United States v. Gardell

• Court: Court of Appeals for the First Circuit
• Decided: May 6, 1994
• Docket: 93-1916
• Status: Published

Opinion

USCA1 Opinion

May 6, 1994           [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ___________________

No. 93-1916

UNITED STATES OF AMERICA,

                                 Plaintiff, Appellee,

                                          v.

                                  BRIAN R. GARDELL,

                                Defendant, Appellant.

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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Martin F. Loughlin,  Senior U.S. District Judge]
                                          ___________________________

                                 ___________________

                                        Before

                             Torruella, Boudin and Stahl,
                                   Circuit Judges.
                                   ______________

                                 ___________________

               Brian R. Gardell on brief pro se.
               ________________
               Michael L. Paup, Acting  Assistant Attorney General, Gary R.
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          Allen, Charles E. Brookhart and  Scott P. Towers, Attorneys,  Tax
          _____  ____________________      _______________
          Division, Department of Justice on brief for appellee.

__________________

                                  __________________

Per Curiam.  Appellant Brian Gardell appeals an order of
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            the  United States  District Court  for  the District  of New

            Hampshire  approving the  report  and recommendation  of  the

            magistrate  judge that  he  comply with  an Internal  Revenue

            Service [IRS]  summons issued pursuant  to 26 U.S.C.    7602.

            The administrative  summons directs Gardell to  appear at the

            IRS office  in Portsmouth,  New Hampshire, to  give testimony

            and to produce for examination books and  records relating to

            his  tax  liabilities  for the  years  1985  and  1987.   Tax

            liabilities had previously been assessed against Gardell  for

            these years and the  purpose of the summons was  to determine

            the collectability of these  liabilities.  On appeal, Gardell

            asserts  that  the  district  court  lacked  jurisdiction  to

            enforce the  summons since Gardell has  the "Status . .  . of

            Freeman and  . . .  has no Contractual,  Quasi-Contractual or

            implied  agreements with  the Federal  Government."   He also

            contends  that the  enforcement of  the summons  violated his

            constitutional right  to due process.   We affirm essentially

            on the grounds stated  by the magistrate judge in  his report

            and  recommendation  dated July  7, 1993.    We add  only the

            following remarks.

                 First, Gardell's contention that as  a "Freeman" without

            contractual obligations  to the government he  is not subject

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to  the  district  court's  jurisdiction is  totally  without

            merit.1  See  United States  v. Sloan, 939  F.2d 499,  500-01
                     ___  _____________     _____

            (7th  Cir. 1991)  (contention  that appellant  was free  from

            income  tax because he was a "freeborn, natural individual  .

            . . [and thus] not subject to the jurisdiction of laws of the

            United  States" is  frivolous), cert.  denied, 112  S.Ct. 940
                                            ____   ______

            (1992);  United States v. Drefke, 707 F.2d 978, 981 (8th Cir.
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            1983) (claim that "taxes are debts which can only be incurred

            voluntarily when individuals contract with the government for

            services . .  . is  totally without  arguable merit"),  cert.
                                                                    ____

            denied,  464 U.S. 942 (1983).  The district court has subject
            ______

            matter  over  a petition  to  enforce  an IRS  administrative

            summons  pursuant  to  26  U.S.C.     7604(a).    It acquired

            personal jurisdiction  over Gardell through service  upon him

            of  the show  cause  order and  the petition  of enforcement.

            United  States v.  Bichara, 826  F.2d 1037,  1039  (11th Cir.
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            1987); United States v.  Miller, 609 F.2d 336, 338  (8th Cir.
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            1979).    

                 Second,  the record makes clear that the IRS has met its

            burden  of establishing a prima facie case for enforcement of
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            1.  Similarly  frivolous  is  Gardell's  contention  that the
            taxing of wages  is unconstitutional.   See, e.g., Wilcox  v.
                                                    ___  ___   ______
            Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988) (contention
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            that wages  are not  income for  tax purposes  is frivolous);
            Casper v. Commissioner,  805 F.2d 902,  906 (10th Cir.  1986)
            ______    ____________
            (appellant's  contention that  amount  he  received from  his
            employer is  not taxable  income is "clearly  without merit")
            (citing cases).

