Tempelman v. USA

• Court: Court of Appeals for the First Circuit
• Decided: June 4, 1993
• Docket: 92-2280
• Status: Published

Opinion

USCA1 Opinion

June 3, 1993
                                [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

No. 92-2280 

                      ANDREW TEMPELMAN AND PRISCILLA TEMPELMAN,

                               Plaintiffs, Appellants,

                                          v.

                          UNITED STATES OF AMERICA, ET AL.,

                                Defendants, Appellees.

____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Joseph A. DiClerico, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                              Torruella, Cyr and Boudin,
                                   Circuit Judges.
                                   ______________

                                 ____________________

            Andrew Tempelman and Priscilla Tempelman on brief pro se.
            ________________     ___________________
            Peter E. Papps, United  States Attorney, James  A. Bruton,  Acting
            ______________                           ________________
        Assistant Attorney General,  Gary R. Allen, William  S. Estabrook, and
                                     _____________  _____________________
        Doris  D. Coles, Attorneys,  Tax Division,  Department of  Justice, on
        _______________
        brief for appellees.

____________________

____________________

Per  Curiam.    Andrew   and  Priscilla  Tempelman  (the
                 ___________

            taxpayers) filed a  pro se action  in federal district  court

            seeking  to enjoin  the Internal  Revenue Service  (IRS) from

            collecting back  taxes.    The  lower  court  denied  relief,

            concluding that the  suit was barred  by the  Anti-Injunction

            Act, 26 U.S.C.    7421(a).  We agree with  this determination

            and therefore affirm.

                                          I.

                 The taxpayers own and operate a small inn and restaurant

            in Milford, New Hampshire.  In 1990, the IRS served them with

            notices of deficiency pursuant  to 26 U.S.C.    6212 claiming

            that approximately $130,000 in taxes, interest and  penalties

            were  owed for  the  years 1984  and  1985.1   The  taxpayers

            thereafter filed a timely petition under 26 U.S.C.   6213 for

            redetermination  in  tax court.    On  October 4,  1991,  the

            taxpayers  and the IRS presented the  court with a stipulated

            agreement calculating a  total liability for  those years  of

            approximately  $35,000 plus  interest.   The tax  court judge

            adopted this agreement in a decision dated November 27, 1991.

            The taxpayers filed an  appeal from this decision on  May 20,

            1992, claiming inter alia  that they had been coerced  by the
                           __________

            IRS  and the tax court into signing the stipulation.  Because

            their  notice of appeal was filed well past the 90-day period

            prescribed  by Fed. R. App. P. 13(a), we dismissed the appeal

            for lack of jurisdiction on September 1, 1992.  We thereafter

____________________

            1.  While  the IRS  also alleged  deficiencies for  the years
            1983 and 1986-88, the instant case pertains only to the years
            1984-85.  

denied their motion for reconsideration and for permission to

            file late.

                 Under 26  U.S.C.   6213(a),  the IRS is  prohibited from

            making   any  assessment  or  levy  or  otherwise  initiating

            collection efforts until  the decision of the  tax court "has

            become final"--which  in this  case occurred on  February 25,

            1992.  See  26 U.S.C.   7481(a).   In the stipulated decision
                   ___

            adopted by  the tax  court, however, the  taxpayers expressly

            agreed to  waive this restriction.   Accordingly, in December

            1991,  the  IRS made  assessments  for the  years  1984-85 in

            accordance with  that decision.   Upon taxpayers'  failure to

            pay, the IRS in  August 1992 levied upon their  New Hampshire

            bank account and  filed a  notice of tax  lien against  their

            property.  Taxpayers responded  by filing their complaint for

            injunctive relief.

                                         II.

                 The   Anti-Injunction   Act   provides,   with   certain

            enumerated  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 ...."   26  U.S.C.  

