Cohen v. Mayer, Civ. No. 260-61.

• Citation: 199 F. Supp. 331
• Decision Date: 14 November 1961
• Docket Number: Civ. No. 260-61.
• Parties: Jack COHEN, Plaintiff, v. Joseph F. J. MAYER, District Director of Internal Revenue, Newark, New Jersey, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

199 F. Supp. 331

Jack COHEN, Plaintiff, v. Joseph F. J. MAYER, District Director of Internal Revenue, Newark, New Jersey, et al., Defendants.

Civ. No. 260-61.

United States District Court D. New Jersey.

November 14, 1961.

Herbert L. Zuckerman, Newark, N. J., for plaintiff.

Chester A. Weidenburner, U. S. Atty., Newark, N. J., by Raymond W. Young, Asst. U. S. Atty., North Bergen, N. J., and James F. Shepherd, Tax Division, Dept. of Justice, for defendants.

MEANEY, District Judge.

This matter comes before the court on the Government's motion to dismiss the plaintiff's complaint.

The plaintiff in the instant suit asks that an injunction be issued against the District Directors of Internal Revenue, Newark and Camden, New Jersey, and the United States of America, precluding them from enforcing and attempting to collect an assessment of deficiencies in respect to income taxes due from the plaintiff for the years 1954, 1955 and 1956, and releasing any and all liens against the plaintiff and his property for for the enforcement of the assessment.

The taxpayer contends that the assessment was void because it was made without compliance with steps previously to be taken by the Director of Internal Revenue, in that he failed to send the taxpayer a statutory 90-day notice of deficiency as required by section 6213(a) of the Internal Revenue Code, 26 U.S.C.A. § 6213(a).

Admittedly such notice was not sent.

On May 27, 1958, the plaintiff filed a voluntary petition in bankruptcy in the United States District Court for the District of New Jersey and was adjudicated bankrupt on May 27, 1958. Section 6871(a) of the Internal Revenue Code, 26 U.S.C.A. § 6871(a), eliminates the requirement of the 90-day notice and permits the United States to make an assessment immediately without notice.

On December 2, 1960, the assessment was made.

The language of the pertinent statute regarding assessment in the event of an institution of proceedings in bankruptcy (section 6871(a) of the Internal Revenue Code) is phrased in seemingly mandatory terms—assessments in such event "shall * * * be immediately assessed if such deficiency has not theretofore been assessed in accordance with law."

Among other things, the Director claims that the taxpayer had an opportunity to litigate the Government's claim in the bankruptcy proceedings, the Director having filed within time a proof of claim. But the nub of the situation is whether the fact that the assessment was not made until December 2, 1960, renders it null and void, since the statute says that the tax shall be immediately assessed when bankruptcy occurs.

Reference to congressional reports in this section of the act is of no assistance so far as congressional intent is concerned. Recourse must therefore be had to normal bases of interpretation and examination of the purpose of the aforementioned...