# Petition for Writ of Certiorari — W. C. Garcia & Associates, Inc. v. Sassi > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0851%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1986 - **Citation:** 475 U.S. 1010 ## Text ' Supreme Court, U.s- iL & B QCT 4 198 ‘ B5-A9L No. ___ | JOSEPH F. SPANIOL, JR. Wwe oo IN THE Supreme Court of the United States OCTOBER TERM, 1985 —~ W.C. GARCIA & ASSOCIATES, INC., Petitioner, —_V.— MICHAEL D. SASSI, DISTRICT DIRECTOR, INTERNAL REVENUE SERVICE, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT JAMES F. KENNEDY 345 Park Avenue 38th Floor New York, New York 10154 (212) 872-6515 Counsel of Record GEORGE T. DONOGHUE, JR. 230 W. Monroe Street Suite 2040 Chicago, Illinois 60606 (312) 236-4711 Attorneys for Petitioner QUESTION PRESENTED Section 6213(a) of the Internal Revenue Code provides, in relevant part, that no assessment of a deficiency in respect of the tax in issue and no levy or proceeding in court for its collection shall be made, begun or prosecuted until a notice of deficiency has been mailed to the taxpayer, nor until the expiration of 90 days after such mailing, nor if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. It further provides: “. . . [T]he making of such assessment or the beginning of such proceediag or levy during the time such prchibition is in force may be enjoined by a proceeding in the proper court.” The question presented is whether the court of appeals has failed to follow this Court’s decision in Rosenman v. United States, 323 U.S. 658 (1945), and this Court’s implicit holding in Laing v. United States, 423 U.S. 161 (1976), by holding that the Taxpayer’s appeal from dismissal of its action for an injunction became moot when the Taxpayer had a check of $137,763.31 delivered to the Internal Revenue Service under threat of having its assets seized by the Internal Revenue Service to satisfy the balance of an assessment that was made without first issuing a notice of deficiency. - ere : SS ips 0 - Ey a ~s 5 7 _ a ee - _ 7 . = % 7 - Fie ea é Ze ~ oo tS : ‘ —_ — > . - 5,e , ‘ aoa S; Fad heath es may : .- 2 ; ~ : = = a yj wath yy = ~ o ; ‘ ‘. =, 4 re) bey ~ o a ne =r © i a. ye i ill TABLE OF CONTENTS PAGE ees Cet ec teeta ubebevssus «ts l CCC arch cedk se OAKS ONE RA6060 6u 6455085 l CS 6 56a sc VENTE SAAC G84 0 o 6000 cee nee 2 TC RCV Ch Ch Gh CA eweess 60 6a6eaneeccecenns 2 Reasons for granting the petition.................... 8 NER 606-64 045 008 4bA00's ss 00 (eccsbinennegen 17 RES SE ee la ee khan ccc te seh abehieeesnce es 2a keene a5beeeessandens Sh wath ae ak 6k we 8 3a eee leas bush ane ciasasacees 4a ee ee ins aeaeewsaeean ee Sa ee ee ee ene hake he KORG RE 4S 8a iv TABLE OF AUTHORITIES Cases: PAGE Campbell v. United States, 532 F.2d 1057 ............ 8 Cool Fuel, Inc. v. Connett, 685 F.2d 309 ....... 2, 3, 4, 8, 16 SPU OS a, GIS UB. SIOe sk cvs issnsncseceses 14 POPE v. Ceeiees Beates, GIS FBS BSF 6 inn vv esas ciccass 7,&9 Fortugno v. Commissioner, 353 F.2d 429............ 8, 9, 11 Koger v. United States, 755 F.2d 1094................ 11, 15 Laing v. United States, 423 U.S. 161................ 3, 4, &, 11, 13, 14, 15, 16 Leich and Co., Charles v. United States, 329 F.2d 649 . .8, 9, 11 Lewyt Corp. v. Commissioner, 215 F.2d 518 .......... 8,9 Maxwell v. Campbell, 205 F.2d 461.................. 8 RR a ee re 12 Peerless Woolen Mills v. Rose, 28 F.2d 661 ........... 8 Pennhurst State School & Hospital v. Halderman, ____ 8 ES a ee ere ee 14 Perlowin v. Sassi, 711 F.2d 910.......... 2, 3, 4, 8, 9, 14, 16 Philadelphia & Reading Corp. v. Beck, 676 F.2d 1159.. 8 Rambo v. United States, 492 F.2d 1060................ 8, 11 Rosenman v. United States, 323 U.S. 658 ..7, 8, 9, 10, 11, 14 ee Oh, Ce Oe sik ccbuscbasesavavs 14 ee Oy PU, SUE ID na ncccnccconcececuess 8, 12 United States v. Consolidated Edison Company of New ey es SPP SPS us Sacco ces vawtcesessecce 1] PAGE United States v. Geophysical Corp., 732 F.2d 693...... 12 Weinberger v. Romero-Barcelo, 456 U.S. 305 ......... 3, 16 Constitution, Statutes, and Revenue Procedure: ee ee Cu caeebenen 1] Internal Revenue Code of 1954 (26 U.S.C.): i cere e hese kei h so eR RDS 13 _ | SoS RICE laa a nea is arene Gus cebeumaae 3, 13 i a. uw dunn g hasan ces asenavneel 4,7,8 EE ca Wena chen bade e de ehaneene 7 EE. — knw cv éeheuanbcceevaeserenen a Be 4, 8, 9, 11, 14, 15, 16 EE ccc ches be deh hanetbeneal eae 13, 14 SE ao. c's unlat ween s teake eee ae 13 a EE Peon: err se rrr ree 13 dS caus ¥0Re eee eke Cea 13 I sco cok dues sbeanda se bee e aes 14 Ss en ck oa acd Kas bes bok exhescee 12 Revenue Procedure 82-51, 82-2 C.B. 839 ............. 