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IN RE COPPOLA

September 22, 1992

IN THE MATTER OF THE TAX INDEBTEDNESS OF JAMES M. COPPOLA AND BARBARA COPPOLA

AZRACK


The opinion of the court was delivered by: JOAN M. AZRACK

AZRACK, United States Magistrate Judge

 On March 15, 1991, the undersigned granted the Internal Revenue Service ("IRS"), a Writ of Entry for the purpose of seizing property to credit towards the tax liabilities of James and Barbara Coppola ("the taxpayers"). The seizure was effected on March 21, 1991, when various articles of personal property, including automobiles, boats, and construction equipment, were removed from the Brooklyn, New York location where the taxpayers resided. Thereafter, several interested parties appeared before the Honorable Jack B. Weinstein, United States District Judge, to challenge the seizure. Judge Weistein directed the undersigned to hear the several claims and make recommendations for their disposition.

 Currently before the Court is the taxpayers' own challenge to the validity of the initial Writ of Entry. In essence, the taxpayers argue that the Writ of Entry was "improvidently granted" by the undersigned on March 15, 1991. As a remedy, the taxpayers request an order that all property which was seized be returned to them. For the reasons set forth below, it is respectfully recommended that the taxpayers' application be denied.

 I. BACKGROUND TO THE APPLICATION

 The taxpayers held controlling interests in a number of construction related corporations. Their underlying tax liabilities arose out of unpaid income and F.I.C.A. taxes withheld from the wages of employees of certain of those corporations, and also out of the employers' own contributions to social security with respect to the same withholdings. Based on the Coppolas' non-payment of the obligations, the IRS filed federal tax liens against the taxpayers themselves and against Coppola-controlled corporations as the taxpayers' nominees.

 The IRS applied to the undersigned for a Writ of Entry empowering them to seize assets in satisfaction of the taxpayers' unpaid liabilities. See 26 U.S.C. § 6331. That application was based on the Declaration of Revenue Officer Elsie McFarland ("McFarland Declaration"). *fn1" In her Declaration, McFarland first reported pertinent facts regarding the underlying assessments and federal tax liens filed, as well as the extent of the liability then unpaid, $ 627,616.48. (McFarland Declaration PP 2-5.) She also averred that the requisite administrative collection efforts had been exhausted, and therefore, that a levy would be appropriate as against all property which belonged to the taxpayers, or in which the taxpayers had an interest. (Id. PP 3-6.)

 McFarland also swore to the following facts:

 - At the time McFarland prepared the declaration, the taxpayers resided at 6097 Strickland Avenue in Brooklyn, New York. That address, according to McFarland's personal observations, encompassed several buildings which spanned across four distinct, but adjacent, lots, (Id. P 8);

 - Those four lots, according to McFarland, were owned by three corporations, namely, Coppola Realty, Mill Harbor Development, and Amanda Realty. The taxpayers were the sole corporate officers and owners of these three entities, (Id. P 8);

 - The taxpayers lived in one of the buildings, and stored both personal and business assets throughout all of the buildings on the Strickland Avenue property, (Id. P 9); and

 - McFarland observed a number of different articles of personalty stored on the parcels, including construction equipment, cars, and boats. She was also informed by an entrant into the buildings that antique trucks and cars were stored there. Further, McFarland had reason to believe that these items belonged to the taxpayers directly, or to either J.J.'s Landing Company, Inc., J.A.J. Equipment Corporation, or J.M.C. Carz, Inc., all of which had been subject to nominee liens filed by the IRS, (Id. PP 10-11).

 The taxpayers do not assert that the administrative procedures followed by the IRS in furtherance of the levy were either defective or inadequately satisfied. Nor do they contend, in the context of this application, that the underlying assessments were improperly made. Instead, the taxpayers' challenge to the Writ of Entry is based solely on their contention that it was issued upon less than probable cause.

 II. JURISDICTION AND SCOPE OF REVIEW

 The IRS argued that the taxpayers do not have standing to challenge the validity of the Writ of Entry. At the outset, this Court notes that the IRS's argument has significant merit. The taxpayers, likely conscious that their standing was not unequivocally grounded in federal law, offered several alternative theories to justify their authority to bring this action. However, because the Court accepts the taxpayers' argument that this Court may review an interlocutory order that it has previously issued, the taxpayers' several theories will be examined only briefly.

 First, the taxpayers directed the Court to Rule 41(e) of the Federal Rules of Criminal Procedure, and argued that this motion, like one under Rule 41(e), is for the return of property. Importantly, Rule 41(e) calls for property to be returned to a movant thereunder "on the ground that such person is entitled to lawful possession of the property." Additionally, the taxpayers invoked the quiet title provisions of 28 U.S.C. § 2410(a)(1). Standing under that section is based on the ...


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