91-1 USTC ¶50,265] Bill M. Overton, Plaintiff-Appellant v. United States of America, P. Crepo, Defendants-Appellees

(CA-10), U.S. Court of Appeals, 10th Circuit, 90-2084, 2/12/91 , Affirming an unreported District Court decision

[Code Secs. 6325 , 7421 , 7432 , and 7433 ]

Suit for release of lien: Damages for failure to release lien: Unauthorized collection actions: Revenue agents: Personal jurisdiction.--An individual taxpayer's claims against the government and its revenue agent for malicious filing of a notice of federal tax lien on his property was properly dismissed by the district court in New Mexico for lack of jurisdiction. Nothing in the record indicated that the revenue officer ever had any contact with New Mexico ; accordingly, personal jurisdiction was lacking. A provision of the judicial code that allows service upon federal defendants beyond the territorial limits of the district in which the suit was filed is a venue statute and not a grant of nationwide in personam jurisdiction. A provision of the Internal Revenue Code that would allow damages actions of this sort against the government was not enacted until after the lien in question was filed and was therefore inapplicable. The Anti-Injunction Act barred the taxpayer's request for injunctive relief. Since the plaintiff failed to properly allege personal jurisdiction against the revenue agent or subject matter jurisdiction against the government, the district court's dismissal of the taxpayer's suit was affirmed.

Bill M. Overton, pro se. William L. Lutz, United States Attorney, Albuquerque, N.M. 87103, Shirley D. Peterson, Assistant Attorney General, Gary R. Allen, David English Carmack, Curtis C. Pett, Department of Justice, Washington, D.C. 20530, for defendants-appellees.

Before LOGAN, MOORE and BALDOCK, Circuit Judges.

BALDOCK, Circuit Judge:

Plaintiff-appellant Bill M. Overton appeals pro se from the district court's dismissal of his claims against the United States and his claims against internal revenue officer P. Crepo, in her individual capacity. Plaintiff asserts that Crepo illegally and maliciously filed a notice of federal tax lien for the years 1977 and 1981 on his property. He seeks damages from the United States and Crepo, as well as the release of the federal tax lien. The district court granted summary judgment in favor of the government for lack of subject matter jurisdiction relying upon the Anti-Injunction Act, I.R.C. §7421 . The court dismissed the claims against the revenue officer for lack of personal jurisdiction.

In accordance with Haines v. Kerner, 404 U.S. 519 (1972), we have construed the plaintiff's pro se pleadings liberally. We first consider the district court's dismissal of defendant's claim against the revenue officer for lack of personal jurisdiction. The plaintiff has the burden of proving personal jurisdiction. Fidelity & Casualty Co. v. Philadelphia Resins Corp., 766 F.2d 440, 443 (10th Cir. 1985), cert. denied, 474 U.S. 1082 (1986). For such jurisdiction, a defendant must have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). See Benally v. Amon Carter Museum of Western Art, 858 F.2d 618, 624-26 (10th Cir. 1988). Plaintiff approaches the issue differently, contending that the court has personal jurisdiction by virtue of 28 U.S.C. §1391(e) , which provides for service upon federal defendants by certified mail beyond the territorial limits of the district in which the suit was initiated. Clearly he is mistaken. Section 1391(e) is a venue statute, not a grant of "nationwide in personam jurisdiction in a personal damage action against a United States official in his individual capacity . . . ." Gilbert v. DaGrossa [85-2 USTC ¶9665 ], 756 F.2d 1455, 1460 (9th Cir. 1985) (citing Stafford v. Briggs, 444 U.S. 527 (1980)). See also Borntrager v. Stevas, 772 F.2d 419 (8th Cir. 1985), cert. denied, 474 U.S. 1008 (1985). Personal jurisdiction does not result from §1391(e) , and we find nothing in the record to indicate that the revenue officer has ever had any contact with New Mexico . Plaintiff therefore has failed to meet his burden of proving that the exercise of personal jurisdiction over the revenue officer would not offend the due process standard of International Shoe. The district court correctly dismissed plaintiff's claims against the revenue officer in her individual capacity.

