Annotations- Effect of payment of
tax
6332 Annotations: Effect
of Payment of Tax- Levy
Penalty
for Failure to Surrender Property: Effect of Payment of Tax
[41-2 USTC
¶9658]Arthur L. Bell, Plaintiff, v. Clifford Anglim, as Collector of
Internal Revenue, et al., Defendants
In
the District Court of the United States, in and for the Northern
District of California, Southern Division, No. 21501-R, Filed July 25,
1941
Jeopardy assessments.--(1) All matters involving income tax of
the taxpayer for the years 1935-1938 having been finally ceased and
disposed of before the Board of Tax Appeals, and the liens thereunder
paid, the Collector has no authority to hold property of the taxpayer
from and after the termination of the said Board of Tax Appeals matters
for the jeopardy assessments for those taxable years. (2) Jeopardy
assessment involving the year 1939 is void for failure of the
Commissioner to send a notice of deficiency within the statutory time
after the jeopardy assessment, or at all.
Howard B.
Crittenden, Jr., 112 Roberts Bldg.,
Tracy
,
Calif.
, for plaintiff. Frank J. Hennessy, U. S. Attorney, Esther B. Phillips,
Assistant U. S. Attorney, for defendants.
ROCHE, D. J.:
The
above-entitled cause having come on regularly for trial the 27th day of
December, 1940, before the above-entitled Court and said matter was duly
and regularly continued to July 25, 1941, and Howard B. Crittenden, Jr.,
appearing as attorney for the plaintiff, Arthur L. Bell, and defendant
Clifford C. Anglim, Collector of Internal Revenue, San Francisco,
California, appearing by his attorney, Frank J. Hennessy, United States
Attorney for the Northern District of California, appearing by Esther B.
Phillips, Assistant United States Attorney, and evidence having been
duly taken and the Court having duly considered the evidence, and
argument of counsel, now makes the following
Findings
of Fact
I. That the
plaintiff, Arthur L. Bell, and the defendant, Clifford Anglim, are bona
fide residents of the Northern District of California, Southern
Division.
II. That, on
October 3, 1939, there was made against the plaintiff a jeopardy
assessment under the income tax laws of the
United States
for the following sums, to wit:
Tax 50% Penalty 25% Penalty Interest
1935 .... $31,448.00 $15,724.00 $7,862.00 $6,697.13
1936 .... 31,448.00 15,724.00 7,862.00 4,810.25
1937 .... 31,448.00 15,724.00 7,862.00 2,923.37
1938 .... 31,448.00 15,724.00 7,862.00 1,036.48
1939 .... 31,448.00
III. That
thereafter, on November 24, 1939, a notice of deficiency letter under 26
U. S. C. A. 272 was sent by registered mail for assessment of the years
1935, 1936, 1937 and 1938; but not for the year 1939.
IV. That the
plaintiff duly and regularly perfected his appeal to the Board of Tax
Appeals from said assessment under said letter.
V. That on
July 2, 1941, the said matters before the Board of Tax Appeals were
finally settled by stipulation, the sums under said stipulation paid to
the defendant Collector, and all matters in said Board of Tax Appeals
proceedings, to wit, the years 1935, 1936, 1937 and 1938, inclusive,
were finally settled and closed.
VI. That the
defendant Collector seized certain property of the plaintiff under the
said jeopardy assessments by distraint thereon and lien thereunder, and
has held and does now hold said property thereunder.
VII. That no
notice of deficiency under 26 U. S. C. A. 272 has been sent to said
plaintiff within ninety (90) days of said jeopardy assessment involving
1939, or at all.
VIII. That the
defendant, Clifford Anglim, was and now is the duly appointed, qualified
and acting Collector of Internal Revenue at San Francisco, California.
IX. That there
is no plain, speedy or adequate remedy at law.
From the
foregoing facts, the Court makes the following
Conclusions
of Law
1) That all
matters involving the income tax of plaintiff, Arthur L. Bell, have been
finally closed and disposed of before the Board of Tax Appeals, for
years 1935 to 1938, inclusive, and the liens thereunder paid, and the
defendant Collector has no authority to hold said property of the
plaintiff from and after the termination of said Board of Tax Appeals
matters for the jeopardy assessments for the years 1935 to 1938,
inclusive.
2) That the
jeopardy assessment involving the year 1939 made October 3, 1939, is
void for failure of the Commissioner of Internal Revenue to send the
letter under 26 U. S. C. A. 272 within ninety (90) days after said
jeopardy assessment, or at all; and the distraint issued thereon and the
liens thereunder are void and the holding or seizure of the plaintiff's
property thereunder illegal and wrongful.
3) That the
plaintiff is entitled to possession of all his property held by the
Collector defendant under authority of distraints issued upon said
jeopardy assessments for the years 1935 to 1939, inclusive, and an
injunction should issue.
Let final
decree be entered accordingly.
