In Re: M. Haggart v.

• Court: Court of Appeals for the First Circuit
• Decided: December 22, 1992
• Docket: 92-1519
• Status: Published

Opinion

USCA1 Opinion

December 22, 1992
                                [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

No. 92-1519

IN RE:  MICHAEL HAGGERT,

                                      Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Frank H. Freedman, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                               Torruella, Cyr and Stahl,
                                   Circuit Judges.
                                   ______________

                                 ____________________

Michael Haggert on brief pro se.
            _______________
            A.  John  Pappalardo, Acting  United  States  Attorney,  James  A.
            ____________________                                     _________
        Bruton,  Acting  Assistant  Attorney  General, Gary  R.  Allen,  David
        ______                                         _______________   _____
        English  Carmack,  and  S.  Robert  Lyons,  Attorneys,  Tax  Division,
        ________________        _________________
        Department of Justice, on brief for appellee.

____________________

____________________

Per  Curiam.   On  August  12,  1991, the  Internal
                      ___________

            Revenue Service ("IRS")  brought an ex  parte application  in
                                                __  _____

            the  district court for a  writ authorizing the  IRS to enter

            the business premises  of appellant Michael  Haggert so  that

            the IRS could effectuate its levy upon, and seize,  Haggert's

            property  in satisfaction of Haggert's federal tax liability.

            On  the  same  day,  a  magistrate  judge  signed   an  order

            permitting  the  entry.    Following  the  IRS'  seizure   of

            Haggert's  property   pursuant   to  this   order,   Haggert,

            proceeding  pro se, filed in the district court on August 27,
                        ___ __

            1991, a "Motion to  Rescind Order and Restore to  Equity," in

            which  he requested the return  of the seized  property.  The

            district  court denied this motion on September 19, 1991.  On

            October 31, 1991, Haggert filed a motion captioned,  "Notice,

            Offences, Demands  and Remedy," in  which he argued  that the

            IRS'  levy upon his property had  been illegal, requested the

            imposition  of  various criminal  penalties  against  the IRS

            agents involved,  and  damages from  the  federal  government

            under  42 U.S.C.    1983.   On March  24, 1992,  the district

            court denied the  motion on  two grounds:   (1) the  district

            court lacked  jurisdiction  over  the  motion,  and  (2)  the

            substantive arguments  raised by  Haggert were  frivolous and

            "have  been rejected  as frivolous by  every court  which has

            considered  them."   Haggert  appeals.    We affirm,  on  the

            grounds relied on by the district court.

I.  JURISDICTION
                                       ____________

Initially, the government argues that Haggert could

            not raise his claims  in the form of post-seizure  motions in

            an  ex parte proceeding brought by the IRS to enter Haggert's
                __ _____

            premises.    Since  the  sole  issue  in  such  an  ex  parte
                                                                __  _____

            proceeding is whether the IRS  showed probable cause to enter

            a  taxpayer's  premises and  seize  property  to satisfy  tax

            liability, see United  States v. Shriver,  645 F.2d 221,  222
                       ___ ______________    _______

            (4th Cir.  1981),  the government  argues that  the ex  parte
                                                                __  _____

            proceeding  is concluded  once  the writ  of  entry has  been

            granted.  Thus, the district court would have no jurisdiction

            over     post-seizure  motions  purportedly  brought  by  the

            taxpayer in the ex parte proceeding.
                            __ _____

                      We need not resolve this technical question because

            we agree with the district court  that there was no basis for

            district  court jurisdiction  over Haggert's  claims, whether

            those claims are  treated as post-seizure  motions in the  ex
                                                                       __

            parte proceeding or, instead, as an entirely new action filed
            _____

            by Haggert in the district court.

                      In part, Haggert's motions  appear to request  that

            the  IRS refund to  Haggert the amounts seized  by the IRS to

            satisfy unpaid taxes, on  the ground that Haggert did  not in

            fact owe those taxes.  In order to seek such a refund  in the

            district court, however,  a taxpayer first must  pay the full

            amount  of the tax owed and file an administrative claim with

            the  IRS for a refund.  28  U.S.C.   1346(a)(1).  Haggert has

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not done this.  Nor did Haggert file a claim in the Tax Court

            for review of  Haggert's tax liability before payment,  as is

            permitted by 26 U.S.C.   6213(a).

                      To  the extent Haggert's motions could be construed

            as a suit to recover for wrongful levy on Haggert's property,

            the district  court has no  jurisdiction because 26  U.S.C.  

            7426(a)(1)  provides that only a third party can bring a suit

            for wrongful levy.  A taxpayer, like Haggert, cannot maintain

            such a suit.

                      Haggert's  motions  also  seek  criminal  penalties

            against the IRS  agents involved in the seizure  of Haggert's

            property.    It  is  well settled,  however,  that  only  the

            Attorney General  of the  United  States or  his delegee  may

            initiate  a prosecution  for  violation  of federal  criminal

            laws.    See  Inmates  of  Attica  Correctional  Facility  v.
                     ___  ___________________________________________

            Rockefeller, 477 F.2d 375, 379-82 (2nd Cir. 1973).
            ___________

                      Finally, Haggert requests damages under 42 U.S.C.  

