"Partial Victory" For TP In The 3rd

[.]

Is everyone on the forum like this guy?

Yes, except many of us are much worse.

Allow me to give you an example:

Have you considered the very high liklihood that you are nothing more than yet another bumbling moron who, after having had everything explained to him in great detail in plain, straightforward English continues to say (and I paraphrase) "Oh, I was just ruminating about some BS, I'll explain more later," except that later never comes nor does anything other than yet more of your incomprehensible gibberish?

Many like you have popped up here in the past. All like you have been ground into very fine dust by the many lawyers and others here who actually know what they're talking about. It usually happens quite rapidly, even though a victim of the grinding, such as yourself, doesn't ever seem to realize that it's happened at all.

You are welcome to continue your obliviousness, it's a source of no small amusement.

[LegalEagleMan]

Is everyone on the forum like this guy?

Yes, except many of us are much worse.

Allow me to give you an example:

Have you considered the very high liklihood that you are nothing more than yet another bumbling moron who, after having had everything explained to him in great detail in plain, straightforward English continues to say (and I paraphrase) "Oh, I was just ruminating about some BS, I'll explain more later," except that later never comes nor does anything other than yet more of your incomprehensible gibberish?

Many like you have popped up here in the past. All like you have been ground into very fine dust by the many lawyers and others here who actually know what they're talking about. It usually happens quite rapidly, even though a victim of the grinding, such as yourself, doesn't ever seem to realize that it's happened at all.

You are welcome to continue your obliviousness, it's a source of no small amusement.

You so smart everyone else one is so dumb.

Yes, he claimed he knew than said later he didn't know (see post above). Are you and him the same person?

All like you have been ground into very fine dust by the many lawyers and others here who actually know what they're talking about.

What is there to ground into dust? Do you not read well, I said that was my initial thought on the matter. Since you have two orders confused on the same subject, actually you have three orders now it doesn't seem like a discussion is not in order? If one does in fact want to discuss?

Everyone is an internet tough guy behind the keyboard. Is this how you talk in your daily life? I have seen behavior like this before, they are called kids.

What exactly do you think I am defending or not defending, you seem to have an agenda of which I can't determine? I never once made a final judgment or final conclusion, should my judgment be to agree with one particular person on this board on all matters? If so, who?

[ASITStands]

On remand, the district court should find that it has jurisdiction, and then dismiss the claims on the merits, for failing to state a claim for which relief may be granted.

The United States District Court has jurisdiction to determine whether it's a quiet title action, or whether the United States had sovereign immunity to remove it, and factually, that's all the Court of Appeals asked it to do by remanding the case.

If the district court decides in favor of the quiet title action, that's when a determination could be made whether it properly belonged in State Court.

On the record before us, we can not say that the District Court properly dismissed this pro se matter on the basis of sovereign immunity. Accordingly, we will remand this matter for further consideration of the question of sovereign immunity and, if necessary, a determination whether the state court had subject matter jurisdiction.

If, however, the district court determines the United States had sovereign immunity, it can dismiss on failure to state a claim upon which relief can be granted, on the Anti-Injunction Act, and the Court of Appeals would be asked to affirm the district court determination.

At least, that's how I see it at this juncture.

[The Operative]

The Operative
That was always my first thought as well, however Petitioner is not or more like was not suing for actions "under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue". The Petitioner is claiming he has no knowledge as to why the lien is there, he lacks the facts necessary to determine anything. My wording I would say. The record is void of the necessary facts, to get where this is right now one would have to be assuming facts not in evidence. (Petitioner is changing his stance in his last brief, this kind of changed is not to was not suing above)

Let me see if I can unravel what you are attempting to say. I believe that you are claiming that the petitioner is not suing for actions under any Act of Congress for the collection of revenue and therefore the removal from state court is not valid. I disagree with that because you are taking the "any Act of Congress" out of context. Let's examine this in further detail using the facts from the Circuit Court opinion.

First, whether the Federal tax lien is supposed to be attached to the petitioner's property or not, is somewhat irrelevant to the issue at hand. In placing a Federal tax lien on a piece of property, the IRS agents, acting for the United States, are acting under the authority granted to them by the Secretary of the Treasury who is using his authority granted by 26 USC (which is supported by an act of Congress). If the IRS has determined there is a tax deficiency, whether that deficiency is correct or not, the IRS has the authority to file a Federal tax lien on property of the taxpayer.

As I have already stated, whether the petitioner believes the Federal tax lien should exist or not is irrelevant to the issue of the removal from state court to the District Court. He is suing the United States and 28 USC 1442(a) applies.