1] IN THE Supreme Court of the United States OCTOBER TERM, 1985 ee >. W.C. GARCIA & ASSOCIATES, INC., Petitioner, —V MICHAEL D. SASSI, DISTRICT DIRECTOR, INTERNAL REVENUE SERVICE, Respondent. <> PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT W.C. Garcia & Associates, Inc. petitions for a writ of certiorari to review the order of the United States Court of Appeals for the Ninth Circuit in this case. OPINIONS BELOW The order of the court of appeals (App., A) is not reported. The order of the District Court (App., B) is not reported. JURISDICTION The order of the court of appeals (App., A) was entered on February 11, 1985. A timely petition for rehearing was denied on July 11, 1985 (App., C). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTES INVOLVED The relevant portions of Sections 6211, 6212, 6213, 6851, 6861, 6863, 7421, and 7430 of the Internal Revenue Code of 1954 (26 U.S.C.) are set out in App., F, infra, 8a-14a. STATEMENT Summary This case was instituted by the Taxpayer in the district court to obtain an injunction in accordance with Section 6213(a), Internal Revenue Code of 1954', preventing the Government from collecting an income tax deficiency that was assessed without first issuing a statutory notice of deficiency. Duris the district court proceedings the Government refrained from . ORDER Filed: May 21, 1984 This matter having come on for hearing on defendant’s motion for summary judgment and the Court having consid- ered the memoranda and the record to date, and for good cause shown, it is hereby ORDERED that defendant’s motion is hereby GRANTED and plaintiff’s complaint and action are hereby dismissed. Judg- ment shall be entered accordingly. ORDERED this day of MAY 21 1984, at San Francisco, California. /s/ M H PATEL United States District Judge ORDER 3a APPENDIX C IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 84-2234 D.C. #CV-84-0224-MHP (Northern California) > W. C. GARCIA & ASSOCIATES, INC., Plaintiff-Appellant, —vs.— MICHAEL D. SASSI, District Director, Internal Revenue Service, Defendant-Appellee. >_> ORDER Filed: July 11, 1985 Before: SCHROEDER, FARRIS and REINHARDT, Circuit Judges. The panel as constituted above has voted to deny the petition for rehearing and to reject the suggestion for rehearing en banc. The full court has been advised of the suggestic . for re- hearing en banc, and no judge of the court has requested a vote on the suggestion for rehearing en banc. Fed. R. App. P. 35(b). The petition for rehearing is denied and the suggestion for rehearing en banc is rejected. 4a APPENDIX D IN THE UNITED STATES COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA No. C-84-0224-MHP > W. C. GARCIA & ASSOCIATES, INC., Plaintiff, —_—VvV.— MICHAEL D. SASSI, District Director, Internal Revenue Service, Defendant. > ORDER Filed: January 27, 1984 This matter came on for hearing on plaintiff’s motion for a temporary restraining order to enjoin the Internal Revenue Service from collecting a tax assessment made against plaintiff. Based on the pleadings filed by plaintiff and arguments of counsel, the Court finds that there is no immediacy that requires it to act prior to 1aving the matter set for a motion for preliminary injunction. The Court is not satisfied that the plaintiff could prevail on the merits because it appears there is substantial questions about the waiver and the probability of success on the merits. In addition, the plaintiff has not shown that it is unable to pay the tax and sue for a refund in district court. Accordingly, the Motion for Temporary Restraining Order is therefore denied. ORDERED this day of JAN 27 1984, at San Francisco, California. /s/ M_H PATEL United States District Judge Sa APPENDIX E UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C-84-0224-MHP > W. C. GARCIA & ASSOCIATES, INC., Plaintiff, —Vvs.