McCabe v. Alexander

• Decision Date: 06 February 1976
• Docket Number: No. 75-2673 Summary Calendar.,75-2673 Summary Calendar.
• Citation: 526 F.2d 963
• Parties: Morgan L. McCABE, Plaintiff-Appellant, v. Donald C. ALEXANDER, Commissioner of Internal Revenue Service, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

526 F.2d 963

Morgan L. McCABE, Plaintiff-Appellant, v. Donald C. ALEXANDER, Commissioner of Internal Revenue Service, et al., Defendants-Appellees.

No. 75-2673 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

February 6, 1976.

J. Thomas Cardwell, Orlando, Fla., George C. Pontikes, Chicago, Ill., for plaintiff-appellant.

John L. Briggs, U.S. Atty., Jacksonville, Fla., Scott P. Crampton, Asst. Atty. Gen., Leonard J. Henzke, Jr., Gilbert E. Andrews, Acting Chief, Appellate Sec., Wynette J. Hewett, Tax Div., U.S. Dept. of Justice, Washington, D.C., Kendell W. Wherry, Asst. U.S. Atty., Orlando, Fla., for defendants-appellees.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

PER CURIAM:

Plaintiff Morgan L. McCabe appeals from the District Court's dismissal without prejudice of his suit to enjoin the sale of certain real property in satisfaction of his income tax liabilities for 1960-1963 and 1966.¹ In addition to enjoining the collection of taxes, taxpayer seeks a declaration that no taxes are due for the years in question.

Plaintiff originally sought a redetermination of income tax deficiencies assessed against him for the years 1958-1967. Confirming a settlement agreement reached between the Internal Revenue Service and McCabe, the Tax Court entered a decision on August 23, 1973, substantially lessening the amount of the deficiencies. Thereafter, the Internal Revenue made a new assessment which reflected the reduced amounts due under the settlement agreement.

However, according to plaintiff, in the interim between this second assessment and the seizure of his property for nonpayment of taxes, he received notices of adjustment abating taxes due under the original (pre-Tax Court decision) assessments.² Taxpayer claims that

these abatements are in no way qualified or conditioned. Therefore, these abatements rescinded the assessment of October 15, 1973 the second assessment, as well as those instituted prior to the Tax Court suit.

The Government responds as follows:

Pursuant to Section 6404(a) . . the assessments entered before the Tax Court litigation . . . were abated. New assessments based upon the income tax liability agreed upon in the Tax Court action were then made. The abatement of the earlier assessments was necessary in order to give effect to the somewhat lesser liability reflected in the Tax Court decisions.

The Anti-Injunction Act, 26 U.S.C. § 7421(a), provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court . . ." The Supreme Court in Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962) fashioned a single exception to this otherwise clearly prohibitive language. The Court held an injunction proper only where (1) it is clear that under no circumstances could the Government ultimately prevail on the merits of its claim; and (2) equity jurisdiction otherwise exists. Accord, Lange v. Phinney, 5 Cir. 1975, 507 F.2d 1000. In evaluating the parties' assertions against these standards, the court must view the facts in the light most favorable to the Government. Enochs, supra, at 7-8, 82 S.Ct. at 1129, 8 L.Ed.2d at 296-297. Lange, supra, at 1003, 1006.

After examining the briefs and record, we conclude that the plaintiff has failed to meet the heavy burden of demonstrating that under no circumstances could the Government prevail. McCabe does not challenge the fact that he owed the taxes set forth in the August, 1973 Tax Court opinion. Rather, he claims that for some unrevealed reason, the Government, after having reached a settlement with the taxpayer, simply abated all of his tax liability. He seeks to portray the Service as Santa Claus rather than its more normal characterization as Scrooge. We doubt that the Government is as generous as McCabe would have us believe. Clearly, the Internal Revenue Service's explanation that it abated the earlier assessment in order to assert, in a new assessment, the lesser...