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6330
Annotations: Judicial Review of Appeals Determinations: District
Court Jurisdiction- Levy Notice of Levy
and Right to Hearing: Judicial Review of Appeals Determinations:
District Court Jurisdiction Part 1 [99-2
USTC ¶50,774] Humes Houston Hart, Appellant v. (CA-3),
U.S. Court of Appeals, 3rd Circuit, 98-2127, 7/22/99, 189 F3d 464,
Affirming an unreported District Court decision Before:
MANSMANN, RENDELL and STAPLETON, Circuit Judges. è
Caution: This court has designated this opinion as NOT FOR
PUBLICATION. Consult the Rules of the Court before citing this
case.ç OPINION Per
Curiam" EC:
Humes Houston Hart appeals from the District Court's order
dismissing his "complaint for mandamus" as barred by the
doctrine of sovereign immunity. For the reasons that follow we
shall affirm the District Court's order. I In
July 1998 Hart filed a "complaint for mandamus" seeking
to terminate the IRS's allegedly illegal acts concerning the
collection of taxes, penalties and interest for 1987, 1988, 1989,
1991, 1992, 1993 and 1994. According to Hart, the IRS violated its
duty to protect his constitutional rights, deprived him of liberty
and property without due process of law, falsified official
government records, submitted false information to a government
agency, violated the Privacy Act, negligently and recklessly
placed his life at risk, and engaged in abuse of process,
obstruction of justice. Hart alleges that as a result of these
acts, he has suffered extensive and permanent financial, physical
and mental injuries, including extreme emotional distress, loss of
employment, loss of financial assets, and life-threatening
illnesses. He seeks an injunction or writ of mandamus pursuant to
28 U.S.C. §1361 to terminated these acts, in excess of $5m in
actual and compensatory damages, and $3,675,000 in statutory
fines. By
order entered addresses
exclusively injuries since A
184. (In his brief Hart characterizes the present action as
"in effect a follow-on" to [98-2 USTC ¶50,509],
96-5639. Brief at 22.) Hart subsequently filed a motion to file an
amended complaint for mandamus. In the amended complaint he
alleges that the IRS "ha[s] been engaged in a continuation
and escalation of their unconstitutional and unlawful course of
intimidating and harassing conduct against him which was
previously complained of in the related action [98-2 USTC
¶50,509], No. 96 CV-5639." A. 187. He also alleges that the
defendants "have unconstitutionally obstructed and are
continuing to obstruct the proper course of justice," id.,
before this Court and the Supreme Court in appeals from previous
related actions. He demands $600,000 in fines and damages for the
injuries he has allegedly sustained as a result of the defendants'
conduct since By
order entered II The
District Court did not err in dismissing Hart's suit. It is well
settled that the United States, as sovereign, is immune from suit
except to the extent that it consents to be sued, and that the
terms of its consent to be sued in any court define that court's
jurisdiction to entertain the suit. United States v. Dalm
[90-1 USTC ¶50,154; 90-1 USTC ¶60,012], 494 U.S. 596, 608
(1990). "The IRS, as an agency of the United States, is thus
shielded from private actions unless sovereign immunity has been
waived. . . . Waivers of federal sovereign immunity must be
unequivocally expressed in the statutory text and any such waiver
must be strictly construed in favor of the United States." Beneficial
Consumer Discount Co. v. Poltonowicz, 47 F.3d 91, 94 (3d Cir.
1995) (internal citations and punctuation omitted). Sovereign
immunity is thus not waived by general jurisdictional statutes
such as 28 U.S.C. §1361. Lonsdale v. United States [90-2
USTC ¶50,581], 919 F.2d 1440, 1443-1444 (10th Cir. 1990). Even if
it were, relief is available under section 1361 only if Hart has
exhausted all other avenues of relief and the IRS owes him a legal
duty which is a specific, plain ministerial act devoid of the
exercise of judgment or discretion. Harman Cove Condominium
Ass'n v. Marsh, 815 F.2d 949, 951 (3d Cir. 1987). The
procedures by which the IRS collects taxes and penalties due
pursuant to an order of the Tax Court plainly do not qualify as
such an act. To
the extent that Hart seeks an injunction, "in general, the
[Anti-Injunction] Act [26 U.S.C. §7421(a)] prohibits suits for
injunctions barring the collection of federal taxes when the
collecting officers have made the assessment and claim that it is
valid." Enochs v. Williams Packing & Navigation Co.,
Inc. [62-2 USTC ¶9545], 370 U.S. 1, 7 (1962). Realizing this,
Hart also seeks a judgment declaring that Act unconstitutional.
However, such relief is expressly barred by the Declaratory
Judgment Act, 28 U.S.C. §2201(a). See Gattuso v. Pecorella
[84-2 USTC ¶9531], 733 F.2d 709 (9th Cir. 1984). At
times Hart seems to be pursuing damages pursuant to Bivens v.
Six Unknown Federal Narcotics Agents, 403 U.S. 388 (1971). To
that extent, his complaint fails because a Bivens action
may not be used against the United States and its agencies. Dahn
v. United States [97-2 USTC ¶50,847], 127 F.3d 1249, 1254
(10th Cir. 1997). In addition, a Bivens action cannot be
brought against IRS employees for allegedly wrongful conduct
within the scope of their duties in light of the comprehensive
administrative scheme created by Congress to resolve tax-related
disputes. Id. Nor is Hart entitled to damages under the
Federal Tort Claims Act, from which "[a]ny claim arising in
respect of the assessment or collection of any tax. . . ." is
exempt. 28 U.S.C. §2680(c). Hart
also argues that he seeks enforcement of 26 U.S.C. §6330
"which waives Sovereign Immunity to the extent that a
District Judge is given the jurisdiction to review and approve or
disapprove collection actions upon request of the Taxpayer and
collection may not then proceed without such approval." Reply
Br. at 4. Even if Hart's description of section 6330 were accurate
(a question we need not address here), that section would be of no
avail because it only applies to collection actions initiated 180
days after We
have considered Hart's remaining arguments on appeal and find them
meritless as well. Accordingly, we shall affirm the judgment of
the District Court. JUDGMENT This
case came on to be heard on the record from the United States
District Court for the Eastern District of Pennsylvania and was
submitted pursuant to Third Circuit LAR 34.1(a). On consideration
whereof, it is now here ORDERED AND ADJUDGED by this Court that
the judgment of the District Court entered 1
The appeal of that case, Hart v. IRS [98-2 USTC ¶50,509],
E.D. Pa. Civ. No. 96-cv-05639, was docketed in this Court [99-2
USTC ¶50,616], at 98-1583. We affirmed by order entered [99-2
USTC ¶50,911] ACT Restoration, Inc., Plaintiff v. United States
of America, Defendant U.S.
District Court, No. Dist. Fla., Pensacola Div., 3:99CV245/RV, Pending
is the Government's motion to dismiss. (doc. 4). I.
FACTUAL BACKGROUND VINSON,
Chief Judge: The
plaintiff seeks a "redetermination of federal employment
taxes," pursuant to Title 26, United States Code, Section
6330(d)(1). The following allegations are contained in the
complaint and are accepted as true for the purpose of ruling on
the motion to dismiss. In
1991 and 1992, the plaintiff, Act Restoration, Inc., operated a
construction business in and around Pensacola, Florida. Under the
plaintiff's company policy, workers were required to furnish their
own tools in exchange for a monthly rental fee paid by the
plaintiff. Plaintiff alleges that this arrangement was necessary
because the plaintiff was primarily engaged in the restoration of
damaged structures, and the work was too varied to employ single
craft workers. Plaintiff alleges that since the tool rental fee
was not in the nature of wages, the plaintiff was not required to,
and did not, treat the rental fees as compensation to its workers
and include the fees on its Form 941 quarterly returns
("Employer's Quarterly Federal Tax Return") for 1991 and
1992 or its Form 940 annual returns ("Employer's Annual
Federal Tax Return") for 1991 and 1992. In
addition, plaintiff paid its workers mileage at the rate of 26
cents per mile through a vehicle rental agreement. The amount of
"reimbursement paid to workers for the use of their
automobiles" was calculated based upon a scale according to
average monthly mileage as reported by plaintiff's workers in
their daily job logs. Plaintiff alleges that it did not report the
amount of mileage paid to its workers on its tax returns because
the amounts "were not to be included in the employees' gross
income, reported on Form W-2, or subject to withholding." The
IRS apparently determined that both the mileage and the tool
rental fees should have been reported as compensation. The IRS
assessed "941 taxes and interest against the Plaintiff for
all four (4) quarters of 1991 and 1992, and 940 EZ taxes and
interest for the calendar years 1991 and 1992." Plaintiff now
seeks a determination that it has erroneously been assessed
employment taxes for the years 1991 and 1992 in the amount of
$36,825.38. 1 Plaintiff
alleged that it "has exhausted its administrative remedies in
connection with such erroneous assessment, but the Internal
Revenue Service refuses to amend its determination." The
Government has filed this motion to dismiss on the grounds that
plaintiff has not alleged facts which establish the statutory
prerequisites to bringing an action in federal district court
pursuant to Section 6330(d)(1) or any other provision of the
Internal Revenue Code, and, therefore, that this action is barred
by the doctrine of sovereign immunity, or alternatively, that this
court lacks subject matter jurisdiction over the action. II.
ANALYSIS The
complaint seems to seek a "reduction in employment tax
liability, penalties, and interest," or in the alternative,
relief under Section 3402(d) of the Internal Revenue Code. A fair
reading of the complaint reveals that it omits many essential
allegations in support of its claim. Therefore, it fails to state
a claim for such relief, and must be dismissed on that basis
alone. However, there is also a jurisdictional problem that
warrants further discussion. Under
the doctrine of sovereign immunity, the federal government may not
be sued unless it consents to be sued. United States v. Dalm
[90-1 USTC ¶50,154; 90-1 USTC ¶60,012], 494 U.S. 596, 608, 110
S.Ct. 1361, 1368, 108 L.Ed.2d 548 (1990). "The terms of [the
Government's] consent to be sued in any court define that court's
jurisdiction to entertain the suit." United States v.
Sherwood, 312 U.S. 584, 586-87, 61 S.Ct. 767, 769, 85 L.Ed.
1058 (1941). Title 28, United States Code, Section 1346 provides
in relevant part: (a)
The district courts shall have original jurisdiction, concurrent
with the United States Court of Federal Claims, of: (1)
Any civil action against the United States for the recovery of any
internal-revenue tax alleged to have been erroneously or illegally
assessed or collected, or any penalty claimed to have been
collected without authority or any sum alleged to have been
excessive or in any manner wrongfully collected under the
internal-revenue laws Section
1346 is a waiver by the Government of its sovereign immunity in
order to allow taxpayers to file actions seeking tax refunds.
However, Section 7422 of the Internal Revenue Code, "Civil
actions for refund," limits the jurisdiction of the district
courts over tax matters: (a)
No suit prior to filing claim for refund.--No suit or proceeding
shall be maintained in any court for the recovery of any internal
revenue tax alleged to have been erroneously or illegally assessed
or collected, or of any penalty claimed to have been collected
without authority, or of any sum alleged to have been excessive or
in any manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Secretary, according to the
provisions of law in that regard, and the regulations of the
Secretary established in pursuance thereof. Thus,
an action for a refund of federal taxes may be maintained only if
the tax has been paid and an administrative claim for refund has
been "duly filed." "Courts have consistently held
that a taxpayer's filing of an administrative refund claim with
the IRS in accordance with the relevant provisions of the Internal
Revenue Code is a jurisdictional prerequisite to the maintenance
of a tax refund suit." Mutual Assurance, Inc. v. United
States [95-2 USTC ¶50,361], 56 F.3d 1353, 1356 (11th Cir.
1995); Charter Co. v. United States [92-2 USTC ¶50,500],
971 F.2d 1576, 1579 (11th Cir. 1992)). Of course, the fact that a
"federal question" may be involved does not affect
sovereign immunity. The
complaint alleges that this court has jurisdiction over this
action pursuant to Title 26, United States Code, Section
6330(d)(1), and that the plaintiff "has exhausted its
administrative remedies." Section 6330(d) provides: (d)
Proceeding after hearing.-- (1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. If
a court determines that the appeal was to an incorrect court, a
person shall have 30 days after the court determination to file
such appeal with the correct court. The
Government contends that this court is without jurisdiction over
this matter because Section 6330(d) does not confer jurisdiction
on the federal district courts over this action, and the plaintiff
has failed to allege that it satisfied the jurisdictional
prerequisite of a refund action under Section 1346. In
Flora v. United States [60-1 USTC ¶9347], 362 U.S. 145,
177, 80 S.Ct. 630, 647, 4 L.Ed.2d 623 (1960), the Supreme Court
held that Title 28, United States Code, Section 1346(a)(1)
requires full payment of the tax assessment before an income tax
refund action can be maintained in a federal district court.