            1983  on  the ground  that the  seizure  of his  property was

            illegal because the IRS did not demonstrate probable cause to

            justify  the writ of entry.  Haggert's   1983 claim, however,

            is  against the U.S. Government only.  Haggert has not served

            any IRS agents or other government employees with process  as

            to any claim under    1983.  The government  enjoys sovereign

            immunity  against  Haggert's claim,  since     1983 does  not

            provide for any waiver of that  immunity.  See Hall v. United
                                                       ___ ____    ______

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States, 704 F.2d  246, 251-52  (6th Cir.)  cert. denied,  464
            ______                                     ____________

            U.S. 1002 (1983).  Also, section 1983 permits damages actions

            against  persons acting  under color  of state  law, and  not

            against  persons  acting  under  federal  law.    Chatman  v.
                                                              _______

            Hernandez,  805 F.2d  453, 455  (1st Cir.  1986); Zernial  v.
            _________                                         _______

            United States, 714 F.2d  431, 435 (5th Cir. 1983).   The IRS,
            _____________

            of  course, acts  under federal,  not state  law.   Nor could

            Haggert bring  a Bivens  claim, since the  federal government
                             ______

            enjoys sovereign  immunity  against Bivens  claims  as  well,
                                                ______

            Nuclear Transport & Storage, Inc. v.  United States, 890 F.2d
            _________________________________     _____________

            1348, 1352  (6th  Cir. 1989),  cert.  denied, 494  U.S.  1079
                                           _____________

            (1990),  and since  the  tax  statutes  themselves  foreclose

            Bivens  claims by  providing adequate  remedies for  improper
            ______

            assessment of tax liability.   Cameron v. IRS, 773  F.2d 126,
                                           _______    ___

            129 (7th Cir. 1985).

                                   II.  THE MERITS
                                        __________

                      As the  district court ruled, even  if the district

            court  had jurisdiction,  Haggert's claims were  meritless in

            any  event.    We will  briefly  consider  each of  Haggert's

            arguments in turn.

                      First,  Haggert  attacked  the sufficiency  of  the

            affidavit  of Revenue  Officer John Mello  in support  of the

            IRS' application for the writ of entry on Haggert's premises.

            Haggert contends that the affidavit is unacceptable hearsay.

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The affidavit of Revenue Officer  Mello does indeed

            contain  hearsay.   In  the affidavit  Revenue Officer  Mello

            states,  "I have  been advised  of the  following by  Revenue

            Officer  Bruce  Boyson,  whom I  know  and  believe  to be  a

            reliable  source of  this information."   The  affidavit then

            goes  on  to  set  forth  the  evidence  in  support  of  the

            application  for the writ of  entry.  This  evidence, in sum,

            was that Haggert had been issued tax  assessments and notices

            of deficiency  for the unpaid tax liability in question; that

            Haggert had neglected  or refused to  pay the taxes  assessed

            for over ten  days; that Haggert had been issued  a notice of

            the  IRS' intention  to levy  on his  property; that  Haggert

            leased the business premises on which entry was sought;  that

            Revenue   Officer  Boyson  had   personally  observed  office

            fixtures and furnishings on  these premises, which were among

            the items to be seized; that Boyson had verified that Haggert

            owned  these  items because  both  Haggert's  landlord and  a

            Uniform Commercial  Code filing  at the Secretary  of State's

            office said so; and that Haggert had refused Boyson's request

            for consent to enter the premises for the purposes of levying

            on Haggert's assets.

                      Even  in  an application  for  a  warrant to  enter

            premises  to  search  for  evidence  of   criminal  activity,

            reliance  in   an  affidavit  upon   hearsay  information  to

            establish probable  cause is  permissible.  A  search warrant

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may be issued on the basis of hearsay information, consistent

            with  the fourth  amendment, if  issuance  of the  warrant is

            justified by the totality of the circumstances.

                      The  task  of the  issuing  magistrate is
                      simply to make a  practical, common-sense
                      decision    whether,   given    all   the
                      circumstances set forth in  the affidavit
                      before him, including the  "veracity" and
                      "basis of knowledge" of persons supplying
                      hearsay  information,  there  is  a  fair
                      probability  that contraband  or evidence
                      of a crime will  be found in a particular
                      place.  And the duty of a reviewing court
                      is simply  to ensure that  the magistrate
                      had  a  "substantial  basis  for  .  .  .
                      conclud[ing]"    that    probable   cause
                      existed.   Jones  v.  United States,  362
                                 _____      _____________
                      U.S., at 271.

