Iannelli v. Long
| Decision Date | 29 June 1973 |
| Docket Number | No. 72-1418.,72-1418. |
| Parties | Robert E. IANNELLI and Dolores Iannelli, his wife v. H. Alan LONG, District Director, Pittsburgh, Pennsylvania, and Johnnie M. Walters, Commissioner of Internal Revenue of the United States of America, successor to Harold T. Swartz, Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
Robert E. Lindsay, Tax Div., Dept. of Justice, Washington, D. C., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Meyer Rothwacks, Chief Appellate Section, John P. Burke, John M. Brant, Attys. Tax Div. Dept. of Justice, Richard L. Thornburgh, Pittsburgh, Pa., of counsel, for appellants.
James E. McLaughlin, McArdle, McLaughlin, Paletta & McVay, Pittsburgh, Pa., Charles Alan Wright, Austin, Tex., William A. Camp, of counsel, for appellees.
Before HASTIE and ALDISERT, Circuit Judges, and DITTER, District Judge.
Certiorari Denied November 19, 1973. See 94 S.Ct. 541.
The order from which the government has taken this appeal enjoined the District Director and the Commissioner of Internal Revenue from seizing or selling, until further order of the court, any property of Robert Iannelli or his wife Dolores to satisfy jeopardy assessments against them for alleged failure to pay overdue federal wagering taxes. In its opinion, W.D.Pa.1971, 333 F.Supp. 407, the court explained that the purpose of this temporary injunction was to protect the taxpayers against possible necessity for self incrimination if, in normal course, they should undertake to establish in a civil suit a right to refund of sums collected pursuant to these assessments while criminal proceedings growing out of their alleged wagering business were pending. The government contends that the district court lacked jurisdiction to grant this injunctive relief because section 7421(a) of the Internal Revenue Code of 1954, U.S.C. § 7421(a), provides, with irrelevant exceptions, that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person".
The parties agree that section 7421(a) is comprehensive and that on its face it seems to prohibit such a suit and such an injunction as we have here. Cf. Enoch v. Williams Packing & Navigation Co., 1962, 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292; Johnson v. Wall, 4th Cir. 1964, 329 F.2d 149. It reflects an evident purpose to protect the public revenue from court imposed delays in the collection of taxes, leaving aggrieved taxpayers to sue for refunds of any amounts improperly collected. Thus, the section presupposes a bona fide attempt of the government to collect revenue. Therefore, if a levy on property is in formal guise an effort to collect taxes but in fact is only a device for harassing and punishing a wrongdoer without honest anticipation that the levy may yield money owed for taxes, it is arguable that a suit to restrain the tax collector's enterprise is not in reality a suit to restrain the collection of taxes. Accordingly, it is relevant to consider whether we have here a bona fide effort to collect revenue.
The taxpayers do not dispute that they may owe the government substantial sums of overdue taxes, though they dispute the claimed...
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