Bothke v. Fluor Engineers & Constructors, Inc., 85-6361

• Decision Date: 16 December 1987
• Docket Number: No. 85-6361,85-6361
• Citation: 834 F.2d 804
• Parties: , 61 A.F.T.R.2d 88-305, 88-1 USTC P 9143 Hans BOTHKE, Plaintiff-Appellant, v. FLUOR ENGINEERS & CONSTRUCTORS, INC., et al., Defendants, and W.J. Terry, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 804

834 F.2d 804

99 A.L.R.Fed. 677, 61 A.F.T.R.2d 88-305,

88-1 USTC P 9143

Hans BOTHKE, Plaintiff-Appellant, v. FLUOR ENGINEERS & CONSTRUCTORS, INC., et al., Defendants and W.J. Terry, Defendant-Appellee.

No. 85-6361.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 2, 1987.

Decided Dec. 16, 1987.

Hans Bothke, Orange, Cal., for plaintiff-appellant.

Michael L. Paup, Chief Appellate Section, Elaine F. Ferris, Dept. of Justice, and Roger M. Olson, Washington, D.C. for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before FERGUSON, NELSON and BEEZER, Circuit Judges.

NELSON, Circuit Judge:

This case has a protracted administrative and judicial history and is before this court for the third time. Hans Bothke, a pro se plaintiff, brought a Bivens ¹ action alleging that an IRS agent, defendant W.J. Terry, violated his constitutional rights in conjunction with an IRS levy on his wages for nonpayment of taxes allegedly due in 1977. He appeals from the district court's entry of summary judgment against him on the basis of defendant Terry's qualified immunity. We affirm.

A brief description of the applicable statutory provisions is in order. Once the IRS determines that there is a payment deficiency with respect to a taxpayer's income tax return, it is authorized to send a notice of such deficiency to the taxpayer. 26 U.S.C. Sec. 6212(a) (1982) ². Within ninety days after the notice is mailed, the taxpayer may file a petition with the United States Tax Court for a redetermination of the deficiency. Id. at Sec. 6213(a). However, if the amount due exceeds the amount reflected on the taxpayer's return merely because of "a mathematical or clerical error appearing on the return," the IRS's notice to the taxpayer "shall not be considered as a notice of deficiency" entitling the taxpayer to petition the Tax Court for a redetermination. Id. at Sec. 6213(b)(1). ³ Within sixty days after a notice of mathematical or clerical error is sent, the taxpayer may request an abatement of any assessment in the notice, in which event the IRS's reassessment of the taxpayer's liability is subject to the notice of deficiency procedures provided by Secs. 6212 and 6213(a). Id. at Sec. 6213(b)(2)(A). The IRS may not commence a levy or court proceeding to collect the assessment during the sixty-day period in which the taxpayer is entitled to request an abatement. Id. at Sec. 6213(b)(2)(B). ⁴

FACTUAL AND PROCEDURAL BACKGROUND

In April, 1978, Bothke filed a timely personal income tax return for the 1977 taxable year. However, on every line except that corresponding to the amount to be refunded, he entered asterisks in lieu of numerical calculations. Bothke entered $1,154.62 as the refund due, which amount corresponded to the amount of taxes withheld by his employer as reflected on the W-2 form submitted with the return. Bothke attached a number of documents to his return, including an affidavit and a memorandum of points and authorities. According to these documents, the IRS had violated Bothke's constitutional right to due process in conjunction with its handling of his income tax return for 1976. Bothke raised numerous constitutional grounds in defense of his refusal to provide more information on his 1977 return, and he claimed that he "had no taxable income pursuant to law and court order in the year of 1977."

The IRS service center in Fresno reviewed Bothke's return, and on March 5, 1979, sent him a notice of "Correction to Arithmetic." See 26 U.S.C. Sec. 6213(g)(2)(D), quoted supra at note 3. The notice stated that, "based on the information received, [the IRS has] adjusted your return accordingly," and that the balance due from Bothke (after adding penalties and interest and subtracting employer withholdings) was $6,177.87. The notice further stated to "[p]lease let us know if you believe the balance due is incorrect for reasons other than uncredited payments."

Bothke responded on March 15, 1979, with a four-page "Protest and Objection," in which he complained that the "Correction On May 2, 1979, Fredric Perdue of the Fresno IRS service center sent Bothke a letter which stated that "this is your legal notice that your claim [for $1,154.62] is disallowed." Perdue characterized Bothke's claim as based on Bothke's "view of certain tax laws being unconstitutional" and advised Bothke that he could challenge the IRS's disallowance of his claim by bringing suit in federal court. On June 6, 1979, approximately sixty days after the IRS had sent the "Correction to Arithmetic" to Bothke, Mr. S. Espinosa, manager of the IRS taxpayer contact unit in Santa Ana, mailed to Bothke a ten-day notice of the IRS's intent to levy unless Bothke paid the balance due.

to Arithmetic" was "not signed, not authenticated, not verified, not trustworthy, nor reliable," unexecuted, without effect, deceptive, in violation of his constitutional right to due process, and failed to apprise Bothke of what information the IRS had relied upon in arriving at the balance due. Bothke also contended that the penalty imposition was unlawful, and he demanded that the IRS answer an attached set of interrogatories within fifteen days or face legal action.

