The opinion of the court was delivered by: LEVET
This is an income tax refund action. It was assigned to me for all purposes under Rule 2, General Rules of the Southern and Eastern Districts of New York. Plaintiff has moved for summary judgment.
The action grows out of the fact that on June 18, 1962, plaintiff was found to have in his possession at Idlewild Airport, New York, New York, the sum of $247,500 in United States currency. Plaintiff is a French citizen and landed at New York as a passenger on a flight which departed from Chicago, Illinois, and was scheduled to terminate in Zurich, Switzerland.
Once it was learned that plaintiff had the sum of money in his possession, it is undisputed that the following actions were taken:
1. On June 18, 1962, the Federal Narcotics Bureau seized the money ($247,500) in the hands of plaintiff and turned it over to the Internal Revenue Service (IRS).
2. On June 21, 1962, allegedly pursuant to Section 6851, Internal Revenue Code of 1954, a jeopardy assessment in the amount of $247,820 was levied against plaintiff and his assets.
3. On or about June 25, 1962, the District Director notified plaintiff in writing that:
(a) Plaintiff had concealed his property in order to hinder collection of income taxes justly due and to become due for the period January 1, 1962 to June 21, 1962.
(b) In accordance with Section 6851 of the Internal Revenue Code of 1954, the Director immediately terminated the taxable year of plaintiff beginning January 1, 1962 and ending June 21, 1962 and declared the income taxes therefor immediately due and payable.
(c) The taxes due for the period were $247,820, which amount was to be paid immediately. (See Pl. Ex. J, 9/26/65)
4. On or about June 21, 1962, the Director, allegedly pursuant to Section 6020, Internal Revenue Code of 1954, filed a so-called "Dummy" return for plaintiff, Form 1040B, "U.S. Non-Resident Alien Income Tax Return." The "Dummy" return and accompanying papers showed taxes due for the period from January 1, 1962 through June 21, 1962 in the sum of $247,820.
5. On August 23, 1962, the Director acknowledged receipt of $247,500. On October 26, 1962, a refund of $10,000 was made to plaintiff.
6. On December 27, 1962, plaintiff executed a "U.S. Departing Alien Income Tax Return" showing no income earned in the United States and no tax due.
7. Plaintiff duly filed a claim for refund for the entire amount in the hands of the government, which was denied, and thereafter plaintiff duly instituted this action.
The statutes involved herein are as follows:
1. Sections 6851(a)(1) and (d), Internal Revenue Code of 1954, which are as follows:
"§ 6851. Termination of taxable year
"(a) Income tax in jeopardy. -
"(1) In general - If the Secretary or his delegate 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 tending to prejudice or to render wholly or partly ineffectual proceedings to collect the income tax for the current or the preceding taxable year unless such proceedings be brought without delay, the Secretary or his delegate shall declare the taxable period for such taxpayer immediately terminated, and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable year or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing return and paying the tax has expired; and such taxes shall thereupon become immediately due and payable. In any proceeding in court brought to enforce payment ...