It certainly COULD be an "internal revenue" case, it certainly could be the Petitioner suing the US government under an Act of Congress, it COULD be all kinds of things. It all seems premature at this point without the necessary facts, although like I said Petitioner's last brief seem to step away from the point I was making.

It absolutely is an internal revenue case. In the first paragraph of the Circuit Court's opinion, it states that Schiaffino alleges he received a notice of federal tax lien.

I can see your point on a few issues because now Petitioner is kind of saying something else in his last brief. He is now trying to go along with the order, which would make what you said more likely. If Petitioner had or does stay with his original line of thinking than this would all be premature assuming facts not in evidence.

I am in no way claiming Petitioner could "win" in State court if the US has an agency order, Sovereign immunity claim could be used at that point. However, it would than get to a position were Petitioner could move the case to CoA directly. Thinking out loud. I am actually waiting to see one more case in the CoA that touches on what I am talking about that is presently in CoA to give me more insight.

Glancing at the petitioner's last brief, I believe I know what he is arguing. He states that the U.S. did not follow statutory procedure when filing the Federal tax lien and therefore the state court should hear the matter. I believe he is using the erroneous argument that in order for the U.S. to file a Federal tax lien, that the U.S. must follow state and county laws on filing liens. Of course, he is wrong.

The Circuit Court has already found that the District Court properly found that the removal from state court was correct and the dismissal of the petitioner's motion to remand was also correct. The only issue left is can the District Court grant the petitioner relief. Since the District Court is barred from removing a Federal tax lien under 26 USC 7421, the only appropriate action is to dismiss for petitioner's failure to state a claim for which relief may be granted.

[Nikki]

LegalEagleMan seems to be missing, as do almost all TPS, a significant point:

The lien against tha TP's assets can not be contested in state court since it is merely REGISTERED in the state. The lien arises automatically when the TP fails to pay what he owes.

It is a federal lien and an integral part of the assessment and collection of taxes.

Thus, the lien, itself, is immune from suit via various laws. The only recourse the taxpayer has is to remove the underlying basis of the lien, either by paying the taxes (and then suing for refund) or by some other legitimate challenge to the assessment.

In any case, non of these actions can be effected in any court other than a federal District, or higher, court.

[LPC]

Rather than continue to argue in a vaccum, let's see what the parties are actually saying.

In April, after the CA3 ruled, the court issued an order asking both parties to submit new briefs on the issue of sovereign immunity. Here is Schiaffino's brief:

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA
United States of America
Plaintiff
v.
Joseph P. Schiaffino
Defendant

SUPPLEMENTAL BRIEF IN SUPPORT OF UNITED STATES'
WAIVER OF SOVEREIGN IMMUNITY

Pursuant to the SCHEDULING ORDER of April 29, 2009 Joseph P. Schiaffino submits this SUPPLEMENTAL BRIEF in support of the United States' waiver of sovereign immunity.

Schiaffino's original Rule to Show Cause Petition was filed in Bucks County Court of Common Pleas, which clearly possessed the power to correct its own records' regarding items such as notices of federal tax lien that did not meet statutory filing requirements. Schiaffino's Petition challenged the validity of the notice of federal tax lien, but did not address or attack the merits of the underlying assessment.

The plain fact that the United States voluntarily submitted documents to the state court's jurisdiction indicated its waiver of sovereign immunity. Schiaffino filed his Petition with that state court, as the issue of waiver of sovereign immunity appeared moot. Schiaffino's Motion for Remand was based on the fact that the state court had the power to correct its own records and therefore had jurisdiction to rule on his original Petition.

1 Albright v. B & G Development Co., 64 Pa. D. & C. 595 (1973), Corn. v. Liscinsky, 195 Pa. Super. 183, 171 A.2d 560 (1961).

However, as the 3rd Circuit Court of Appeals has held, removal was proper under 28 U.S.C. 1442(a)(1). Therefore, the remaining issue is whether the United States has waived its sovereign immunity in the instant case.

Regarding federal debt collection procedures, 28 U.S.C. $3002 (1 5) states that the "United States" means; (A) a Federal corporation; (B) an agency, department, commission, board, or other entity of the United States; or (C) an instrumentality of the United States. The United States, in its corporate capacity, voluntarily waives its sovereign character, and all its attendant privileges. See The Bank of the United States v. The Planters ' Bank ofGeorgia, (1824) 22 U.S. (9 Wheat.) 904, 907-908,6 L.Ed 244

Further, 28 U.S.C. 91340 provides the district courts "original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue," and 28 U.S.C. §2410(a) provides "Under the conditions prescribed in this section and section 1444 of this title for the protection of the United States, the United States may be named a party in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter -- (1) to quiet title to, (2) to foreclose a mortgage or other lien upon, (3) to partition, (4) to condemn, or . . . with respect to, real or personal property on which the United States has or claims a mortgage or other lien."

