United States of America v. DAVID R. STINSON and JOYCE R. STINSON

* Honorable Thomas N. O’Neill, Jr., U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 01-3891
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UNITED STATES OF AMERICA,
Appellee,
v.
DAVID R. STINSON and JOYCE R. STINSON,
Appellants.
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Appeal from the United States District Court
for the Western District of Pennsylvania
(C.A. No. 00-491)
District Judge: Honorable Robert J. Cindrich
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Argued
June 27, 2002
Before AMBRO and STAPLETON, Circuit Judges, and O’NEILL, District Judge.*
(Filed: August 16, 2002)
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Mark J. Krauland, Esq. (Argued)
Mark J. Krauland & Assoc., P.C.
912 Western Ave.
Pittsburgh, PA 15233
Counsel for Appellants
Sara A. Ketchum, Esq. (Argued)
Tax Division
Department of Justice

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P.O. Box 502
Washington, D.C. 20044
Counsel for Appellee
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OPINION OF THE COURT
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O'NEILL, J.:
Appellants David and Joyce Stinson appeal the District Court’s entry of summary judgment in
favor of the United States in the amount of $152,239.34, reflecting income taxes, penalties and interest
assessed by the Internal Revenue Service against appellants for the years 1985, 1986, 1987, 1988, and
1991.
I.
The IRS had assessed liabilities against appellants on March 12, 1990 (for the tax year 1988),
March 19, 1990 (for the tax years 1985, 1986, and 1987) and May 25, 1992 (for the tax year 1991).
These taxes were not paid upon notice and demand, thus giving rise to federal tax liens. On April 6,
1998, appellants entered into a payroll deduction agreement (“PDA”) with the IRS to pay their tax
liability in monthly installments. Under the terms of this agreement $1,132 was to be deducted each
month from the wages of Joyce Stinson. This agreement was signed by Harold and Joyce Stinson and
a representative of Mrs. Stinson’s employer. In the space marked “IRS Originator, title and IDRS
number” the words “Harold Stanton Revenue Officer 2122” are printed. Payments were deducted and
forwarded to the IRS each month from May, 1998 through October, 2000. On March 13, 2000 the
United States filed this action seeking to reduce to judgment the balance remaining on the assessments

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1 This section describes the circumstances under which a taxpayer “is allowed to satisfy liability
for payment of any tax in installment payments . . . .” 26 U.S.C. § 6159(a).
2 Section 6331(k)(2) states that “no levy pursuant to § 6331(a) shall be made on the property
or rights to property of any person with respect to any unpaid tax (A) during the period that an offer by
such person for an installment agreement under § 6159 for payment of such unpaid tax is pending with
the Secretary;” and “(C) during the period such an installment agreement for payment of such unpaid
tax is in effect.”
Section 6331(a) states: “If any person liable to pay any tax neglects or refuses to pay the same
within 10 days of notice and demand it shall be lawful for the Secretary to collect such tax . . . by levy
upon all property and rights to property . . . belonging to such person or on which there is a lien
provided in this chapter for the payment of such tax.”
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made against appellants. As of December 31, 2000 the total amount of these assessments left unpaid
was $152,239.34.
The IRS moved for summary judgment and on July 17, 2001, Magistrate Judge Kenneth
Benson filed a Report and Recommendation in favor of the government. Judge Benson rejected
appellants’ contention that the PDA should act as a bar to the government’s suit because it constituted
an installment agreement under 26 U.S.C. § 6159.1 According to Judge Benson, since no signature
appeared in the box on the PDA marked “Agreement examined or approved by (Signature, title, and
function)” it was never reviewed or approved by any official authorized to bind the IRS, and therefore
there was no evidence that the PDA was in effect at the time this action was filed. Accordingly, Judge
Benson held that the IRS was not barred by 26 U.S.C. § 6331(k)(2) from maintaining this suit.2
Appellants objected to this recommendation on the grounds that (1) proper authority was delegated to
Stanton in compliance with IRS regulations, (2) if Stanton had no such authority then there is a triable
issue as to whether appellants knew or could have known this and whether he represented himself to
the Stinson’s as having such authority, and (3) the principles of equitable estoppel should operate to bar

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the government from bringing this action.
On September 18, 2001, District Court Judge Robert Cindrich granted the government’s
motion for summary judgement; however, he did not adopt the reasoning of the Magistrate Judge,
finding instead that the PDA appeared “to fit within the language of Section 6159.” Judge Cindrich held
further that even if the PDA constituted a valid installment agreement, appellants’ argument must fail
because § 6331(k)(2) was not in effect when the PDA began to operate in May, 1998 and therefore
could not be relied on by appellants to bar the current action. Since at the time the PDA was signed
installment agreements were not yet covered by § 6331(k), Judge Cindrich held there could have been
no detrimental reliance on any alleged misrepresentation by the government that the PDA was such an
agreement; therefore, appellants’ estoppel argument also failed.
On appeal the Stinsons continue to assert that the PDA constitutes an installment agreement
under § 6159(a). Appellants contend that it was not they but Magistrate Judge Benson who first
attempted to apply § 6331(k), and argue that the existence of a valid § 6159 agreement bars the type
of action brought against them by the government irrespective of the applicability of § 6331(k). Should
we find that the PDA is not a valid installment agreement under § 6159, appellants argue that the
doctrine of equitable estoppel should bar the action against them.
II.
On appeal from an order entering summary judgment, this Court undertakes de novo review,
applying the same standard the District Court should apply. Summary judgment is appropriate when
“there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a

