Enochs v. Green
Citation | 270 F.2d 558 |
Decision Date | 25 September 1959 |
Docket Number | No. 17666.,17666. |
Parties | James L. ENOCHS, United States District Director of Internal Revenue for the District of Mississippi, Appellant, v. T. O. GREEN, Appellee. |
Court | U.S. Court of Appeals — Fifth Circuit |
Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Atty., Dept. of Justice, Washington, D. C., Robert E. Hauberg, U. S. Atty., Jackson, Miss., I. Henry Kutz, Atty., Fred E. Youngman, Grant W. Wiprud, Dept. of Justice, Washington, D. C., for appellant.
Roland J. Mestayer, Jr., Thomas R. Ward, Meridian, Miss., for appellee.
Before RIVES, Chief Judge, and CAMERON and JONES, Circuit Judges.
T. O. Green, the appellee, brought suit against the District Director of Internal Revenue for the District of Mississippi. In the complaint it was alleged that Green was the major stockholder and an officer of Biloxi Packard Motor Company, Inc., a now defunct corporation which had its place of business at Biloxi, Mississippi. The year 1953 was the last year of the operation of the corporation. Social Security and withholding taxes were deducted by the corporation from the wages of its employees but were not remitted by the corporation to the United States. On April 23, 1956, after the corporation had been liquidated, the District Director assessed a penalty against Green under the provisions of Section 2707(a) of the Internal Revenue Code of 1939,1 levied upon his bank account and was taking steps to proceed against his salary. Asserting that the penalty so assessed was a deficiency under Section 272 of the Internal Revenue Code of 19392 requiring the issuance of a ninety-day letter with a right to petition the Tax Court, before any assessment was made, the taxpayer, Green, claimed the assessment was invalid. Injunctive relief against enforcement of the assessment by levy or otherwise was sought. The District Director moved to dismiss on the ground the Court had no jurisdiction to issue an injunction for the reasons (a) that no ninety-day letter is required, (b) that Green has an adequate remedy at law, and (c) the Internal Revenue Code prohibits injunctions in cases such as this. The Court issued a temporary injunction. The District Director has appealed.
In Subchapter E of Chapter 9 of the 1939 Code are general provisions applicable to the taxes imposed by the other Chapter 9 subchapters. In Subchapter E are the following provisions:
There are no Chapter 9 provisions, such as are so fully set forth in Chapters 1, 3 and 4, requiring notices of deficiency assessments with a right of petitioning the Tax Court before any distraint can be made. Had the Congress intended that such procedures should be required in the collection of taxes imposed under Subchapters A and D of Chapter 9, such requirements would have been expressly provided. Since it was not so provided we think it was not so intended.
One of the purposes, probably the primary purpose, of the deficiency notice is to permit the taxpayer, if he wishes, to seek a review of the Commissioner's determination by the Tax Court.
So it seems that the Tax Court has no jurisdiction to review determinations of the Commissioner with respect to social security taxes or withholding taxes.
If this were a case where a penalty had been imposed for the non-payment of a tax withheld on tax-free covenant bonds, or on the income of a non-resident alien, or on the income of a foreign corporation pursuant to the Chapter 1 provisions of Section 143 or Section 144, 26 U.S.C.A. (I.R.C.1939) §§ 143, 144, it seems that distraint for the collection of such penalty could be enjoined unless a deficiency notice had been given. Houston Street Corporation v. Commissioner, 5 Cir., 1936, 84 F.2d 821; G.C.M. 17274, C.B. 1937-1, p. 159. Such is not the case before us. The fund for which the appellee was responsible did not arise from a tax where notice was required before distraint. The penalty payable by an employer who has deducted such contributions and taxes from the wages of employees and failed to remit is not a deficiency and the ninety-day notice is not required. See McAllister v. Dudley, D.C. W.D.Pa.1956, 148 F.Supp. 548; 9 Mertens Law of Federal Income Taxation Ch. 49, p. 215, § 49.210. This being so, there is no right to the ninety-day notice and no right to petition the Tax Court. Unless some equitable ground is shown for staying the collection, an injunction should not issue. Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422; United States v. Curd, 5 Cir., 257 F.2d 347, certiorari denied 358 U.S. 920, 79 S.Ct. 290, 3 L.Ed.2d 239. The avenue is open for Green to pay, file a claim for refund and bring suit to recover in the event the penalty is improperly assessed. The hardships to Green, of which he complains, of having his bank account and his salary levied upon are not circumstances which will permit collection to be stayed by injunction. Reams v. Vrooman-Fehn Printing Co., 6 Cir., 1944, 140 F.2d 237; 26 U.S.C.A. (I.R.C. 1939) § 3653.
Deciding, as we do, that the appellant had no right to a deficiency notice nor to petition the Tax Court for a determination of his liability, the cause will be reversed and remanded with directions to vacate the injunction and dismiss the complaint.
Reversed and remanded.
It is the pride and boast of this nation that it derives its support in the main from taxes paid by the average citizen. It is axiomatic that statutes of the character with which we are dealing are valid only if their language is so clear and explicit as to be understandable by the average man. Such an average man, faced with the maze of legal lore upon which the appellant relies — in the brief he cites thirty statutes, some with a dozen subsections, four reports of congressional committees, four Treasury Regulations, and thirty-one court decisions, besides other items from text books, bulletins, etc. — would be likely to find himself bewildered and amazed that such an amorphous mishmash could be conjured up to confuse and befuddle those who are required to fill the coffers of the federal treasury.
Nobody, it seems to me, could...
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...(there is no requirement that before liability for employment taxes accrues, notice of deficiency or assessment be given); Enochs v. Green, 270 F.2d 558 (5th Cir.1959) (no deficiency notice is required for social security and withholding taxes); cf. Macatee, Inc. v. United States, 214 F.2d ......
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