However, where there is a claim for refund of employment taxes
assessed, the requirement of Flora is met if the tax
assessed is paid in full for one employee. See, e.g., Steele v.
United States [60-2 USTC ¶9573], 280 F.2d 89, 90-91 (8th Cir.
1960). The recognized and well established procedure in federal
taxation matters is to either challenge the IRS in Tax Court or
pay the tax and seek a refund in a United States district court.
Plaintiff has not alleged that it has paid the tax assessment in
full, or for at least one of its employees. Therefore, this court
does not have jurisdiction over this matter under Section 1346. Plaintiff
argues that this court has jurisdiction over this action under
Section 6330 itself. Plaintiff is mistaken. While Section 6330 is
a new provision added to the Code in 1998 and applicable to
collection actions initiated after In
its response to the Government's Motion to Dismiss, plaintiff has
filed a copy of a document titled "Notice of
Determination," which upheld the collection action after an
"Appeals hearing." This notice advised the plaintiff: If
you want to dispute this determination in court, you have 30 days
from the date of this letter to file a complaint in the
appropriate United States District Court for a redetermination. (Doc.
8, exh. A) While
this did instruct the plaintiff to take action in this court, it
does not confer jurisdiction. Frankly, I cannot understand why the
Government fails to adequately explain why it instructed the
plaintiff to seek redetermination in this court. Nevertheless,
this notice also states "[d]uring the Appeals conference, you
chose not to pursue other alternatives to a lien or levy as means
of payment of the deficiency. Therefore, it has been determined
that the enforcement action taken by Collection is valid."
Thus, while the specific nature of the "enforcement action
taken by Collection" is unclear, it is apparent that the
taxes and penalties assessed have not been paid and that this
matter has progressed to the collection stage. Further, although
the plaintiff was notified that it had 30 days to appeal to a
federal district court, such notice does not overcome the
procedural requirement that a tax assessment be paid in full for
at least one of plaintiff's workers prior to bringing a refund
action in federal district court, nor does it divest the Tax Court
from "jurisdiction of the underlying tax liability."
Thus, this court is without subject matter jurisdiction over this
action. III.
CONCLUSION For
all of the above reasons, the Government's motion to dismiss is GRANTED.
Plaintiff shall have 14 days from the date of this order to file
an amended complaint or 30 days in which to seek review in the Tax
Court in accordance with Title 26, United States Code, Section
6330(d)(1). DONE
AND ORDERED this 24th
day of September, 1999. 1
It is unclear from the complaint how the plaintiff's separate
claims are computed. [2000-1
USTC ¶50,279] David McCune, Plaintiff v. United States of
America, Defendant U.S.
District Court, No. Dist. Tex., Dallas Div., 3:99-CV-2368-T, MALONEY,
District Judge: Before
the Court is the motion to dismiss, filed by Defendant United
States of America. After considering the motion, Plaintiff's
response, and Defendant's reply, the Court is of the opinion that
the motion should be granted because this court lacks subject
matter jurisdiction. On
Section
6330 of the Internal Revenue Code provides: (d)
Proceeding after hearing.-- (1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. 26
U.S.C. §6330. Therefore, a district court has jurisdiction to
hear this type of suit only if the Tax Court does not have
jurisdiction. The Tax Court has jurisdiction over income tax
issues. See Temp. Treas. Reg. §301.6330-1T(f)(2) Q &
A-F-3. Furthermore, district courts do not have jurisdiction to
hear disputes concerning income taxes unless those taxes have been
paid in full. See Flora v. United States [60-1 USTC
¶9347], 362 U.S. 145, 150-51 (1960). First,
the government contends that McCune did not timely appeal the IRS
determination because he filed suit in excess of thirty days after
the IRS determination was issued. McCune responds by asserting
that he filed a motion for reconsideration with the IRS, thereby
tolling the limitations period. However, even if the limitations
period was tolled by the filing of the motion for reconsideration,
this court lacks subject matter jurisdiction to hear the case. Districts
Court have jurisdiction under section 6330 only if the Tax Court
lacks jurisdiction. Clearly, the Tax Court had jurisdiction over
this case because it concerns income taxes, despite McCune's
contention that he is not a taxpayer. Moreover, this court does
not have jurisdiction to hear McCune's complaint because the
income taxes at issue have not been paid in full. See Flora
[60-1 USTC ¶9347], 362 U.S. at 150-51. The Court rejects McCune's
argument that the doctrine established by the United States
Supreme Court in Flora is a sham and that it should be
abolished immediately. See Crain v. Commissioner of Internal
Revenue [84-2 USTC ¶9721], 737 F.2d 1417 (5th Cir. 1984).
Therefore, the government's motion to dismiss should be granted
because this court lacks subject matter jurisdiction over the
case. It
is therefore ORDERED that the Motion to Dismiss, filed by
Defendant United States of America on [2000-2
USTC ¶50,634] Danny True, Plaintiff v. Commissioner of the
Internal Revenue Service and the United States of America,
Defendants U.S.
District Court, Mid. Dist. Fla., Orlando Div.,
99-1151-Civ-Orl-22A, Danny
True, Sanford, Fla., pro se. Carol Koehler Ide, Scott M.
Grossman, Department of Justice, Washington, D.C. 20530, Thomas W.
Turner, Ralph E. Hopkins, Orlando, Fla., for defendants. ORDER CONWAY,
District Judge: This
cause is before the Court for consideration of Defendants' Motion
to Dismiss Or, in the Alternative, for Summary Judgment (Doc. 5),
filed I.
Background Plaintiff,
Danny True ("True"), brings this action against
Defendants, Commissioner of the Internal Revenue Service
("the Commissioner") and the United States of America
("the Government"), alleging that he has been deprived
of due process of law under the Fifth Amendment. Plaintiff alleges
that he received a letter dated Your
Federal tax is still not paid. We previously asked you to pay
this, but we still haven't received your payment. This letter is
your notice of our intent to levy under Internal Revenue Code
(IRC) Section 6331 and your right to receive Appeals consideration
under IRC Section 6330. *
* * * If
you don't pay the amount you owe, make alternative arrangements to
pay, or request Appeals consideration within 30 days from the date
of this letter, we may take your property, or rights to property,
such as real estate, automobiles, business assets, bank accounts,
wages, commissions, and other income. We've enclosed Publication
594 with more information, Publication 1660 explaining your right
to appeal, and Form 12153 to request a Collection Due Process
Hearing with Appeals. [Doc.
5, Ex. A.] The letter then informs True that he owes $18,707.45 in
taxes plus penalties and interest for the 1994 tax year and
$27,329.31 for 1995. Id. By
letter dated True
then received a notification letter from the IRS, dated We
have reviewed the proposed collection action for the periods shown
above. This letter is your legal Notice of Determination, as
required by law. A summary of our determination is stated below
and the enclosed statement shows, in detail, the matters we
considered at your Appeals hearing and our conclusions. [Doc.
5, Ex. C.] In
the attachment to the letter (Attachment-3193), the IRS further
explained: You
were previously afforded the opportunity to appeal the assessment
of Income tax, plus statutory additions, for the tax years at
issue here. Per IRC 6330(c)(2)(B), "In General,--the person
may also raise at the hearing challenges to the existence or
amount of the underlying tax liability for any tax period if the
person did not receive any statutory notice of deficiency for such
tax liability or did not otherwise have an opportunity to dispute
such tax liability.["] For the above reason, your request for
a hearing was not granted. Id. True
asserts that he was never notified of the date or place of the
hearing and thus he was denied the right to appear at the hearing
to present his defenses and arguments. [Compl. pp. 6-7.] True
complains that the IRS held an ex parte hearing which deprived him
of due process. Id. pp. 9-10. II.
Analysis The
United States moves to dismiss this action based on lack of
personal and subject matter jurisdiction under Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(2). In the alternative, the
United States seeks summary judgment pursuant to Fed.R.Civ.P.
56(c). Since the Government's motion to dismiss as to jurisdiction
relies on matters outside the pleadings, the Court will treat that
part of the motion as one for summary judgment. See
Fed.R.Civ.P. 12(c). The
Government argues that this Court has no subject matter
jurisdiction because 26 U.S.C. §6330(d)(1) requires that this
appeal be brought in the United States Tax Court. The parties
agree that, with respect to the There
is no dispute that the IRS informed True of his right "to
request a Collection Due Process Hearing with Appeals." (Doc.
5. Ex. A.] Similarly, the evidence shows that True timely
requested Appeals consideration. Some confusion exists as to what
transpired next. In a follow-up letter to True, the IRS stated
that "[a] summary of our determination is stated below and
the enclosed statement shows, in detail, the matters we considered
at your Appeals hearing and our conclusions." Doc. 5, Ex. C
(emphasis supplied). The attached explanation informs True that
his request for a hearing was not granted and the IRS decided not
to withdraw the Notice of Intent to Levy. From these conflicting
statements, it is unclear whether a hearing was in fact held. 2 In
any event, the parties agree that the IRS did reach a
determination as to True's request for consideration by deciding
that 1) True was not entitled to a hearing; and 2) the IRS would
not withdraw the Notice of Intent to Levy. Therefore, under
Section 6330, True is entitled to judicial review as follows: (d)(1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or; (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. 28
U.S.C. §6330(d)(1)(A) & (B). Under
this provision, the Court must determine whether jurisdiction
properly lies here or in the United States Tax Court. A claimant
is required to bring a §6330 appeal in the Tax Court; so long as
the Tax Court has jurisdiction of the underlying tax liability.
True argues that the Tax Court does not have jurisdiction over
this matter because the tax liabilities at issue are for
"employment tax." The Government responds that the tax
liabilities are in fact "income tax" liabilities, over
which the Tax Court has jurisdiction. See 26 U.S.C.
§§6211(a), 6212(a). In fact, the evidence shows that the
liabilities are for income tax derived from True's
self-employment. [Pl.'s Mem. in Opp., Doc. 8.] Accordingly, this
Court lacks jurisdiction to hear this matter. 3 As the
Government noted in its motion for summary judgment, True will not
be materially prejudiced by this decision because 26 U.S.C.
§6330(d)(1) allows True to bring his claim in the appropriate
court within thirty (30) days of dismissal of this action. 4 III.
Conclusion Based
on the foregoing, it is ORDERED as follows: 1.
Defendants' Motion to Dismiss Or, in the Alternative, for Summary
Judgment (Doc. 5), filed 2.
Plaintiff's Motion for Summary Judgment (Doc. 16), filed 3.
This case is dismissed for lack of subject matter jurisdiction. 4.
Pursuant to 26 U.S.C. §6330, Plaintiff, Danny True, shall have 30
days from the date of this Order to file his appeal with the
appropriate court. 5.
The Clerk is directed to close this case. DONE
and ORDERED. 1
Accordingly, this Court must liberally construe Plaintiff's
allegations. See Haines v. Kerner, 404 U.S. 519, 30
L.Ed.2d 652, 92 S.Ct. 594 (1972). 2
However, the Court suspects that page one of the letter contains
boilerplate language which may not have been applicable to True's
situation. 3
Accordingly, the Court does not reach the Government's argument
that the Commissioner of the Internal Revenue Service is not a
proper party to this proceeding. 4
While the Court lacks subject matter jurisdiction to hear this
case, a review of the file raises a serious question as to whether
the IRS properly denied True's request for a Collection Due
Process hearing. See, e.g., 26 U.S.C. §6330(b)(1).
True is free to address his due process concerns in the event he
decides to refile his appeal in the appropriate court. [2000-2
USTC ¶50,837] Bobby P. Lewis, Plaintiff v. I.R.S., Clerk, U.S.
Tax Court, Washington, D.C., Defendants U.S.
