FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS October 20, 2016
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
JEFFREY T. MAEHR,
Plaintiff - Appellant,
v. No. 16-1204
(D.C. No. 1:16-CV-00512-LTB)
JOHN KOSKINEN, Commissioner of (D. Colo.)
Internal Revenue; JOHN VENCATO,
Revenue Agent; GINGER WRAY,
Revenue Agent; JEREMY WOODS,
Disclosure Specialist; WILLIAM
SOTHEN, Revenue Agent; GARY
MURPHY, Revenue Agent;
THERESA GATES, Program
Manager; SHARISSE TOMPKINS,
Disclosure Manager; CAROLYN W.
COLVIN, SSA Acting Administrator;
WELLS FARGO BANK N.A.; JOHN
AND JANE DOES 1-100,
Defendants - Appellees.
ORDER AND JUDGMENT *
Before KELLY, McKAY, and MORITZ, Circuit Judges.
Appellant Jeffrey Maehr appeals the district court’s dismissal of his pro se
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
complaint as legally frivolous.
In his complaint, Appellant challenges both the assessment of unpaid
income tax liabilities against him and the manner in which the government is
seeking to collect these unpaid liabilities.
We agree with the district court that Appellant’s challenges to his
underlying tax liabilities are frivolous. Appellant has raised these same
arguments before, and we have rejected them before. See, e.g., Maehr v. IRS, 480
F. App’x 921, 923 (10th Cir. 2012). The cases and statutes cited by Appellant do
not change this analysis. We thus affirm the dismissal of all of Appellant’s
challenges to the validity of the previously adjudicated determination that he is
liable for unpaid income taxes.
Most of Appellant’s challenges to the government’s collection efforts are
also legally frivolous. For instance, this court has previously rejected as frivolous
the argument that the IRS is only authorized to levy the property of government
employees, see James v. United States, 970 F.2d 750, 755 n.9 (10th Cir. 1992),
and Appellant’s argument that his Social Security retirement benefits cannot be
levied under 42 U.S.C. § 407(a) ignores the fact that this provision is expressly
superseded by 26 U.S.C. § 6334(c) in the tax-collection context. Appellant’s
reliance on 26 U.S.C. § 6331(h) is also misplaced. This statute permits a levy of
up to fifteen percent on certain payments listed in § 6334(a) that would otherwise
be completely exempt from levy; it places no limitations on the government’s
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authority to levy property that falls outside the express protections of § 6334(a),
including Social Security retirement benefits. The allegations in Appellant’s
complaint are also insufficient to establish a meritorious legal claim for relief
against Wells Fargo based on its role in the levies placed on Appellant’s accounts.
However, we are persuaded that Appellant’s complaint raises one
potentially meritorious claim for relief relating to the manner in which the
government is seeking to collect his unpaid tax liabilities. Appellant alleges that
the government has placed two levies on the bank account where he receives his
disability payments from the Veterans’ Administration, seeking seizure of all
funds from this account despite the fact that the money in this account comes
almost entirely from VA disability payments that are statutorily exempt from
levy. See 26 U.S.C. § 6334(a)(10).
In their brief on appeal, Appellees argue there are two reasons why we can
affirm the dismissal of this claim as frivolous: (1) the IRS did not place a direct
levy on any exempt VA disability payments; and (2) even if the IRS is improperly
levying exempt disability payments, “‘the only remedy available to the taxpayer
would be full payment of the assessment of his tax liability followed by a suit for
refund in district court.’” (Br. at 13 (quoting Marvel v. United States, 548 F.2d
295, 297 (10th Cir. 1977)) (brackets omitted).)
