Tempelman v. USA ( 1993 )

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[NOT FOR PUBLICATION]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.
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.
Per Curiam. Andrew and Priscilla Tempelman (the
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
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
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
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
never filed a motion for reconsideration or a motion to
vacate or revise. See Tax Court Rules 161, 162. Any claim
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.
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
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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