United States v. Gardell

USCA1 Opinion









May 6, 1994 [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

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No. 93-1916




UNITED STATES OF AMERICA,

Plaintiff, Appellee,

v.

BRIAN R. GARDELL,

Defendant, Appellant.


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APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE


[Hon. Martin F. Loughlin, Senior U.S. District Judge]
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Before

Torruella, Boudin and Stahl,
Circuit Judges.
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Brian R. Gardell on brief pro se.
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Michael L. Paup, Acting Assistant Attorney General, Gary R.
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Allen, Charles E. Brookhart and Scott P. Towers, Attorneys, Tax
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Division, Department of Justice on brief for appellee.



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Per Curiam. Appellant Brian Gardell appeals an order of
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the United States District Court for the District of New

Hampshire approving the report and recommendation of the

magistrate judge that he comply with an Internal Revenue

Service [IRS] summons issued pursuant to 26 U.S.C. 7602.

The administrative summons directs Gardell to appear at the

IRS office in Portsmouth, New Hampshire, to give testimony

and to produce for examination books and records relating to

his tax liabilities for the years 1985 and 1987. Tax

liabilities had previously been assessed against Gardell for

these years and the purpose of the summons was to determine

the collectability of these liabilities. On appeal, Gardell

asserts that the district court lacked jurisdiction to

enforce the summons since Gardell has the "Status . . . of

Freeman and . . . has no Contractual, Quasi-Contractual or

implied agreements with the Federal Government." He also

contends that the enforcement of the summons violated his

constitutional right to due process. We affirm essentially

on the grounds stated by the magistrate judge in his report

and recommendation dated July 7, 1993. We add only the

following remarks.

First, Gardell's contention that as a "Freeman" without

contractual obligations to the government he is not subject







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to the district court's jurisdiction is totally without

merit.1 See United States v. Sloan, 939 F.2d 499, 500-01
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(7th Cir. 1991) (contention that appellant was free from

income tax because he was a "freeborn, natural individual .

. . [and thus] not subject to the jurisdiction of laws of the

United States" is frivolous), cert. denied, 112 S.Ct. 940
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(1992); United States v. Drefke, 707 F.2d 978, 981 (8th Cir.
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1983) (claim that "taxes are debts which can only be incurred

voluntarily when individuals contract with the government for

services . . . is totally without arguable merit"), cert.
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denied, 464 U.S. 942 (1983). The district court has subject
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matter over a petition to enforce an IRS administrative

summons pursuant to 26 U.S.C. 7604(a). It acquired

personal jurisdiction over Gardell through service upon him

of the show cause order and the petition of enforcement.

United States v. Bichara, 826 F.2d 1037, 1039 (11th Cir.
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1987); United States v. Miller, 609 F.2d 336, 338 (8th Cir.
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1979).

Second, the record makes clear that the IRS has met its

burden of establishing a prima facie case for enforcement of
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1. Similarly frivolous is Gardell's contention that the
taxing of wages is unconstitutional. See, e.g., Wilcox v.
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Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988) (contention
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that wages are not income for tax purposes is frivolous);
Casper v. Commissioner, 805 F.2d 902, 906 (10th Cir. 1986)
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(appellant's contention that amount he received from his
employer is not taxable income is "clearly without merit")
(citing cases).

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the administrative summons as set out in United States v.
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Powell, 379 U.S. 48 (1964). See also Sylvestre v. United
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States, 978 F.2d 25, 26 (1st Cir. 1992), cert. denied, 113
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S.Ct. 1606 (1993). Gardell, who concedes that the IRS

satisfied these requirements, thereupon bears the burden of

showing, by an allegation of specific facts, that the

enforcement of the summons would constitute an abuse of the

court's process--"that is, that the summons had been issued

for an improper purpose or for any other purpose reflecting

on the good faith of the investigation." Id. at 27 (citing
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Powell, 379 U.S. at 58). The only arguments Gardell raised
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in this regard either before this court or before the

district court challenge the liabilities which were assessed

against him and which underlie the summons. However, a

challenge to an assessment of liability can only be brought

in Tax Court within ninety days of the mailing of a notice of

deficiency, see 26 U.S.C. 6213(a), or before the district
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court after the payment of the tax, id. 7422 (until tax is
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paid, district court without jurisdiction to hear allegation

that tax has been erroneously assessed).2 A challenge to

the underlying assessment is not a valid defense to the

enforcement of an administrative summons, United States v.
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2. There is no evidence that Gardell ever attempted to file
a petition for redetermination of his liabilities with the
Tax Court. According to this IRS, the time to challenge
Gardell's tax liability in Tax Court has now passed.

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Harper, 662 F.2d 335, 336 (5th Cir. 1981) (per curiam)
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(taxpayer challenge to underlying assessment does not suffice

to meet his burden to show improper purpose), and is

misplaced in an appeal from a district court order enforcing

one, United States v. Mueller, 930 F.2d 10, 12 (8th Cir.
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1991) ("district court correctly held that [the summoned

party] could not use the proceedings to enforce the IRS

summons as a forum in which to contest the validity of the

underlying assessments."). Since Gardell was afforded an

opportunity to challenge the administrative summons in an

adversarial proceeding before the district court prior to the

enforcement of the summons, he suffered no deprivation of his

constitutional right to due process. See Reisman v. Caplin,
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375 U.S. 440, 446, 449-50 (1964) (no constitutional

invalidity in procedure for enforcement of summons since

there is "full opportunity for judicial review before any

coercive sanctions may be imposed"); United States v.
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Gilleran, 992 F.2d 232, 233-34 (9th Cir. 1993) ("no liberty
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or property interest protectable by due process prior to the

enforcement of the summons") .

Finally, the IRS asks this court to impose sanctions

against appellant for bringing a frivolous appeal. Gardell's

challenges to the administrative summons are frivolous and/or

misplaced. Both this court and others have not hesitated to

impose sanctions for similarly frivolous appeals. See, e.g.,
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Kelly v. United States, 789 F.2d 94, 98 (1st Cir. 1986)
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(imposing sanctions on appellant who claimed that because he

was a "natural individual and unenfranchised freeman" who

neither asked for nor received privileges from government he

owed no tax); Sullivan v. United States, 788 F.2d 813, 816
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(1st Cir. 1986) (similar); see also Wilcox, 848 F.2d at 1008
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(appellant contended wages are not income and payment of

taxes is voluntary); Casper v. Commissioner, 805 F.2d at 906
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(similar). We agree that sanctions are warranted in this

case. Although the Government seeks $1,500 in lieu of costs

and attorneys' fees, we, in accord with our prior practice in

similar cases, assess only double costs against Gardell for

bringing a frivolous appeal. Fed. R. App. P. 38.

The judgment of the district court is affirmed. Double
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costs are assessed against appellant.
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