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3 Under 26 U.S.C. § 6501(a) the government may bring suit against a taxpayer “only if the . . .
proceeding [is] begun within ten years after the assessment of the tax.”
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matter of law.” Fed. R. Civ. P. 56(c).
Appellants contend that the District Court’s ruling that § 6331(k)(2) does not bar the
government’s suit is not relevant to their appeal. We agree. Section 6331(k)(2) bars the Secretary of
the Treasury from levying upon the property or rights to property of any person with respect to any
unpaid tax during the period that an offer for an installment agreement under § 6159 is pending and
during the period such an installment agreement is in effect. Appellants do not contend that the IRS
imposed an unlawful levy on their property. Rather, appellants argue that since § 6159 states that the
Secretary is authorized to enter into agreements under which the “taxpayer is allowed to satisfy liability
for payment of any tax in installment payments. . . ”, their compliance with the PDA satisfied their
outstanding tax liability.
The IRS “limits the length of installment agreements to the 10-year statutory collection period 3
except in instances when a reasonable extension of the statutory period for collection will allow an
agreement to be accepted. In these cases, waivers of the CSED [(Collection Statute Expiration Date)]
should be secured.” Int. Rev. Man. 5.14.2.1(2). Appellants point out that “[i]n an area of the [PDA]
listed as ‘IRS Use Only’, there is a circle around an indicator for the statement ‘No future action is
required,’ and an entry listing the CSED as 3/19/00.” (App. Br. at 11). According to appellants, since
the PDA does not include a condition extending the period of limitations and appellants have never
waived the statutory expiration date, the agreement by its terms expired on March 19, 2000. We note
that the PDA does not list the CSED as “3/19/00” but lists the earliest CSED as “3/19/00” (emphasis

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4 March 12, 2000, fell on a Sunday. The government filed this suit on March 13, 2000, the
first day following that was not a Saturday, Sunday or legal holiday. See Fed. R. Civ. P. 6(a).
5 Even if the PDA does constitute a § 6159 installment agreement, appellants have not been
able to identify any reason why such a circumstance would bar the government from bringing an action
to reduce their outstanding tax liability to judgment. See 26 U.S.C. §§ 7401-03 (authorizing the IRS to
reduce an unpaid tax assessment to judgment and to foreclose federal tax liens which arise from such an
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added), and that payments continued to be deducted and forwarded to the government through
October, 2000. There is nothing on the face of the PDA that suggests that it was the intention of either
party that the PDA have a definite termination date of March 19, 2000. But there is also nothing
contained in the PDA indicating that the IRS was willing to take less than the full amount owed by
appellants.
At oral argument counsel for appellants admitted that as the ten year statute of limitations
approached on the earliest assessment, March 12, 1990, the IRS asked appellants to agree to a
voluntary extension of the statute of limitations that would allow the terms of the PDA to remain in
place. Appellants refused. This left the IRS with the choice of either allowing appellants to avoid their
outstanding tax liability or bringing suit prior to March 13, 2000.4 28 U.S.C. §§ 7403(a) states in
relevant part:
In any case where there has been a refusal or neglect to pay any tax, or to discharge any
liability in respect thereof, whether or not levy has been made, the Attorney General or his
delegate, at the request of the Secretary, may direct a civil action to be filed in a district court of
the United States to enforce the lien of the United States under this title with respect to such tax
or liability . . . .
Appellants’ refusal to extend the statutory period is the functional equivalent of a refusal to pay their tax
obligation, thereby rendering an action to reduce this obligation to judgment appropriate. This is true
whether the PDA is construed to be a § 6159 installment agreement or not.5 Treasury Regulation §

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assessment in federal court).
6 The regulation states: “The actions include, for example:
1. Requesting updated financial information from any party to the agreement;
2. Conducting further investigations (including the issuance and enforcement of
summonses) in connection with the tax liability to which the installment
agreement applies.
3. Filing or refiling notices of federal tax lien; and
4. Taking collection action against any person who is not a party to the agreement
but who is liable for the tax to which the agreement applies.”
26 C.F.R. § 301.6159.1(d)(1-4).
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301.6159-1(d) states:
Except as otherwise provided by the installment agreement, during the terms of the agreement
the director may take actions to protect the interests of the government with regard to the
unpaid balance of the tax liability to which the installment agreement applies . . . , including any
actions enumerated in the agreement.
26 C.F.R. § 301.6159-1. Appellants argue that the government’s suit against them is not authorized by
this regulation because it does not fit among any of the examples of permissible action that are listed
immediately following the regulation.6 We disagree. The four scenarios listed are merely examples of
such action and do not provide an exhaustive list of the only actions that may ever be taken by the IRS
to protect the interests of the government. If during the pendency of an installment agreement the
limitations period on the assessed liability of the taxpayer is about to expire, the government may
protect the interests of the United States by reducing the taxpayer’s obligation to judgment.
Since in our view the government properly brought this action against appellants whether the
PDA constitutes a valid installment agreement under § 6159 or not, there could have been no
detrimental reliance on any alleged misrepresentation by the government that the PDA was an

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installment agreement. Therefore we need not address appellants’ argument the government should be
equitably estopped from bringing suit against them.
III.
For the foregoing reasons, we will affirm the Order of the District Court granting the
government’s motion for summary judgment.
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TO THE CLERK:
Please file the foregoing opinion.
/s/ Thomas N. O’Neill, Jr.
District Judge

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