District Court, So. Dist. Tex., Houston Div., CIV. H-00-1122, HITTNER,
District Judge: Pending
before the Court is Defendant United States of America's Motion to
Dismiss (Instrument #6). Having considered the motion,
submissions, and applicable law, the Court determines that the
motion should be granted. Statement
of Facts On
Lewis
responded to the IRS notice by timely requesting a due process
hearing. Lewis attached a written statement regarding the Notice
to Levy to his request for a hearing. Lewis's statement did not
contest the tax liability. Rather, Lewis simply requested a stay
in the levying process for 60 days in order to sell some land and
thereby satisfy his tax debt. The IRS agreed to delay levying
Lewis's property for 60 days. Nevertheless, Lewis was unable to
sell this property to satisfy his tax deficiencies. On
Discussion As
Lewis is the party seeking to invoke federal jurisdiction, he
bears the burden of demonstrating that jurisdiction is proper in
this Court. See Santos v. Reno, 2000 WL 1404904 (5th Cir. Section
6330 provides: (d)
Proceeding after hearing-- (1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. If
a court determines that the appeal was to an incorrect court, a
person shall have 30 days after the court determination to file
such appeal with the correct court. Id.
Courts have interpreted these provisions to mean that district
courts have jurisdiction under section 6330 only if the Tax Court
lacks jurisdiction. E.g., McCune v. United States of America
[2000-1 USTC ¶50,279], 2000 WL 378878, at *1 (N.D. Tex. Regulations
issued by the United States Department of Treasury further clarify
this matter: If
the Tax Court would have jurisdiction over the type of tax
specified in the CDP Notice (of example, income and estate taxes),
then the taxpayer must seek judicial review by the Tax Court. If
the tax liability arises from a type of tax over which the Tax
Court would not have jurisdiction, then the taxpayer must seek
judicial review by a district court of the United States in
accordance with Title 28 of the United States Code. Temp.
Treas. Reg. §301.6330-1T(f)(2) Q&A-F-3. In
this case, the Tax Court has jurisdiction because Lewis's case
involves tax liability. For this Court to have jurisdiction, Lewis
would have to demonstrate in his complaint that one of the items
involving a trust fund related to a Federal trust fund. Moore
v. Commissioner [CCH Dec. 53,802], 114 T.C. 171 (2000). In the
absence of such an allegation, the claims in this suit are purely
of a tax nature and fall squarely within the tax jurisdiction of
the Tax Court. McCune [2000-1 USTC ¶50,279], 2000 WL
378878, at *1. Accordingly, Lewis has failed to meet his burden of
proving this Court has jurisdiction over his claim. See Santos,
2000 WL 1404904, at *1. Having
determined that this Court lacks subject matter jurisdiction over
this tax matter, it may not consider the Government's second and
third arguments. Accordingly, the Court hereby ORDERS
that United States of America's Motion to Dismiss (Instrument #6)
is GRANTED. [2000-2
USTC ¶50,839] John E. Diefenbaugh, Plaintiff-Appellant v. Joseph
W. Weiss, Associate Chief of the Internal Revenue Service,
Defendant-Appellee (CA-6),
U.S. Court of Appeals, 6th Circuit, 00-3344, John
E. Diefenbaugh, Toledo, Ohio, pro se. Richard Farber,
Randolph L. Hutter, Department of Justice, Washington, D.C. 20530,
for defendant-appelee. Before:
KRUPANSKY, BATCHELDER and GILMAN, Circuit Judges. è
Caution: This court has designated this opinion as NOT FOR
PUBLICATION. Consult the Rules of the Court before citing this
case.ç ORDER John
E. Diefenbaugh, an Ohio resident proceeding pro se, appeals
a district court order dismissing, for lack of jurisdiction, his
civil action filed pursuant to 26 U.S.C. §6330. This case has
been referred to a panel of the court pursuant to Rule 34(j)(1),
Rules of the Sixth Circuit. Upon examination, this panel
unanimously agrees that oral argument is not needed. Fed. R. App.
P. 34(a). On
On
We
review de novo the district court's dismissal of an action
for lack of subject matter jurisdiction. Friends of Crystal
River v. United States Envtl. Protection Agency, 35 F.3d 1073,
1077-78 (6th Cir. 1994); Willis v. Sullivan, 931 F.2d 390,
395 (6th Cir. 1991). Federal Rule of Civil Procedure 12(h)(3)
permits sua sponte dismissals of suits over which the
district court does not possess subject matter jurisdiction. Rauch
v. Day and Night Mfg. Corp., 576 F.2d 697, 701 (6th Cir.
1978). Before
a levy may be made on the property of any taxpayer, such taxpayer
must be notified of his right to request a pre-levy hearing. 26
U.S.C. §6330(a). If a hearing is requested, it is conducted by
the IRS Office of Appeals. 26 U.S.C. §6330(b)(1). Upon receipt of
the Office of Appeals's notice of determination, §6330(d)(1)
specifies the appropriate forum to which a taxpayer seeking
judicial review of such determination may proceed. The taxpayer
may file an appeal with the Tax Court or, "if the Tax Court
does not have jurisdiction of the underlying tax liability,"
to the appropriate federal district court. 26 U.S.C. §6330
(d)(1). The Tax Court has jurisdiction over income tax issues and
liabilities. Temp. Treas. Reg. §301.6330-1T(f)(2)Q & A-F-3; see
also Martin v. Commissioner [85-1 USTC ¶9238], 756 F.2d 38,
40 (6th Cir. 1985) (taxpayer's action challenging income tax
liability falls within jurisdiction of Tax Court); Goza v.
Commissioner [CCH Dec. 53,803], 114 T.C. 176, 182 (Mar. 17,
2000) (Tax Court has jurisdiction over actions involving income
tax liabilities). Thus, if the §6330 proceeding involves income
tax issues, the district court does not have jurisdiction to
consider the case. Upon
review, we conclude that the district court properly dismissed
Diefenbaugh's petition for lack of jurisdiction. See Fed.
R. Civ. P. 12(h)(3); Friends of Crystal River, 35 F.3d at
1077-78; Willis, 931 F.2d at 395. In his petition,
Diefenbaugh sought to challenge the Office of Appeals's adverse
decision regarding his income tax liabilities for the years 1989
through 1996. The notice of determination, which sustained the
IRS's proposed levy, specifically informed Diefenbaugh that if he
desired to dispute the Office of Appeals's decision, he must file
a petition for redetermination with the Tax Court. Because the Tax
Court has jurisdiction over levies to collect income taxes, it,
rather than the district court, has exclusive jurisdiction to
review the IRS's levy pursuant to §6330(d)(1). Diefenbaugh's
contention that the Tax Court lacks jurisdiction over his petition
is without merit. Congress has specifically conferred jurisdiction
upon the Tax Court to consider a taxpayer's petition involving a
proposed levy to collect income taxes. See 26 U.S.C.
§6330(d)(1)(A). Moreover, the Tax Court has the authority to
consider both questions of law and questions of fact with respect
to the types of taxes over which it has jurisdiction. See,
e.g., Estate of Mueller v. Commissioner [98-2 USTC ¶60,325],
153 F.3d 302, 304 (6th Cir. 1998), cert. denied, 525 U.S.
1140, 143 L.Ed.2d 40, 119 S.Ct. 1031 (1999) (legal conclusions of
the Tax Court are reviewed de novo). Diefenbaugh's argument
to the contrary, "the Tax Court exercises judicial, rather
than executive, legislative, or administrative, power. It was
established by Congress to interpret and apply the Internal
Revenue Code in disputes between taxpayers and the Government. By
resolving these disputes, the court exercises a portion of the
judicial power of the United States." Freytag v.
Commissioner [91-2 USTC ¶50,321], 501 U.S. 868, 890-91, 115
L.Ed.2d 764, 111 S.Ct. 2631 (1991). Since Diefenbaugh's petition
involves income tax liabilities, jurisdiction over his action lies
with the Tax Court. See Martin [85-1 USTC ¶9238], 756 F.2d
at 40; Goza [CCH Dec. 53,803], 114 T.C. at 182. Accordingly,
the district court's order is affirmed. Rule 34(j)(2)(C), Rules of
the Sixth Circuit. [2001-1
USTC ¶50,298] Ida Dimartino, Plaintiff v. The United States and
the Assistant Commissioner (International) of the Internal Revenue
Service, Defendants U.S.
District Court, Dist. Nev., CV-S-00-0144-RLH (RJJ), ORDER (Motion
to Dismiss--# 4) HUNT,
District Judge: Before
the Court is United States' Motion to Dismiss (# 4) filed Background There
have been very few facts submitted to the Court regarding
Plaintiff's cause of action. On In
her Complaint, Plaintiff alleges that on Plaintiff
alleges she received a second Letter 1058 and Form 12153 informing
her of her right to a Due Process Appeals Hearing as provided by I.R.C.
6320(a)(1) and (a)(3)(B). Plaintiff asserts she timely
responded to this letter on June 31, 1999. Plaintiff
further contends that on Plaintiff
seeks a Temporary Restraining Order prohibiting the Las Vegas
Appeals Function from proceeding upon the Notice of Determination. Defendants
move to dismiss Plaintiff's claims, pursuant to Fed.R.Civ.P.
16(b)(1), because this Court lacks subject matter jurisdiction. DISMISSAL
FOR LACK OF SUBJECT MATTER JURISDICTION PURSUANT TO RULE 12(B)(1) Federal
Rule of Civil Procedure 12(b)(1) provides that a defendant may
move the Court to dismiss a claim for lack of subject matter
jurisdiction. Defendants asserts this Court should dismiss
Plaintiff's action for lack of subject matter jurisdiction,
because the United States has not waived its sovereign immunity
from suit, and because the Anti-Injunction Act prohibits courts
from entertaining injunction claims against the IRS. Sovereign
Immunity "Absent
a waiver, sovereign immunity shields the Federal Government and
its agencies from suit." Fed. Deposit Ins. Corp. v. Meyer,
510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) (citing Loeffler
v. Frank, 486 U.S. 549, 554, 100 L.Ed.2d 549, 108 S.Ct. 1965
(1988); Federal Housing Administration v. Burr, 309 U.S.
242, 244, 84 L.Ed. 724, 60 S.Ct. 488 (1940)). "Absent its
consent to suit, an action against the United States must be
dismissed." Elias v. Connett [90-2 USTC ¶50,397], 908
F.2d 521, 527 (9th Cir. 1990) (citing Gilbert v. DaGrossa
[85-2 USTC ¶9665], 756 F.2d 1455, 1458 (9th Cir. 1985). Plaintiff
has named the United States and the "Assistant Commissioner
(International) of the Internal Revenue Service" as
co-defendants in this action, and seeks an injunction against the
IRS. The Court finds that this suit is a suit against the Federal
Government and one of its agencies, the IRS. Therefore, the Court
lacks subject matter jurisdiction over Plaintiff's claim, absent a
waiver by the United States Government of its sovereign immunity. In
her Complaint, Plaintiff asserts this Court has federal question
jurisdiction over her claims pursuant to 26 U.S.C. §6320, 6330. 1 Upon review
of these statutes, the Court finds that Defendants have not waived
immunity from Plaintiff's suit in United States District Court,
and therefore, the Court must dismiss Plaintiff's complaint for
lack of subject matter jurisdiction. The
provisions of Section 6330(d) constitute a limited waiver of the
United States' sovereign immunity, and provide a means by which a
taxpayer may challenge a Determination made by the IRS in a
statutory Collection Due Process Hearing. The statute provides, Judicial
Review of determination.--The
person may, within 30 days of a determination under this section,
appeal such determination--(A) to the Tax Court (and the Tax Court
shall have jurisdiction to hear such matter); or (B) if the Tax
Court does not have jurisdiction of the underlying tax liability,
to a district court of the United States. 26 U.S.C. §6330(d)(1). The
provisions of Section 6330 are clear. The Tax Court has exclusive
jurisdiction to review determinations made under its provisions,
unless the Tax Court lacks jurisdiction over the underlying the
matter. As Plaintiff's underlying matter is income tax liability,
and the Tax Court has jurisdiction over such claims, the
provisions of Section 6330(d)(1)(B), conferring limited
jurisdiction to federal district courts, are inapplicable. The
Court notes that Plaintiff will not be deprived of the opportunity
to have her appeal heard, even though the thirty day period within
which to appeal the Determination has expired. Section 6330(d)(1)
provides, "If a court determines that the appeal was to an
incorrect court, a person shall have 30 days after the court
determination to file such an appeal with the correct court."