— MICHAEL D. SASSI, District Director, Internal Revenue Service, Defendant. > ORDER DENYING PRELIMINARY INJUNCTION Filed: March 12, 1984 Plaintiff has filed a motion for preliminary injunction seek- ing to enjoin the Internal Revenue Service (“Service”) from collecting an income tax deficiency assessed against it. The court reviewed the papers filed in support of and in opposition to the motion and heard oral argument, and having considered all the foregoing makes the following order. The Service assessed an income tax deficiency in the amount of $82,883.80 in plaintiff’s income taxes for the taxable year ended November 30, 1975. The Service did not send plaintiff a notice of deficiency prior to the assessment as required by 26 U.S.C. §§ 6212(a) and (c). The Service contends that by plaintiff’s execution of a Waiver of Restriction on Assessment and Collection of Deficiency in Tax, plaintiff waived any right to a deficiency notice. Plaintiff has moved to restrain the assessment and collection of the deficiencies, pursuant to 26 U.S.C. § 6213(a), based on the failure of the Service to comply ? 6a with the requirements of 26 U.S.C. §§ 6212(a) and (c). Section 6213(a) provides that any assessment or collection may be enjoined until a notice of deficiency has been issued to the taxpayer. Plaintiff contends that pursuant to § 6213(a), it is entitled to an injunction without a showing that it has suffered an irreparable injury or that the payment of the deficiency and subsequent suit for refund constitutes an inadequate remedy at law. According to plaintiff, under the plain language of the statute, plaintiff is entitled to an injunction upon proof that the deficiency assessment was made cr collection attempted prior to the issuance of a notice of deficiency by the Service. The law of this circuit, however, is to the contrary. In Cool Fuel, Inc. v. Connett, 685 F.2d 309 (9th Cir. 1982), and Perlowin v. Sassi, 711 F.2d 910 (9th Cir. 1983), this circuit held that a taxpayer is not entitled to injunctive relief under § 6213(a) absent a showing of irreparable harm and the ab- sence of an adequate legal remedy. Cool Fuel, 685 F.2d at 313-14; Perlowin, 711 F.2d at 912. Plaintiff has alleged that its exclusion from the Tax Court is per se an irreparable injury. No Ninth Circuit authority supports such a contention. Nor has plaintiff shown payment of the deficiencies under protest, and subsequent suit for a refund to be an inadequate remedy of law. Plaintiff has attempted to persuade this court that the Ninth Circuit cases of Cool Fuel and Perlowin conflict with the position of the Supreme Court in Laing v. United States, 423 U.S. 161 (1976). Plaintiff’s argument is specious. The issue, of whether a taxpayer is entitled to injunctive relief pursuant to § 6213(a) to restrain any a*sessment or collection of a defi- ciency prior to the issuance of a notice of deficiency, was not before the Court in Laing. Laing does not discuss the equitable considerations for injunctive relief. Its silence does not justify plaintiff’s reading that ordinary equitable considerations do not obtain under § 6213(a). In its 1983 decision in Perlowin, the Ninth Circuit considered Laing in another context. How- ever, it did not see fit to read Laing in the manner urged by 7a plaintiff. Rather, it went on to reaffirm its holding in Cool Fuel that the taxpayer must show irreparable injury and lack of an adequate remedy at law. Accordingly, plaintiff’s motion for preliminary injunction is DENIED. IT IS SO ORDERED. Dated: MAR 12 1984 /s/ M_H PATEL Marilyn Hall Patel United States District Judge 8a APPENDIX F Internal Revenue Code of 1954 (26 U.S.C.) SEC. 6211. Definition of a Deficiency. (a) In General.—For purposes of this title in the case of income, estate, and gift taxes imposed by subtitles A and B and excise taxes imposed by chapters 41, 42, 43, 44, and 45, the term “deficiency” means the amount by which the tax imposed by subtitle A or B, or chapter 41, 42, 43, 44, or 45, exceeds the excess of — (1) the sum of (A) the amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus (B) the amounts previously assessed (or collected without assessment) as a deficiency, over— (2) the amount of rebates, as defined in subsection (b)(2), made. * * * * SEC. 6212. Notice of Deficiency. (a) In General.—If the Secretary determines that there is a deficiency in respect of any tax imposed by subtitle A or B or chapter 41, 42, 43, 44, or 45, he is authorized to send notice of such deficiency to the taxpayer by certified maii or registered mail. (c) Further Deficiency Letters Restricted.— (1) General rule.