Lassoff v. Gray
| Decision Date | 14 May 1959 |
| Docket Number | No. 13758-13760.,13758-13760. |
| Citation | 266 F.2d 745 |
| Parties | Benjamin LASSOFF and Irene Lassoff, Appellants, v. William M. GRAY, District Director, Internal Revenue Service, Appellee. Myron DECKELBAUM and Dorothy Deckelbaum, Appellants, v. William M. GRAY, District Director, Internal Revenue Service, Appellee. Robert LASSOFF, Appellant, v. William M. GRAY, District Director, Internal Revenue Service, Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Daniel W. Davies, Newport, Ky., Davies & Hirschfeld, Newport, Ky., on the brief, for appellants.
Helen Buckley, Washington, D. C., Charles K. Rice, Lee A. Jackson, A. F. Prescott and S. Dee Hanson, Washington, D. C., J. Leonard Walker and Charles M. Allen, Louisville, Ky., on the brief, for appellee.
Before MARTIN, Chief Judge, and BOYD and CHOATE, District Judges.
Three cases are involved in this appeal. Each of the complaints are substantially identical and the several plaintiffs below — appellants here — were each seeking a temporary and permanent injunction against gambling tax assessments and relief from tax liens imposed upon their properties. Upon the Collector's motions the complaints were dismissed and this appeal is from the orders of dismissal.
The plaintiffs below by their several complaints charged that on September 12, 1958, Benjamin Lassoff, Meyer Deckelbaum and Robert Lassoff each were assessed in the amount of $100,259.94 for the month of March 1956 and $110,004.52 for the period April 1st to April 19th, 1956, or a total assessment of $300,264.46 for excise wagering taxes, penalties and statutory interest claimed to be due under Section 4401 et seq. Internal Revenue Code of 1954, 26 U.S.C.A. § 4401 et seq. Plaintiffs alleged that these assessments were unlawful, arbitrary, capricious and wholly void, for the reason that plaintiffs were not engaged in the business of accepting wagers on sports events or contests and that they did not conduct a wagering pool or lottery, and further alleged that they did not hold a special occupational stamp to engage in such business, and for those reasons were not liable, and could not be liable, for the impositions.
Further, each of the aforenamed individuals averred that the levy against them was made without previous discussion, and that the basis of the assessments has not been disclosed, although protest has been made and a conference requested. They each further alleged that the defendant and his subordinates, acting without any valid basis, had proceeded to file and post notice of lien against each of their properties in the sum of $300,264.46, with interest accruing at the rate of over $1,000 per month. They further asserted that they do not have and cannot acquire funds or credits sufficient to pay the assessments, or provide a bond to guarantee payment thereof, and are therefore deprived of any means of contesting the illegal taxes.
Plaintiffs also alleged that due to the enormity of the assessments it is wholly unlikely that they will ever be able to accumulate sufficient estate to pay the assessment or provide a bond as would be required in order to contest the assessments, and that their property will be sold at distress prices resulting in irreparable injury unless an injunction be issued, and that they will suffer and presently do suffer in their businesses by reason of the liens and the eventual sale of their properties which they are unable to protect unless equity intervenes.
The court below based its orders of dismissal upon Section 7421(a) Internal Revenue Code of 1954, 26 U.S.C.A. § 7421 (a), which provides, "(a) * * * No suit for the purpose of restraining the assessment or collection of any tax...
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