Therefore, Plaintiff will be permitted to refile her claim with
the Tax Court within thirty days of this Order. The
Anti-Injunction Act Even
if this Court found that Section 6330 provides federal district
court jurisdiction over Plaintiff's claim, the Court is without
jurisdiction to grant Plaintiff the injunctive relief she seeks.
The Anti-Injunction Act provides, "No suit for the purpose of
restraining the assessment or collection of any tax shall be
maintained in any court. . ." 26 U.S.C. §7421(a). This
Act withdraws from courts the jurisdiction to grant injunctive
relief restraining the assessment or collection of taxes, despite
the existence of jurisdiction over the suit in which such relief
is sought. The Court finds that no statutory or judicial
exemptions to the Act are applicable to this case and therefore,
this Court is without jurisdiction to grant Plaintiff the only
form of relief she seeks, a restraining order. Accordingly,
for good cause appearing, IT IS HEREBY ORDERED that United States'
Motion to Dismiss is GRANTED. JUDGMENT
IN A CIVIL CASE IT
IS ORDERED, ADJUDGED AND DECREED that this action is DISMISSED.
Judgment is entered for the Defendants and against the Plaintiff. 1
Plaintiff also asserts a claim under "HR 2676," which
the Court is unable to address, because Plaintiff has not provided
a full citation, and the Court is unable to locate an "HR
2676" relevant to Plaintiff's case. [2001-1
USTC ¶50,328] Humes Houston Hart v. Internal Revenue Service, et
al U.S.
District Court, East. Dist. Pa., Civ. 00-4658, DALZELL,
District Judge: AND
NOW, this 8th day of February, 2001, upon consideration of
defendant's motion to dismiss (docket entry # 2), and plaintiff's
response thereto, and the Court finding that: (a)
Plaintiff Humes Houston Hart, pro se, has filed suit, yet
again, for damages arising from his tax liability for the years
1987, 1988, and 1989; 1 (b)
Although this complaint has much overlap with his previous
complaints--and we will, accordingly, dismiss his Privacy Act
claims for the reasons set forth in Hart v. United States
[2000-2 USTC ¶50,809], 2000 WL 1727737 (E.D.Pa. (c)
According to Hart, on (d)
After receiving the notice, Hart made a timely request for a CDP
hearing pursuant to 26 U.S.C. §6330(a)(3)(B) and specifically
requested a review of his underlying tax liability, id. at
¶7; (e)
Upon review by an IRS Appeals Officer, however, the IRS issued
this taxpayer a formal Notice of Determination advising him that
he was not entitled to challenge his liability for those taxes, id.
at ¶¶12-14; (f)
Under 26 U.S.C. §6330(c)(2), one requesting a CDP hearing may
raise "any relevant issue relating to the unpaid tax or the
proposed levy", but may only challenge the underlying tax
liability for any tax period "if the person did not
receive any statutory notice of deficiency for such tax liability
or did not otherwise have an opportunity to dispute such
tax liability" (emphasis added); 2 (g)
Hart believes, however, that the Appeals Officer's decision
deprived him of due process, and he therefore seeks to appeal that
decision to the district court pursuant to 26 U.S.C. §6330(d)(1),
which provides for judicial review of a CDP determination; (h)
However, 26 U.S.C. §6330(d)(1) provides for review to the Tax
Court, unless the Tax Court does not have jurisdiction, in which
case the appeal goes to a district court; (i)
Here, plaintiff's income tax liabilities are at issue, and the Tax
Court--not the district court--has jurisdiction to hear
plaintiff's appeal of the CDP determination; 3 (j)
Hart, however, is not out of due process quite yet, because 26
U.S.C. §6330(d)(1) provides that "[i]f a court determines
that the appeal was to an incorrect court, a person shall have 30
days after the court determination to file such appeal with the
correct court"; (k)
Because we lack jurisdiction to hear plaintiff's appeal of the CDP
determination, we will grant defendant's motion to dismiss for
lack of subject matter jurisdiction under Fed. R. Civ. P.
12(b)(1); It
is hereby ORDERED that: 1.
Defendant's motion to dismiss is GRANTED; and 2.
This action is DISMISSED; 3.
All outstanding motions are DENIED AS MOOT; and 4.
The Clerk shall CLOSE this case statistically. 1
Our Order dated 2
Clearly, Hart not only had notice of the deficiency but also
vigorously disputed his liability, see Hart v. United
States [2000-2 USTC ¶50,809], 2000 WL 1727737 (E.D.Pa. 3
The Tax Court has jurisdiction to redetermine the amount of
certain tax deficiencies, including income tax, see 26
U.S.C. §6214(a). [2001-2
USTC ¶50,539] James E. Brown, Plaintiff v. Charles O. Rossotti,
Commissioner of Internal Revenue, Defendant U.S.
District Court, Mid. Dist. Tenn., Nashville Div., 3:01-0020, TRAUGER,
District Judge: On
The
authority cited by the plaintiff and his attempts to distinguish
the authority relied upon by the Magistrate Judge do not support
his position. The tax court has jurisdiction over this appeal by
the plaintiff under 26 U.S.C. §6330(d)(1) concerning his income
tax liabilities for 1990 and 1991. Since the tax court has
jurisdiction, this court does not. Diefenbaugh v. Weiss
[2000-2 USTC ¶50,839], 2000 WL 1679510 (6th Cir. (Ohio)). The
other jurisdictional statutes cited by the plaintiff in an attempt
to bring this case within the court's jurisdiction do not apply
here. The
Report and Recommendation is ACCEPTED and made the findings
of fact and conclusions of law of this court. For the reasons
expressed therein, the defendant's motion to dismiss for lack of
jurisdiction is GRANTED. Since
this appeal was filed in the wrong court, the plaintiff/tax payer
has thirty (30) days from the entry of this Order to file an
appeal in the Tax Court. 26 U.S.C. §6630(d)(1). It
is so ORDERED. REPORT
AND RECOMMENDATION I.
INTRODUCTION BROWN,
Magistrate Judge: For the reasons stated below, the Magistrate
Judge recommends that the defendant's motion to dismiss
(Docket Entry No. 7) for lack of jurisdiction be granted. II.
DISCUSSION This
case was referred to the undersigned for case management and a
Report and Recommendation on all dispositive motions (Docket Entry
No. 4). This
case involves a petition by James E. Brown to review the decision
of the Commissioner of Internal Revenue Service (IRS) concerning
an effort to collect $110,117.86 in taxes for 1990, and $1,857.54
in taxes for 1991 (Exh. A to Petition, Docket Entry No. 1). 1 The petition
itself is a rather convoluted document consisting of 18 pages
setting out the lengthy procedural history in this matter. It is
apparent that the effort to collect the taxes in question here are
a result of a decision by the Sixth Circuit in the case of Brown
v. Commissioner of Internal Revenue Service [99-1 USTC
¶50,544], 1999 WL 283903 (6th Cir.), a copy of which is attached
to this Report and Recommendation. It is apparent to the
Magistrate Judge that this opinion of the Sixth Circuit is binding
on this Court and that the facts found therein are likewise
binding on the parties. The
findings set out by the Sixth Circuit may be summarized as
follows: The
petitioner was a civilian employee of the Army in Germany, and as
a result of a discrimination judgment he received a substantial
award under Title VII of the Civil Rights Act of 1964. The
judgment was in the sum of $137,918.97, and of that amount
$27,118.00 was withheld for taxes, with some being deposited to Brown's
retirement account. Mr. Brown claimed that he filed a
return for 1990 in June 1991, but IRS records show that no return
was received until July 1992. There was considerable litigation
over whether or not Mr. Brown filed the return in June
1991, or July 1992. However, that issue was resolved adversely to
Mr. Brown by the Tax Court and this opinion of the Sixth
Circuit affirmed that decision. On the return, Mr. Brown
claimed the Title VII award was excludable from income and
requested a refund of the taxes withheld. He also claimed
deductions for business expenses that could have been reimbursed
by his employer. The IRS in September 1992 sent Mr. Brown a
refund check in the amount of $30,045.66. Mr. Brown filed a
return for 1991, again claiming deductions for business expenses
that could have been reimbursed by his employer. As the Sixth
Circuit stated, mysteriously the IRS received information from the
Social Security Administration that Mr. Brown had also
received additional payments on his Title VII action in 1991 from
the United States District Court in the amount of $81,669.00, plus
$42,277.00 which was withheld for taxes. The IRS later determined
this information to be incorrect, however, as a result of this
information the IRS began a thorough review of Mr. Brown 's
return. Mr. Brown filed suit in the Court of Federal
Claims, seeking the $81,669.00 which he stated he had never
received. However, before the case was resolved the IRS issued a
Notice of Deficiency for the tax years 1990 and 1991, on May 12,
1997. Mr. Brown promptly filed a petition with the Tax
Court to contest the deficiency. He contested the deficiency on a
number of ground: (1) the IRS was estopped from assessing a
deficiency for 1990 because they had asserted that the statute of
limitations had run on that year in their argument to the Court of
Federal Claims; (2) jurisdiction belonged to the Court of Federal
Claims rather than in the Tax Court; (3) the case of U.S. v.
Burke [92-1 USTC ¶50,254], 504 U.S. 229, 242 (1992), which
held that Title VII damages were not excludable for income, was
being applied retroactively to him; (4) his 1990 return had been
filed in June 1991, and the two-year statute of limitations for
recovering erroneous refunds had passed; (5) he should not have
been assessed an additional tax for negligence in reporting the
Title VII award; (6) he was entitled to deduct his reimbursable
business expenses; and (7) he was entitled to deduct litigation
expenses of $44,275.00 from his Title VII award. The Tax Court
denied Mr. Brown 's motion for summary judgment and
rejected his arguments that jurisdiction belonged in the Court of
Federal Claims and that a two-year statute of limitations applied.
Following a hearing on the remaining issues, the Tax Court entered
its decision assessing a deficiency and penalties for both 1990
and 1991. Mr. Brown appealed the decision of the Tax Court,
and the Sixth Circuit in its 1999 opinion (copy attached),
rejected all of Mr. Brown 's arguments and affirmed the Tax
Court decision in all aspects. It
also appears that Mr. Brown continued to attack the
jurisdiction of the Tax Court and to insist that his case should
have initially been heard in the United States Court of Federal
Claims. However, this issue has been finally determined by the
decision of the United States Court of Appeals for the Federal
Circuit in the case of James E. Brown v. United States,
2000 WL 1782769, decided on Mr.
Brown has also referred to an earlier decision showing his
efforts to litigate with the Army (Docket Entry No. 12) and the
Army's efforts to transfer the case to the District of Columbia. Brown
v. Marsh, 777 F.2d 8 (D.C. Cir. 1985). The Magistrate Judge
agrees with Mr. Brown that this case has no bearing on the
present motion. While it appears Mr. Brown may have been
treated badly by the Army, this is not a case about the Army. It
is about jurisdiction. The
issue raised in this case is precipitated by the fact that Mr. Brown,
contrary to the instructions furnished in the Notice of
Determination (Docket Entry No. 1, Exhibit A), filed this action
with the District Court rather than with the United States Tax
Court. The Notice of Determination concerning collection
activities under Title 26, Section 6320 and/or Section 6330,
clearly advised Mr. Brown that if he wished to dispute the
determination of the taxes due he must file a petition with the
United States Tax Court for a redetermination within thirty (30)
days. Rather
than following this advice, Mr. Brown filed this petition
in the District Court and the IRS, in their motion, now seeks to
dismiss the matter for lack of jurisdiction. III.
LEGAL DISCUSSION Despite
the lengthy and convoluted petition (Docket Entry No. 1), an even
longer and more convoluted response to the motion to dismiss
(Docket Entry No. 9), and an Errata (Docket Entry No. 12), this
case appears to the Magistrate Judge to boil down to a rather
simple issue: does the Tax Court have jurisdiction in this matter?
If it does, the petition is not properly in front of the District
Court and this case must be dismissed and the petitioner allowed
thirty (30) days to file his petition with the Tax Court. Title
26, United States Code, Section 6330(d)(1) provides: (1)
Judicial review of determination.--The person may, within
30 days of a determination under this section, appeal such
determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. If
a court determines that the appeal was to an incorrect court, a
person shall have 30 days after the court determination to file
such appeal with the correct court. Concerning
the division of jurisdiction between the Tax Court and the
District Court, it appears that the Sixth Circuit in the case of Diefenbaugh
v. Weiss [2000-2 USTC ¶50,839], 2000 WL 1679510 (6th Cir.
