Hartman v. Switzer, Civ. A. No. 73-788.

• Decision Date: 21 May 1974
• Docket Number: Civ. A. No. 73-788.
• Parties: Raymond M. HARTMAN, Plaintiff, v. C. Dudley SWITZER, District Director of Internal Revenue, et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

376 F. Supp. 486

Raymond M. HARTMAN, Plaintiff, v. C. Dudley SWITZER, District Director of Internal Revenue, et al., Defendants.

Civ. A. No. 73-788.

United States District Court, W. D. Pennsylvania.

May 21, 1974.

Raymond M. Hartman, pro se.

Robert Sevilla, Tax Div., Dept. of Justice, Washington, D. C., for defendants.

OPINION

JOHN L. MILLER, District Judge.

Now pending before the Court is the government's motion to dismiss plaintiff's complaint requesting a three-judge district court and other relief on the grounds of failure to state a claim upon which relief can be granted and the Court is without subject matter jurisdiction.

A brief statement of the history of this litigation is necessary to our disposition of the government's motion. The plaintiff, Raymond M. Hartman, by letter dated June 19, 1972, from the District Director, Internal Revenue Service, was advised of income tax deficiencies for the tax years ending December 31, 1969, and December 31, 1970. This letter of June 19, 1972, was the formal notice of deficiency or ninety-day letter which permitted the taxpayer to contest the alleged deficiency in the United States Tax Court by filing his petition within ninety days. On September 18, 1972, the taxpayer filed a petition with the Tax Court. The proceedings in the Tax Court pertaining to the income tax deficiencies were continued by that Court on motion pending disposition of the matter sub judice. Subsequently on July 20, 1973, the District Director noticed the taxpayer as is delinquent in his federal employment tax for the calendar years 1970, 1971 and 1972 on the remuneration paid to an employee. The taxpayer next filed his complaint and petition in this Court requesting a three-judge district court enjoin the defendants from enforcing the revenue laws of the United States, Title 26 U.S. C.A., and the regulations promulgated thereunder and a declaratory judgment they are unconstitutional.

Because 28 U.S.C.A. § 2282¹ expressly forbids a single district judge from enjoining the application of a federal statute and the complaint and petition seeks this sort of relief, it becomes this Court's duty to look beyond the prayer for relief to the substantive allegations of the complaint, to consider the substantiality of the constitutional issues raised by Mr. Hartman, whether the complaint at least formally alleges a basis for equitable relief and whether the case presented otherwise comes within the requirements of a three-judge district court. Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 82 S.Ct. 1294, 8 L.Ed.2d 794 (1962); Ex parte Poresky, 290 U.S. 30, 54 S.Ct. 3, 78 L. Ed. 152 (1933); Majuri v. United States, 431 F.2d 469 (3 Cir. 1970) cert. den. 400 U.S. 943, 91 S.Ct. 245, 27 L. Ed.2d 248 (1970); Thompson v. Groshens, 475 F.2d 127 (3 Cir. 1973).

The allegations in the plaintiff's complaint are very broad. Among them, he avers the information requested upon the form 1040 and schedules infringes upon his Fifth Amendment right against self-incrimination;² the Tax Court is unconstitutional and incapable of exercising lawful jurisdiction for any purpose; Title 26 U.S.C.A. is unconstitutional by denying equal protection of the laws; the operation of the Internal Revenue Code as presently administered is in violation of the Fifth Amendment; the defendants are threatening to make and file a deficiency assessment; that the proposed assessment³ and notice of deficiency is not based upon law or fact or a Constitutional money system; that the alleged assessment is not based upon the monies of account of the United States or upon Legal tender — Gold and Silver Coin — but is unconstitutionally determined on the basis of unlawful fiat paper money; U.S. Citizens are not permitted to own gold under the provisions of Title 31, U.S.C.A. and these sections are unconstitutional and make it impossible for citizens to exercise their Constitutional rights to coin money out of gold and silver so as to pay their debts to individuals and to the States in compliance with Article I, Section 10 of the Constitution. Plaintiff's complaint continues for approximately twelve pages wherein his strong dislike and belief in the unconstitutionality of the federal money system, Internal Revenue Laws and Tax Court become evident.

