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GALLO v. UNITED STATES

January 3, 1997

JAMES GALLO, Plaintiff, against UNITED STATES OF AMERICA, DEPARTMENT OF TREASURY, INTERNAL REVENUE SERVICE, Defendant.


The opinion of the court was delivered by: BATTS

 DEBORAH A. BATTS, United States District Judge.

 Plaintiff brought this action seeking a permanent injunction from a pending levy on his bank account, issued by the Internal Revenue Service ("IRS"). Defendant has moved to dismiss Plaintiff's Complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, for lack of subject matter jurisdiction. For the reasons stated below, Defendant's motion to dismiss Plaintiff's Complaint for lack of subject matter jurisdiction is granted.

 I. BACKGROUND

 On or about May 2, 1995, Plaintiff was contacted via telephone by an IRS collection officer. (Pl.'s Aff. at 1.) The collection officer informed Plaintiff that approximately $ 83,000.00 was due and owing to the IRS by Plaintiff personally, for payroll withholding taxes, interest and/or penalties not paid by a corporation known as the Great American Copper Corp. ("Great American"). (Id. at 1-2.) During the telephone conversation, Plaintiff informed the collection officer that claims against him based on taxes incurred by Great American were invalid because he was never an officer, director or shareholder of Great American but only a salaried employee. (Id. at 2.)

 Plaintiff received an IRS Notice of Levy on or about June 30, 1995. (Pl.'s Aff. Ex. G.) The Notice of Levy ordered Plaintiff's bank to restrain and freeze Plaintiff's $ 84,915.24 personal bank account and within 21 days, to turn over the funds to the IRS. (Id.)

 Plaintiff responded by starting the present action and filing an ex parte Order to Show Cause for a Temporary Restraining Order. The Court did not rule on the Order to Show Cause. Instead, the parties stipulated that neither the IRS nor the Plaintiff would remove the funds from Plaintiff's bank account, while they pursued settlement discussions. (Stipulation and Order of 7/28/95.) The Court so ordered the stipulation, and several further stipulations extending the time in which the parties agreed not to remove the funds.

 In March of 1996, for reasons unknown to the Court, the bank, holding Plaintiff's funds, transferred the funds to the IRS. (Letter from Benjamin Golub, Esq., counsel for Plaintiff to the Honorable Deborah A. Batts of 3/27/96, at 2.) The parties then orally agreed that the IRS would retain the funds while the parties continued to negotiate. (Letter from Assistant United States Attorney Glenn C. Colton to the Honorable Deborah A. Batts of 4/17/96, at 2.) Subsequent to that agreement the Defendant moved to dismiss this cause of action for lack of subject matter jurisdiction.

 II. DISCUSSION

 Resolution of Defendant's motion to dismiss based on lack of subject matter jurisdiction requires the consideration by the Court of evidence outside the pleadings. "On a motion under Fed. R. Civ. P. 12(b)(1) challenging the Court's subject matter jurisdiction, the Court may resolve disputed jurisdictional fact issues by reference to evidence outside the pleadings, such as affidavits." Chappelle v. Beacon Communications Corp., 863 F. Supp. 179, 181 (S.D.N.Y. 1994) (quoting Antares Aircraft, L.P. v. Federal Rep. of Nig., 948 F.2d 90, 96 (2d Cir. 1991)). The party asserting subject matter jurisdiction bears the burden of proof. See Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994).

 A. Plaintiff's Permanent Injunction Claim

 It is well-settled that the Anti-Injunction Act generally prohibits the Court from entertaining any action "for the purpose of restraining the assessment or collection of any tax . . . ." 26 U.S.C. ยง 7421(a). Noting that the Anti-Injunction Act "could scarcely be more explicit," the Supreme Court has stated that:

 
The principal purpose of [its] language [is] the protection of the Government's need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement judicial interference, 'and to require that the legal ...

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