73-2 USTC P 16,098
Robert E. IANNELLI and Dolores Iannelli, his wife
v.
H. Alan LONG, District Director, Pittsburgh, Pennsylvania,
and Johnnie M. Walters, Commissioner of Internal
Revenue of the United States of America,
successor to Harold T. Swartz,
Appellants.
No. 72-1418.
United States Court of Appeals,
Third Circuit.
Argued Feb. 27, 1973.
Decided June 29, 1973.
Certiorari Denied Nov. 19, 1973.
See
Robert E. Lindsay, Tax Div., Dept. of Justice, Washington, D. C., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Meyer Rothwacks, Chief Appellatе Section, John P. Burke, John M. Brant, Attys. Tax Div. Dept. of Justice, Richard L. Thornburgh, Pittsburgh, Pa., of counsel, for appellants.
James E. McLaughlin, McArdle, McLaughlin, Paletta & McVay, Pittsburgh, Pa., Charles Alan Wright, Austin, Tex., William A. Camp, of counsel, for appellees.
Before HASTIE and ALDISERT, Circuit Judges, and DITTER, District Judge.
OPINION OF THE COURT
HASTIE, Circuit Judge.
The order from which the government has taken this appeal enjoined the District Director and thе Commissioner of Internal Revenue from seizing or selling, until further order of the court, any property of Robеrt Iannelli or his wife Dolores to satisfy jeopardy assessments against them for alleged failure to pay overdue federal wagering taxes. In its opinion, W.D.Pa.1971,
The parties agree that section 7421(a) is comprehensive and that оn its face it seems to prohibit such a suit and such an injunction as we have here. Cf. Enoch v. Williams Packing & Navigation Co., 1962,
The taxpayers do not dispute that they may owe the government substantial sums of overdue taxes, though they dispute the claimеd amount of their total indebtedness. Moreover, at the time of the jeopardy assessment and resultant levies the taxpayers, who had not filed a complete inventory of their possessions, apрeared to be the owners of mortgaged income producing rental property, a furnished home, a life insurance policy, bank accounts, automobiles and the contents of a safe deрosit box. It is not disputed that in the aggregate the levies on their property were intended to and prоbably would yield substantial revenue, although in the district court counsel for the government conceded thаt at least some of the real property was so heavily mortgaged that a forced sale would not in likelihood benefit the government.
Though one of the government's objectives in this undertaking to seize аll of the taxpayers' discoverable property may have been to put economic рressure upon persons believed to be engaged in large scale criminal activities, the jeopardy assessment and consequent levies also appear to have been bona fide and potentially productive attempts to collect revenue. And bona fide efforts to collеct taxes through lawful procedure are the very undertakings that Congress has protected through the enactment of section 7421(a) against frustration or delay by litigation.
The district court was understandably and properly concerned that the taxpayers not be forced to choose between forfеiting their property without contesting the tax assessments on the one hand and, on the other, incriminating themselves by admitting in a tax refund suit that they had been engaged in an illicit enterprise for which they already had been indicted. But a tax refund claim and complaint adequate to toll the running of the statute of limitations could be drafted and filed without damaging admissions concerning the details or even the nature of taxpayers' business. And further proceedings in such a suit would properly be deferred on the plaintiffs' request until the conclusion of related criminal proceedings against them or until the running of all applicable periоds of limitations on prosecutions. Cf. United States v. Kordel, 1970,
For these reasons we have concluded that section 7421(a) of the Internal Revenue Code prohibits the relief granted to the taxpayers in this case.
The judgment will be reversed.