            7421(a).    In Enochs  v. Williams  Packing  Co., 370  U.S. 1
                           ______     ______________________

            (1962), the  Court fashioned an additional  exception to this

            provision, holding that a suit  for injunctive relief may lie

            where (1) the taxpayer will suffer irreparable harm absent an

            injunction, and (2)  it is clear that "under no circumstances

-3-

could the Government  ultimately prevail"  on the  underlying

            dispute.   Id. at 7;  accord, e.g., South  Carolina v. Regan,
                       ___        ______  ____  _______________    _____

            465 U.S. 367,  374 (1984); Commissioner v.  Shapiro, 424 U.S.
                                       ____________     _______

            614, 627 (1976); Bob Jones Univ. v. Simon, 416 U.S.  725, 737
                             _______________    _____

            (1974);  Lane v. United States,  727 F.2d 18,  20 (1st Cir.),
                     ____    _____________

            cert. denied, 469 U.S.  829 (1984).  The taxpayers  here seek
            ____________

            to  invoke this exception, arguing  that they satisfy both of

            the  Enochs  criteria.    The district  court  (adopting  the
                 ______

            recommendations  of  a  magistrate-judge) disagreed,  finding

            that the  taxpayers had established irreparable  harm but had

            failed   to  show   that  the   government  would   under  no

            circumstances  prevail.     This  determination   is  plainly

            correct.       The  Enochs Court  elaborated  on  the  latter
                                ______

            requirement as follows:

                      [T]he question of whether the Government has a
                 chance of ultimately prevailing is to be determined
                 on the basis  of the information available to it at
                 the  time of  suit.   Only if  it is  then apparent
                 that,  under the most  liberal view of  the law and
                 facts,  the  United  States  cannot  establish  its
                 claim,  may   the  suit   for   an  injunction   be
                 maintained.

            370 U.S.  at 7.  In  attempting to meet this  "heavy" burden,

            McCarthy v. Marshall,  723 F.2d 1034,  1040 (1st Cir.  1983),
            ________    ________

            the taxpayers advance two arguments.  First, they charge that

            they were coerced into  signing the stipulation, under threat

            of  dismissal  of  their  petition, without  having  had  the

            opportunity  to  examine  the agreement  and  the  underlying

            tabulations.   The  transcripts of  the tax  court proceeding

-4-

undermine  this  claim.2   They  reveal  that  the threat  of

            dismissal  arose--not because of  any heavy-handed tactics on

            the  part of  the  IRS  or  the  court--but  because  of  the

            taxpayers'  inadequate bookkeeping and their unwillingness to

            produce records.  Indeed, the court refrained from dismissing

            the petition even while noting that the IRS was "entitled" to

            such  relief.  Supp. App.  at 52.   Furthermore, although the

            taxpayers  appeared pro se, the court arranged for them to be

            assisted by an attorney from a local law school's tax clinic,

            who  argued on their behalf.  At  the close of the hearing at

            which the agreement was  announced, the taxpayers praised the

            judge.  Id. at 42.  After the judge's decision, the taxpayers
                    ___

            never  filed  a motion  for  reconsideration or  a  motion to

            vacate or revise.  See  Tax Court Rules 161, 162.   Any claim
                               ___

            of coercion or duress is, at the very least, far-fetched.

                 Second, the taxpayers complain  that, once the tax court

            decision  issued, the  IRS  attorney destroyed  her  personal

            working  papers containing  the  calculations underlying  the

            stipulated agreement.  They contend that  she was required to

            retain  those  papers until  the  tax  court decision  became

____________________

            2.  Because the district court  dismissed the complaint prior
            to service  of process  on the government,  these transcripts
            were not part of the record below.  The IRS, having submitted
            them in a supplemental  appendix to this court, asks  that we
            take judicial notice thereof.  This request is granted.  See,
                                                                     ___
            e.g., Fed. R. Evid.  201; Taino Lines, Inc. v.  M/V Constance
            ____                      _________________     _____________
            Pan Atlantic, 982  F.2d 20,  22 n.8 (1st  Cir. 1992);  United
            ____________                                           ______
            States v. Berzon, 941 F.2d 8, 14 n.9 (1st Cir. 1991). 
            ______    ______

                                         -5-

final.   They  argue  that the  attorney's calculations  were

            riddled with errors  and omissions.  And they  conclude that,

            since all "evidence"  in support  of the IRS'  claim has  now

            been destroyed, the IRS has no chance of prevailing  thereon.