Turning to the claim for damages against the government, "[i]t is well-settled that the United States retains its sovereign immunity from suit unless it has expressly waived such immunity . . . ." National Commodity & Barter Ass'n v. Gibbs [90-1 USTC ¶50,147 ], 886 F.2d 1240, 1245-46 (10th Cir. 1989) (citing Atkinson v. O'Neill, 867 F.2d 589, 590 (10th Cir. 1989)). Plaintiff cannot rely on the Federal Tort Claims Act as a waiver of sovereign immunity since the act excludes from coverage "[a]ny claim arising in respect of the assessment or collection of any tax . . . ." 28 U.S.C. §2680(c). Furthermore, plaintiff cannot rely on I.R.C. §7432 . Section 7432 amounts to a limited waiver of sovereign immunity for civil damages actions for failure to release a federal tax lien upon notice under I.R.C. §6325 ; however, it is effective only for damages arising and notices given after December 31, 1988. Technical and Miscellaneous Revenue Act of 1988, §6240(c), Pub. L. No. 100-647, 102 Stat. 3746. Plaintiff has not shown that he has given notice in accordance with §6325 . Section 7432 's waiver therefore is inapplicable. Since there was no waiver of sovereign immunity, the district court correctly granted the government summary judgment on plaintiff's claim for damages.

We now address plaintiff's request for injunctive relief. The Anti-Injunction Act provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person . . . ." I.R.C. §7421(a) . "A judicial exception to the act permits an injunction 'if the taxpayer demonstrates that: (1) under no circumstances could the government establish its claim to the asserted tax; and (2) irreparable injury would otherwise occur.' " Lonsdale v. United States [90-2 USTC ¶50,581 ], 919 F.2d 1440, -- (10th Cir. 1990) (quoting Bob Jones University v. Simon [74-1 USTC ¶9438 ], 416 U.S. 725, 737 (1974)). Nothing in the record remotely indicates that plaintiff has established either of the Bob Jones prerequisites for injunctive relief.

Plaintiff contends that the IRS has removed the assessments underlying the lien and that the Anti-Injunction question is "moot" since there is no "assessment" or "collection" at issue. Rec. vol. I, doc. 5 at 4. Yet plaintiff apparently has failed to pursue the administrative remedy for such a claim. The Code provides that the Secretary is to issue a certificate of release for any notice of federal tax lien within thirty days of the day the Secretary determines that the liability for the underlying assessment has been satisfied or is legally unenforceable. I.R.C. §6325(a) ; Temp. Treas. Reg. §401.6325-1 (1983). Taxpayers can request such certificate of release with a written submission to the district director where the lien is filed. The writing must contain the name and address of the taxpayer, a copy of the notice of federal tax lien, and an explanation of the grounds for release of the lien. Id.

If, as plaintiff alleges, "[t]he IRS has implicitly admitted [its] mistake . . . by removing the assessments," rec. vol. I, doc. 5 at 4, he is not without remedy. If the assessments indeed have been paid and the Secretary refuses to issue a certificate of release pursuant to his duty under §6325(a) , plaintiff may force the release by instituting proceedings against the Secretary in the nature of mandamus, 28 U.S.C. §1361 , or through a quiet title action, 28 U.S.C. §2410(a). ¹ Plaintiff, however, has failed to provide any evidence of a §6325 notice or of payment of the assessments. ²

The Supreme Court's interpretation of Fed.R.Civ.P. 56(c) requires that summary judgment be granted against a party "who fails to . . . establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Reazin v. Blue Cross & Blue Shield, 899 F.2d 951, 979 (10th Cir. 1990). The moving party need only "inform[] the district court of the basis for its motion, and identify[] those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323 (quoting Fed.R.Civ.P. 56(c)). The government has met this burden by pointing to the Anti-Injunction Act as a bar to injunctive relief. Plaintiff, on the other hand, has not provided evidence of compliance with the notice provisions of §6325 or that the assessments have been paid or are legally unenforceable, nor has he established the Bob Jones prerequisites for injunctive relief. [74-1 USTC ¶9438 ], 416 U.S. at 737. The government is not required to come forth with affirmative evidence to disprove these elements. Plaintiff therefore fails under the Celotex guideline for avoidance of summary judgment. 477 U.S. at 322, 23. We conclude that "there is no genuine issue of material fact" and that the government is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56(c).

AFFIRMED.