(Ohio)) (unpublished opinion, copy attached), has definitively
answered this question. The Diefenbaugh case appears to be
on all fours with the present case. In Diefenbaugh, the
taxpayer sought to challenge the Office of Appeals' adverse
decision regarding his income tax liability by filing a petition
with the District Court rather than the Tax Court. The Sixth
Circuit stated in Diefenbaugh, Thus,
if the §6330 proceeding involves income tax issues, the District
Court does not have jurisdiction to consider the case. Upon
review, we conclude that the District Court properly dismissed Diefenbaugh
's petition for lack of jurisdiction. See Fed.R.Civ.P.
12(h)(3); Friends of Crystal River, 35 F.3d at 1077-78. Willis,
931 F.2d at 395. In his petition, Diefenbaugh sought to
challenge the Office of Appeals's adverse decision regarding his
income tax liabilities for the years 1989 through 1996. The notice
of determination which sustained the IRS's proposed levy,
specifically informed Diefenbaugh that if he desired to
dispute the Office of Appeals's decision, he must file a petition
for redetermination with the Tax Court. Because the Tax Court has
jurisdiction over levies to collect income taxes, it, rather than
the District Court, has exclusive jurisdiction to review the IRS's
levy pursuant to §6330(d)(1). Diefenbaugh
's contention that the Tax Court lacks jurisdiction over his
petition is without merit. Congress has specifically conferred
jurisdiction upon the Tax Court to consider a taxpayer's petition
involving a proposed levy to collect income taxes. See 26
U.S.C. §6330(d)(1)(A). Moreover the Tax Court has the authority
to consider both questions of law and questions of fact with
respect to the types of taxes over which it has jurisdiction. Id.
at **1-2. The
petitioner attempts to avoid this square holding of the Sixth
Circuit by arguing that the instant case involves an issue of an
erroneous refund as opposed to a tax. He states in his response
(Docket Entry No. 9, p. 1) that he relies principally upon the
decision of the District Court for the Middle District of
Tennessee in Ackers v. United States [82-1 USTC ¶9332],
541 F.Supp. 65 (M.D. Tenn. 1981), that an erroneous refund is not
a tax. However, a reading of that case shows that it does not so
hold. Jurisdiction was not an issue in Ackers. The issue
there involved a statute of limitations question and in no way is
analogous or helpful in the present case. Likewise, the
petitioner's reliance on Commissioner v. McCoy [87-2 USTC
¶13,736], 484 U.S. 3, 6-7 (1987), is likewise misplaced. That
case did not hold that interest and penalties on an alleged tax
deficiency are outside the jurisdiction of the Tax Court. Rather,
it held that the issue had not been presented to the Tax Court.
The Tax Court clearly did have jurisdiction to rule on the issue
of a tax deficiency. Interest and penalties were separate and
outside the scope of the petition to the Tax Court. Had the
petitioner in that case wished to challenge the interest and late
payment penalties, the procedure was for the petitioner to pay the
interest and penalties and sue for their refund in the appropriate
federal District Court or in the Claims Court. The petitioner also
cites the case of Moore v. Commissioner [CCH Dec. 53,802],
114 T.C. 171 (2000), for the proposition that the Tax Court does
not have jurisdiction pursuant to 26 U.S.C. §6330(d) over matters
outside its I.R.C. §7442 jurisdiction. The Moore case
dealt with an attempt by the IRS to collect Federal Insurance
Contribution Act taxes (FICA) under section 3131, and employee
income tax withholding under §3401, along with appropriate
penalties. As in this case, the petitioner there had sought relief
through the Appeals Office and had been issued a Notice of
Determination denying his request. The notice in the Moore
case specifically advised him that he had 30 days from the date of
the letter to file a complaint with the appropriate United States
District Court for a redetermination. Instead, Mr. Moore
filed his petition for review with the Tax Court and the Tax Court
held that while it had jurisdiction over income, estate, and gift
taxes, it did not have jurisdiction over withholding and FICA
taxes. The Magistrate Judge reads the Moore case as being
entirely consistent with the position of the Commissioner and this
case. If the Tax Court has jurisdiction, the federal District
Court does not; if the Tax Court does not have jurisdiction, the
federal District Court does. Despite
the petitioner's lengthy, convoluted and unpersuasive arguments in
his memorandum (Docket Entry No. 10), this case does involve a
determination of income taxes for the years 1990 and 1991. The
Sixth Circuit, in Brown v. Commissioner of Internal Revenue
Service, upheld the determination by the Tax Court that Mr. Brown
owed additional taxes for 1990 and 1991. That decision is final. Granted
there was a refund in 1992. Nevertheless, the entire issue of
refund has been consumed by the issue of total taxes due and it is
only income taxes due we are left to deal with. It is apparent
from the record that following that decision, the IRS has
proceeded to attempt to collect the taxes due as a result of that
judgment and has issued assessments which Mr. Brown
challenged through the appeals process. As shown by Exhibit A to
Petition 1, the Appeals Council has denied his request and he is
now free to challenge the matter in the appropriate court. The
appropriate court, since this involves income taxes, is the Tax
Court, as pointed out by the Sixth Circuit in the Diefenbaugh
case. The government concedes, and the statute provides, that
following a dismissal of his case for lack of jurisdiction in this
matter, the plaintiff will have 30 days in which to file his
petition for review with the Tax Court. IV.
RECOMMENDATION For
the reasons set out above, the Magistrate Judge recommends
that the defendant's motion to dismiss for lack of jurisdiction be
granted. Under
Rule 72(b) of the Federal Rules of Civil Procedure, any party has
ten (10) days from receipt of this Report and Recommendation in
which to file any written objections to this Recommendation, with
the District Court. 2 Any party
opposing said objections shall have ten (10) days from receipt of
any objections filed in this Report in which to file any responses
to said objections. Failure to file specific objections within ten
(10) days of receipt of this Report and Recommendation can
constitute a waiver of further appeal of this Recommendation. Thomas
v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985), reh'q
denied, 474 U.S. 1111 (1986). 1
The parties are reminded that Local Rule 8(a)(1) requires that all
exhibits to pleadings should be sequentially numbered with the
pleading itself. Sequential numbering of all exhibits allows the
parties and the Court to make ready reference to any particular
page of exhibits. 2
The petitioner is reminded that under the Local Rules of Court,
pleadings shall not exceed 25 pages without permission of the
Court. [2001-2
USTC ¶50,672] Carlin G. Bartschi and Joyce A. Bartschi,
Plaintiffs v. Thomas L. Tracy, Settlement Officer, P. Thomas
Menaugh, Associate Chief, Appeals, Defendants U.S.
District Court, Dist. Ariz., CIV00-1548-PHX-SRB, BOLTON,
District Judge: Pending
before the Court is Defendants' Motion to Dismiss. (Doc. 13-1).
The Court now rules on the motion. I.
BACKGROUND Plaintiffs,
Carlin G. Bartschi and Joyce A. Bartschi, proceeding pro se,
filed a Complaint against Defendants Thomas L. Tracy, Settlement
Officer, and P. Thomas Menaugh, Associate Chief, Appeals, seeking
judicial review of the Notice of Determination Concerning
Collection Actions issued by the Internal Revenue Service
("IRS"). Plaintiffs raise allegations premised on
certain procedural irregularities involved in the issuance of the
Notice of Determination. In
1998, Congress enacted 26 U.S.C. §6330 as part of the IRS
Restructuring and Reform Act of 1998, Pub.L. No. 105-206. This
statute provides that prior to the issuance of an administrative
tax levy, the IRS must provide the taxpayer with notice of an
opportunity for a Collection Due Process ("CDP") hearing
before the IRS Office of Appeals. 26 U.S.C. §6330(a),(b). A
taxpayer must request a hearing within 30 days of the date notice
of a right to a hearing is provided. 26 U.S.C.
§6330(a)(2),(a)(3)(B). At
the hearing conducted by an appeals officer of the IRS Office of
Appeals, the government is required to provide verification that
all applicable law and administrative procedure requirements have
been met. 26 U.S.C. §6330(c)(1). The taxpayer has the opportunity
to raise any relevant issue relating to the unpaid tax or proposed
levy. 26 U.S.C. §6330(c)(2)(A). The taxpayer can also raise
challenges to the amount of the underlying tax liability if the
taxpayer did not receive any statutory notice of deficiency or did
not otherwise have an opportunity to dispute such tax liability.
26 U.S.C. §6330(c)(2)(B). Within
30 days of the issuance of the determination by the appeals
officer, the taxpayer may appeal the determination to the United
States Tax Court, or if the Tax Court does not have jurisdiction
of the underlying tax liability, to a United States district
court. 26 U.S.C. §6330(d)(1). Plaintiffs'
Complaint states that they received a Notice of Intent to Levy and
notice of their opportunity to request a hearing. The Complaint
alleges that Plaintiffs timely requested a CDP hearing but that
Defendant Tracy and Plaintiff's were unable to agree upon a date
for the hearing and a determination was made in absentia. That
determination, entitled Notice of Determination Concerning
Collection Actions, issued Plaintiffs
also allege that the verification provided by the government,
verifying that all law and administrative requirements had been
met, failed to show that Plaintiffs had been sent a notice of
assessment, that the assessment list had been transmitted, or that
the assessment officer had executed the summary record of
assessment. II.
DISCUSSION Defendants
argue that Plaintiffs' claims against Defendants Tracy and Menaugh
should be dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim. In determining whether a
complaint states a claim for which relief can be granted, all
factual allegations are taken as true and construed in the light
most favorable to the nonmoving party. Enesco Corp. v.
Price/Costco Inc., 146 F.3d 1083, 1085 (9th Cir. 1998). At
this stage of the litigation, "[a] court may dismiss a
complaint only if it is clear that no relief could be granted
under any set of facts that could be proved consistent with the
allegations." Hishon v. King & Spalding, 467 U.S.
69, 73 (1984). A
suit against an IRS employee in his or her official capacity is
essentially a suit against the United States. Gilbert v.
DaGrossa [85-2 USTC ¶9665], 756 F.2d 1455, 1458 (9th Cir.
1985); Hutchinson v. United States [82-1 USTC ¶9405], 677
F.2d 1322, 1327 (9th Cir. 1982). Plaintiffs' Complaint alleges
that Defendants Tracy and Menaugh failed to follow various
procedures involved in the issuance of the Notice of
Determination. The challenged conduct of each Defendant falls
squarely within their official capacities as employees of the IRS
and thus provides no basis for the imposition of personal
liability. To
the extent Plaintiffs attempt to bring claims under Bivens v.
Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403
U.S. 388 (1971), against Defendants Tracy and Menaugh for
violations of their constitutional rights, such claims must also
be dismissed. The Ninth Circuit has refused to recognize a
constitutional violation arising from the collection of taxes. Wages
v. Internal Revenue Service, 915 F.2d 1230, 1235 (9th Cir.
1990). Furthermore, the remedies provided by Congress,
particularly the right to sue the government for a refund of
taxes, foreclose a damage action under Bivens. Id.; McMillen v.
United States Department of Treasury, 960 F.2d 187, 190-91
(1st Cir. 1991). Accordingly, Plaintiffs' claims against
Defendants Tracy and Menaugh should be dismissed and such claims
are properly construed as brought against the United States. Defendants
also move pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure to dismiss the Complaint for lack of subject matter
jurisdiction. When considering a motion to dismiss pursuant to
Rule 12(b)(1), a district court is not restricted to the face of
the pleadings, but may review evidence, such as affidavits and
testimony, to resolve factual disputes concerning the existence of
jurisdiction. Federal Deposit Insurance Corp. v. Nichols,
885 F.2d 633, 635-36 (9th Cir. 1989). It
is well established that the United States as a sovereign is
immune from suit unless it has consented to be sued. United
States v. Dalm [90-1 USTC ¶50,154; 90-1 USTC ¶60,012], 494
U.S. 596, 608 (1990). A waiver of sovereign immunity must be
explicit and is strictly construed in favor of the United States. Id.
The party suing the United States bears the burden of
demonstrating a waiver of immunity. Cominotto v. United States,
802 F.2d 1127, 1129 (9th Cir. 1986). Because
Plaintiffs' suit is, as noted above, against the United States,
the Court lacks jurisdiction unless sovereign immunity has been
explicitly waived by statutory consent to jurisdiction. In the
Complaint, Plaintiffs invoke jurisdiction under 28 U.S.C. §§1331
and 1340 and allege a waiver of sovereign immunity under 5 U.S.C.