This line  of reasoning is  likewise unavailing.   It is

            hardly  surprising  that  personal working  papers  would  be

            disposed of once a stipulated agreement has  been reached and

            entered.   Such papers are obviously not the central evidence

            in support  of the IRS' claim  that back taxes are  due.  And

            the  taxpayers' underlying complaint  of IRS miscalculations,

            having  not   been  timely   raised,  falls  well   short  of

            establishing   "that   under  no   circumstances   could  the

            Government ultimately prevail."   We therefore agree with the

            lower court that the Enochs exception is inapplicable.3
                                 ______

                 The  taxpayers' remaining arguments  can be more readily

            dismissed.  First, they seek,  in the alternative, to  invoke

            one of  the statutory exceptions to  the Anti-Injunction Act:

            the provision in    6213(a) permitting a court to  enjoin any

            assessment made  prior to  the tax court's  decision becoming

            final.    As mentioned,  however,  the  taxpayers waived  the

            statutory bar  on assessments being made prior  to that time.

____________________

            3.  Indeed,  in light of the dismissal of the appeal from the
            tax court ruling, it might well be argued that the government
            already has prevailed.  We need not decide,  however, whether
            the  instant  matter is  moot or  is  barred on  res judicata
                                                             ____________
            grounds, inasmuch as it is in any event without merit.

                                         -6-

Moreover, the filing of  a notice of appeal operates  to stay

            the assessment or collection  of a deficiency only if  a bond

            is filed  with the tax court.   See 26 U.S.C.    7485(a); Tax
                                            ___

            Court Rule 192.  No such bond was filed here.  

                 Second, the taxpayers complain  that the district  court

            dismissed  their suit sua sponte prior  to service of process
                                  __________

            on the government.   Yet  the court's lack  of authority  was

            apparent  from the face  of the  complaint.   The magistrate-

            judge's  report  provided  ample  notice  of the  complaint's

            deficiencies.     And   the   taxpayers  were   afforded  two

            opportunities   to  correct  those   shortcomings:  first  in

            objecting  to  the  magistrate-judge's report,  and  later in

            asking  the  district court  to  reconsider  its judgment  of

            dismissal (the  court, in  fact, granted  reconsideration and

            then  reinstated its  dismissal).   We  thus need  not decide

            whether  the court's sua sponte dismissal was error.  Even if
                                 __________

            it were, any such error was, under the circumstances, plainly

            harmless.  See, e.g.,  Purvis v. Ponte, 929 F.2d  822, 826-27
                       ___  ____   ______    _____

            (1st Cir. 1991) (per curiam).4

____________________

            4.  The taxpayers  also rely  on the Shapiro  Court's holding
                                                 _______
            that, before the applicability of the Enochs exception can be
                                                  ______
            ascertained,  the government  has the obligation  to disclose
            the factual basis for  its assessments.  See 424 U.S. at 626-
                                                     ___
            27.   That holding is  clearly inapposite.   The Shapiro case
                                                             _______
            involved  a jeopardy assessment  made without any opportunity
            for a prompt post-seizure inquiry into the basis for the IRS'
            claim.   Here,  by contrast,  the taxpayers  have had  a full
            opportunity to contest the IRS' claim in tax court. 

                                         -7-

Affirmed.  The motion  to amend pleading and  the motion
                 ________________________________________________________

            to show cause are denied. 
            _________________________

-8-