—If the Secretary has mailed to the taxpayer a notice of deficiency as provided in subsection (a), and the taxpayer files a petition with the Tax Court within the time prescribed in section 6213(a), the Secre- tary shall have no right to determine any additional 9a deficiency of income tax for the same taxable year, of gift tax for the same calendar year, or estate tax in respect of the taxable estate of the same decedent, of chapter 41 tax for the same taxable year, of chapter 43 tax for the same taxable year, of chapter 44 tax for the same taxable year, of section 4940 tax for the same taxable year, of chapter 42 tax (other than under section 4940) with respect to any act (or failure to act) to which such petition relates, or of chapter 45 tax for the same taxable periods, except in the case of fraud, and except as provided in section 6214(a) (relating to assertion of greater deficiencies before the Tax Court), in section 6213(b)(1) (relating to mathematical or clerical errors), in section 6851 (relating to termination assessments), or in section 6861(c) (relating to the making of jeopardy assessments). * * * * SEC. 6213. Restrictions Applicable To Deficiencies; Petition To Tax Court. (a) Time for Filing Petition and _ Restriction § on Assessment.—Withir 90 days, or 150 days if the notice is addressed to a person outside the United States, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day}, the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency. Except as otherwise provided in section 6851 or section 6861 no assessment of a deficiency in respect of any tax imposed by subtitle A or B, chapter 41, 42, 43, 44, or 45 and no levy or proceeding in court for its collection shali ve made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such 90-day or 150-day period, as the case may be, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. Notwithstanding the provisions of section 7421(a), the making of such assessment or the beginning of such proceeding or levy 10a during the time such prohibition is in force may be enjoined by a proceeding in the proper court. * * * * (d) Waiver of Restrictions.—The taxpayer shall at any time (whether or not a notice of deficiency has been issued) have the right, by a signed notice in writing filed with the Secretary, to waive the restrictions provided in subsection (a) on the assess- ment and collection of the whole or any part of the deficiency. * * * * Sec. 6851. Termination Assessments of Income Tax. (a) Authority for Making.— (1) In general.—If the Secretary finds that a taxpayer designs quickly to depart from the United States or to remove his property therefrom, or to conceal himself or his property therein, or to do any other act (including in the case of a corporation distributing all or part of its assets in liquidation or otherwise) tending to prejudice or to render wholly or partially ineffectual proceedings to collect the income tax for the current or the immediately preceding taxable year unless such proceeding be brought without delay, the Secretary shall immediately make a determination of tax for the current taxable year or for the preceding taxable year, or both, as the case may be, and notwithstanding any other provision of law, such tax shall become immediately due and payable. The Secretary shall immediately assess the amount of the tax so deter- mined (together with all interest, additional amounts, and additions to the tax provided by law) for the current taxable year or such preceding taxable year, or both, as the case may be, and shall cause notice of such determina- tion and assessment to be given the taxpayer, together with a demand for immediate payment of such tax. * * * * lla (b) Notice of Deficiency.—If an assessment of tax is made under the authority of subsection (a), the Secretary shall mail a notice under section 6212(a) for the iaxpayer’s full taxable year (determined without regard to any action taken under subsec- tion (a)) with respect to which such assessment was made within 60 days after the later of (i) the due date of the taxpayer’s return for such taxable year (determined with regard to any extensions), or (ii) the date such taxpayer files such return. Such deficiency may be in an amount greater or less than the amount assessed under subsection (a). * * * * SEC. 6861. Jeopardy Assessments of Income, Estate, Gift, and Certain Excise Taxes. (a) Authority for Making.