§702 and 26 U.S.C. §6330. As
a general grant of jurisdiction, 28 U.S.C. §1331 cannot by itself
be construed as constituting a waiver of the government's
immunity. Hughes v. United States [92-1 USTC ¶50,086], 953
F.2d 531, 539, n.5 (9th Cir. 1992). Likewise, 28 U.S.C. §1340 is
also a general jurisdiction statute which does not waive the
government's sovereign immunity. Id. Plaintiffs
rely on 26 U.S.C. §6330 as a basis for the Court's subject matter
jurisdiction and as a waiver of sovereign immunity. Because they
are not challenging the underlying tax liability, but rather, the
procedural regularity of the assessment, Plaintiffs argue that the
Court has jurisdiction over this action. Defendants argue that
exclusive jurisdiction rests with the United States Tax Court
because even though Plaintiffs claim to contest only procedural
regularity, they are in essence seeking judicial review of a
determination involving their income tax liability. Title
26 U.S.C. §6330(d)(1) provides that within 30 days of the
determination by the appeals office, the taxpayer may seek
judicial review of the determination by filing a petition with the
Tax Court, or, "if the Tax Court does not have jurisdiction
of the underlying tax liability," to the appropriate federal
district court. Here,
Plaintiffs challenge the adverse Notice of Determination issued by
the Appeals Officer following a CDP hearing, finding that the
proposed levy action to collect certain tax liabilities of the
Plaintiffs was appropriate. While Plaintiffs' allegations focus on
certain procedural irregularities, nonetheless, the underlying
action rests on Plaintiffs' income tax liabilities. 1 Section
6330(d)(1), Treasury Regulations §301.6330-1T(f)(2)Q & A-F3,
and the case law make clear that jurisdiction is dependent upon
the underlying tax liability, not whether the claims are
characterized as procedural or substantive. When the IRS's
proposed levy involves an underlying income tax liability,
judicial review over a determination made in a CDP hearing lies in
the United States Tax Court, not the district court. Johnson v.
Commissioner of Internal Revenue [2000-2 USTC ¶50,591], 2000
WL 1041191, *3 (D. Or. 2000); Brown v. Rossotti [2001-2
USTC ¶50,539], 2001 WL 717043, *2-3 (M.D. Tenn. 2001); Sherod
v. Commissioner of Internal Revenue [2001-2 USTC ¶50,507],
2001 WL 584305, *2 (D. Utah 2001); Dimartino v. United States
[2001-1 USTC ¶50,298], 2001 WL 260042, * 2 (D. Nev. 2001); see
also Krugman v. Commissioner [CCH Dec. 53,355], 112 T.C. 230,
236, n. 6 (1999); Treas. Reg. §301.6330-1T(f)(2)Q & A-F-3.
Thus, since the tax liabilities at issue are income taxes, the
United States Tax Court has exclusive jurisdiction. Finally,
Plaintiffs' reliance on the Administrative Procedure Act
("APA"), 5 U.S.C. §702 in support of a waiver of
sovereign immunity is without merit. Section 702 does waive the
government's sovereign immunity in certain instances, however, the
APA does not provide an independent basis for subject matter
jurisdiction in the district courts. Tucson Airport Authority
v. General Dynamics Corp., 136 F.3d 641, 645 (9th Cir. 1998).
Accordingly, the APA cannot provide this Court with subject matter
jurisdiction. See Gallo Cattle Co. v. United States Department
of Agriculture, 159 F.3d 1194, 1198 (9th Cir. 1998). For
the reasons discussed above, Plaintiffs' claim for judicial review
of the IRS determination is dismissed for lack of subject matter
jurisdiction. Pursuant to 26 U.S.C. §6330(d)(1)(B), 2 Plaintiffs
shall have 30 days from the date of this Order to file their
appeal with the United States Tax Court. IT
IS ORDERED granting Defendants' Motion to Dismiss. (Doc. 13-1). 1
The Declaration of Thomas L. Tracy submitted by Defendants
establishes that the type of tax at issue is the Plaintiffs'
individual income tax liabilities. Plaintiffs do not dispute this
fact. 2
26 U.S.C. §6330(d)(1)(B) provides: If a court determines that the
appeal was to an incorrect court, a person shall have 30 days
after the court determination to file such appeal with the correct
court. [2001-2
USTC ¶50,747] Eleanor M. Glass, Plaintiff-Appellant v. Internal
Revenue Service, Roy Romero, Associate Chief of the Internal
Revenue Service, Defendants-Appellees (CA-10),
U.S. Court of Appeals, 10th Circuit, 01-2112, Eleanor
M. Glass, Roswell, N.M., pro se. Bruce R. Ellisen, Sara Ann
Ketchum, Department of Justice, Washington, D.C. 20530, Jon E.
Fisher, Department of Justice, Dallas, Tex., for
defendants-appellees. Before:
SEYMOUR, MCKAY and BRORBY, Circuit Judges. è
Caution: This court has designated this opinion as NOT FOR
PUBLICATION. Consult the Rules of the Court before citing this
case.ç ORDER
AND JUDGMENT * SEYMOUR,
Circuit Judge: Ms.
Eleanor M. Glass, proceeding pro se, appeals the district
court's dismissal of her case. Ms. Glass brought suit in district
court under the Internal Revenue Code and the U.S. Constitution
against agents of the Internal Revenue Service (IRS) contesting
that agency's determination of her liability for income taxes,
seeking to halt the agency's collection efforts, and claiming the
agency violated her Constitutional and statutory procedural
rights. The district court dismissed her suit for lack of subject
matter jurisdiction. The district court also denied Ms. Glass's
motion requesting that the district court issue an order stating
its findings of fact and conclusions of law. For the reasons
stated below, we affirm the denial of the motion for a memorandum
of decision, affirm the dismissal of Ms. Glass's other claims for
lack of jurisdiction, but hold the suit should have been dismissed
"without prejudice." 1 While
appellant is correct that Federal Rule of Civil Procedure 52(a)
requires that a court, in a trial without a jury, make findings of
fact and conclusions of law, that rule also provides that it is
"sufficient if the findings of fact and conclusions of law
are stated orally and recorded in open court following the close
of the evidence. . . ." Fed. R. Civ. P. 52(a). The district
court stated in its order denying Ms. Glass's motion that its
statements in open court would serve as adequate statements of the
court's findings of fact and conclusions of law. We agree these
statements are adequate for this court to conclude that the basis
for the district court's dismissal was lack of subject matter
jurisdiction. We therefore hold the district court did not err in
denying Ms. Glass's motion for a memorandum or opinion providing
in writing the factual and legal basis of the dismissal. We
next address the jurisdictional issues. The Internal Revenue
Service notified Ms. Glass in 1998 that it had determined she was
deficient in her tax payments for failing to pay income tax for
the years 1994-96. Ms. Glass was later notified that the agency
was pursuing a levy on her property to collect on the alleged tax
deficiency. After the IRS issued the levy determination notice,
Ms. Glass requested and obtained an administrative hearing with
the agency, at which she argued unsuccessfully that she has no tax
liability under the Tax Code. Ms. Glass then sought to challenge
the IRS's proceedings against her by bringing suit in federal
district court, alleging a host of statutory and constitutional
violations. The district court dismissed all of her claims with
prejudice for lack of subject matter jurisdiction. The
U.S. Tax Court has jurisdiction over many types of claims related
to the Tax Code, Title 26. The Tax Court's jurisdiction is
exclusive for certain types of claims, thus depriving the district
court of jurisdiction over those claims. With regard to Ms.
Glass's claims that she is not liable for taxes, the IRS
determined that she is liable for income taxes, a type of tax
liability over which the Tax Court has jurisdiction. 26 U.S.C.
§§7441-42. See also 26 U.S.C. §§1, 61, 63 (imposing
income tax liability, and defining gross income and taxable
income). The Tax Court has exclusive jurisdiction over petitions
for the redetermination of tax deficiencies, the means of
challenging the merits of a tax deficiency determination. 26
U.S.C. §6213. With regard to Ms. Glass's claim challenging the
levy on her property, the Tax Court has exclusive jurisdiction
over appeals of levy determinations as long as it has jurisdiction
over the underlying tax liability that the IRS has alleged. 26
U.S.C. §6330(d)(1)(A). As stated above, the Tax Court has
jurisdiction over the underlying liability at issue in this case,
so it also has exclusive jurisdiction over Ms. Glass's levy
determination appeal. Therefore the district court did not err in
dismissing her claims under the Tax Code for lack of jurisdiction. Moreover,
the district court has no jurisdiction over Ms. Glass's
constitutional procedural due process claims. District courts have
no jurisdiction over civil claims challenging taxes unless
litigants first pay the assessed tax and then raise these claims
in a refund suit. See 26 U.S.C. 7421(a) (prohibiting suits
to restrain assessment or collection of taxes); see also Flora
v. United States [60-1 USTC ¶9347], 362 U.S. 145, 4 L.Ed.2d
623, 80 S.Ct. 630 (1960) (holding 28 U.S.C. §1346(a), which gives
district courts jurisdiction over civil suits challenging tax
assessments, requires full payment of assessed tax prior to suit).
Therefore, it was proper to dismiss these claims for lack of
jurisdiction as well. The
district court dismissed Ms. Glass's claims with prejudice.
However, dismissal for lack of subject matter jurisdiction is not
an adjudication on the merits, and dismissal should have been
without prejudice. See Figueroa v. Buccaneer Hotel, Inc.,
41 V.I. 502, 188 F.3d 172, 182 (3rd Cir. 1999) (holding claims
dismissed for lack of jurisdiction should be dismissed without
prejudice even if litigant may not later pursue those claims in
federal court). We
AFFIRM the district court's denial of the motion for a
memorandum of decision, AFFIRM the district court's
dismissal for lack of jurisdiction, but REVERSE the
district court's dismissal with prejudice and REMAND to
enable the district court to dismiss this action without
prejudice. AFFIRMED
IN PART, REVERSED IN PART, AND REMANDED. *
After examining appellant's brief and the appellate record, this
panel has determined unanimously that oral argument would not
materially assist the determination of this appeal. See
Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). The case is
therefore submitted without oral argument. This order and judgment
is not binding precedent, except under the doctrines of law of the
case, res judicata, or collateral estoppel. The court
generally disfavors the citation of orders and judgments;
nevertheless, an order and judgment may be cited under the terms
and conditions of 10th Cir. R. 36.3. 1
In addition to the district court's dismissal on jurisdictional
grounds and its denial of the motion for a memorandum or opinion,
Ms. Glass also raises numerous substantive claims on appeal, which
essentially dispute her liability under the U.S. Tax Code and the
power of and proper procedure for the IRS and the Tax Court to
determine and collect on this liability. These claims include
whether: 1) the Tax Court has authority to adjudicate whether a
liability exists or a deficiency exists; 2) Ms. Glass was denied
her due process rights in the administrative hearing provided by
the agency; 3) the district court erred when it defined her wages
as income; 4) the IRS has used "proper procedures" in
its assessments of her tax liability; and 5) the IRS has
adequately established the fact and amount of her actual tax
deficiency. Aplt. br. at 11-12. Because we affirm the district
court's disposition of this case on jurisdictional grounds, as
discussed below, we do not reach the merits of Ms. Glass's
additional claims. [2002-1
USTC ¶50,249] Andrew Johnson, Plaintiff v. United States,
Defendant U.S.
District Court, Dist. Utah, No. Div., 1:00cv0149 ST, STEWART,
District Judge: Plaintiff
has asked the Court to review the decision by the Internal Revenue
Service ("IRS") not to allow Plaintiff to participate in
a Collection Due Process (CDP) heating before the Appeals Office
of the IRS. Plaintiff objects to the IRS application of
administrative levies in order to satisfy what the IRS alleges are
unpaid balances on past income tax assessments. Defendant has
filed a motion to dismiss, arguing inter alia that the
Court does not have jurisdiction in this case. Having reviewed the
briefs by the parties submitted in support of these motions, the
relevant law, and being fully advised of the issues presented, the
Court hereby enters the following order. 26
U.S.C. §6330(d)(1) provides for judicial review of a CDP
determination. However, 26 U.S.C. §6330(d)(1) also provides that
review be conducted by the Tax Court, unless the Tax Court does
not have jurisdiction, in which case the appeal goes to a district
court. Because Plaintiff is contesting issues of income tax
liability, the Tax Court--not the district Court--has jurisdiction
to hear Plaintiff's appeal. 26 U.S.C. §6214(a); 26 C.F.R.