            Illinois v. Gates, 462 U.S. 213, 238-39 (1983).
            ________    _____

                      There is disagreement among the circuits whether an

            IRS  application  for  a writ  of  entry  is  subject to  the

            probable cause  standards applied  to search warrants  in the

            criminal law setting  under Gates, id., or is instead subject
                                        _____  ___

            to  the  less  exacting  probable  cause  standards governing

            administrative  searches, see Marshall v. Barlow's, Inc., 436
                                      ___ ________    ______________

            U.S. 307, 320-21 (1978); United States v. Blanchard, 495 F.2d
                                     _____________    _________

            1329,  1331 (1st Cir. 1974).  Compare United States v. Condo,
                                          _______ _____________    _____

            782  F.2d  1502,  1505  (9th Cir.  1986)  (applying  criminal

            standards),  with In  the Matter of  Carlson, 580  F.2d 1365,
                         ____ __________________________

            1376-81 (10th Cir. 1978) (applying administrative standards).

            Even under the criminal  standards, however, we could readily

            find  "that  the  magistrate  had  a  substantial  basis  for

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concluding that  probable cause existed."   Gates, supra, 462
                                                        _____  _____

            U.S. at 238-39 (quotation and citation omitted).

                      The hearsay  statements in Revenue  Officer Mello's

            affidavit were not those of an unidentified informant, but of

            a  named IRS  Revenue Officer,  Bruce Boyson,  whose business

            address  and  telephone  number  are  given  in  an  attached

            "seizure data sheet."  The magistrate judge had ample reason,

            therefore, for confidence in  the veracity and reliability of

            the hearsay declarant.   See United States v. McCormick,  309
                                     ___ _____________    _________

            F.2d 367, 372  (7th Cir.  1962), cert. denied,  372 U.S.  911
                                             ____________

            (1963)  ("information .  . .  communicated  in the  course of

            official business by [FBI]  agents among themselves . .  . is

            [not] excluded by the hearsay rule . . . so as to require the

            quashing of a search warrant issued upon the affidavit of one

            of  the   agents  setting   forth  his  reliance   upon  such

            information").

                      In addition, Mello's affidavit adequately  sets out

            the  basis of  the  hearsay information  provided by  Boyson.

            Giving  the affidavit  the "practical,  common-sense" reading

            required by Gates, supra, 462 U.S. at 238,  it is implicit in
                        _____  _____

            the  affidavit  that  the assertions  that  Haggert  received

            various required IRS  assessments and notices, which  Haggert

            neglected or  refused to pay,  were derived from  IRS records

            maintained in  the course  of official business.   Similarly,

            Boyson's hearsay  assertion  that  the  office  fixtures  and

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furnishings belonged  to Haggert  was supported by  a Uniform

            Commercial Code  filing and by Haggert's  landlord.  Although

            this would  appear to  be double  hearsay, double  hearsay is

            permissible  in  such an  affidavit  if  adequate indicia  of

            reliability are present.   United States v. Angulo-Lopez, 791
                                       _____________    ____________

            F.2d 1394, 1397 (9th  Cir. 1986).  A Uniform  Commercial Code

            filing   certainly  carries  ample  indicia  of  reliability.

            Boyson's other statements were based on personal knowledge or

            observation.  If we  had jurisdiction to consider the  issue,

            therefore,  we   would  have  no  difficulty   in  finding  a

            substantial  basis for  the magistrate  judge's determination

            that the affidavit was adequate to establish probable cause.

                      Haggert   also  argues   that  the   affidavit  was

            insufficient to support the writ of entry because the IRS did

            not  submit   the  actual  notices  of   deficiency  and  tax

            assessments against Haggert.  The affidavit,  however, stated

            that  notices  of deficiency  and  tax  assessments had  been

            issued to Haggert for  the unpaid tax liability in  question.

            This  was  adequate,  as   the  magistrate  judge  found,  to

            establish probable  cause to believe that  Haggert's property

            was subject  to levy by  the IRS.   Actual production of  the

            documents was not required.

                      Haggert's  other points,  as the  government notes,

            were   all   well-worn  tax-protestor   arguments  repeatedly

            rejected by  the courts.   Haggert argued  that he was  not a

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taxpayer,  and owed no income tax, because his wages were not

            income; that he did  not live within the jurisdiction  of the

            IRS, which  is limited to  Washington, D.C.; that  the income

            tax is a  volunteer tax  by self-assessment, and  he had  not

            chosen  to volunteer; that the  income tax is  an excise tax;

            and  that application  of  the Internal  Revenue Code  to tax

            Haggert  would  be  unconstitutional.   These  arguments  are

            meritless,  indeed silly, on their face.  See, e.g., Cheek v.
                                                      ___  ____  _____

            United  States, 111 S. Ct. 604, 612-13 (1991); In re Becraft,
            ______________                                 _____________

            885 F.2d 547  (9th Cir.  1989); Wilcox  v. Commissioner,  848
                                            ______     ____________

            F.2d 1007  (9th Cir.  1988); Sullivan v.  United States,  788
                                         ________     _____________

            F.2d 813, 815 (1st Cir. 1986).

                      The  government's request  for  the  imposition  of

            sanctions on Haggert, who has no record of repeated frivolous

            filings in this court, is denied.
                                      ______

                      The judgment of the district court is affirmed.
                                                            ________

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