Garzon v. United States, 84-2381-Civ-ATKINS.
| Decision Date | 21 February 1985 |
| Docket Number | No. 84-2381-Civ-ATKINS.,84-2381-Civ-ATKINS. |
| Parties | Jorge E. GARZON, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Stanley P. Kaplan, Miami, Fla., for plaintiff.
Stephen Kwartin, U.S. Dept. of Justice, Tax Div., Washington, D.C., for defendant.
This is an action brought by plaintiff, Jorge E. Garzon, against the United States of America pursuant to 26 U.S.C. § 7429.1 Garzon is seeking judicial review of a termination assessment of income taxes against him by the Internal Revenue Service. The assessment of $38,346 was made on July 23, 1984. The plaintiff timely requested administrative review under 26 U.S.C. § 7429(a)(2) and timely commenced this action by the filing of his complaint on October 9, 1984 pursuant to 26 U.S.C. § 7429(b)(1). Hearings in this matter were held on October 27, 1984 and November 16, 1984.
The plaintiff alleges that this court has jurisdiction under the provisions of 26 U.S.C. § 7429 and 28 U.S.C. §§ 1346(e)2 and 1402(c).3 The defendant, Government, asserts that this court lacks venue under 26 U.S.C. §§ 7429(e) and 28 U.S.C. § 1402(a)(1)4 because the plaintiff is a nonresident alien.
Plaintiff, Garzon, is a citizen of the Republic of Colombia. On the evening of July 17, 1984, plaintiff's automobile was stopped by officers of the Metro-Dade Police Department on a traffic violation. Plaintiff was accompanied in his car by a passenger named Luis Hernando Juban.
After an initial conversation between the officers and Garzon, the officers indicated that they were suspicious of Garzon's and Juban's immigration status. When questioned by the police officer, Garzon stated that he had cash in a shopping bag in the rear of the vehicle. Garzon further stated that the amount was $91,000, and that the cash was to be used to purchase some shoes. Plaintiff has also asserted that he is the manager of a shoe store called Emerald Shoes.
The police officers called in detectives from the Organized Crime Bureau of the Miami-Dade County Public Safety Department who, in turn, called in agents of the U.S. Customs Service and the Immigration and Naturalization Service. Garzon was interrogated by the agents of these various investigative agencies for several hours. He voluntarily consented to a search of his vehicle and apartment. A dog trained to sniff narcotics was used to search for evidence of criminal activity. The dog sniffed Garzon's currency, automobile, and apartment. No evidence of criminal activity was found as a result of this investigation.
Garzon was released but his money was retained by the Property Clerk's Office of the Organized Crime Bureau. Special Agent Ronald Anderson of the U.S. Customs Service notified the I.R.S. about the possibility of a termination assessment.5 Internal Revenue Agent Rosa Blanco determined that Garzon owed $38,346 in taxes for the period between January 1, 1984 and July 1984.
At the hearing held in this case, Garzon testified that when his father died in Colombia in 1981, he became heir to a considerable inheritance. A substantial portion of this inheritance consisted of a farm in Colombia which he sold to Hernan Cortes Ortiz. The selling price was the equivalent of $80,000 in U.S. dollars which was paid by Ortiz to Garzon in various installments sometime between June, 1982 and June, 1983. Ortiz made these payments by bringing the U.S. currency from Colombia to the United States. Garzon stated that this additional currency was all part of his inheritance from his father's estate. Although neither Garzon nor Ortiz could recall the exact amount brought into the United States, they did testify that it was not less than $100,000. According to Garzon, the currency which he had in his possession on July 17, 1984 was part of the inheritance transported by Ortiz.
Ortiz' passport established that he had, in fact, made numerous trips between Colombia and the United States during 1982 and 1983. He stated that he was a merchant in Colombia who traveled to the United States to purchase merchandise for export to his native country. These purchases were often made for cash which he brought into the United States along with Garzon's money. Since he often carried in excess of $5,000 in currency, he would report said currency to Customs on its form 4790, commonly referred to as a CMIR. Based upon entry dates stamped in Ortiz' passport, Customs was able to locate CMIR's which reflected that Ortiz reported bringing in currency in excess of $350,000 during the period from September 1982 through July 1983.
Garzon was aware that a Custom's Form 4790 was required to be filed whenever more than $5,000 in currency was transported into the United States. On the evening of July 17, 1984, Garzon was unsure as to whether Ortiz had, in fact, declared the currency he was transporting. In order to protect Ortiz, Garzon concocted a story that the currency in his vehicle had been sent to him via an Avianca Airlines flight on July 12, 1984.
