Opinion
No. 184-00073.
January 30, 1986.
Automatic Stay — Collection — Taxes — Third Parties — Corporations. — The automatic stay does not prevent the Internal Revenue Service from collecting a penalty under 26 U.S.C. § 6672 against a nondebtor officer of the debtor-corporation. Section 362 stays actions against the debtor or property of the estate, not against third parties.
See Sec. 362(a) at ¶ 8602.
This adversary proceeding is before the Court on a motion to dismiss filed by the United States of America. The debtor corporation, plaintiff herein, filed a petition under Chapter 11 of the Bankruptcy Code on February 2, 1984. A timely proof of claim was filed on behalf of the United States for unpaid employment taxes in the amount of $42,339.84. On November 30, 1984, this Court confirmed the debtor corporation's Plan of Arrangement which provides for full payment of the federal tax liabilities within six years of assessment.
Prior to confirmation of the plan, the Internal Revenue Service had informed Robert Gay, Jr., vice-president of the debtor corporation, of a proposed assessment to be made against him pursuant to 26 U.S.C. § 6672, the so-called 100% penalty provision asserted against responsible persons of a corporation who willfully fail to collect and pay over employment taxes. On November 8, 1984, the debtor corporation filed this adversary proceeding alleging that the proposed assessment against Robert Gay violated the automatic stay provisions of the Bankruptcy Code. On December 24, 1984, the Internal Revenue Service made an assessment pursuant to 26 U.S.C. § 6672 against Robert Gay, Jr. Subsequently, in February, 1985, the debtor amended its Complaint to request that the Internal Revenue Service be enjoined from taking any collection action on the assessment made against Robert Gay, Jr. so long as the debtor corporation's Plan of Arrangement was in effect. The United States has moved to dismiss the adversary proceeding for lack of jurisdiction and for failure to state a claim upon which relief may be granted. For the reasons set forth below, the motion to dismiss is granted.
It is well-settled that a responsible person's liability under 26 U.S.C. § 6672 is separate and distinct from the corporation's tax liability. Newsome v. United States, 431 F.2d 742 (5th Cir. 1970). It is equally well-settled that one party cannot litigate the tax liability of another. Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976). Accordingly, the debtor corporation herein lacks standing to enjoin the assessment and collection action taken by the Internal Revenue Service against Robert Gay, Jr. See United States v. Driscoll's Towing Service, Inc., 51 B.R. 990 (S.D. Fla. 1985), In re Arrow Transfer and Storage Co., 50 B.R. 726 (E.D. Tenn. 1985); United States v. Huckabee Auto Co., 46 B.R. 741 (M.D. Ga. 1985).
Even if the debtor corporation had standing to seek injunctive relief, an injunction would be prohibited by 26 U.S.C. § 7421, the Anti-Injunction Act. That statute provides in part:
Except as provided in sections 6212(a) and (c), 6213(a), 6672(b), 6694(c), 7426(a) and (b)(1), and 7429(b), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.
26 U.S.C. § 7421(a). Several District Courts have recognized that the Anti-Injunction Act bars actions such as the present one which seek to enjoin collection of a § 6672 assessment from individuals not party to the bankruptcy. See A to Z Welding Mfg. Co. v. United States, No. BC 85-79 (E.D. Ark. Nov. 15, 1985); United States v. A B Heating and Air Conditioning, Inc., No. 85-519-Civ-T-13 (M.D. Fla. Sept. 4, 1985); In re Arrow Transfer and Storage Co., 50 B.R. 726 (E.D. Tenn. 1985); United States v. Driscoll's Towing Service, Inc., 51 B.R. 990 (S.D. Fla. 1985).
The fact that the debtor corporation is complying with its confirmed Plan of Reorganization does not alter the conclusion that this proceeding should be dismissed. This Court finds nothing in the Bankruptcy Code which prohibits the Internal Revenue Service from making an assessment under 26 U.S.C. § 6672 against parties who are not in bankruptcy or from taking action to collect that assessment.
The debtor corporation also has alleged that the Internal Revenue Service violated 11 U.S.C. § 362, the automatic stay provisions, by making the § 6672 assessment against Mr. Gay. Section 362 operates to stay action taken against the debtor or property of the estate but does not prohibit an assessment against a third party such as Mr. Gay. See Wedgeworth v. Fibreboard Corp., 706 F.2d 541 (5th Cir. 1983). The Internal Revenue Service did not violate the automatic stay by making a § 6672 assessment against Robert Gay, Jr.
For the foregoing reasons, IT IS HEREBY ORDERED that the Motion to Dismiss filed by the United States is GRANTED and this adversary proceeding is hereby DISMISSED.