889 F. 2d 1097 - Wc Garcia Assoc Inc v. S Miceli

MEMORANDUM**

W.C. Garcia & Associates ("Garcia") appeals the district court's grant of summary judgment in favor of the IRS. On appeal, Garcia argues that the court erred by (1) not enjoining the IRS from collecting a tax deficiency; (2) not ordering the return of money seized in a prior deficiency action; and (3) not awarding litigation costs against the government. We reject these arguments and we affirm.

The district court concluded that Garcia's action for injunctive relief in this case was rendered moot by the IRS's decision to abate the assessment and to release all liens. We agree. Although this is the second time the IRS has sought to collect on this deficiency without the requisite notice of deficiency to the taxpayer, see 26 U.S.C. Sec. 6213(a), there has been no showing that the event will likely occur again. See United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953) ("The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive.").

Even if the controversy was not moot, we fail to see how the district court could have afforded Garcia the injunctive relief it sought. There was no showing in this case of the necessary irreparable injury and the absence of an adequate legal remedy. See Perlowin v. Sassi, 711 F.2d 910, 912 (9th Cir.1983); Cool Fuel, Inc. v. Connett, 685 F.2d 309, 313-14 (9th Cir.1982). Garcia paid the first assessment and therefore had an adequate remedy in district court to seek a refund pursuant to 26 U.S.C. Sec. 7422. See Cool Fuel, 685 F.2d at 314. We agree with the district court that Garcia may not, however, seek such a refund in this action and thereby avoid the jurisdictional prerequisites of section 7422(a).

Finally, Garcia contends it should be awarded its reasonable litigation costs pursuant to 26 U.S.C. Sec. 7430(a). We disagree. Although the IRS admitted that its second assessment was erroneous, there has been no showing that the government's position throughout these proceedings was not substantially justified. See 26 U.S.C. Sec. 7430(c)(4)(A)(i).

AFFIRMED.