The opinion of the court was delivered by: NEAHER
Plaintiff Ranger Bakers, Inc. ("Ranger") and co-plaintiff Mark Jacobson, its president, have brought this civil rights action alleging that defendants, the Organized Crime and Racketeering Section of the Department of Justice (the "Strike Force"), the Internal Revenue Service (the "IRS"), and named IRS officers, have carried on a "personal vendetta" against plaintiffs in violation of their constitutional rights.
Plaintiffs seek injunctive relief and compensatory and punitive damages for asserted acts of harassment and discriminatory enforcement of the laws, particularly the denial of even-handed treatment of the tax laws.
A temporary restraining order having been denied, the matter presently before the court is plaintiffs' motion for a preliminary injunction which would require the IRS to accept plaintiffs' proposal for deferred payment of their current tax liabilities and to afford plaintiffs the same considerations given other taxpayers in the collection of taxes due.
Plaintiffs' motion must be denied. The ultimate effect of such an injunction would be to prevent the assessment and collection of federal taxes. Under the Anti-Injunction Act, 26 U.S.C. § 7421, this court is without power to grant the injunctive relief requested.
The actions of the IRS which plaintiffs seek to enjoin are two jeopardy assessments and levies for the collection of employee withholding taxes owed by Ranger for the second and third quarters of 1975. The events leading up to the assessments are intertwined with plaintiffs' claims against the Strike Force, not presently before the court.
On October 29, 1974 Ranger acquired the assets of Silvercup Bakeries, Inc., then in proceedings under Chapter XI of the Bankruptcy Act.
Ranger with Jacobson at its head began the struggle for Silvercup's financial recovery and managed to remain current with Silvercup's tax obligations, at least for employee withholding taxes, up to March 30, 1975, the end of the first quarter.
According to plaintiffs, Silvercup's business position improved in the hands of Ranger until a newspaper article appeared in May 1975, which stated, in effect, that Ranger and Silvercup were controlled by the "mob."
This information allegedly was disseminated by the Strike Force.
As a result of the news item and Strike Force investigations, plaintiffs claim Ranger's business was severely damaged by loss of customers, suppliers and financial backing. Plaintiffs maintain Ranger's cash supply was so diminished it was unable to meet "the required weekly withholding tax deposits and [it] incurred a tax liability for the second quarter of 1975 . . . of approximately $264,000."
There followed the first jeopardy assessment. On September 30, 1975 plaintiffs received a deficiency notice calling for payment of the second quarter withholding taxes in 10 days, i.e., by October 9, 1975.
At a meeting on September 30 with IRS agents, plaintiffs requested that an installment payment schedule be arranged. Before any plan was approved and on October 1, the IRS levied on Ranger's payroll account and on several customers, demanding payment in full of taxes plus penalties.
By the following day, Ranger had raised and paid the entire amount due, $280,715.62.
Shortly thereafter the IRS made further jeopardy assessments and moved to collect the withholding taxes due for the third quarter ending September 30, 1975. On October 14 the IRS notified plaintiffs the taxes were due "immediately," again levying on Ranger's bank account and customers.
Plaintiffs insist the IRS' actions were taken as part of a conspiracy to destroy the name of Ranger, Silvercup and Jacobson and not to ensure the full collection of taxes due.
Section 7421 of the Internal Revenue Code provides in pertinent part that "[except] as provided in sections 6212(a) and (c), [and] 6213(a), . . . no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court. . . ." Thus the plaintiffs are not entitled to injunctive relief unless (1) the statutory bar of § 7421 is lifted by the statutory exceptions of §§ 6212 and 6213 or by the judicially created exception of Enochs v. Williams Packing & Navigation ...