On June 14, 1979, Bothke wrote to Perdue in Fresno and sent a copy of the correspondence to Espinosa in Santa Ana. Bothke denied Perdue's contention that he was challenging the constitutionality of the tax laws. Bothke stated that his record showed he was "claim[ing] in good faith [his] constitutional right to procedural due process." He objected to Espinosa's letter of June 6 because it did not attest to the validity of the amount claimed due. As soon as the IRS was willing to comply with the law, Bothke wrote, "please schedule a hearing at which we can determine in good faith further steps which should result in the filing of [Bothke's] amended return for the year 1977."

On August 3, 1979, Bothke's case was turned over to defendant Terry, an IRS revenue officer working in the Santa Ana collection division. She was provided with Bothke's file and a Tax Delinquent Account (TDA), a one-page IRS form showing some history of the case. The file, however, did not include a copy of Bothke's tax return, and Terry requested that Fresno provide her with a copy.

Terry twice submitted a "Recommendation for Nonfiling of Notice of Tax Lien." She wrote that "[b]ecause of the sensitivity of the case, it is in best interest not to file F[ederal] T[ax] L[ien] until extensive research completed on T[ax] P[ayer] claims." According to Terry's notes on the TDA History Record, she "[w]anted to have a copy [of Bothke's return] before seeing T[ax] P[ayer] because of delicacy [blank] of the situation." During this litigation, Terry has testified that she considered this case "sensitiv[e]" because of the volume of correspondence between the IRS and Bothke.

On November 20, 1979, Terry noted on the TDA History Record that, because of a computer error, she had still not received a copy of Bothke's return. The next day, without having seen the return, she went to Bothke's residence. Bothke was not home, so Terry left her card and a message for him to call her. Bothke telephoned Terry later the same day, and according to Terry's notes on the TDA History Record, she "demanded F[ull] P[ayment]." Bothke responded that "you (the IRS) violated every one of my rights, you (the IRS) committed perjury." Terry's notes reflect that Bothke repeated his complaints set forth in his earlier letters to Perdue and Espinosa, that she explained that the taxes needed to be paid, and that "[t]here was nothing more to say."

On November 26, Terry served a wage levy on Bothke's employer, and the levy was executed on November 30 in the amount of $3,415.43. On November 29, one day before the levy was executed, Terry received Bothke's "Objection to Notice of Levy" and accompanying affidavit, which among other things stated that the levy violated Bothke's right to due process because he had not been afforded a notice of deficiency pursuant to 26 U.S.C. Sec. 6212(a).

Bothke resigned from his job to prevent further levies on his wages, then filed an In October, 1980, Bothke filed suit against Terry, alleging violations of his statutory and constitutional rights. ⁵ Bothke's complaint alleged that he had never received a notice of deficiency, as required by 26 U.S.C. Secs. 6212 and 6213, and that Terry had "willfully and knowingly" issued a "spurious" notice of levy on his property. The complaint stated that Terry's actions constituted a "malicious abuse of discretion" and that Terry had acted "in bad faith [and with] bad motive." Bothke alleged that he warned Terry that she was violating his statutory rights, but that Terry thereafter had "unlawfully and maliciously circumvented" Bothke's statutory rights by inducing his employer with the "spurious" levy to deprive Bothke of his property. Bothke further alleged that his employer had "intentionally and maliciously" and recklessly conspired with Terry to deprive Bothke of his property in violation of 26 U.S.C. Sec. 6213(a). As a result of the defendants' conduct, claimed Bothke, he had suffered "emotional distress, embarrassment, humiliation, mental anguish, and loss of peace of mind." Bothke sought $100,000 in compensatory damages and $150,000 in punitive damages from Terry.

amended 1977 return reflecting dollar amounts rather than asterisks and indicating that a refund was due. When Bothke filed suit against another IRS agent in conjunction with a different levy on Bothke's property, the IRS elected as a policy matter to abate any then-existing assessments and to release its liens with respect to Bothke's 1977 taxes.

1. Bothke I.

On March 22, 1981, the district court adopted the recommendation of a magistrate and entered summary judgment for Terry on the ground that she was either absolutely or qualifiedly immune because she had...