
    on the basis of the information available to it at
    the time of suit. Only if it is then apparent
    that, under the most liberal view of the law and
    facts, the United States cannot establish its
    claim, may the suit for an injunction be
    maintained.

    370 U.S. at 7. In attempting to meet this "heavy" burden,

    McCarthy v. Marshall, 723 F.2d 1034, 1040 (1st Cir. 1983),
    ________ ________

    the taxpayers advance two arguments. First, they charge that

    they were coerced into signing the stipulation, under threat

    of dismissal of their petition, without having had the

    opportunity to examine the agreement and the underlying

    tabulations. The transcripts of the tax court proceeding


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    undermine this claim.2 They reveal that the threat of

    dismissal arose--not because of any heavy-handed tactics on

    the part of the IRS or the court--but because of the

    taxpayers' inadequate bookkeeping and their unwillingness to

    produce records. Indeed, the court refrained from dismissing

    the petition even while noting that the IRS was "entitled" to

    such relief. Supp. App. at 52. Furthermore, although the

    taxpayers appeared pro se, the court arranged for them to be

    assisted by an attorney from a local law school's tax clinic,

    who argued on their behalf. At the close of the hearing at

    which the agreement was announced, the taxpayers praised the

    judge. Id. at 42. After the judge's decision, the taxpayers
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    never filed a motion for reconsideration or a motion to

    vacate or revise. See Tax Court Rules 161, 162. Any claim
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    of coercion or duress is, at the very least, far-fetched.

    Second, the taxpayers complain that, once the tax court

    decision issued, the IRS attorney destroyed her personal

    working papers containing the calculations underlying the

    stipulated agreement. They contend that she was required to

    retain those papers until the tax court decision became



    ____________________

    2. Because the district court dismissed the complaint prior
    to service of process on the government, these transcripts
    were not part of the record below. The IRS, having submitted
    them in a supplemental appendix to this court, asks that we
    take judicial notice thereof. This request is granted. See,
    ___
    e.g., Fed. R. Evid. 201; Taino Lines, Inc. v. M/V Constance
    ____ _________________ _____________
    Pan Atlantic, 982 F.2d 20, 22 n.8 (1st Cir. 1992); United
    ____________ ______
    States v. Berzon, 941 F.2d 8, 14 n.9 (1st Cir. 1991).
    ______ ______

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    final. They argue that the attorney's calculations were

    riddled with errors and omissions. And they conclude that,

    since all "evidence" in support of the IRS' claim has now

    been destroyed, the IRS has no chance of prevailing thereon.



    This line of reasoning is likewise unavailing. It is

    hardly surprising that personal working papers would be

    disposed of once a stipulated agreement has been reached and

    entered. Such papers are obviously not the central evidence

    in support of the IRS' claim that back taxes are due. And

    the taxpayers' underlying complaint of IRS miscalculations,

    having not been timely raised, falls well short of

    establishing "that under no circumstances could the

    Government ultimately prevail." We therefore agree with the

    lower court that the Enochs exception is inapplicable.3
    ______

    The taxpayers' remaining arguments can be more readily

    dismissed. First, they seek, in the alternative, to invoke

    one of the statutory exceptions to the Anti-Injunction Act:

    the provision in 6213(a) permitting a court to enjoin any

    assessment made prior to the tax court's decision becoming

    final. As mentioned, however, the taxpayers waived the

    statutory bar on assessments being made prior to that time.


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    3. Indeed, in light of the dismissal of the appeal from the
    tax court ruling, it might well be argued that the government
    already has prevailed. We need not decide, however, whether
    the instant matter is moot or is barred on res judicata
    ____________
    grounds, inasmuch as it is in any event without merit.

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    Moreover, the filing of a notice of appeal operates to stay

    the assessment or collection of a deficiency only if a bond

    is filed with the tax court. See 26 U.S.C. 7485(a); Tax
    ___

    Court Rule 192. No such bond was filed here.

    Second, the taxpayers complain that the district court

    dismissed their suit sua sponte prior to service of process
    __________

    on the government. Yet the court's lack of authority was

    apparent from the face of the complaint. The magistrate-

    judge's report provided ample notice of the complaint's

    deficiencies. And the taxpayers were afforded two

    opportunities to correct those shortcomings: first in

    objecting to the magistrate-judge's report, and later in

    asking the district court to reconsider its judgment of

    dismissal (the court, in fact, granted reconsideration and

    then reinstated its dismissal). We thus need not decide

    whether the court's sua sponte dismissal was error. Even if
    __________

    it were, any such error was, under the circumstances, plainly

    harmless. See, e.g., Purvis v. Ponte, 929 F.2d 822, 826-27
    ___ ____ ______ _____

    (1st Cir. 1991) (per curiam).4




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    4. The taxpayers also rely on the Shapiro Court's holding
    _______
    that, before the applicability of the Enochs exception can be
    ______
    ascertained, the government has the obligation to disclose
    the factual basis for its assessments. See 424 U.S. at 626-
    ___
    27. That holding is clearly inapposite. The Shapiro case
    _______
    involved a jeopardy assessment made without any opportunity
    for a prompt post-seizure inquiry into the basis for the IRS'
    claim. Here, by contrast, the taxpayers have had a full
    opportunity to contest the IRS' claim in tax court.

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    Affirmed. The motion to amend pleading and the motion
    ________________________________________________________

    to show cause are denied.
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