We address the second of these arguments first. In Marvel, we considered
a business’s request for a preliminary injunction to prevent the IRS from levying
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on the business’s assets during the pendency of a district court lawsuit for refund
of a partial payment of employment taxes. We noted that the Anti-Injunction Act
appears on its face to prevent any such injunctive relief: “Except as provided in
sections 6121(a) and (c), 6213(a), and 7426(a) and (b)(1), no suit for the purpose
of restraining the assessment or collection of any tax shall be maintained in any
court by any person . . . .” 26 U.S.C. § 7421(a). We then noted that this
provision had been subject to “a long and variable history of judicial construction
ranging from strict enforcement to equation with the ordinary judicial standard for
equitable relief.” Marvel, 548 F.2d at 297. Most recently, however, the Supreme
Court had employed a strict construction of this Act, recognizing only a narrow
exception applicable where the taxpayer demonstrates “‘that under no
circumstances could the Government ultimately prevail’ and that ‘equity
jurisdiction otherwise exists.’” Id. (quoting Enochs v. Williams Packing &
Navigation Co., 370 U.S. 1, 7 (1962)). Given “the literal wording of the Act, the
strict pattern of construction adopted by the Supreme Court, and the great
deference afforded by the Supreme Court to the government’s interest in the
prompt collection and enforcement of taxes,” we refused to recognize any other
exception to the applicability of the Anti-Injunction Act. Id. at 300. We then
held that the business had failed to satisfy the demanding requirements of the
Williams Packing exception to the Act, and we thus held that the district court
had properly denied the requested injunctive relief. Id. at 300–01.
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As for the language from Marvel that Appellees quote in their brief, this
language relates to the jurisdiction of the tax court in refund cases involving the
partial payment of employment or excise taxes, and it has no clear applicability
here. We also note that Appellees’ brief ignores the fact that Appellant’s
complaint sought relief other than injunctive relief, and they have not addressed
whether Appellant could potentially obtain other relief for the allegedly illegal
levying of the bank account where Appellant’s VA disability benefits are
deposited.
However, Marvel’s broader holding—that the Anti-Injunction Act prevents
injunctive relief unless the plaintiff can satisfy the demanding Williams Packing
exception—is still at issue in determining whether or not Appellant can obtain
injunctive relief for this claim. And on this point, there is an unresolved question
regarding the possible distinction between directly levying exempt funds and
placing a levy on the bank account where such funds are deposited.
If the IRS had placed a direct levy on Appellant’s VA disability benefits,
we have little doubt that Appellant would have been able to satisfy the Williams
Packing test and obtain injunctive relief. We see no possibility of the government
prevailing on the merits in such a case, and a disabled veteran will likely be able
to show that he will suffer irreparable injury if the government is not enjoined
from illegally levying the VA benefits on which he relies for his maintenance and
survival. See Comm’r v. Shapiro, 424 U.S. 614, 627 (1976) (stating that the
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second prong of the Williams Packing test is satisfied if “the taxpayer shows that
he would otherwise suffer irreparable injury”). However, here the government
has not directly levied Appellant’s VA benefits, and it suggests that it may do
indirectly what it may not do directly—that it may wait until exempt VA
disability benefits have been directly deposited into Appellant’s bank account and
then promptly obtain them through a levy on all funds in the bank account,
despite their previously exempt status. The government cites no authority to
support this argument, and the few cases we have found adopting such a rule, see,
e.g., Calhoun v. United States, 61 F.3d 918 (Fed. Cir. 1995) (unpublished table
decision); United States v. Coker, 9 F. Supp. 3d 1300, 1301–02 (S.D. Ala. 2014);
Hughes v. IRS, 62 F. Supp. 2d 796, 800–01 (E.D.N.Y. 1999), have not considered
whether this result is consistent with the Supreme Court’s opinion in Porter Aetna
Casualty & Surety Co., 370 U.S. 159 (1962), or with 38 U.S.C. § 5301’s
prohibition against the levy of veterans’ benefit payments either before or after
receipt by a beneficiary.
We REVERSE AND REMAND for the district court to consider
Appellant’s non-frivolous legal claim that the IRS has improperly levied exempt
VA disability benefits by placing a levy on all funds in the bank account where
Appellant’s disability benefits are deposited. In so doing, we express no opinion
on the ultimate resolution of this claim or on the unresolved questions regarding
the availability of the types of relief Appellant has sought or may seek in an
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amended complaint addressing only this claim. We AFFIRM the dismissal of all
other claims and arguments as legally frivolous. Appellant’s motion to proceed in
forma pauperis on appeal is GRANTED. All other pending motions are
DENIED.
ENTERED FOR THE COURT
Monroe G. McKay
Circuit Judge
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