Sam G. McDonald v. Robert L. Phinney, Director of Internal Revenue, First District of Texas, and The United States, 285 F.2d 121, 1st Cir. (1961)
Sam G. McDonald v. Robert L. Phinney, Director of Internal Revenue, First District of Texas, and The United States, 285 F.2d 121, 1st Cir. (1961)
Sam G. McDonald v. Robert L. Phinney, Director of Internal Revenue, First District of Texas, and The United States, 285 F.2d 121, 1st Cir. (1961)
2d 121
61-1 USTC P 9176
On February 20, 1956, appellant filed a petition in the Tax Court in order to
obtain a redetermination of the alleged deficiency. The issues raised in that
petition did not, however, come to trial but were settled on a stipulation of
counsel. The settlement contemplated a deficiency of $6,500 plus an additional
sum of $325, as provided by section 293(a) of the Code of 1939. On February
3, 1958, the Tax Court entered judgment against appellant on the basis of this
stipulation between the parties. No appeal was taken from the judgment so
entered.
3
We think that the trial court acted properly in dismissing the complaint. Section
7421 clearly prohibits suits to restrain assessment or collection of taxes except
in certain cases not relevant to the present inquiry. While it is true that,
notwithstanding the statutory prohibition against such suits, they have been
allowed under certain circumstances, see, e.g. Miller v. Standard Nut Margarine
Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422, they are not permitted when the
complaining party asserts financial hardship and nothing or little more. State
Railroad Tax Cases, 92 U.S. 575, 23 L.Ed. 663; Lloyd v. Patterson, 5 Cir., 242
F.2d 742; Enochs v. Green, 5 Cir., 270 F.2d 558; Robique v. Lambert, D.C.,
114 F.Supp. 305, affirmed per curiam 5 Cir., 214 F.2d 3. We think it clear that
the facts involved in the instant case necessitate its falling into the latter class
of cases, for appellant has failed to show the extraordinary circumstances which
would justify the issuance of an injunction by the district court. See United
States v. Curd, 5 Cir., 257 F.2d 347; Tomlinson v. Poller, 5 Cir., 220 F.2d 308,
and Darnell v. Tomlinson, 5 Cir., 220 F.2d 894.
Taking the view we do of this case, it becomes unnecessary for us to rule on the
remaining points raised by appellant in his brief, set out below as stated by
appellee:
7
'2. Whether the judgment of the Tax Court, entered upon such stipulation, is res
judicata with respect to the federal income taxes of the taxpayer for the year
involved in those proceedings.
'3. Whether the United States, without its consent, may be made a party to a
suit for injunction against the assessment or collection of federal income taxes
by virtue of the limited waiver of sovereign immunity contained in 28 U.S.C.,
Section 2410(a) with respect to certain actions to quiet title or for the
foreclosure of a mortgage or other lien upon property.'
It is, therefore, the judgment of this Court that the order of the district court be
affirmed.