Schiaffino's Petition challenged the validity of a notice of federal tax lien which arises under an Act of Congress for internal revenue, and also involves the quiet title to personal property and thus meets the requirements of both 28 U.S.C. $1340 and 28 U.S.C. §2410(a). See Aqua Bar & Lounge v. US. Depl. of Treasury, 539 F. 2d 953 (1976). The existence of a notice of federal tax lien vests this Court with jurisdiction to hear Schiaffino's Petition. See Kabakjian v. US., 267 F. 3d 208 (2001).

Since Schiaffino's Petition is not barred by sovereign immunity, this Court must hear Schiaffino's Petition challenging the validity of a notice of federal tax lien.

Respectfully submitted,
Joseph P. Schiaffino,
205 Wyckford Drive
Perkasie, Penna. 18944
267-247-2202

Date: May 15,2009.

As I said before, the court should find that it has jurisdiction, and then rule against Schiaffino for failure to state a cause of action for which relief may be granted, because Schiaffino is wrong as a matter of law about the application of "statutory filing requirements" to notices of federal liens. See http://evans-legal.com/dan/tpfaq.html#recording

And Schiaffino is also wrong about the application of the federal debt collection practices act, because it doesn't apply to the collection of taxes. See http://evans-legal.com/dan/tpfaq.html#FDCPA

[LPC]

No evidence exist on the record that this is an "internal revenue" case that I have seen, it is void of such evidence.

It's a case involving a federal tax lien arising under the INTERNAL REVENUE CODE. You don't think that cases under the INTERNAL REVENUE CODE are "internal revenue" cases?

Petitioner claims non-response when inquiring, that appears to be the Petitioner's position.

Where did you get that idea?

Petitioner is not challenging under section 6320, how did the IRC get involved in this case now?

It's a federal tax lien. What law do you think creates a federal tax lien?

The petition submitted in State court must be taken as true that there is no valid lien.

Wrong. For the purpose of a motion to dismiss, the factual allegations of the plaintiff (Schiaffino) must be assumed to be true, but not the legal conclusions, and the validity of a federal tax lien is a legal conclusion, not a factual or evidentiary issue.

And because the notice of federal tax lien is a part of the public record, the court can take judicial notice of the form and contents of the notice and rule on whether or not it is valid.

It certainly COULD be an "internal revenue" case but as this moment in time it is not an "internal revenue" case.

Nonsense. The dispute is over the form or validity of a notice of federal tax lien filed in accordance with section 6323 of the Internal Revenue Code.

The petitioner is claiming that lien does not exist not that there is some type of procedural issue with the process of the lien.

Wrong again. The petitioner's brief says that the petition was filed to correct "notices of federal tax lien that did not meet statutory filing requirements."

And federal tax liens arise automatically upon assessment, demand for payment, and failure to pay. See IRC section 6321. Schiaffino isn't contesting the validity of the assessment, Schiaffino has effectively admitted that there is a lien and the only issue is the validity and effect of the notice of lien.

[Prof]

LPC, I don't have time to go back and read the case (I'm trying to get an article done), but I am curious if you can shed more light as follows:

As you point out, the federal tax lien is an automatic, statutory lien that arises as to the taxpayer's interest in his or her own property; the lien attaches to that property by statute without more.

I usually think of the notice as necessary to advise third parties of the US's lien on the taxpayer's property so that a purchaser cannot take free, or a lender cannot get ahead of the US. Here, the taxpayer seems to be challenging the lien as a notice to third parties so that he can quiet title as to himself (that is, quiet title).

My question: I know that levy cannot take place without some sort of notice, but that is not what is at issue here, is it? He has already admitted the assessment or waived anydispute, as to the assessment, that that is what gives rise to the lien, as far as I know.

[Famspear]

It appears that although Schiaffino is the party who commenced this case (in the Court of Common Pleas of Bucks County, Pennsylvania), he styled the United States as the "plaintiff" and himself as the "defendant" in his "Petition for Rule to Show Cause" in Bucks County.

