Hospital Resource Personnel, Inc. v. US
| Decision Date | 03 June 1994 |
| Docket Number | No. CV 194-53.,CV 194-53. |
| Citation | 860 F. Supp. 1554 |
| Parties | HOSPITAL RESOURCE PERSONNEL, INC., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Southern District of Georgia |
Thomas Reuben Burnside, Jr., Burnside, Wall, Daniel, Ellison & Revell, Augusta, GA, for plaintiff.
Edmund Alexander Booth, Jr., Augusta, GA, and James B. Thompson, Jr., Trial Atty., Tax Div., U.S. Dept. of Justice, Washington, DC, for defendant.
Before the Court in the above-captioned case is Plaintiff Hospital Resource Personnel, Inc.'s Motion for Temporary Restraining Order, Preliminary Injunction, and Permanent Injunction. Plaintiff's Motion seeks to restrain and enjoin the United States of America, through officers and agents of the Internal Revenue Service ("IRS"), from enforcing a Federal tax lien on Plaintiff's assets and from implementing other efforts to collect certain assessed taxes. Also before the Court is Plaintiff's Motion for Leave to Amend its Complaint to add a claim for the injunctive relief addressed above.
Plaintiff operates a registry of nurses from which hospitals in the Augusta and the surrounding Central Savannah River Area may fill additional staffing needs when high patient censuses require extra on-duty nurses. When the nurses complete their agreed-upon services for the hospitals, they submit completed time sheets to Plaintiff's office. Plaintiff pays the nurses an hourly rate and then receives payment from its client hospitals for the hours the nurses actually worked.
The IRS has assessed taxes apparently in excess of $1,144,000.00 against Plaintiff. The IRS claims that the nurses on Plaintiff's registry were employees rather than independent contractors and that Plaintiff should have withheld employment taxes on all payments made to Plaintiff's nurse employees. Plaintiff claims that the nurses on its registry have at all times been treated as independent contractors, that the Plaintiff has filed all necessary 1099 information returns on its nurses, that no withholding was necessary, and that the IRS has wrongfully assessed the taxes at issue.
Plaintiff has filed the instant lawsuit seeking 1) a refund of $82.27 representing employment taxes paid under protest to the IRS, and 2) injunctive relief prohibiting the government from asserting its federal tax lien or from otherwise collecting the additional taxes assessed.
The Court is mindful of the Anti-Injunction Act, 26 U.S.C. § 7421, and its strong mandate against restraining the government's efforts in the collection of assessed taxes. The Court also notes, however, that the Anti-Injunction Act is not an absolute prohibition against such interference. The Supreme Court has determined that an exception to the Act exists in certain limited circumstances. See Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962). If a taxpayer can show 1) that under no circumstances can the government ultimately prevail on the merits, and 2) that equity jurisdiction otherwise exists, then the taxpayer's suit may be maintained in district court to enjoin the collection of taxes. Enochs, supra at 7, 82 S.Ct. at 1129.
It appears that the judicially created exception to the Anti-Injunction Act may apply in the present case. The testimony at the May 25, 1994, hearing on the present motion indicates that Plaintiff has a more than substantial likelihood of success on the merits of its claim for more lasting injunctive relief.1 Plaintiff, through the testimony of its officer David M. Barbee, has thus far presented a compelling case that the government could in no circumstances prevail on the merits of its case. The Declaration of Revenue Officer Merritt J. Swinney, on the other hand, is merely a conclusory adoption of his 1991 investigation of Plaintiff to determine Plaintiff's liability for employment taxes.
While an IRS tax assessment made in good faith may enjoy a facial presumption of validity, the IRS in the present case appears to have ignored the countervailing presumptions afforded taxpayers in the "safe haven" provisions of § 530 of the Internal Revenue Act of 1978, Pub.L. 95-600, 92 Stat. 2763, 2885-86 (November 6, 1978) (codified at 26 U.S.C. § 3401 note (1982) (as amended). These provisions, which counsel for the government acknowledges apply in the present case (see Response number 3 of United States to Local Rule 8.6 Interrogatories), generally provide safe haven to the taxpayer who does not treat his workers as employees for withholding tax purposes when the taxpayer had any "reasonable basis" for such treatment. According to House Report No. 95-1748, 95th Cong., 2d Sess. 3-4 (1978), Section 530 was intended to protect a taxpayer "if a taxpayer had any reasonable basis for treating its workers as other than employees" (emphasis added). Significantly, the report further states that "the committee intends that this reasonable basis requirement be construed liberally in favor of the taxpayers." Id. at 631-32 (emphasis added).
In addition to the many common law factors probative of whether a worker is to be treated as an employee or as an independent contractor — most of which, if not all of which, indicate that the nurses on Plaintiff's registry are independent contractors rather than employees — section 530(a)(2) provides three statutory safe...
To continue reading
Request your trial
-
Nat'l Ass'n of Mortgage Brokers v. Bd. of Governors of The Fed. Reserve System
...quo of a case until the court has an opportunity to hear a request for fuller relief. Id.; see, e.g., Hosp. Res. Pers., Inc. v. United States, 860 F.Supp. 1554, 1556 (S.D.Ga.1994) (explaining that the purpose of a TRO is to preserve the status quo pending a hearing for a preliminary or perm......
-
Clark v. City of Macon, Ga.
... ... who arranged for plaintiff to be admitted to Charter Lake Hospital for depression. She was released from Charter Lake in late February 1992, ... Mr. Benjamin Hubbard ("Hubbard"), Director of Personnel for the City, met with plaintiff in July and offered her a Secretarial I ... Anderson v. Liberty Lobby, Inc"., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) ... \xC2" ... ...
-
Shelley v. Am. Postal Workers Union
...quo of a case until the court has an opportunity to hear a request for fuller relief. Id.; see, e.g., Hosp. Res. Pers., Inc. v. United States, 860 F.Supp. 1554, 1556 (S.D.Ga.1994) (explaining that the purpose of a TRO is to preserve the status quo pending a hearing for a preliminary or perm......
-
Isbell v. City of Oklahoma City
...for preliminary injunctive relief can receive more careful and deliberate consideration. See Hospital Resource Personnel, Inc.v. United States, 860 F. Supp. 1554, 1556 (S.D. Ga. 1994). Pursuant to Fed. R. Civ. P. 65(c), the Court finds that security in the amount of $550.00 is sufficient to......
-
Motions
...an opportunity for a full inquiry to determine if an injunction should be granted. Hospital Resource Personnel, Inc. v. United States , 860 F.Supp. 1554, 1556 (S.D. Ga. 1994). An applicant can obtain a TRO without notice to the adverse party. However, the applicant must either show that an ......
-
Table of Cases
...(2d Cir. 1989), §4:117.2 Horta v. Sullivan , 4 F.3d 2, 7-8 (1st Cir. 1993), §7:102 Hospital Resource Personnel, Inc. v. United States , 860 F.Supp. 1554, 1556 (S.D. Ga. 1994), §7:10 Ho v. United States , 331 F.2d 144 (9th Cir. 1964), §9:33.1 Howze v. Jones & Laughlin Steel Corp. , 750 F.2d ......