¹ Section 2410 waives sovereign immunity only to the extent that the taxpayer challenges the procedural regularity of the lien, not the underlying tax assessment. Schmidt v. King [90-2 USTC ¶50,487 ], 913 F.2d 837 (10th Cir. 1990); Pollack v. United States [87-2 USTC ¶9463 ], 819 F.2d 144, 145 (6th Cir. 1987); Aqua Bar & Lounge v. United States [76-2 USTC ¶9554 ], 539 F.2d 935 (3d Cir. 1976); Falik v. United States [65-1 USTC ¶9295 ], 343 F.2d 38, 40-43 (2d Cir. 1965). To the extent that taxpayer challenges the Secretary's failure pursuant to his duty under I.R.C. §6325(a) to release the lien upon notice and proof that the underlying assessments have been paid, he challenges the procedural regularity of the existence of the lien itself, and not the assessments. This type of suit obviously would not violate the principle that "a person whose sole claim is that a federal tax assessment was not well grounded in fact and law must 'pay first and litigate later.' " Falik [65-1 USTC ¶9295 ], 343 F.2d at 42. See also Kurio v. United States [68-1 USTC ¶9382 ], 281 F.Supp. 252, 264 n.13 (S.D.Tex 1968) ("Once the tax or part of the assessment has been paid, the suit is no longer in the nature of an injunctive action."); United States v. Waite, Inc. [80-1 USTC ¶9128 ], 480 F.Supp. 1235, 1240 (W.D.Pa. 1979); Annotation, Taxpayer's Right under 28 USCS §2410(a) to Challenge Procedures Followed in Imposing and Enforcing Federal Tax Lien on his Property, 38 A.L.R. Fed. 900 (1978).

² Exhibit A in plaintiff's complaint appears to be a written request seeking a certificate of release for the lien, rec. vol. I, doc. 1, A; however, the pleadings mention nothing of the matter, and the complaint contains nothing more than allegations that the assessments have been removed and are unenforceable.

[59-2 USTC ¶9688]James R. Whelpley, Plaintiff v. A. R. Knox, District Director of Internal Revenue for the District of Minnesota, Defendant

U. S. District Court, Dist. Minn., 3rd Div., Civil No. 3-57-169, 176 FSupp 936, 7/23/59

[1954 Code Sec. 6325]

Tax liens: Action to secure release: Proper parties defendant.--While the District Director has the power to issue a certificate of release from a tax lien, the United States is still an indispensable party in a suit to secure such a release, since it, and not the District Director, owns the proprietary interest in the lien. Motion to dismiss the complaint granted, since the United States was not a party defendant.

Carl K. Lifson, 1140 Rand Tower , Minneapolis , Minn. , for plaintiff. Fallon Kelly , United States Attorney, 221 Federal Courts Building, St. Paul , Minn. , for defendant.

Memorandum

BELL , District Judge:

In this action the plaintiff seeks to compel the District Director of Internal Revenue to issue certificates of release of certain tax liens against the plaintiff's property. The complaint alleges that the plaintiff became liable to the United States for certain withholding and employment taxes. These liabilities were assessed and liens duly created in favor of the United States which were filed in the Office of the Register of Deeds of Hennepin County, Minnesota. Thereafter, the plaintiff filed a voluntary petition in bankruptcy and was adjudicated bankrupt on March 27, 19 50. The United States submitted proofs of claims in that proceeding embracing the tax liabilities on which the aforementioned liens were based. The Government's claims were allowed in the final bankruptcy order but remained unpaid and the plaintiff was discharged in bankruptcy from his dischargeable debts. The plaintiff contends that the statute of limitations now precludes enforcement of these liens and seeks to have this Court force the defendant to issue a "Certificate of Release of Federal Tax Lien" for each of the liens.

The District Director moved to dismiss this action on the grounds (1) that this action does not lie against the District Director because he has no proprietary interest in the liens and (2) that the tax liens are the property of the United States which is a necessary party in actions affecting such liens.

