501 F.2d 127 (5th Cir. 1974), 73-2454, Aguilar v. United States

Docket Nº:73-2454.
Citation:501 F.2d 127
Party Name:Roberto Flores AGUILAR, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
Case Date:September 12, 1974
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 127

501 F.2d 127 (5th Cir. 1974)

Roberto Flores AGUILAR, Plaintiff-Appellant,


UNITED STATES of America, Defendant-Appellee.

No. 73-2454.

United States Court of Appeals, Fifth Circuit.

Sept. 12, 1974

Page 128

Francis P. Maher, Laredo, Tex., Robert A. Maher, Chicago, Ill., for plaintiff-appellant.

Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Richard Farber, Attys., Tax Div., Dept. of Justice, Washington, D.C., Lee H. Henkel, Jr. Act. Chief Counsel, IRS, Washington, D.C., James R. Gough, Mary L. Sinderson, Asst. U.S. Attys., Houston, Tex., Karl Schmeidler, Gary R. Allen, Tax Div., Dept. of Justice, Washington, D.C., for defendant-appellee.

Before BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges.

JOHN R. BROWN, Chief Judge:

The IRS terminated appellant's 'tax period', pursuant to § 6851 of the Code assessed a tax of $12,774.00 and levied on a truck belonging to appellant and $11,270.00 in cash discovered in the truck without issuing a notice of deficiency under § 6861(b). 1 Disposition is controlled by the two recent decisions of Clark v. Campbell, 5 Cir., 1974, 501 F.2d 108, this day decided and Willits v. Richardson, 5 Cir., 1974, 497 F.2d 240. Campbell holds that § 6213(a) 2 entitles a § 6851 quick termination taxpayer to an injunction against the assessment and collection of the alleged tax due when the IRS fails to issue a deficiency notice within 60 days. Willits holds that on the showing of a kind here made out taxpayer is at least entitled to prove that the action of the IRS in conjunction with drug enforcement authorities demonstrated the assessment to be arbitrary and capricious. We reverse the District Court's dismissal of his action and remand for further proceedings not inconsistent with these opinions.

Page 129

Appellant is a citizen and resident of Mexico. 3 He owns a trucking business which he operates exclusively in the Republic of Mexico. He did at of his business in Mexico and was not a taxpayer 4 within the meaning of the Code, had no duty to file a return and had no income subject to taxation by the United States. 5

On July 27, 1972, appellant's employees were on their way in one of his trucks to San Antonio, Texas to obtain automotive parts with the cash which was later discovered, but had turned back after encountering engine trouble. The truck was stopped by local police in Laredo, Texas for a title check. The police found a discrepancy in the identification number. Upon examination of the vehicle they discovered $11,270.00 in United States currency in a sack in the driver's compartment. The police seized the truck and the two employees proceeded back to Mexico on foot.

The Laredo police notified the United States Customs Bureau of their discovery and that Bureau immediately placed a 'hold' on the truck based on a 'suspicion' that it was involved in illicit narcotics activity. When the Laredo police refused to return the cash found in the truck to appellant, appellant brought suit in the state court. The cash was promptly deposited in the registry of that court.

On August 3, 1972, the IRS made a § 6851 quick termination of his tax period and sent the usual letter to appellant terminating his tax year, and informing him that a tax of $12,774.00 had been assessed and was immediately due and payable. The IRS served a notice of levy on the state court which was holding the funds. Appellant's truck was seized and sold by the IRS for $750.00.

Despite persistent efforts by appellant...

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