The attorney for the United States, in the Notice of Removal filed in the federal district court, replicated the form of the caption of the case as filed by Schiaffino in the Bucks County court -- but pointed out that Schiaffino's characterization of the parties was incorrect. The case docket in the federal district court also reflects the erroneous characterization of the parties by Schiaffino.

It appears that Schiaffino's error was not unintentional. Schiaffino contended, in the federal court, that the United States could not move for removal to the federal court, using the argument that the United States was supposedly not the defendant in the state court action, but was instead the "plaintiff".

Of course, nobody was fooled by Schiaffino's dishonesty.

[Famspear]

LPC, I don't have time to go back and read the case (I'm trying to get an article done), but I am curious if you can shed more light as follows:

As you point out, the federal tax lien is an automatic, statutory lien that arises as to the taxpayer's interest in his or her own property; the lien attaches to that property by statute without more.

I usually think of the notice as necessary to advise third parties of the US's lien on the taxpayer's property so that a purchaser cannot take free, or a lender cannot get ahead of the US. Here, the taxpayer seems to be challenging the lien as a notice to third parties so that he can quiet title as to himself (that is, quiet title).

My question: I know that levy cannot take place without some sort of notice, but that is not what is at issue here, is it? He has already admitted the assessment or waived anydispute, as to the assessment, that that is what gives rise to the lien, as far as I know.

As Prof and others have pointed out, if Schiaffino is challenging only the validity of the filing of the notice of lien -- and not challenging the validity of the lien itself -- then Schiaffino may be missing the boat.

If Schiaffino is not challenging the validity of the lien itself, but is only challenging some aspect of the filing of the notice (or the form of the notice, etc.), then Schaffino would really be trying to raise the rights of third parties (namely the rights of the IRS and any other creditors he happens to have). The tax lien would be valid as against Schiaffino regardless of the validity of the filing of the notice (i.e., regardless of the priority rights of the IRS with respect to the various other creditors of Schiaffino). Indeed, the tax lien would be valid as against Schiaffino even if the IRS never bothered to issue a notice. This is the point about which nearly all tax protesters seem to be blissfully unaware.

I wonder what the court would decide if the government were to argue for dismissal on the ground that the validity of the filing of the notice really doesn't affect any property right of Schiaffino -- as between the United States and Schiaffino -- one way or the other. The "property right" damage to Schiaffino was done when the lien arose, not when the notice was filed. (However, Schaiffino is adversely affected by the filing of the notice, in the sense that the marketability of his property is adversely affected if a notice of federal tax lien is in the record.)

[The Observer]

This is a perfect example of what happens when people like Schiaffino and LegalEagleMan have little or no knowledge of the law governing liens. In Schiaffino's case it is apparent that he didn't understand the concept of the tax lien as an abstract and instead focused on the notice of lien as being the "real" problem that he needed to deal with in his errant attempt to get rid of it. So he attacked the filing of the notice, not realizing that the government could still enforce the lien administratively and/or judicially without the notice being in play.

Now, to give Schiaffino the benefit of the doubt, it might be possible that his effort was to get rid of the notice to allow him more maneuver room in borrowing against or liquidating assets that were encumbered by the tax lien. We have seen other instances here where taxpayers undertook fraudulent steps to make it look as though certain assets were not impacted by the filing of the tax notice. But given the the facts mentioned in the case, I'd say his efforts need to be chalked up under the "magic-word" category for TPs who think mumbo-jumbo can cure their tax ills.

[LPC]

This is a perfect example of what happens when people like Schiaffino and LegalEagleMan have little or no knowledge of the law governing liens. In Schiaffino's case it is apparent that he didn't understand the concept of the tax lien as an abstract and instead focused on the notice of lien as being the "real" problem that he needed to deal with in his errant attempt to get rid of it. So he attacked the filing of the notice, not realizing that the government could still enforce the lien administratively and/or judicially without the notice being in play.

In fairness to them, the concept of an "inchoate lien" didn't make a lot of sense to me either when I first encountered it, and I think I only really began to understand the difference between the federal tax lien and the notice of lien (and the effect of the notice) when I began working on the Tax Protester FAQ.

So, federal tax liens are not the easiest things to understand, and even lawyers can have problems with the concepts.

[LPC]

My question: I know that levy cannot take place without some sort of notice, but that is not what is at issue here, is it?

Not as far as I can tell, no.

He has already admitted the assessment or waived any dispute, as to the assessment, that that is what gives rise to the lien, as far as I know.

That's my understanding also. From what I have seen in his last filing, he is contesting the notice of federal lien for failing to comply with Pennsylvania statutory filing requirements.