The plaintiff reasons that the liens arising from the tax liabilities are unenforceable because the statute of limitations has run upon the collection of these liabilities. For this reason he alleges that he is entitled to mandatory relief under the Administrative Procedures Act compelling the District Director to release the liens citing Section 6325 of the Internal Revenue Code of 1954 as conferring such power upon the District Director. This section states:

"(a) Release of lien.--Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of release of any lien imposed with respect to any internal revenue tax if--

"(1) Liability satisfied or unenforceable.--The Secretary or his delegate finds that the liability for the amount assessed, together with all interest in respect thereof, * * * has become legally unenforceable, * * *"

The purpose of this suit is to expunge the federal tax liens outstanding against the plaintiff's property. It is well settled that the District Director has no proprietary interest in the tax liens, Stafford Mills v. White, 41 F. 2d 58 ( Mass. ); Naus v. Broadrick, 103 F. Supp. 233 (W. D. Kan.) [52-1 USTC ¶9145] but that such liens are the property of the United States thereby making the United States a necessary and indispensable party in any action affecting such liens, Jones v. Tower Production Co., 138 F. 2d 675 (C. A. 10th) [43-2 USTC ¶9628]; Czieslik v. Burnet, 57 F. 2d 715 (ED NY) [1932 CCH ¶9046]; Maryland Casualty Co. v. Charleston Lead Works, 24 F. 2d 836 (ED SC) [1928 CCH D-8246].

As stated in Minnesota v. Hitchcock, 185 U. S. 373 at page 387:

"The question whether the United States is a party to a controversy is not determined by the merely nominal party on the record but by the question of the effect of the judgment or decree which can be entered."

Applying this test to the case at hand, the effect of the certificate of release sought by the plaintiff is to extinguish the tax liens upon the property covered by it. Section 6325(c) of the Internal Revenue Code of 1954. The powers conferred upon the District Director by this section make the liens no less the property of the United States . Thus the effect of the decree sought by the plaintiff will be to destroy the United States ' ownership of these liens. Therefore, the United States is an indispensable party to this suit but one that cannot be sued in absence of its statutory consent.

The Administrative Procedures Act relied upon by the plaintiff is not an implied waiver of all government immunity from Suit, Blackmar v. Guerre, 342 U. S. 512. Furthermore, the Administrative Procedures Act does not apply to suits restraining the collection of federal taxes by reason of the prohibition against such suits in Section 7421 of the Internal Revenue Code of 1954. Rivoli Trucking Corp. v. Scanlon, 162 F. Supp. 53 (ED NY) [58-2 USTC ¶9532].

Accordingly, the defendant's motion to dismiss will be granted.

[52-1 USTC ¶9145]Harold G. Naus, Plaintiff v. Lynn R. Brodrick, Collector of Internal Revenue for the District of Kansas, and United States of America, Defendants

In the United States District Court for the District of Kansas, Second Division, Civil Action No. W-113, 103 FSupp 233, October 12, 19 51

Liens: Cancellation of tax lien: Refund of taxes voluntarily paid: Suit against the United States.--In order to sell free and clear of encumbrances certain real estate conveyed to husband and wife as joint tenants, the husband, after the death of his wife, paid withholding and federal insurance taxes assessed against his wife for which notices of liens were filed. Such liens were thereupon discharged, but a lien for unpaid taxes assessed against the wife prior to her marriage remained of record. Thereafter, action was brought against the Collector for refund of taxes and for judgment and decree releasing the real estate from the lien. On motion of the husband the United States was joined as defendant, notwithstanding the fact that it had not consented to suit against it. Motion dismissing the complaint was granted on the grounds that (1) the tax liability was voluntarily paid although not owing by the husband and, therefore, could not be recovered by him, (2) no statutory or other authority was shown as authorizing a court to issue a decree directing the Collector to discharge a notice of lien covering taxes owed the United States where such lien was filed in the exercise of his duty, (3) federal tax liens are the property of the United States, rather than the Collector, (4) no statutory or other authority was shown for a suit against the United States, for discharge, by decree of a court, of a notice of tax lien covering taxes owed the United States, and (5) there was an adequate remedy at law for the adjudication of any lien the United States may have had against property.

Fred Hinkle, Schweiter Bldg., Wichita , Kan. , for plaintiff. Lester Luther, United States Attorney, and Eugene Davis, Assistant United States Attorney, both of Topeka, Kan., for defendant.

