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UNITED STATES v. GUNN

April 7, 1960

UNITED STATES OF AMERICA, PLAINTIFF,
v.
C.C. GUNN, DEFENDANT.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

There is before the court for consideration and disposition the plaintiff's motion for summary judgment.

The record, including the pleadings, admissions, affidavits and exhibits on file in the instant case, together with the record in the related case, Gunn v. Mathis, D.C., 157 F. Supp. 169, Civil No. 1385, discloses all of the material facts necessary to be considered in the determination of the motion.

The defendant is a citizen of Arkansas and resides at Van Buren in Crawford County. Jurisdiction is conferred by Title 28 U.S.C.A. §§ 1340 and 1345.

On April 14, 1950, and March 7, 1950, the defendant was sent statutory notices of deficiencies in taxes for the calendar years 1942, 1943, 1944, 1945 and 1946, plus 50 percent fraud penalties for the years 1942, 1943 and 1944. The fraud penalties were based upon a determination of the Commissioner of Internal Revenue that the defendant had filed false and fraudulent income tax returns for the years involved with the intent to evade the tax.

Following receipt of the notices of deficiencies, the defendant duly filed petitions in the Tax Court of the United States, Docket Nos. 28673 and 28674, which court on April 27, 1956, held that "the fraud penalties for 1942 to 1944, inclusive, were properly determined by respondent, and that petitioner's returns for those years were fraudulent with intent to evade tax.*fn1

On July 26, 1956, the defendant filed his petition in the United States Court of Appeals for the Eighth Circuit for review of the decision of the Tax Court, but failed to file a bond as provided in Title 26 U.S.C.A. § 7485 (Internal Revenue Code of 1954), staying the assessment and collection of the deficiencies and fraud penalties as determined by the Tax Court by its decision of April 27, 1956.

On August 31, 1956, while the petition for review was pending in the Court of Appeals, assessments of the deficiencies and fraud penalties were made in conformity with the decision of the Tax Court, and on October 26, 1956, notices of tax lien based upon the assessments of August 31, 1956, were filed and recorded in the office of the Circuit Clerk and Recorder of Crawford County, Arkansas.

On August 8, 1957, the United States Court of Appeals rendered its opinion in the suit filed by the defendant, Gunn v. Commissioner of Internal Revenue, 8 Cir., 1957, 247 F.2d 359. On page 366 of the opinion the court said:

    "For the reasons stated, the Tax Court's decision
  as related to the taxable years 1942-1944 is
  reversed, with remand for further proceedings, and
  the decision as related to the taxable years
  1945-1946 is affirmed."

On November 15, 1957, the defendant commenced an action in this court, Gunn v. Mathis, D.C., 157 F. Supp. 169 (Civil No. 1385) against the District Director of Internal Revenue and other Internal Revenue employees seeking an injunction against any levy, seizure or distraint under the assessments of August 31, 1956, on the ground that such assessments as to the calendar years 1942, 1943 and 1944, by virtue of the decision of the Court of Appeals, had not become final.*fn2

Following the remand to the Tax Court of Gunn v. Commissioner, supra, the Commissioner of Internal Revenue on December 9, 1957, filed in the Tax Court a motion to require the petitioner (defendant here) to make a further and better statement of the nature of his defense. On the next day the following order was entered by the Tax Court granting the Commissioner's motion:

    "On December 9, 1957, the Commissioner filed a
  motion for a further and better statement of the
  nature of petitioner's defense. The premises
  considered, and so that as many facts as possible may
  be stipulated prior to trial, it is
    "Ordered, that on or before January 3, 1958,
  petitioner file an amended petition making a further
  and better statement with respect to his net worth on
  December 31, 1941, and on whatever other material
  dates petitioner intends to produce evidence of net
  worth, showing the following items:

"A. Cash on hand.

    "B. Bank balances, showing the names and location
  of banks.
    "C. Securities, showing the nature of the items,
  dates acquired and cost.
    "D. Personal property, showing the individual
  items, dates acquired and cost.
    "E. Real property, showing the individual items,
  dates acquired by petitioner and cost.
    "F. Mortgages and notes held by petitioner, showing
  each individual instrument, dates acquired and basis
  therein.
    "G. Receivables, both business and personal,
  showing each individual item, dates acquired and
  basis therein.
    "I. Petitioner's mortgages and notes held by
  others, showing each individual instrument, dates
  given and the amounts owed on each.
    "J. Payables, both business and personal, showing
  each individual item, dates on which ...

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