497 F.2d 240 (5th Cir. 1974), 73-3163, Willits v. Richardson

Docket Nº:73-3163.
Citation:497 F.2d 240
Party Name:Sharon WILLITS, Plaintiff-Appellant, v. W. L. RICHARDSON and A. J. O'Donnell, Defendants-Appellees.
Case Date:July 18, 1974
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 240

497 F.2d 240 (5th Cir. 1974)

Sharon WILLITS, Plaintiff-Appellant,

v.

W. L. RICHARDSON and A. J. O'Donnell, Defendants-Appellees.

No. 73-3163.

United States Court of Appeals, Fifth Circuit.

July 18, 1974

Page 241

George D. Gold, Miami, Fla., for plaintiff-appellant.

Mervyn L. Ames, Asst. U.S. Atty., Miami, Fla., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Crombie J. D. Garrett, Ann Belanger, Attys., Tax Division, Dept. of Justice, Washington, D.C., for defendants-appellees.

Before WISDOM and CLARK, Circuit Judges, and GROOMS, District Judge.

CLARK, Circuit Judge:

Sharon Willits sought injunctive relief from a jeopardy seizure of virtually all of her property by the Internal Revenue Service (IRS) pursuant to a quick termination proceeding under 26 U.S.C. § 6851. 1 At the conclusion of an evidentiary hearing on her motion for a preliminary injunction, the district court found the cause to be barred by 26 U.S.C. § 7421(a), 2 which prohibits judicial restraint of tax assessment or collections. The trial court erred procedurally in dismissing the action at this preliminary stage. It also erred substantively in determining the proof adduced failed to show that the seizure procedures utilized by the IRS, although in the guise of a tax, were intended to harass and punish Mrs. Willits for her association with a suspected dealer in

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narcotics; and in holding that she had failed to show a basis for equitable relief. We reverse.

The following were the facts as found by the district court:

On May 24, 1973, Officers Mosher and Ahearn of the City of Miami Police Department, while driving in an unmarked vehicle, began pursuing the plaintiff, Sharon Willits, who was driving a 1972 Cadillac in the vicinity of the 79th Street Causeway in Miami. Upon becoming aware that she was being followed by an unmarked car, the plaintiff pulled over to the side of the street momentarily and the unmarked car pulled in behind her. No one emerged from the unmarked car and the plaintiff pulled away from the side of the curb and the unmarked car containing officers Ahearn and Mosher continued following the plaintiff. The plaintiff then pulled over a second time when the unmarked car pulled up beside her and she noticed police badges being waived at her by the occupants of the unmarked car. Officer Ahearn then emerged from the unmarked car and approached the plaintiff. Officer Ahearn was not in uniform and was dressed in very casual clothes. He had a full beard and long frizzled hair which was tied in a ponytail in back. Officer Mosher also emerged from the car and was dressed in a manner similar to that of Officer Ahearn.

Upon identifying himself as a police officer, Officer Ahearn asked the plaintiff for identification, including her driver's license. Officer Ahearn asked the plaintiff if the address shown on the license was correct and the plaintiff responded that she could not or would not disclose her correct residential address. The address appearing on the driver's license appeared to be in Broward County and the plaintiff was arrested in Dade County. Registration of the automobile which the plaintiff was driving showed that the car was registered in the name of an individual other than the plaintiff and the plaintiff explained that she was using the car with his permission. A check was made on the registration through the police radio and the officers found that the address on the registration did not exist. It was later found that there had been a typographical error in making out the registration and the car was released to the registered owner.

