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NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished
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UNITED STATES of America, Plaintiff, Appellee,
Brian R. GARDELL, Defendant, Appellant.
United States Court of Appeals,
May 6, 1994.
Appeal from the United States District Court for the District of
New Hampshire [Hon. Martin F. Loughlin, Senior U.S. District Judge ]
Brian R. Gardell on brief pro se.
Michael L. Paup, Acting Assistant Attorney General, Gary R. Allen,
Charles E. Brookhart and Scott P. Towers, Attorneys, Tax Division,
Department of Justice on brief for appellee.
Before Torruella, Boudin and Stahl, Circuit Judges.
Appellant Brian Gardell appeals an order of the United States District Court
for the District of New Hampshire approving the report and recommendation
of the magistrate judge that he comply with an Internal Revenue Service
[IRS] summons issued pursuant to 26 U.S.C. s 7602. The administrative summons
Gardell to appear at the IRS office in Portsmouth, New Hampshire, to give
testimony and to produce for examination books and records relating to
his tax liabilities for the years 1985 and 1987. Tax liabilities had previously
been assessed against
Gardell for these years and the purpose of the summons was to determine the
collectability of these liabilities. On appeal, Gardell asserts that the
court lacked jurisdiction to enforce the summons since Gardell has the "Status
... of Freeman and ... has no Contractual, Quasi-Contractual or implied agreements
with the Federal Government." He also contends that the enforcement of
the summons violated his constitutional right to due process. We affirm essentially
on the grounds stated by the magistrate judge in his report and recommendation
dated July 7, 1993. We add only the following remarks.
First, Gardell's contention that as a "Freeman" without contractual
obligations to the government he is not subject to the district court's jurisdiction
is totally without merit. [FN1] See United States v. Sloan, 939 F.2d 499, 500-01
(7th Cir. 1991) (contention that appellant was free from income tax because
he was a "freeborn, natural individual ... [and thus] not subject to the
jurisdiction of laws of the United States" is frivolous), cert. denied,
112 S.Ct. 940 (1992); United States v. Drefke, 707 F.2d 978, 981 (8th Cir.
1983) (claim that "taxes are debts which can only be incurred voluntarily
when individuals contract with the government for services ... is totally without
arguable merit"), cert. denied, 464 U.S. 942 (1983). The district court
has subject matter over a petition to enforce an IRS administrative summons
pursuant to 26 U.S.C. s 7604(a). It acquired personal jurisdiction over Gardell
through service upon him of the show cause order and the petition of enforcement.
United States v. Bichara, 826 F.2d 1037, 1039 (11th Cir. 1987); United States
v. Miller, 609 F.2d 336, 338 (8th Cir. 1979).
Second, the record makes clear that the IRS has met its burden of establishing
a prima facie case for enforcement of the administrative summons as set out
in United States v. Powell, 379 U.S. 48 (1964). See also Sylvestre v. United
States, 978 F.2d 25, 26 (1st Cir. 1992), cert. denied, 113 S.Ct. 1606 (1993).
Gardell, who concedes that the IRS satisfied these requirements, thereupon
bears the burden of showing, by an allegation of specific facts, that the enforcement
of the summons would constitute an abuse of the court's process-"that
is, that the summons had been issued for an improper purpose or for any other
purpose reflecting on the good faith of the investigation." Id. at 27
(citing Powell, 379 U.S. at 58). The only arguments Gardell raised in this
regard either before this court or before the district court challenge the
liabilities which were assessed against him and which underlie the summons.
However, a challenge to an assessment of liability can only be brought in Tax
Court within ninety days of the mailing of a notice of deficiency, see 26 U.S.C.
s 6213(a), or before the district court after the payment of the tax, id. s
7422 (until tax is paid, district court without jurisdiction to hear allegation
that tax has been erroneously assessed). [FN2] A challenge to the underlying
assessment is not a valid defense to the enforcement of an administrative summons,
United States v. Harper, 662 F.2d 335, 336 (5th Cir. 1981) (per curiam ) (taxpayer
challenge to underlying assessment does not suffice to meet his burden to show
improper purpose), and is misplaced in an appeal from a district court order
enforcing one, United States v. Mueller, 930 F.2d 10, 12 (8th Cir. 1991) ("district
court correctly held that [the summoned party] could not use the proceedings
to enforce the IRS summons as a forum in which to contest the validity of the
underlying assessments."). Since Gardell was afforded an opportunity to
challenge the administrative summons in an adversarial proceeding before the
district court prior to the enforcement of the summons, he suffered no deprivation
of his constitutional right to due process. See Reisman v. Caplin, 375 U.S.
440, 446, 449-50 (1964) (no constitutional invalidity in procedure for enforcement
of summons since there is "full opportunity for judicial review before
any coercive sanctions may be imposed"); United States v. Gilleran, 992
F.2d 232, 233- 34 (9th Cir. 1993) ("no liberty or property interest protectable
by due process prior to the enforcement of the summons"). Finally, the
IRS asks this court to impose sanctions against appellant for bringing a frivolous
appeal. Gardell's challenges to the administrative summons are frivolous and/or
misplaced. Both this court and others have not hesitated to impose sanctions
for similarly frivolous appeals. See, e.g., Kelly v. United States, 789 F.2d
94, 98 (1st Cir. 1986) (imposing sanctions on appellant who claimed that because
he was a "natural individual and unenfranchised freeman" who neither
asked for nor received privileges from government he owed no tax); Sullivan
v. United States, 788 F.2d 813, 816 (1st Cir. 1986) (similar); see also Wilcox,
848 F.2d at 1008 (appellant contended wages are not income and payment of taxes
is voluntary); Casper v. Commissioner, 805 F.2d at 906 (similar). We agree
that sanctions are warranted in this case. Although the Government seeks $1,500
in lieu of costs and attorneys' fees, we, in accord with our prior practice
in similar cases, assess only double costs against Gardell for bringing a frivolous
appeal. Fed. R. App. P. 38. The judgment of the district court is affirmed.
Double costs are assessed against appellant.
FN1. Similarly frivolous is Gardell's contention that the taxing of wages
is unconstitutional. See, e.g., Wilcox v. Commissioner, 848 F.2d 1007,
1008 (9th Cir. 1988) (contention that wages are not income for tax purposes
Casper v. Commissioner, 805 F.2d 902, 906 (10th Cir. 1986) (appellant's
contention that amount he received from his employer is not taxable income
without merit") (citing cases).
FN2. There is no evidence that Gardell ever attempted to file a petition for
redetermination of his liabilities with the Tax Court. According to this IRS,
the time to challenge Gardell's tax liability in
Tax Court has now passed.
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