Findings of Fact and Conclusions of Law

HILL, District Judge:

This action for recovery of withholding and federal insurance contributions taxes in the sum of $327.71, and for certain equitable relief, was tried by the Court on July 10, 19 51. The plaintiff and the defendants were represented by their respective counsel. The case was tried upon the issues made by the pleadings, and oral and other evidence submitted to the Court. Upon consideration of the evidence and issues presented in this case the Court, having concluded that judgment should be for the defendants, makes the following Findings of Fact and Conclusions of Law:

Findings of Fact

1. The plaintiff, Harold G. Naus, is a citizen of the United States of America , is over 21 years of age, and is domiciled in and is a citizen of the State of Kansas . The defendant, Lynn R. Brodrick, is a citizen of the State of Kansas , and at all times material to this action was and still is the duly appointed, constituted and acting United State Collector of Internal Revenue for the District of Kansas. The defendant, United States of America , is a corporation sovereign and body politic.

2. The "First Cause of Action" set out in the complaint herein is an action for recovery of a sum of money paid by plaintiff to the defendant Collector of Internal Revenue, and it arises under the internal revenue statutes. The "Second Cause of Action" set out in the complaint is for general legal or equitable relief, and no statutory basis has been shown for the relief requested therein.

3. On or about October 19, 19 46, the plaintiff, Harold G. Naus, was married to Geneva Alexandria Burleson, a citizen of the United States and a resident of Augusta in Butler County , Kansas , and the plaintiff remained married to her until the time of her death on July 7, 19 47. Prior to her marriage to the plaintiff Geneva Alexandria Burleson began the operation of two beauty shops in Butler County , Kansas , and continued the operation of those shops after her marriage and until the time of her death. In the operation of those shops she became indebted to the defendant, United States of America , for certain withholding and federal insurance contributions taxes, as set out hereinbelow.

4. On November 6, 19 46, Geneva Alexandria Burleson, as owner of Vogue Beauty Shope at Augusta, Kansas, signed and filed with the defendant Collector of Internal Revenue, on Treasury Form W-1, a quarterly return of income tax withheld on wages for the period ended June 30, 19 46, in the amount of $235.77; this return was received by the Collector, without remittance, on November 15, 19 46. On April 28, 19 47, Geneva Alexandria (Burleson) Naus, as owner of Vogue Beauty Shope at Augusta, Kansas, signed and filed with the defendant Collector of Internal Revenue, on Treasury Form SS-1a, Employer's Tax Return for the quarter ended March 31, 19 47, showing federal insurance contributions tax due for that period in the amount of $19.56; this return was received by the Collector, without remittance, on May 14, 19 47.

5. On December 8, 19 47, the plaintiff, as Administrator of the estate of his wife, Geneva Alexandria (Burleson) Naus, signed and filed with the defendant Collector of Internal Revenue, on Treasury Forms W-1 quarterly returns of income tax withheld on wages for the periods ended June 30, 19 47, and July 8, 19 47 "Final", in the respective amounts of $120.90 and $3.90; and on Treasury Form SS-1a, quarterly returns of Employer's Tax, for the same periods, showing federal insurance contributions taxes due in the respective amounts of $24.82 and $6.78. All these returns, filed by plaintiff as Administrator of his wife's estate, were received by the Collector without remittance; the returns for the period ended June 30, 19 47, were received by the Collector on October 1, 19 47, and the returns for the final period, ended July 8, 19 47, were received by the Collector on December 9, 19 47.

6. The taxes returned, as set out in paragraph numbered 4 and 5, hereinabove, were duly assessed, with delinquent penalties and interest. On July 26, 19 47, a notice of tax lien was filed by the Collector with the Register of Deeds of Butler County, Kansas, against "Geneva A. Burleson, Vogue Beauty Shope," for withholding taxes for the period April 1, 19 46 through June 30, 19 46, in a total amount of $287.77; on October 18, 19 47, a notice of tax lien was filed by the Collector with the Register of Deeds for Sedgwick County, Kansas, against "Geneva A. Burleson Naus, dec'd", for insurance contributions taxes for the period January 1 through 31, 1947, in the sum of $19.71; and for withholding taxes for the period April 1 through June 30, 19 46, in the sum of $240.62, and for the period January 1 through March 31, 19 47, in the sum of $107.01. Subsequently, on or about January 15, 19 48, a further notice of tax lien was filed by the Collector with the Register of Deeds of Sedgwick County, Kansas, against Mrs. Geneva A. Burleson Naus, for insurance contributions and withholding taxes for the period April 1, through July 8, 19 47, in the amount of $186.96. All these notices of tax liens filed were on Treasury Form 668, which contained the printed statement that the taxes set out therein were a Lien "in favor of the United States upon all property and rights to property belonging to said taxpayer, to wit:" Then followed the name of the taxpayer, as shown hereinabove. The name of the plaintiff, Harold G. Naus, did not appear on any of these notices of tax lien; and none of the notices of tax lien described any property that may have belonged to the taxpayer named therein.