Approximately six weeks prior to May 24, 1973, Officer Ahearn had stopped a vehicle containing the plaintiff and a Mr. Rick Cravero. The plaintiff was also driving that vehicle when it was stopped and her license was checked by Officer Ahearn. Mr. Cravero had been under surveillance by the City of Miami Police Department for approximately five months in that he was suspected of dealing in narcotics. Neither the plaintiff nor Mr. Cravero were arrested by Officer Ahearn on that occasion. Inasmuch as the plaintiff was unable to give Officer Ahearn a specific address for her residence, she was arrested for speeding and was taken by Officers Ahearn and Mosher to the police station some seventy blocks distant. The time of this arrest was approximately 7:30 p. m. on May 24, 1973. The plaintiff was not taken to the traffic section of the police department but was taken to the narcotics section. Officers Ahearn and Mosher were not assigned to traffic detail but were assigned at the time of this arrest to the narcotics section and took the plaintiff to their office. Upon arriving at their office, the plaintiff was requested to open her purse and at that time a pistol was observed. The plaintiff did not display a permit for carrying this weapon and she was thereafter placed under arrest by Officer Ahearn for carrying a concealed weapon and was advised of her constitutional rights at this time. A more thorough search was then made of her purse and certain tablets were discovered. These tablets were not placed

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in evidence although there was testimony from one witness that the tablets were subjected to chemical analysis and were found to be barbiturates. Plaintiff claimed at the time that these barbiturates had been purchased pursuant to a prescription she had received from a doctor. No additional evidence on that point was submitted by plaintiff. The search of plaintiff's purse also revealed an envelope containing some slips of paper and approximately $4,400.00 in cash and a gold coin and another small piece of jewelry. Plaintiff was wearing some diamond rings and these were also surrendered to the police by the plaintiff at the request of the police. The plaintiff was then taken to another section of the police station and was charged with possession of narcotic drugs, unlawfully carrying a concealed weapon and speeding. She was released later that night on $2,000.00 bond which was posted by a friend.

On the morning of May 25, 1973, Officer Ahearn advised Mr. John Zahurak of the United States Internal Revenue Service that Mrs. Willits had been arrested and advised him of the charge of possession of narcotics placed against her. Mr. Zahurak on that day went over to the City of Miami Police Department and viewed the police report prepared on the arrest of the plaintiff and the description of the materials taken from her purse. Mr. Zahurak was also advised by representatives of the City of Miami Police Department that the plaintiff was an associate of several persons who were suspected of dealing in narcotics. Mr. Zahurak was advised by Officer Ahearn that the sum of $4,400.00 had been taken from Mrs. Willits' purse and that the sum was in a white envelope which contained a slip of paper with some names and figures on it. He further advised Mr. Zahurak that Mrs. Willits had told him that she was not employed. Mr. Zahurak testified that he then checked to seek whether Mrs. Willits had filed an income tax return for the years 1969, 1970, 1971 and 1972, and the information he received was that no return had been filed by Mrs. Willits for those years. Although the police report indicated that only a few pills contained in two vials had been found in Mrs. Willits' purse, Mr. Zahurak computed that Mrs. Willits had earned commission income of $60,000.00 on sales of $240,000.00 worth of cocaine during 1973 and recommended to his superiors that Mrs. Willits' taxable period for the period from January 1, 1973, through May 23, 1973, be terminated and that a tax be demanded and if necessary assessed against Mrs. Willits for that period in the amount of $25,549.00. Also on May 25, 1973, Officer Zahurak caused an administrative summons to be issued to the City of Miami Police Department for the property which had been taken from Mrs. Willits' purse and person.

On May 25, 1973, at approximately 3:20 p.m., a notice was sent to Mrs. Willits by certified mail from the District Director of Internal Revenue Service in Jacksonville, Florida, advising her that her taxable period from January 1, 1973 through May 23, 1973, had been terminated and that there was a tax due and payable from her for that period of $25,549.00. Mrs. Willits was further advised in that letter that any unpaid portion of the tax would be assessed against her and that administrative or judicial action to collect the assessment would be taken immediately. On May 25, 1973, an assessment in the amount of $25,549.00 for Federal income taxes for the terminated period was made against Mrs. Willits. On May 30, 1973, Revenue Officer Vincent Bernola served a...

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