§301.6330-1T(f)(Q.-F3, A.-F3); see also, Hart v. Internal
Revenue Service [2001-1 USTC ¶50,328], 2001 WL 3936999 (E.D.
Pa. 2001) (dismissing case for failure to file with Tax Court).
The Court, therefore, does not have jurisdiction to hear
Plaintiff's complaint, and Defendant's motion to dismiss for lack
of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) is
GRANTED. 26
U.S.C §6330(d)(1) provides that if a court determines that an
appeal was made to an incorrect court, a party shall have 30 days
after the court determination to file such appeal with the correct
court." Accordingly, Plaintiff has 30 days to file his appeal
with the Tax Court. SO
ORDERED. [2002-1
USTC ¶50,294] Paul L. Hickey, Nellida F. Hickey, Plaintiffs v.
United States of America, Defendant U.S.
District Court, Dist. Nev., CV-S-01-0929-PMP (PAL), PRO,
District Judge: Presently
before this Court is a Motion to Dismiss. Defendant United States
of America ("Defendant") filed United States' Motion to
Dismiss (Doc. #3) on I.
LEGAL STANDARD In
considering a motion to dismiss, this Court must presume all
well-pleaded allegations of material fact and must draw all
reasonable inferences in favor of the non-moving party. Knevelbaard
Dairies v. Kraft Foods, Inc., 232 F.3d 979, 984 (9th Cir.
2000). However, the Court is not "required to accept as true
allegations that are merely conclusory, unwarranted deductions of
fact, or unreasonable inferences." Sprewell v. Golden
State Warriors, 231 F.3d 520, 527-28 (9th Cir. 2000). There is
a strong presumption against dismissing an action for failure to
state a claim. Gilligan v. Jamco Dev. Corp., 108 F.3d 246,
249 (9th Cir. 1997). The issue is not whether Plaintiff will
ultimately prevail, but whether he may offer evidence in
support of his claims. Davis v. Monroe County Bd. of Educ.,
526 U.S. 629, 654 (1999) (quoting Scheuer v. Rhodes, 416
U.S. 232, 236 (1974)). Consequently, the Court may not grant a
Motion to Dismiss for failure to state a claim "unless it
appears beyond doubt that the Plaintiff can prove no set of facts
in support of his claim which would entitle him to relief." Conley
v. Gibson, 355 U.S. 41, 45-46 (1957). The
liberal rules of notice pleading set forth in the Federal Rules of
Civil Procedure do not require a plaintiff to set out in detail
the facts supporting his claim. Yamaguchi v. United States
Dep't of the Air Force, 109 F.3d 1475, 1481 (9th Cir. 1997)
(quoting Conley, 355 U.S. at 47). All the Rules require is
a "short and plain statement" that adequately gives the
defendant "fair notice of what the plaintiff's claim is and
the grounds upon which it rests." Yamaguchi, 109 F.3d
at 1481. Therefore, a plaintiff merely must plead sufficiently to
"establish a basis for judgment against the defendant." Id.
at 1481. Further, a claim is sufficient if it shows that the
plaintiff is entitled to any relief which the court can grant,
even if the complaint asserts the wrong legal theory or asks for
improper relief. Haddock v. Board of Dental Exam'rs, 777
F.2d 462, 464 (9th Cir. 1985). II.
DISCUSSION Plaintiffs
contend that they received a Notice of Levy form issued in an
attempt to collect income tax owed by the Plaintiffs for 1996 and
1997. (Compl. ¶2.) Plaintiffs allege that they requested a
Collection Due Process ("CDP") hearing (Compl. ¶2), and
that the resulting CDP hearing did not comply with the
requirements imposed by law. (Compl. ¶4.) Defendant
has brought a motion to dismiss for lack of subject matter
jurisdiction. Defendant argues that the United States has not
waived its sovereign immunity, that the Tax Court properly has the
power of judicial review, and that 26 U.S.C. §6330(d) establishes
only a limited waiver of sovereign immunity. In response,
Plaintiffs claim that the United States Tax Court does not have
jurisdiction to hear their claim, that notice from the Secretary
or his delegate of their right to a CDP hearing is a
jurisdictional prerequisite for the CDP hearing, and that various
legal issues bar the United States Tax Court from having
jurisdiction. 1 Of
primary importance in the present case is whether or not this
Court has jurisdiction to hear Plaintiffs' claims. The section of
the United States Code at issue, 26 U.S.C. §6330, specifies that
"[n]o levy may be made on any property or right to property
of any person unless the Secretary has notified such person in
writing of their right to a hearing under this section before such
levy is made." 26 U.S.C. §6330(1). The statute also provides
for judicial review: (1)
Judicial review of determination.--The person may, within
30 days of a determination under this section, appeal such
determination-- (A)
To the Tax Court (and the Tax Court shall have jurisdiction
with respect to such matter); or (B)
if the Tax Court does not have jurisdiction of the
underlying tax liability, to a district court of the United
States. 26
U.S.C. §6330(d) (emphasis added). Thus, the Tax Court has the
power to hear appeals from determinations pursuant to 26 U.S.C.
§6330. 26 U.S.C. §6330(1)(A). Only if the Tax Court does not
have jurisdiction over the "underlying tax liability"
does a United States District Court have jurisdiction. 26 U.S.C.
§6330(1)(B). See also True v. Commissioner of the Internal
Revenue Serv. [2000-2 USTC ¶50,634], 108 F.Supp.2d 1361 (M.D.
Fla. 2000) ("A claimant is required to bring a §6330 appeal
in the Tax Court, so long as the Tax Court has jurisdiction of the
underlying tax liability."). If the Tax Court has
jurisdiction over the present claim, then, this Court cannot hear
Plaintiffs' case. The
Tax Court is an Article I court and has limited jurisdiction to
"rule on deficiencies assessed by the government on
taxpayers." Crawford v. Commissioners of Internal Revenue
[2001-2 USTC ¶50,648], 266 F.3d 1120, 1122 (9th Cir. 2001). See
also 26 U.S.C. §7441; Freytag v. Commissioner of Internal
Revenue [91-2 USTC ¶50,321], 501 U.S. 868, 891 (1991)
("The Tax Court's function and role in the federal judicial
scheme closely resemble those of the federal district courts,
which indisputably are 'Courts of Law.' Furthermore, the Tax Court
exercises its judicial power in much the same way as the federal
district courts exercise theirs."). Despite the fact that the
Tax Court's jurisdiction is ostensibly limited to hearing disputes
about the government's assessment of deficiencies, however, the
Tax Court also has the jurisdiction to hear constitutional claims.
Rager v. Commissioner of Internal Revenue [85-2 USTC
¶9783], 775 F.2d 1081, 1083 (9th Cir. 1985) ("[W]e have
often upheld Tax Court decisions which were based on a
constitutional inquiry.") (citing sources). See also
Crawford [2001-2 USTC ¶50,648], 266 F.3d at 1123 ("We
have previously held that Tax Courts, which are Article I courts,
have jurisdiction to consider constitutional questions in the
context of deciding deficiencies."). Even
drawing all inferences in favor of Plaintiffs, as this Court must,
this Court finds that the Tax Court has jurisdiction to hear
Plaintiffs' claims. Knevelbaard Dairies, 232 F.3d at 984.
The Plaintiffs' claims involve a dispute over a proposed levy by
the Internal Revenue Service in response to an alleged income tax
liability. This is precisely the kind of claim over which the Tax
Court has jurisdiction. See Krugman v. Commissioner of Internal
Revenue [CCH Dec. 53,355], 12 [112] T.C. 230, 236 n.6 (1999)
("[T]he Tax Court has jurisdiction to review determinations
under sec. 6330 relating to proposed levies."). Further, the
fact that Plaintiffs have alleged constitutional violations in the
present case does not preclude the Tax Court from hearing all of
their claims. Rager [85-2 USTC ¶9783], 775 F.2d at 1083; Crawford
[2001-2 USTC ¶50,648], 266 F.3d at 1123. Because the Tax Court
has jurisdiction over Plaintiffs' claims, this Court cannot hear
those claims. 26 U.S.C. §6330(1)(B). This
Court's dismissal of Plaintiffs' claims on subject matter
jurisdiction grounds will not be prejudicial to Plaintiffs. As the
Defendant pointed out in its Motion to Dismiss, Plaintiffs have
thirty days in which to bring their claim in the Tax Court. 26
U.S.C. §6330(d)(1). See also True v. Commissioner of the
Internal Revenue [2000-2 USTC ¶50,634], 108 F.Supp.2d 1361,
1364 (M.D. Fla. 2000) ("[Plaintiff] will not be materially
prejudiced by this decision because 26 U.S.C. §6330(d)(1) allows
[Plaintiff] to bring his claim in the appropriate court within
thirty (30) days of dismissal of this action."). III.
CONCLUSION IT
IS THEREFORE ORDERED that Defendant United States of America's
Motion to Dismiss (Doc. #3) is hereby GRANTED. Plaintiffs Paul L.
Hickey and Nellida F. Hickey's Complaint is hereby DISMISSED in
its entirety. 1
Plaintiffs contend that several legal issues preclude the Tax
Court from having jurisdiction. Specifically, Plaintiffs make four
claims in support of their contention that the Tax Court does not
have jurisdiction: (1) that the "notice inviting plaintiff to
request the hearing was not sent by the Secretary of the Treasury
or his delegate as required by 26 U.S.C. §6330(a)(1)"; (2)
that the "appeals officer did not receive 'verification from
the Secretary that all the requirements of any applicable law and
administrative procedures [were] met,' " in violation of 26
U.S.C. §6330(c)(1); (3) that Plaintiffs were denied
representation at the hearing; and (4) "[w]hether or not
there is such thing as an underlying income tax 'liability' as a
matter of law." (Pls.' Objection to Def.'s Mot. to Dismiss at
3.) [2002-1
USTC ¶50,319] Donald P. Pinsonneault, Plaintiff v. United States
of America, Defendant U.S.
District Court, Dist. Nev., CV-S-01-0919 RLH (RJJ), HUNT,
District Judge: Before
the Court is Defendant's Motion to Dismiss and for Summary
Judgment (#4), filed BACKGROUND For
the calendar years 1993, 1994, 1995, 1996, and 1997, Plaintiff
indicated on his federal tax return that he had an income of $0.
For the years 1993 and 1994 Plaintiff requested a full refund of
income tax withheld by his employer. For the years 1995, 1996, and
1997, Plaintiff claimed to be exempt and therefore paid no federal
income tax. For each of these years, the Internal Revenue Service
assessed a penalty for filing a frivolous return. The IRS sent
Plaintiff notification of the filing of a federal tax lien to
collect back taxes and civil penalties and notified Plaintiff of
the opportunity to request a hearing pursuant to 26 U.S.C.
§6330(b). On
On
DISCUSSION 26
U.S.C. §6331 provides that if any person liable to pay any tax
neglects or refuses to do so within ten days after notice and
demand for payment, the IRS is authorized to collect such tax by
levy upon property belonging to the taxpayer. Before proceeding
with the collection by way of levy, however, the IRS must provide
the taxpayer notice of the right to a hearing on the matter. Id.
§6330(a). The taxpayer has a right, within thirty days of the
section 6330 notice, to request a hearing with the IRS Office of
Appeals. Id. §6330(a)(3)(B). At the hearing, the taxpayer
may raise any issue relevant to the unpaid tax and the proposed
levy, including challenges to the propriety of the levy and offers
of collection alternatives. Id. §6330(c)(2). The
impartial IRS Appeals Officer who conducts the hearing must then
formulate his or her determination based on: (1) the verification
that the requirements of any applicable law or administrative
procedure have been met; (2) the issues raised by the taxpayer;
and (3) the proper balance between the need for efficient tax
collection and the legitimate concern that any collection action
be no more intrusive than necessary. See id. §6330(c)(3).
Following the hearing, the Appeals Officer sends a Notice of
Determination to the taxpayer that summarizes the matters raised
during the hearing and responds to any offers or objections made
by the taxpayer. If the taxpayer is dissatisfied with the
administrative determination, he may seek judicial review in the
United States Tax Court within 30 days of receiving the Notice or,
if the Tax Court does not have jurisdiction over the underlying
tax liability, the appropriate United States District Court. Id.