7. The plaintiff in this action has made no contention that the taxes assessed against his wife, as hereinabove set forth, were not properly due and owing by her to the defendant United States of America .

8. On or about May 21, 19 47, by warranty deed, W. R. Snodgrass and others conveyed to the plaintiff, Harold G. Naus, and to Geneva Alexandria Naus, husband and wife or the survivor as joint tenants and not as tenants in common, certain real property which is described in the complaint herein as follows:

"Lot Seven (7), Block Eighteen (18) in Schweiter's Ninth Addition to the City of Wichita , Sedgwick County , Kansas ."

This deed was duly recorded in Sedgwick County , Kansas , on June 6, 19 47. About January 1948, the plaintiff entered into an agreement with Jerry F. Daniels and Maude M. Daniels, husband and wife, to convey to them for a valuable consideration the real property described above. Upon examination of the abstract of title the Daniels discovered that there were notices of federal tax liens of record against Mrs. Geneva A. Burleson Naus, the plaintiff's deceased wife, and they refused to carry out the agreement to purchase this property unless the plaintiff indemnified them against any claim that might be asserted against it by reason of these outstanding notices of tax liens.

[Discharge Lien upon Payment of Taxes Owed by Another]

9. Thereafter the plaintiff contacted the defendant Collector of Internal Revenue, or his representative, and requested that the notices of tax liens in question be discharged of record. Upon the Collector's refusal to discharge the notices of tax liens, the plaintiff, Harold G. Naus, on or about January 27, 19 48, paid to the defendant Collector the withholding and federal insurance contributions taxes, penalties and interest outstanding against his wife, which had been assessed for periods subsequent to her marriage to the plaintiff, in the sum of $327.71. The notices of liens covering these taxes were then discharged by the Collector. The plaintiff did not pay the withholding taxes, penalties and interest assessed against his deceased wife for the period April 1 through June 30, 19 46, which was prior to their marriage, in the sum of $240.62. About January 31, 19 48, the plaintiff deposited with Jerry F. Daniels and his wife the sum of $240.00 for the purpose of indemnifying them against any claim that might be made against the property described by reason of the notice of tax lien still of record against his deceased wife.

[Claim for Refund of Taxes and Discharge of Existing Lien]

10. About August 18, 19 48, the plaintiff, as Administrator of the estate of his wife, Geneva A. Naus, filed three claims for refund with the defendant Collector of Internal Revenue, as follows: One claim for withholding taxes, penalties and interest, in the sum of $267.69, for the period January 1 through July 8, 19 47; one claim for federal insurance contributions taxes, penalties and interest, in the sum of $60.02, for the period January 1 through July 8, 19 47; and one claim for withholding taxes and interest in the sum of $240.62 for the the period April 1 through June 30, 19 46. The bases of the claims for refund with respect to the withholding taxes were stated to be that the assessments were paid from the personal funds of the deponent, and not from the estate of the decedent, and were paid "in an attempt to remove the lien so he could sell his land"; and with respect to the claim covering the insurance contributions taxes it was stated that deponent paid the assessment from his personal funds "under a misapprehension of his legal rights and in order to attempt to remove a tax lien wrongfully filed on his own real estate." In a statement entitled "Extended Statement of Facts", signed for the plaintiff by his attorney and submitted with these claims for refund, the assessment for withholding taxes for the period April 1 through June 30, 19 46, in the sum of $240.62, was referred to, followed by the statement: "This item of taxes the claimant did not pay, he supposes because it was assessed in the name of Burleson and, perhaps was not found by the Collector at the time the computation of tax was made. This tax was assessed even before the claimant married the deceased."