Garzon was employed until sometime in February, 1984, as a part time waiter (working three days a week) at Jacaranda night club. He earned a salary of $15.00 a day plus tips of approximately $60 to $70 a day. He was unemployed from February 1984 until June 16, 1984 when he went to work as a manager at Emerald Shoe Store. His monthly salary there was $1,350 from which his employer deducted FICA tax of $90.45 and income tax of $209.55.
Pursuant to the termination assessment in the amount of $38,346, the defendant, through the Internal Revenue Service, levied upon the $90,780 held by the Property Clerk's Office of the Organized Crime Bureau. Upon payment to the Internal Revenue Service by the Property Clerk, the balance of the money was returned to Garzon.
On or about December 30, 1981, the plaintiff applied for and received a nonimmigrant B-1/B-2 multiple entry visa from the United States Consulate in Bogota, Colombia, valid through December 30, 1985. A B-1/B-2 visa permits the visa holder to apply for multiple entries into the United States, provided that no stay exceeds six months in duration. At the time this cause of action arose, Garzon had exceeded the maximum six month stay allowed to him under his multiple-entry visa.
In his affidavit filed with the Internal Revenue Service on September 25, 1984, Garzon stated: "It was never his intention permanently to reside here or to apply for U.S. citizenship." He also recited in that affidavit that he was in the United States only to recover money taken from him by the Internal Revenue Service.
The plaintiff married a United States citizen on September 10, 1984. Garzon, however, never claimed to be a resident alien until October 25, 1984, the day after the defendant, Government, moved to dismiss this action for lack of venue by alleging that the plaintiff is a nonresident alien.
Although this court has jurisdiction of this cause under 26 U.S.C. § 7429(b)(1) and 28 U.S.C. § 1346(e), the defendant has filed a Motion to Dismiss for improper venue alleging that Garzon is a nonresident alien and, therefore, barred from bringing this action in this court. The first issue to be considered by the court, therefore, is whether Garzon is a resident or a nonresident alien. Once this issue is resolved the court must then determine whether a nonresident alien has the right to contest termination assessments under I.R.C. § 7429.
There are few reported cases which deal with the venue issues raised by 26 U.S.C. § 7429(e). Under section 7429(e) a civil action such as the one we have before us, "shall be commenced only in the judicial district described in section 1402(a)(1) ... of Title 28, United States Code." Section 1402(a)(1) provides that a civil action may be prosecuted against the United States under 28 U.S.C. § 1346(a) only "in the judicial district where the plaintiff resides." The defendant, Government, argues that Garzon is a nonresident alien and not a resident in any judicial district in this country.
The applicable case law supports the proposition that the issue of residency is a factual one and must be determined through a consideration of all relevant facts and circumstances. Williams v. United States, 704 F.2d 1222 (11th Cir. 1983); Park v. Commissioner, 79 T.C. 252 (1982); Adams v. Commissioner, 46 T.C. 352 (1966); Jellinek v. Commissioner, 36 T.C. 826 (1961). The court finds that on the facts and circumstances in this case, plaintiff, Garzon, is a nonresident alien. In further support of its decision the court relies on Constantinescu v. Commissioner, 11 T.C. 37 (1948), where the court held that petitioner, an alien physically present in the United States, was not a resident of the United States within the meaning of Treasury regulations. The Tax Court further held that as a nonresident alien, petitioner was not taxable on her capital gains.
Having now determined that the plaintiff is a nonresident alien, the court must turn to the difficult question of whether Garzon, as a nonresident alien, has the right to contest the termination assessment under 26 U.S.C. § 7429(e). The court in Williams v. United States, 704 F.2d 1222, 1227 (11th Cir.1983) specifically reserved this question: "If the court finds that Williams is a nonresident alien taxpayer, it must consider the difficult constitutional question of whether the government may constitutionally raise improper venue to bar a nonresident alien taxpayer from use of the jeopardy assessment review procedures provided by section 7429 I.R.C."
Section 7429(e) effectively provides that venue is improper in all districts for nonresident alien taxpayers. This provision necessarily gives rise to questions concerning plaintiff's due process (equal protection) rights under the Fifth Amendment of the United States Constitution.6 This case, thus, places in issue the constitutionality...
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