TAMPA — A federal judge in Tampa has declined an IRS request that his court order a Sarasota orthopedics center to obey U.S. tax laws.
In his seven-page order handed down Feb. 6, Judge James D. Whittemore of the U.S. District Court for the Middle District of Florida, Tampa Division, denied a U.S. government request for an injunction to require Askins & Miller Orthopaedics comply with its employment tax obligation. "In short, the United States seeks an injunction that requires Defendants [Askins & Miller] to comply with the Internal Revenue law or, in other words, 'obey the law,'" Whittemore wrote in his order.
"Indeed, the United States, in its own words, is 'attempting to ensure that Defendants comply with the same tax laws that all other businesses must follow.'"
That, Whittemore said in his order, is not how an injunction works, as they require demonstration of irreparable harm that the requesting party would suffer if the injunction is not granted. Whittemore also cited established precedent that "has repeatedly questioned the enforceability of obey-the-law injunctions in the context of securities cases and others."
Based on that precedent, the requested injunction, even if it was granted, "would be unenforceable," Whittemore wrote.
At issue in the case is Askins & Miller's failure to withhold payroll taxes from employees' wages and to remit those taxes to the IRS, according to the order. "Askins & Miller does not contest its responsibility to pay its employment tax obligations and admits it failed to deposit or made late deposits of employment taxes over a seven year period," the order said.
"And since December 2010, the IRS has made numerous attempts to bring Askins & Miller into compliance with its obligations through phone calls, in person meetings and installment agreements."
Askins & Miller "has only sporadically complied" but that suggests the orthopedics center knows it should do so, the order said. "The few instances in which the company has complied indicate that the Defendants know how to follow the law but nonetheless choose to disobey it," the order said.
Askins & Miller's counsel also argued that the IRS cannot establish it will suffer irreparable harm if the injunction were not granted and that there also is an adequate remedy in law, which it may access, according to the order. Askins & Miller's counsel claimed the U.S. could bring action for damages to collect the unpaid employment taxes, "as it has done in this case," the order said.
While counsel for the U.S. referred to the continued inability of the IRS to collect the unpaid employment taxes, that does not amount to irreparable harm under court precedent or Florida law, Whittemore wrote in his order.
"While Defendants do not contest their employment tax obligations, and the record demonstrates they have failed to comply with those obligations and are likely to continue ignoring them, the United States, like any other creditor, must resort to the remedies provided by law," Whittemore concluded.