11. In a letter dated February 28, 19 49, addressed to plaintiff and signed by a Deputy Commissioner of Internal Revenue, the plaintiff was advised that his claim for refund of $60.02 taxes, penalty and interest paid under the Federal Insurance Contributions Act for the period January 1, through July 8, 19 47, was disallowed. In explanation of the reason for this disallowance, that letter contained the statement that one who is under no obligation to pay the federal tax liability of another does pay such tax liability, he cannot recover any part of the tax paid unless he is able to establish that the payment was involuntary. Cases were then cited and quotations therefrom set out in support of that statement; and the plaintiff was further advised that the Commissioner's office was of the opinion that the payment made by him was voluntary; that the taxes were assessed against Mrs. Naus rather than the claimant, and that the notices of tax lien plainly showed that the taxes were liens upon the property of the taxpayer, and that the name of Harold G. Naus did not appear on such notices.

12. In a letter dated March 3, 19 49, addressed to plaintiff and signed by the defendant Collector of Internal Revenue, the plaintiff was advised that his claim for refund of withholding taxes paid by him for the period January 1 through July 8, 19 47, in the sum of $267.69, was disallowed for the same reasons set out in the letter of February 28, 19 49, from the Deputy Commissioner of Internal Revenue; that with respect to the claim covering withholding taxes for the period April 1 through June 30, 19 46, although Claimant stated in the claim that they had been paid by him, the Collector's records showed that this tax, penalty and interest had not been paid; and that "In view of the fact that the taxes were assessed against Mrs. Geneva A. Burleson (Naus), rather than against you, your claim for abatement in the amount of $240.62 is hereby disallowed."

[Action for Refund of Taxes and Discharge of Lien]

13. After disallowance of his claims for refund, the plaintiff, on or about May 4, 19 50, filed this action against the Collector of Internal Revenue, praying (A) for a refund of the taxes assessed against his wife and paid by him in the sum of $327.71, plus interest according to law; (B) for interest at 6% per annum on the sum of $240 from January 31, 19 48; and (C) for judgment and decree "Releasing the above described real estate from any and all liens thereon as claimed by the Defendant and expunging the records of the Register of Deeds of Sedgwick County, Kansas, in conformity therewith. Directing the defendant to file a release thereof insofar as the above described land is concerned and as against this Plaintiff and to cause the same to be recorded in the office of the Register of Deeds of Sedgwick County, as aforesaid."

[ United States Joined as Defendant]

14. Answer was filed on behalf of the defendant Collector of Internal Revenue with respect to the demand for refund of the taxes paid by the plaintiff; and in a separate defense in the answer it was set out that federal tax liens are the property of the United States of America, and that the Collector of Internal Revenue is not a proper party defendant to an action affecting such liens. Thereafter plaintiff filed a motion to join the United States of America as a defendant in this action, which motion was granted. The United States then filed a motion to dismiss this action as to it, alleging (1) a misjoinder of parties defendant; (2) that the United States had not consented to be sued in this action; and (3) a lack of jurisdiction over the United States in this case since service had not been made upon it in accordance with the Rules of Civil Procedure. The motion of the United States was denied and service upon it ordered. Copies of a summons and of the original complaint thereafter were forwarded to the Attorney General and copies served upon the United States Attorney for the District of Kansas. Answer was filed on behalf of the United States, alleging, with respect to the "First Cause of Action" set out in the complaint, a misjoinder of parties defendant; and, with respect to the "Second Cause of Action", a lack of statutory authority for an action of this nature against it, or for the granting, by a decree of the Court, the relief prayed for therein. Plaintiff filed a general denial in reply to the Answer of the United States . The issues thus joined were tried by the Court.

15. The demand contained in paragraph "B" of the prayer to the plaintiff's complaint, for interest on the sum of $240 from January 31, 19 48, was waived by counsel for the plaintiff in open court.

[Ultimate Findings]

16. In consideration of the above findings of fact, the Court makes the following ultimate findings;

A. The payment to the defendant Collector of Internal Revenue, on or about January 27, 19 48, of taxes, penalties and interest assessed against Geneva Alexandria (Burleson) Naus and owing to the United States in the sum of $327.71, was voluntarily made by the plaintiff.

B. The notices of tax liens filed by the defendant Collector of Internal Revenue in Butler County, Kansas, against Geneva Alexandria Burleson, and Sedgwick County, Kansas, against Geneva A. (Burleson) Naus, purported to be liens only upon the property and rights to property belonging to the taxpayer named in those notices; the name of the plaintiff, Harold G. Naus, did not appear on any of those notices of tax lien; and no property of the taxpayer named therein was described in those notices of tax lien.