The original complaint is mostly conclusory, and merely claims that the notice of lien is "contrary to the rules, statutes, public law, regulations, the Pennsylvania Constitution and the United States Constitution, all of which govern this Commonwealth of Pennsylvania, and a violation of Defendant's right to due process," but doesn't really explain how or why.

The complaint also alleges that Schiaffino filed an "Affidavit of Non-Liability" (not sure where he filed it) and then sent IRS agents both a "Presumptive Notice" and an "Affidavit of Truth" and the IRS never responded to either, so the "Presumptive Notice" and "Affidavit of Truth" are "lawfully binding" on the U.S. But he doesn't say what's in those documents (at least, not in the copy of the complaint that was included with the government's motion to remove) so they don't help to clarify what he thinks might be wrong with the notice of federal tax lien.

[grixit]

Maybe we need a tutorial on the difference between something's satus and a document that records that status.

I'd start with something most people should be familiar with, receipts.

A receipt doesn't make an item yours, it just shows that you bought it. Of course we don't call a receipt "notice of purchase". If we did, i doubt even a tp would be confused.

For more expensive items, we have more extensive documents. Like title deeds and pink slips. They don't confer ownership either, but they are important.

Then move onto bills.

A bill doesn't make you owe, it just confirms that you owe.

Hopefully after that, tp's will be ready to understand what a notice of lien is.

[Prof]

Maybe we need a tutorial on the difference between something's satus and a document that records that status.

I'd start with something most people should be familiar with, receipts.

A receipt doesn't make an item yours, it just shows that you bought it. Of course we don't call a receipt "notice of purchase". If we did, i doubt even a tp would be confused.

For more expensive items, we have more extensive documents. Like title deeds and pink slips. They don't confer ownership either, but they are important.

Then move onto bills.

A bill doesn't make you owe, it just confirms that you owe.

Hopefully after that, tp's will be ready to understand what a notice of lien is.

Actually, title documents (pink slips or auto registrations, manufacturer's certificates/statements of origin, a real property deeds) do confir ownership and in certain contexts are the only way to get ownership or, alternatively, prove ownership. So, in large part, those documents do create and confer ownership.

The same is true for documents of title (e.g., warehouse receipts).

[Pottapaug1938]

Actually, Certificates of Title do NOT confer ownership; they are only evidence of ownership. In Massachusetts, I can legally own a car without a ceritificate of title; but unless I have one from the old owner evidencing an intent to transfer ownership to me, I will never be able to register the car. Likewise, if I buy a piece of registered land, I own it; but until I present the appropriate documents to the Land Court side of the Registry of Deeds, there's no way that I can prove ownership or have it legally recognized.

[Pottapaug1938]

I know about "race" and "race notice" states; but this means only that the ownership is defeasible.

[Prof]

Defeasible, as in "you lose." Might be able to sue the seller for fraud successfully (since he knowingly sold the land to two different parties at different times), but you lose the land.

I agree with the Dogg; however, I think you short-change the automobile title documents -- in most states, the holder of the title is a BFP, and takes from a person in possession. An unrecorded transfer of real property is also not effective in most cases. So, whether the title /deed is necessary to confer title, it sure is necessary to prove title.

[Prof]

I agree with the Dogg[....]

Only one "g", please. My first name ain't Snoop.

You sure?

[LPC]

From the Tax Protester FAQ section on notices of levies (and liens):

What tax protesters fail to recognize is that there is a difference between a legal interest or relationship and the document that creates the interest or relationship. So, for an example, there is a difference between a promissory note and a debt, because the promissory note is a document and the debt is the legal relationship created (or evidenced) by the promissory note. Similarly, a deed can be used to transfer the ownership of property, but deeds (i.e., documents) and ownership (a legal interest) are two different things.

[Discussion of levies and cases on levies omitted.]

The same principles apply to liens and notices of lien. A “lien” is a legal interest in property, not a document. Federal tax liens are defined by statute, and they come into existence automatically, as soon as a tax is assessed and demand is made for payment:

[Quotation omitted]

The purpose of a “notice of lien” is not to create a lien, because the lien exists under section 6321 as soon as the IRS has made a demand for the tax due. The purpose of the notice is to make the lien enforceable against purchasers and certain other third parties who may also have interests in the property subject to the lien. This is spelled out in section 6323[....]

The confusion between the names of documents and the names of legal relationship created or evidenced by documents is not limited to tax protesters, though. I regularly hear people talk about "who has the deed" to a property even while it is clear that they are not talking about the location of a document but about the ownership (i.e., title) to the property.