Carlos Zuluaga v. United States

774 F.2d 1487, 3 Fed. R. Serv. 3d 1393, 56 A.F.T.R.2d (RIA) 6279, 1985 U.S. App. LEXIS 24408

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 29, 1985
• Docket: 84-6200
• Status: Published

Opinions

TANG, Circuit Judge.

Carlos Zuluaga appeals from the district court’s dismissal of his action challenging a termination assessment issued against him by the Internal Revenue Service. Because we lack jurisdiction over this appeal, we dismiss.

In April 1984, IRS investigators seized more than $200,000 from the trunk of Zu-luaga’s automobile as part of an investigation of the appellant for alleged laundering of proceeds from narcotics trafficking. After discovering that Zuluaga had not filed a tax return in two years, the IRS issued a termination assessment of $340,773 pursuant to 26 U.S.C. § 6851.

On May 4, 1984, the appellant filed a protest with the IRS, seeking a redetermi-nation of the reasonableness of the assessment and the propriety of the amount assessed. After this administrative challenge proved unsuccessful, Zuluaga sought relief in the district court under 26 U.S.C. § 7429 which authorizes district court review to determine whether the assessment is reasonable under the circumstances and whether the amount assessed is appropriate under the circumstances. § 7429(b)(2).¹ The appellant also sought a return of the currency seized from his automobile pursuant to Fed.R.Crim.P. 41(e).

On June 22, 1984, the IRS gave notice that it would depose Zuluaga on June 29. After the parties stipulated to a 40-day extension of time for the district court’s decision, the IRS noticed Zuluaga’s deposition for July 19. On July 17, Zuluaga moved for a protective order which was denied by the magistrate on July 19. Zu-luaga failed to appear for the deposition and the IRS moved to dismiss the ease pursuant to Fed.R.Civ.P. 37(d). Zuluaga then moved for reconsideration of the denial of his motion for a protective order. After hearings were held on the motion July 23, the district court denied the motion as well as Zuluaga’s Rule 41(e) motion for return of property. The court concluded that the motion for return of property was outside the statutory scope of a section 7429 proceeding. The court was willing to give Zuluaga until July 27 to appear for a deposition. When Zuluaga’s counsel informed the court that Zuluaga would not appear on that date, the court unconditionally dismissed the action. This appeal followed.

We conclude that we lack appellate jurisdiction over this appeal and therefore order it dismissed.

Under 26 U.S.C. § 7429(f), “[a]ny determination made by a district court under this section shall be final and conclusive and shall not be reviewed by any other court.” The clear import of this language is that a district court’s determination in a section 7429 proceeding is final and no review of that proceeding may be brought to this court. See Vicknair v. United States, 617 F.2d 1129, 1131 (5th Cir.1980). Indeed, this court has expressly extended the general rule of nonreviewability to decisions made in a section 7429 proceeding outside the precise confines of section 7429(b). Nichols v. United States, 633 F.2d 829, 831 (9th Cir.1980) (due process claim and evidentiary challenge nonreviewable).

This reading of the statute is consistent with the legislative intent behind the passage of section 7429. The statute was enacted as part of the Tax Reform Act of 1976 to provide expedited administrative and district court review of jeopardy assessments. Congress was concerned with the hardship resulting from lengthy delays in a taxpayer’s effort to obtain judicial review of assessments through an ordinary refund action in the district court or court of claims. H.R.Rep. No. 658, 94th Cong., 2d Sess. 303, reprinted in 1976 U.S.Code Cong. & Ad.News 2897, 3199; S.Rep. No. 938, 94th Cong., 2d Sess. 363, reprinted in 1976 U.S.Code Cong. & Ad.News 3439, 3792. Consequently, an expedited procedure for review of jeopardy assessments was provided in section 7429. After administrative review of the jeopardy assessment, the taxpayer may seek district court review within 30 days of the administrative determination or within 46 days of the taxpayer’s request for administrative review (whichever is earlier). § 7429(b)(1). The district court is required to act within 20 days unless the taxpayer requests an extension and reasonable grounds exist for that request. § 7429(c). The action “may not be extended at the request of the Treasury Department or the court. It is further provided that a determination by the district court may not be appealed to or reviewed by any other court.” S.Rep. No. 938 supra, at 365, reprinted in U.S.Code Cong. & Ad.News at 3794; see 26 U.S.C. § 7429(c), (f).

Although a dismissal under Fed.R.Civ.P. 37(d) is not strictly within the explicit items of district court review described in § 7429(b), the language of § 7429(f) and the legislative history from which the statute emerged suggest that such a disposition is not reviewable in this court. Since a Rule 37(d) dismissal is a dismissal on the merits, see Fed.R.Civ.P. 41(b), to allow an appeal from a section 7429 action would frustrate Congress’ intent to provide a limited and expedited review of jeopardy assessments without delay. “The clear intent of Congress was to preclude appeals from district court proceedings under § 7429. We will not frustrate that intent by a narrow reading of § 7429(f).” Nichols, 633 F.2d at 831 (citation omitted).

The appeal is DISMISSED for lack of appellate jurisdiction.

1 . § 7429(b)(2) provides:

Determination by district court. Within 20 days after an action is commenced under paragraph (1), the district court shall determine whether or not—

(A) the making of the assessment under section 6851, 6861, or 6862, as the case may be, is reasonable under the circumstances, and

(B) the amount so assessed or demanded as a result of the action taken under section 6851, 6861, or 6862, is appropriate under the circumstances.