C. The plaintiff has failed to show any statutory, or other, authority for the discharge or extinguishment, by a decree of the Court, of a notice of tax lien covering taxes due and owing to the United States, where such notice of lien has been filed by the Collector of Internal Revenue in the exercise of his duty as an officer of the United States; and

D. The plaintiff has failed to show any statutory, or other, authority for a decree or order of the Court, releasing and discharging any property that may be subject thereto from such lines.

Conclusions of Law

1. This Court has jurisdiction of this cause and of the parties hereto.

2. The federal taxes, penalties and interest, assessed against the plaintiff's wife, Geneva Alexandria Burleson Naus, were due and owing to the United States by that taxpayer, and the payment to the defendant Collector of the sum of $327.71 of that tax liability was voluntarily made by the plaintiff and may not be recovered by him. Stahlman v. Vidal, 305 U. S. 61 [38-2 USTC ¶9549]; Wourdack v. Becker, 55 Fed. (2d) 840 [1932 CCH ¶9071].

3. The evidence in this case fails to show that the plaintiff is entitled to the relief prayed for in paragraph "C" of the prayer to his complaint; and the plaintiff has failed to show any statutory, or other, authority for the granting of such relief by a decree of the Court. Compare: Metropolitan Life Insurance Co. v. United States , 107 Fed. (2d) 311 [39-2 USTC ¶9771]; and Integrity Trust Co. v. United States, 3 Fed. Supp. 577 [1933 CCH ¶9469].

4. Federal tax liens are the property of the United States of America , rather than the Collector of Internal Revenue. Czieslik v. Burnet, 57 Fed. (2d) 715 [1932 CCH ¶9046]; Stafford Mills v. White, 41 Fed. (2d) 58.

5. Plaintiff has failed to show any statute authorizing a suit against the United States for the discharge or extinguishment, by a decree of the Court, of a notice of tax lien covering taxes due and owing to the United States, or for the release or discharge from such liens, by decree of the Court, of property that may be subject to such tax liens. Only such types of actions as are specifically authorized by federal statute may be maintained against the United States . United States v. Clarke, 8 Pet. 436; Eastern Transportation Co. v. United States, 272 U. S. 675; Munro v. United States, 303 U. S. 36.

6. The plaintiff has now, and at all times material hereto has had, a plain, adequate and complete remedy at law, as provided for in Title 28, Section 2410, United States Code, for the adjudication of any lien the United States may have or claim against plaintiff's, porperty, and for the quieting of plaintiff's title to property from any cloud thereon resulting from the notices of tax liens filed against the plaintiff's wife, Geneva A. Burleson Naus. In view of this plain, adequate and complete remedy at law, the plaintiff has failed to show any basis for equitable relief with respect to his title to the property described in the complaint.

7. Judgment in accordance with these findings of fact and conclusions of law will be entered for the defendants, dismissing the complaint herein, with defendants' allowable costs to be taxed.

Judgment

Upon the basis of the Findings of Fact and Conclusions of Law entered in this action, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the plaintiff recover nothing from the defendants, and that the defendants have judgment dismissing the complaint with their lawful costs and disbursements to be taxed.

[52-1 USTC ¶9213]Kirby C. Sidbury, Plaintiff v. Edwin Gill, Collector of Internal Revenue, Defendant

In the District Court of the United States for the Eastern District of North Carolina, Wilmington Division, Civil No. 446, 102 FSupp 483, February 1, 19 52

Liens: Suit for cancellation: Proper party defendant: Damages against collector: Venue.--A taxpayer who failed to pay his taxes upon demand could not maintain an action for damages growing out of a cloud on title created by tax liens against a collector of internal revenue who acted in the discharge of his official duty. Moreover, the collector is not a proper party in an action for cancellation of tax liens, since such liens are the exclusive property of the United States and a court is without jurisdiction in the absence of the United States as a defendant. Finally, an action which is brought in a district other than the one in which the collector resides must be dismissed for improper venue, since the collector, for purposes of venue, is similar to any other defendant.

Rodgers & Rodgers, Wilmington , North Carolina , for plaintiff. Charles P. Green, United States Attorney, Raleigh , North Carolina , for defendant.

Memorandum By the Court