Tax Levy

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7^th Circuit Court of Appeals

Case Name: Eriem Surgical, Inc., v. United States of America et el.

Case No.: 14-3540

Officials: EASTERBROOK, ROVNER, and SYKES, Circuit Judges.

Focus: Tax Levy

Micrins Surgical, Inc., went out of business on March 13, 2009, without paying all of its taxes. Eriem Surgical, Inc., was incorporated the same day, purchased Micrins’ inventory, took over its office space, hired its employees, used its website and phone number, and pursued the same line of business: the sale of surgical instruments. Bernhard Teitz, the president and 40% owner of Micrins, continued to play a leading role in Eriem, though its sole stockholder is Carol Teitz, Bernhard’s wife. Eriem uses “Micrins” as a trademark. (Bernhard asserts that he owns this mark and licensed it to Eriem.) The Internal Revenue Service treated Eriem as a continuation of Micrins and collected almost $400,000 of Micrins’ taxes from Eriem’s bank accounts and receivables. Eriem responded with this wrongful levy suit under 26 U.S.C. §7426(a)(1). After a bench trial, the district judge concluded that Eriem is indeed a continuation of Micrins and that the levy therefore is valid.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.