—If the Secretary believes that the assessment or collection of a deficiency, as defined in section 6211, will be jeopardized by delay, he shall, notwithstanding the provisions of section 6213(a), immediately assess such deficiency (together with all interest, additional amounts, and additions to the tax provided for by law), and notice and demand shali be made by the Secretary for the payment thereof. (b) Deficiency Letters.—If the jeopardy assessment is made before any notice in respect of the tax to which the jeopardy assessment relates has been mailed under section 6212(a), then the Secretary shall mail a notice under such subsection within 60 days after the making of the assessment. * * * * SEC. 6863. Stay of Collection of Jeopardy Assessments. (a) Bond to Stay Collection.—When an assessment has been made under section 6851, 6861, or 6862, the collection of the whole or any amount of such assessment may be stayed by filing with the Secretary, within such time as may be fixed by regulations prescribed by the Secretary, a bond in an amount equal to the amount as to which the stay is desired, condi- 12a tioned upon the payment of the amount (together with interest thereon) the collection of which is stayed, at the time at which, but for the making of such assessment, such amount would be due. Upon the fil'ag of the bond the collection of so much of the amount assessed as is covered by the bond shall be stayed. The taxpayer shall have the right to waive such stay at any time in respect of the whole or any part of the amount covered by the bond, and if as a result of such waiver any part of the amount covered by the bond is paid, then the bond shail, at the request of the taxpayer, be proportionately reduced. If any portion of such assessment is abated, the bond, shall, at the request of the taxpayer, be proportionately reduced. * * * * SEC. 7421. Prohibition Of Suits To Restrain Assessment Or Collection. (a) Tax.—Except as provided in sections 6212(a) and (c), 6213(a), 6672(b), 6694(c), 7426(a) and (b)(1), and 7429(b), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed. * * * * SEC. 7430. Awarding Of Court Costs and Certain Fees. (a) In General.—In the case of any civil proceeding which 1S—— (1) brought by or against the United States in connec- tion with the determination, collection, or refund of any tax, interest, or penalty under this title, and (2) brought in a court of the United States (including the Tax Court and the United States Claims Court), the prevailing party may be awarded a judgment for reason- able litigation costs incurred in such proceeding. * ¥ * * 13a (b) Limitations.— * * * * (2) Requirement that administrative remedies be exhausted.—A judgment for reasonable litigation costs shall not be awarded under subsection (a) unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the Internal Revenue Service. (3) Only costs allocable to this United States.—An award under subsection (a) shall be made only for reason- able litigation costs which are allocable to the United States and not to any other party to the action or proceeding. (4) Exclusion of declaratory judgment proceedings.— (A) In general.—No award for reasonable litigation costs may be made under subsection (a) with respect to any declaratory judgment proceeding. (B) Exception for section 501(C)(3) determination revocation proceedings.—Subparagraph (A) shall not apply to any proceeding which involves the revocation of a determination that the organization is described in section 501(c)(3). * * * * (c) Definitions.—For purposes of this section— * * * * (2) Prevailing party.— (A) In general.—The term “prevailing party” means any party to any proceeding described in subsection (a) (other than the United States or any creditor of the taxpayer involved) which— (i) establishes that the position of the United States in the civil proceeding was unreasonable, and l4a (ii)(1) has substantially prevailed with respect to the amount in controversy, or (II) has substantially prevailed with respect to the most significant issue or set of issues pre- sented. (B) Determination as to prevailing party.—Any de- termination under subparagraph (A) as to whether a party is a prevailing party shall be made— (i) by the court, or (ii) by agreement of the parties. * * * * --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0851%3A1. Public record. Not legal advice.