Opinion
Bk. No. 80-10143-M.
February 23, 1981.
Bankruptcy Reform Act — Automatic Stay — IRS Summons — Entities Nor in Bankruptcy
The automatic stay provisions of Bankruptcy Code Section 362(a) do not preclude the commencement of proceedings to enforce Internal Revenue Service summonses served upon the debtor in connection with the tax investigation of concerns on which the debtor served as a principal or officer. The concerns being investigated by the Service are not subject to bankruptcy proceedings. See Sec. 362(a) at ¶ 8602.
[Opinion of the Court]
The above-entitled adversary proceeding came on for hearing on February 18, 1981 before the undersigned upon the Order to Show Cause obtained by the plaintiff and entered on November 26, 1980, and upon the defendants' Motion to Dismiss, served in response to said Order to Show Cause; and the Court, having considered all of the papers and pleadings, and having considered the arguments of counsel for all parties, and being fully advised in the premises, now makes the following
FINDINGS OF FACT
1. On January 22, 1980, the defendant, Daniel Lewandowski, a Revenue Officer of the Internal Revenue Service, issued and served two Internal Revenue Service summonses to Harold J. Geiger to appear before Lewandowski at the Internal Revenue Service offices in Buffalo on February 14, 1980, to testify in the matter of the corporate income tax liabilities of W.S.R. Oils, Inc. and A.G.Q. Food Company, Inc. and to produce certain records relating to those corporations.
2. On January 23, 1980, Geiger, together with his wife, filed a petition, seeking relief under the Bankruptcy Code.
3. On February 14, 1980, Geiger failed to appear in response to the summonses, he was not excused from appearing, and his failure to comply with the summonses continues to date.
4. On October 26, 1980, petitions to obtain judicial enforcement of the summonses, naming Geiger as respondent, were filed in the district court and orders to show cause, originally returnable December 8, 1980, were entered on October 27, 1980.
5. On November 25, 1980, the instant adversary proceeding was commenced and an order to show cause was entered on November 26, 1980. The order to show case was originally returnable on December 1, 1980 and was subsequently adjourned to January 13, 1981 and then to February 18, 1981.
6. Neither A.G.Q. Food Company, Inc. nor W.S.R. Oils, Inc. are the subject of any pending Bankruptcy case.
Based upon the foregoing findings of fact, the Court now makes the following
CONCLUSIONS OF LAW
1. The automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a) does not preclude the commencement or continuation of the proceedings to enforce certain Internal Revenue Service summonses issued to and served upon Harold J. Geiger summoned to testify as a witness or as a principal or officer in the tax investigation of entities not in bankruptcy, which proceedings were instituted by the defendants here in the United States District Court for the Western District of New York.
2. The plaintiff has an adequate remedy at law with respect to the Internal Revenue Service summonses in that he may interpose whatever defenses he may have in the enforcement proceeding currently pending in the district court. [ Reisman v. Caplin, 375 U.S. 440 (1964).]
3. This Court does not, pursuant to 11 U.S.C. § 105(a), have jurisdiction to entertain the plaintiff's action for injunctive relief with respect to the enforcement of Internal Revenue Service summonses issued in aid of an investigation of the federal tax liabilities of A.G.Q. Food Company, Inc. and W.S.R. Oils, Inc. [ Reisman v. Caplin, 375 U.S. 440 (1964).]
4. The plaintiff's complaint fails to state a claim for which relief may be granted by this Court.
NOW, upon the foregoing Findings of Fact and Conclusions of Law, the Court makes the following
ORDER FOR JUDGMENT
IT IS HEREBY ORDERED that the Clerk of the Bankruptcy Court shall forthwith enter a judgment of dismissal in the above-entitled action.