obscures the Government's right to file suit for the collection of taxes. See, 26 U.S.C. §§ 7402 and 7403; 28 U.S.C. §§ 1340 and 1345. The Government has the right to initiate suit for the collection of taxes in cases such as this, when the taxpayer has neglected to pay his tax, and is, therefore, not required to wait for the taxpayer to decide in which forum he wishes to proceed.
There is nothing in § 7426 nor in the cases that suggests that the presence of the taxpayer in the suit mandates a determination of his tax liability by the Tax Court, if a determination of his tax liability is necessary at all.
In the present case, the Government does seek in its cross-claim to foreclose on its tax lien. The Government points out that movants' argument is wrong in that there are several statutes which provide the Court with jurisdiction to determine the tax issues in this case.
The position of the United States is that the present action was substantially changed when the Government was permitted to file its cross-claim seeking foreclosure of tax liens against the Vescos.
The Court agrees with the Government's contention that the counter- and cross-claims should be treated as independent causes of action with their own jurisdictional bases. The Government relies upon 26 U.S.C. §§ 7402 and 7403 and 28 U.S.C. §§ 1340 and 1345 as the jurisdictional underpinnings for its cross-claims and counterclaims, and contends they give the district court jurisdiction to determine the tax liability. This Court is urged by the Government to proceed with the action and, if necessary, determine the Vescos' tax liability along with its determination of the ownership of the property in question and, assuming a favorable determination for the Government, foreclose on the tax liens.
It is clear that 26 U.S.C. §§ 7402(a), 7403(a) and 28 U.S.C. §§ 1340, 1345 do give jurisdiction to the district court to decide all issues necessary for the enforcement of our internal revenue laws and for the enforcement and collection of Government liens.
Under these sections the Court would have jurisdiction to adjudicate the Vescos' tax liabilities. See, Miller and Miller Auctioneers, Inc. v. G. W. Murphy Industries, 472 F.2d 893, 895 (10th Cir. 1973); Pettyjohn v. Pettyjohn, 192 F.2d 322, 325 (8th Cir. 1951). Movants do not dispute this fact. However, this is a § 7426 suit as well as a §§ 7402, 7403 suit. In the former, the tax assessment cannot be challenged, but in the latter it usually must be. Neither the parties nor the Court could find any case that might indicate which section takes precedence. Logically, it seems to the Court that though the tax is presumed valid and unassailable in a § 7426 suit, the taxpayers themselves do have the right to have their tax assessment challenge adjudicated before the Government liens are foreclosed, United States v. O'Connor, 291 F.2d 520, 527 (2d Cir. 1961); Bowers v. American Surety Co., 30 F.2d 244, 245 (2d Cir. 1929), cert. den. 279 U.S. 865, 73 L. Ed. 1003, 49 S. Ct. 480 (1929), but not necessarily before a decision is reached on the question of ownership of the assets. The Court believes that it is free to proceed to an adjudication of ownership of the assets in the § 7426 suit and then to deal with the §§ 7402, 7403 action for foreclosure of the tax liens,
or to proceed with the two actions simultaneously.
However, movants next assert that even if this Court has jurisdiction to adjudicate the Vescos' tax liability, once the Tax Court has the matter before it, the district court must, or, at least should, defer to it. The Tax Court is a court of special expertise. It is particularly suited to adjudicate tax liability. Nonetheless, district courts are often required to make similar findings of tax liability.
In In re Commercial National Bank of Shreveport, 139 F. Supp. 794, 795 (W.D. La. 1956), the Court was faced with a question similar to the one at issue here. The question was, did the taxpayer have to go to the Tax Court to litigate the issue of his tax liability or could the district court do it? The court stated, "I am of the view that it [the district court] had jurisdiction to determine all claims, including that of the United States for income taxes, without the necessity to follow the usual routine of review by the Tax Court." See, Sonitz v. United States, 221 F. Supp. 762, 764-65 (D.N.J. 1963), overruled on other grounds, Quinn v. Hook, 231 F. Supp. 718 (E.D. Pa. 1964), aff'd per curiam on grounds different from the district court, 341 F.2d 920 (3d Cir. 1965). In United States v. Pettyjohn, 84 F. Supp. 423, 426 (W.D. Mo. 1949), the court stated that "while the Tax Court performs judicial functions, nevertheless it is an administrative board within the Executive Branch of the Government, and its jurisdiction as an administrative board could in no case interfere with the jurisdiction of a district court to enforce the Government's lien."
Jurisdiction is concurrent in the district court and the Tax Court. In Florida v. United States, 285 F.2d 596, 604 (8th Cir. 1960), the court stated in dictum:
"The question of whether tax liabilities involved in the litigation pending in the tax court should first be determined in the tax court or whether such liability should be determined in this case, remains open for consideration by the trial court."