During argument on its motion to dismiss, the government further asserted 26 U.S.C.A. § 7421(a),⁴ in support of the motion, maintaining the legislation withdraws jurisdiction from federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes. Plaintiff contends that injunctive relief is not barred in this case and cites 26 U.S.C.A. § 7426(b)(2)(B) and (C) to the Court as an exception to the bar.⁵ He concedes, however, these sections pertain to actions by persons other than the taxpayer and then asserts they also are unconstitutional.⁶ While it is true courts have held that under extraordinary circumstances injunctive relief may be granted despite the general bar of 26 U.S.C.A. § 7421(a), Enochs, District Director of Internal Revenue v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962); Miller, Collector of Internal Revenue v. Standard Nut Margarine Co. of Florida, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932), this is not an action to come within the exceptions provided in 26 U. S.C.A. § 7421 (a), i. e., to enjoin any additional assessment, levy, or beginning of a legal proceeding while plaintiff's petition is in the Tax Court. Plaintiff's contention is without merit for section 7421(a) prevents Mr. Hartman from maintaining an injunction action to bar the collection of taxes. Jules Hairstylists of Maryland v. United States, 268 F. Supp. 511 (Md.1967) aff'd, 389 F.2d 389 (4 Cir. 1968) cert. den. 391 U.S. 934, 88 S.Ct. 1847, 20 L.Ed.2d 854 (1968). This section was enacted to permit the United States to lay and collect taxes with a minimum of interference. The Circuit Court of Appeals observed in Iannelli v. Long, 487 F.2d 317, 318 (3 Cir. 1973), ". . . bona fide efforts to collect taxes through lawful procedure are the very undertakings that Congress has protected through the enactment of section 7421(a) against frustration or delay by litigation." Furthermore, a basis for equitable relief in this action is lacking as dissatisfied taxpayers are provided by Congress with two remedies for obtaining judicial review namely, actions for refunds, 28 U.S.C.A. § 1346(a)(1) in the Federal District Courts and suits for redetermination of deficiencies in income, gifts, or estate taxes in the Tax Court, 26 U.S.C.A. § 6512. Enochs, District Director of Internal Revenue v. Williams Packing & Navigation Co., Inc., supra; Enterprises Unlimited, Inc. v. Davis, 340 F.2d 472 (9 Cir. 1965); Hamilton v. United States, 309 F.Supp. 468 (S.D.N.Y.1969) aff'd, 429 F.2d 427 (2 Cir. 1970). It is beyond question that where an adequate remedy at law exists equitable relief will not be granted. Accord Iacona v. United States, 343 F.Supp. 600 (E.D.Pa.1972); Majuri v. United States, supra; New Orleans Book Mart, Inc. v. Mitchell, 318 F.Supp. 352 (M.D.Fla.1970), aff'd 401 U.S. 968, 91 S.Ct. 1199, 28 L.Ed.2d 319 (1970). And "it is no longer open to question that a suit may not be brought to enjoin the assessment or collection of a tax because of the alleged unconstitutionality of the statute imposing it." Dodge v. Osborn, 240 U.S. 118, 121, 36 S.Ct. 275, 276, 60 L.Ed. 557 (1916) and cases cited therein. See Collins v. Daly, 437 F.2d 736 (7 Cir. 1971).

We have already mentioned that the type of relief the plaintiff requests is declaratory and in view of the plain wording of the declaratory judgment act⁷ must be denied. As was observed by Chief Judge Bazelon in McGlotten v. Connally, 338 F.Supp. 448, 452-453 (D. C.1972) ". . . the scope of this exception § 2201 is coterminous with the breadth of the Tax Injunction Act, 26 U.S.C. § 7421(a), Footnote omitted which forbids enjoining the collection or assessment of any tax." In view of the prohibition contained in section 2201, the plaintiff's action for a declaratory judgment as to a federal tax matter is specifically prohibited. See Jolles Foundation v. Moysey, 250 F.2d 166 (2 Cir. 1957); United States v. Teitelbaum, 342 F.2d 672 (7 Cir. 1965) cert. den. 382 U. S. 831, 86 S.Ct. 71, 15 L.Ed.2d 75 (1965); Mitchell v. Riddell, 402 F.2d 842 (9 Cir. 1968) cert. den. 394 U.S. 456, 89 S.Ct. 1223, 22 L.Ed.2d 415 (1969); Laing v. United States, 364 F. Supp. 469 (D.Vt.1973).

We next consider the plaintiff's claims of constitutional violations which we believe to be frivolous on their face. First the validity of the first income tax act under the Sixteenth Amendment to the Federal Constitution was sustained as against a multitude of objections in Brushaber v. Union Pac. R. Co., 240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493 (1915). Likewise, the power to levy has long been held constitutional, Phillips v. Commissioner of Internal Revenue, 283 U.S. 589, 51 S.Ct. 608, 75 L.Ed. 1289 (1931). The constitutionality of the Tax Court has been explicitly sustained before the enactment of the 1969 statute. See e. g., Nash Miami Motors, Inc. v. Commissioner of Internal Revenue, 358 F.2d 636 (5 Cir. 1966) cert. den. 385 U.S. 918, 87 S.Ct. 227, 17 L. Ed.2d 142 (1966); Martin v. Commissioner of Internal Revenue, 358 F.2d 63 (7 Cir. 1966) cert. den. 385 U.S. 920, 87 S.Ct. 231, 17 L.Ed.2d 144 (1966); Willmut Gas & Oil Co. v. Fly, 322 F.2d 301 (5 Cir. 1963) cert. den. 375 U.S. 984, 84 S.Ct. 518, 11 L.Ed.2d 473 (1964). The 1969 legislation altered the status of the Tax Court from an "independent agency in the Executive Branch of the Government" to a "court of record" established "under Article I of the Constitution of the United States." The authority of Congress to establish specialized courts or courts of limited jurisdiction outside of the authority of Article III of the Constitution has long been recognized. See Williams v....