The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
This is an action challenging the constitutionality and
operation of the income tax system. The plaintiffs Sal Celauro
Jr. ("Celauro"), Paul S. Astrup, and Rosanne B. Astrup ("Paul and
Rosanne Astrup") (collectively, the "Plaintiffs") are associated
with a group known as "We the People Foundation for
Constitutional Education, Inc.," that seeks to redress the
Government's alleged violations of the Constitution's tax, war
powers, money, debt limiting, and privacy clauses.
In this case, the Plaintiffs seek the following: (1) the return
of $12,700.00 that the defendant Smith's Aerospace, Inc.
garnished from Paul Astrup's wages and turned over to the IRS
without a court order; (2) the return of $3,070.24 that the
defendant Teacher's Federal Credit Union garnished from Paul and
Rosanne Astrup's savings account and turned over to the IRS; and
(3) the return of $7,942.69 that the defendant DCS Transport & Logistics Solutions ("DCS") garnished from
Celauro's wages and turned over to the IRS.
The Plaintiffs also seek injunctive relief as follows: (1) an
order permanently enjoining the IRS and defendant IRS Revenue
Officer Lawrence Engel ("Engel") (improperly referred to in the
caption as "Engle") from abusing their authority by threatening
private organizations with IRS civil enforcement actions; (2) an
order permanently enjoining Smith's Aerospace, Inc.
("Aerospace"), Teacher's Federal Credit Union ("TFCU"), and DCS
(collectively the "private Defendants") from complying with any
notice of levy that is not backed by an order from "a court of
competent jurisdiction;" and (3) an order preliminarily enjoining
the private Defendants from garnishing any money from the
accounts or wages of the Plaintiffs and turning that money over
to the IRS. This request for preliminary relief is the subject of
A. Facts as to the Plaintiff Paul and Rosanne Astrup
On October 8, 2004, IRS Revenue Officer Engel sent a "Notice of
Levy on Wages, Salaries and other Income" for the years 1996 and
1997 in the amount of $1,669.15 to Paul Astrup's employer
Aerospace with regard to his earnings. The Notice of Levy was
signed by Astrup and returned to the IRS. During the next four
pay periods Aerospace took $1,669.15 of earnings from Astrup's
pay. On October 14, 2004, Astrup sent a "Petition for Redress" to the IRS that
informed the IRS of his intention to take the dispute over his
tax liability to the United States District Court.
On November 29, 2004, Engel sent a "Notice of Levy on Wages,
Salaries and other Income" for the years 1998-2001 to Aerospace
in the amount of $51,730.34. On November 30, 2004, Engel sent a
"Notice of Levy" for the years 1998-2001 in the amount of
$51,730.34 to the TFCU where Astrup had a bank account. The TFCU
took $3,070.24 from Astrup's savings account ant turned it over
to the IRS.
On December 9, 2004, Engel served Astrup with an Administrative
Summons requiring him to appear on January 6, 2005, and to
produce his private and personal books and records for the years
1998-2001. On January 6, 2005, Astrup met with Engel for about 15
minutes. In the meeting, Astrup "asked more questions regarding
liability" and Engel "refused to answer the questions."
B. Facts as to the Plaintiff Celauro On November 13, 2003, Celauro was visited by Engel at DCS his
place of business . Engel claimed that Celauro owed taxes.
Celauro denied the claims and refused to answer questions.
Celauro was served with a summons to appear at the IRS office in
Garden City on December 1, 2003. On November 21, 2003, Celauro
received a memo from his employer DCS regarding a letter that was
sent to it by the IRS. The letter informed DCS that Celauro's
Form W-4, Employee's Withholding Allowance Certification, did not
conform with the requirements of the IRS Code. The letter
directed DCS to withhold tax as if Celauro was a single taxpayer.
DCS complied and started withholding taxes in accordance with the
On December 1, 2003, Celauro appeared at the IRS office and a
hearing was conducted. At the hearing the IRS was represented by
Engel and Revenue Officer Sara Ann Gagliardi. During the hearing,
Celauro questioned whether he was required to turn over the
information to the IRS. Engel responded that it was mandatory. At
the end of the hearing, Celauro presented Engel with numerous
documents such as "Statement of Facts and Beliefs about the
Regarding the Individual Income Tax," "Produce the Law That
Imposes a Tax on Me, My Property, of My Activities, or Leave Me
Alone!," and "Questions Needing Answers" all pertaining to issues
about the tax code. Celauro never received a response. Between December 1, 2003 and February 4, 2004, Celauro sent
numerous documents, requests for answers, and letters to Engel,
all with no response. DCS continued withholding federal taxes
from Celauro's wages.
On December 23, 2003, Engel filed a Form 668(Y)(c) Notice of
Federal Tax Lien in the amount of $22,285.96 against Celauro with
the Clerk of Nassau County, New York. On January 26, 2004, Engel
sent DCS a Notice of Levy on Wages, Salary, and Other Income" in
the amount of $23,143.31 with regard to Celauro's earnings. On
February 6, 2004, Celauro received his paycheck with a
garnishment amount in the sum of $1,596.84 deducted. On February
23, 2004, Celauro resigned from DCS.
On May 7, 2004, Engel handed Celauro a summons to appear at the
IRS on May 25, 2004. The meeting was postponed to June 8, 2004.
On June 8, 2004 a hearing was held at the IRS office. Engel was
present for the IRS along with a Revenue Agent and an IRS
attorney. During the hearing Celauro was served with IRS Letter
3221(DO), which informed Celauro that he owed the IRS the sum of
$20,727.33 in unpaid taxes.
On November 13, 2004, Celauro received a Letter 950 (DO) from
the IRS Director for the North Atlantic Examination which
proposed changes to his federal tax years 1998-2001. The letter
offered Celauro with two options: (1) agree with the proposed
changes and pay the amount; or (2) disagree with the amount and
request a conference with the Appeals Office. On the same day,
Celauro sent a letter to the ...