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the administrative summons  as set  out in  United States  v.
                                                        _____________

            Powell, 379 U.S.  48 (1964).   See also  Sylvestre v.  United
            ______                         ___ ____  _________     ______

            States,  978 F.2d 25, 26  (1st Cir. 1992),  cert. denied, 113
            ______                                      ____  ______

            S.Ct.  1606 (1993).    Gardell,  who  concedes that  the  IRS

            satisfied these requirements, thereupon  bears the burden  of

            showing,  by  an  allegation  of  specific  facts,  that  the

            enforcement  of the summons would  constitute an abuse of the

            court's process--"that  is, that the summons  had been issued

            for an improper purpose  or for any other purpose  reflecting

            on  the good faith of  the investigation." Id.  at 27 (citing
                                                       __

            Powell, 379 U.S. at  58).  The only arguments  Gardell raised
            ______

            in  this  regard  either  before this  court  or  before  the

            district court challenge the  liabilities which were assessed

            against  him and  which  underlie the  summons.   However,  a

            challenge  to an assessment of liability  can only be brought

            in Tax Court within ninety days of the mailing of a notice of

            deficiency, see 26 U.S.C.    6213(a), or before the  district
                        ___

            court after the payment of the  tax, id.   7422 (until tax is
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            paid, district  court without jurisdiction to hear allegation

            that  tax has been erroneously  assessed).2    A challenge to

            the  underlying assessment  is  not a  valid  defense to  the

            enforcement of an  administrative summons,  United States  v.
                                                        _____________

____________________

            2.  There is no evidence that Gardell  ever attempted to file
            a petition  for redetermination  of his liabilities  with the
            Tax  Court.   According to  this IRS,  the time  to challenge
            Gardell's tax liability in Tax Court has now passed.

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Harper,  662  F.2d  335, 336  (5th  Cir.  1981) (per  curiam)
            ______                                           ___  ______

            (taxpayer challenge to underlying assessment does not suffice

            to  meet  his  burden  to  show  improper  purpose),  and  is

            misplaced in an appeal from a district court order  enforcing

            one,  United States  v. Mueller,  930 F.2d  10, 12  (8th Cir.
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            1991)  ("district court  correctly  held  that [the  summoned

            party]  could  not use  the  proceedings to  enforce  the IRS

            summons as a forum  in which to contest  the validity of  the

            underlying assessments.").    Since Gardell  was afforded  an

            opportunity  to challenge  the  administrative summons  in an

            adversarial proceeding before the district court prior to the

            enforcement of the summons, he suffered no deprivation of his

            constitutional right to due process.  See Reisman v.  Caplin,
                                                  ___ _______     ______

            375  U.S.   440,  446,   449-50  (1964)   (no  constitutional

            invalidity  in  procedure for  enforcement  of  summons since

            there  is "full  opportunity for  judicial review  before any

            coercive  sanctions  may  be  imposed");  United  States   v.
                                                      ______________

            Gilleran, 992 F.2d 232,  233-34 (9th Cir. 1993) ("no  liberty
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            or property interest protectable by due  process prior to the

            enforcement of the summons") .

                 Finally,  the IRS  asks this  court to  impose sanctions

            against appellant for bringing a frivolous appeal.  Gardell's

            challenges to the administrative summons are frivolous and/or

            misplaced.   Both this court and others have not hesitated to

            impose sanctions for similarly frivolous appeals.  See, e.g.,
                                                               ___  ___

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Kelly  v.  United States,  789 F.2d  94,  98 (1st  Cir. 1986)
            _____      _____________

            (imposing sanctions on appellant  who claimed that because he

            was  a "natural  individual  and unenfranchised  freeman" who

            neither asked for nor  received privileges from government he

            owed  no tax); Sullivan v.  United States, 788  F.2d 813, 816
                           ________     _____________

            (1st  Cir. 1986) (similar); see also Wilcox, 848 F.2d at 1008
                                        ___ ____ ______

            (appellant  contended wages  are  not income  and payment  of

            taxes is voluntary); Casper v. Commissioner, 805  F.2d at 906
                                 ______    ____________

            (similar).   We  agree that  sanctions are warranted  in this

            case.   Although the Government seeks $1,500 in lieu of costs

            and attorneys' fees, we, in accord with our prior practice in

            similar cases,  assess only double costs  against Gardell for

            bringing a frivolous appeal.  Fed. R. App. P. 38.

                 The judgment of the district  court is affirmed.  Double
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            costs are assessed against appellant.
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