Laing v. United States

RESPONDENT:United States
LOCATION:Republic of Cuba

DOCKET NO.: 73-1808
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 423 US 161 (1976)
REARGUED: Oct 15, 1975
DECIDED: Jan 13, 1976
ARGUED: Jan 21, 1975

Donald M. Heavrin
Joseph S. Oteri – for James Burnett McKay Laing
Stuart A. Smith –

Facts of the case


Media for Laing v. United States

Audio Transcription for Oral Reargument – October 15, 1975 in Laing v. United States
Audio Transcription for Oral Argument – January 21, 1975 in Laing v. United States

Audio Transcription for Opinion Announcement – January 13, 1976 in Laing v. United States

Warren E. Burger:

Mr. Justice Marshall has two consolidated case opinions two announce.

Thurgood Marshall:

First of these cases is 73-1808, Laing against the United States and the second is 74-75, United States versus Hall, here are on writs of certiorari to the Second and Sixth Circuits.

These cases involve two taxpayers whose taxable years were terminated by the Internal Revenue Service prior to the normal expiration dates, pursuant to the jeopardy termination provisions, Section 6851 of the Internal Revenue Code.

This Section allows the IRS immediately to terminate a taxpayer’s taxable period when it finds that the taxpayer intended to commit any act tending to prejudice the collection of his income tax for the current or proceeding taxable year.

In such cases, a tax is due immediately upon termination.

In each of the instant cases, the IRS levied upon to seize the taxpayer’s property without sending any notice of deficiency, a jurisdictional prerequisite to a taxpayer’s refund suit in the Tax Court, and without following the other procedures mandated by Section 6861 of the Code, which prescribes for the procedure for the assessment and collection of deficiencies whose collection is in jeopardy.

The Government contends that these procedures are not applicable to 6851, because such termination do not create the efficiency within the meaning of that word.

In No. 73-1808, the District Court for the District of Vermont accepted the Government’s argument and held that a deficiency notice and the procedures of 6861 are not required for a 6851 termination.

The Court of Appeals for the Second Circuit affirmed.

In the other case, 74-75, the District Court for the Western District of Kentucky granted the taxpayer relief, holding that the IRS must follow the 6861 procedures.

The Court of Appeals for the Sixth Circuit affirmed.

We, therefore, granted certiorari to resolve the conflict.

In an opinion filed today with clerk, we hold that the tax owing, but not reported at the time of 6851 termination, is a deficiency whose assessment and collection is subject to the procedures of 6861.

Under the statutory definition of deficiency, the tax owing and unreported after jeopardy termination is clearly a deficiency.

Moreover, to deny a taxpayer to litigate his tax liability in the Tax Court is out of keeping with the legislative scheme.

Analysis of the early codification of the Code confirms this conviction.

According to the judgment of the Court of Appeals for the Second Circuit, No. 73-1808 is reversed and remanded for proceedings consistent with this opinion and the judgment of the Court of Appeals for the Sixth Circuit in No. 74-75 is affirmed.

Mr. Justice Brennan has filed a concurring opinion and Mr. Justice Blackmun has filed a dissenting opinion in which the Chief Justice and Mr. Justice Rehnquist join.

Mr. Justice Stevens took part in the consideration or decision of these cases.

Warren E. Burger:

Thank you, Mr. Justice Marshall.