§6330(d)(1). Review is limited to matters actually raised at the
administrative hearing. Temp. Treas. Reg. §301.6330-1T(f) (2001). Here
Plaintiff challenges both his underlying tax liability and the
determination of the IRS hearing officer with respect to the
frivolous return penalties assessed against him. The Court will
address separately Defendant's motion to dismiss for lack of
subject matter jurisdiction and motion for summary judgment. I.
Motion to Dismiss for Lack of Subject Matter Jurisdiction In
general, the United States is immune from suit under the doctrine
of sovereign immunity unless it explicitly waives such immunity. United
States v. Mitchell, 445 U.S. 535, 538 (1980). The plaintiff
has the burden of establishing that the government has waived
sovereign immunity and to identify the specific statutory
provision containing the waiver. See Baker v. United States,
817 F.2d 560, 562 (9th Cir. 1987). The waiver must be express and
will not be implied. Lane v. Pena, 518 U.S. 187, 192
(1996). The scope of a waiver of sovereign immunity is to be
strictly construed in favor of the sovereign. Dep't of the Army
v. Blue Fox, Inc., 525 U.S. 255, 261 (1999). Plaintiff
relies on 26 U.S.C. §6330(d) as a basis for the Court's subject
matter jurisdiction and the United States' waiver of sovereign
immunity. Under Section6330(d), an individual may seek judicial
review of the determination of an IRS hearing officer, an employee
and representative of the United States. However, the person
appealing the determination must bring suit in the United States
Tax Court unless the Tax Court does not have jurisdiction over the
type of underlying tax liability involved. 26 U.S.C. §6330(d). Plaintiff
challenges the IRS's determination that he owed taxes for the
years 1995, 1996, and 1997. See Complaint ¶¶52-58. The
Tax Court has exclusive jurisdiction over petitions for the
redetermination of income tax deficiencies. 26 U.S.C. §2613. As
such, the Tax Court has exclusive jurisdiction to hear Plaintiff's
income tax-related claims. This Court, therefore, has no
jurisdiction to hear these claims. See 26 U.S.C.
§6330(d)(1). Plaintiff's challenge to the levy related to his tax
liability for the years 1995, 1996, and 1997 will therefore be
dismissed. In accordance with 26 U.S.C. §6330(d), Plaintiff has
thirty days to file his appeal with the U.S. Tax Court. II.
Motion for Summary Judgment Pursuant
to Rule 56(c) of the Federal Rules of Civil Procedure, summary
judgment is proper only "where the record before the court on
the motion reveals the absence of any material facts and [where]
the moving party is entitled to prevail as a matter of law." Zoslaw
v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982)
(quoting Portland Retail Druggists Ass'n v. Kaiser Found.
Health Plan, 662 F.2d 641, 645 (9th Cir. 1981)), cert.
denied, 460 U.S. 1085 (1983). "A material issue of fact
is one that affects the outcome of the litigation and requires a
trial to resolve the parties' differing versions of the
truth." Sec. & Exch. Comm'n v. Seaboard Corp., 677
F.2d 1289, 1293 (9th Cir. 1982) (citations omitted). The
party moving for summary judgment has the burden of showing the
absence of a genuine issue of material fact, and the court must
view all facts and draw all inferences in the light most favorable
to the responding party. See Adickes v. S.H. Kress & Co.,
398 U.S. 144, 157 (1970). See also Zoslaw v. MCA Distrib. Corp.,
693 F.2d 870, 883 (9th Cir. 1982), cert. denied, 460 U.S.
1085 (1983). Once this burden has been met, "[t]he opposing
party must then present specific facts demonstrating that there is
a factual dispute about a material issue." Zoslaw, 693
F.2d at 883 (citation and internal quotes omitted). Section
6330(d) does not specify the standard of review a district court
should apply to an appeal of a Notice of Determination. However,
the legislative history indicates that the court should conduct a de
novo review only "where the validity of the tax liability
was properly at issue at the administrative hearing." H.
Conf. Rept. 105-599, 105th Cong.2d Sess. 266 (1998). Where the
amount of the underlying tax liability is not properly part of the
appeal, the court reviews a Notice of Determination for abuse of
discretion. See Sego v. Comm'r of Internal Revenue [CCH
Dec. 53,938], 114 T.C. 604, 609-10 (2000); Goza v. Comm'r of
Internal Revenue [CCH Dec. 53,803], 114 T.C. 176, 179-80
(2000). Here
the IRS hearing officer did not abuse his discretion when he
determined that the requirements of applicable law had been met
and that Plaintiff had been afforded statutorily-required
administrative procedures. See 26 U.S.C. §6330(c)(1). The
hearings officer also attempted to address the issues raised by
Plaintiff; however, Plaintiff did not address any of the
statutorily-specified issues that may be raised at a collection
due process hearing, such as spousal defenses, the appropriateness
of an intended collection action, and possible alternative means
of collection. See 26 U.S.C. §6330(c); see also Sego
[CCH Dec. 53,938], 114 T.C. at 609. Instead Plaintiff attempted to
revisit the issue of his underlying tax liability at the
collection hearing at issue. Appeals
of the underlying claims are only appropriate at a collection due
process hearing if the plaintiff did not receive notice of tax
liability, Goza [CCH Dec. 53,803], 114 T.C. at 182, or
"had no previous opportunity to contest the validity of those
claims." Kintzler v. Internal Revenue Serv. [2001-2
USTC ¶50,696], 2001 WL 1137294, at *2 (D. Nev. 2001). Here
Plaintiff both received notice of his tax liability and had an
opportunity to contest those claims. The only other issues raised
by Plaintiff at the collection due process hearing have been
deemed frivolous by the courts. See, e.g., Olsen v. United
States [85-1 USTC ¶9401], 760 F.2d 1003, 1005 (9th Cir. 1985)
(rejecting "wages are not income" argument); Browder
v. Comm'r of Internal Revenue [CCH Dec. 46,775(M)], T.C.M.
1990-408 (rejecting claim that IRS employee was not a
"delegate" of the Secretary of the Treasury). Plaintiff
has not, and cannot, prove any set of facts in support of his
claim which would entitle him to relief and has failed to
demonstrate that there are any material issues of fact. Summary
judgment is therefore appropriate. See Kintzler [2001-2
USTC ¶50,696], 2001 WL 1137294, at *3 (granting summary judgment
against tax protester seeking appeal of IRS Notice of
Determination). CONCLUSION Accordingly,
and for good cause appearing, IT
IS HEREBY ORDERED that Defendant's Motion to Dismiss and for
Summary Judgment (#4) is GRANTED. [2002-1
USTC ¶50,341] Gary L. Sepp and Patricia A. Sepp, Plaintiffs v.
Thomas L. Tracy, Settlement Officer Internal Revenue Service, P.
Thomas Menaugh, Associate Chief, Appeals Internal Revenue Service,
Defendants U.S.
District Court, Dist. Ariz., CIV. 00-1724-PHX-SMM, MCNAMEE,
Chief District Judge: Pending
before the Court is Defendants' Motion to Dismiss (Doc. #8)
pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure
to state a claim upon which relief may be granted and Federal
Rules of Civil Procedure 12(b)(1) for lack of subject matter
jurisdiction. After considering the arguments raised by the
parties in their briefing, the Court now issues the following
ruling. BACKGROUND Plaintiffs
initiated this action on STANDARD
OF REVIEW Federal
Rule of Civil Procedure 12(b)(1) permits a defendant to bring a
motion to dismiss asserting a "lack of subject matter
jurisdiction." Fed. R. Civ. P. 12(b)(1). When subject matter
jurisdiction is challenged under Rule 12(b)(1), the plaintiff has
the burden of proving jurisdiction in order to survive the
defendant's motion to dismiss. See Tosco v. Comtys. for a
Better Env't, 236 F.3d 495, 499 (9th Cir. 2000); Stock
West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th
Cir. 1989). "A plaintiff suing in a federal court must show
in his pleading, affirmatively and distinctly, the existence of
whatever is essential to federal jurisdiction, and, if he does not
do so, the court, on having the defect called to its attention or
on discovering the same, must dismiss the case, unless the defect
be corrected by amendment." Smith v. McCullough, 270
U.S. 456, 459 (1926). A case is properly dismissed when the court
lacks the statutory authority or constitutional power to
adjudicate the case. See, e.g., Tosco, 236 F.3d at 499. Further,
a court should not dismiss a claim unless convinced beyond a doubt
that the plaintiff can prove no set of facts in support of the
claim that would entitle the plaintiff to relief. See Conley v.
Gibson, 355 U.S. 41, 45-46 (1957); Parks Sch. of Bus., Inc.
v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). The
complaint is construed in the light most favorable to the
plaintiff. See W. Mining Council v. Watt, 643 F.2d 618, 624
(9th Cir. 1981). The Court must "presum[e] that general
allegations embrace those specific facts that are necessary to
support the claim." Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992). Legal conclusions, however, couched as
factual allegations are not given a presumption of truthfulness. See
Jones v. Cmty. Redevelopment Agency, 733 F.2d 646, 649-50 (9th
Cir. 1984). In
deciding a motion to dismiss, the court may consider allegations
contained in the complaint, exhibits attached to the complaint,
matters of public record, orders of record in the lawsuit, and
other materials subject to judicial notice. See, e.g., Parks
Sch. of Bus. 51 F.3d at 1484. The Ninth Circuit has held that
"documents whose contents are alleged in the complaint and
whose authenticity no party questions, but which are not
physically attached to the pleading, may be considered in ruling
on a Rule 12(b)(6) motion to dismiss." Branch v. Tunnell,
14 F.3d 449, 454 (9th Cir. 1994). In Branch, the Ninth
Circuit went on to state that "[s]uch consideration does 'not
convert the motion to dismiss into a motion for summary judgment.'
" Id. (quoting Romani v. Shearson Lehman Hutton,
929 F.2d 875, 879 n.3 (1st Cir. 1991)). DISCUSSION I.
Subject Matter Jurisdiction In
their Motion to Dismiss, Defendants contend that since the hearing
from which judicial review is being sought involves income tax
liabilities, exclusive jurisdiction lies with the United States
Tax Court, regardless of whether Plaintiffs are challenging
procedural regularity or the merits of the underlying assessment.
In response, Plaintiffs suggest that their claims raise only
procedural issues and, therefore, do not involve the type of
underlying tax liability necessary to vest jurisdiction in the
United States Tax Court. 26
U.S.C. §6330(d)(1) of the Internal Revenue Code provides the
following procedure for judicial review of agency decisions: (d)
Proceeding after hearing. (1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction with
respect to such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the United States. While
it is arguable that Congress only intended, when drafting §6330,
to grant the United States Tax Court jurisdiction over the
calculus of IRS assessments regarding income tax liability,
Plaintiffs fail to cite any case law to support such an
interpretation. Indeed, following such a rationale would do no
more than allow a plaintiff a second opportunity to litigate
United States Tax Court decisions in the district courts by simply
redrafting their complaints to allege that it was the procedure
followed and not the determination of the IRS that caused the
injury. Generally accepted notions of res judicata cannot
be so easily circumvented, no matter how careful the
word-smithing. Logic and analogous case law support the
interpretation that jurisdiction over "underlying tax
liability" includes jurisdiction over tax issues involving
procedure. See Bartschi v. Tracy [2001-2 USTC ¶50,672],
2001 WL 1338795 (D. Ariz. 2001); Johnson v. Commissioner of
Internal Revenue [2000-2 USTC ¶50,592], 2000 WL 1041191 (D.
Or. 2000); Dimartino v. United States [2001-1 USTC
¶50,298], 2001 WL 260042 (D. Nev. 2001); Treas. Reg.
§301.6330-1T(f)(2)Q & A-F-3. Additionally, Plaintiffs do not
dispute the Declaration of Thomas L. Tracy, submitted by
Defendants, establishing that the type of tax at issue is
Plaintiffs' individual income tax liability. (See Decl. of
Thomas L. Tracy at 1). Thus, the United States Tax Court has
exclusive jurisdiction. II.
Failure to State a Claim Defendants
argue that Plaintiffs' claims against Defendants in their
individual capacities should be dismissed pursuant to Federal Rule
of Civil Procedure 12(b)(6) for failure to state a claim. In
response, Plaintiffs contend that sovereign immunity is waived and
suggest that the general procedures set forth in 5 U.S.C.
§§701-704 provide the method for taking judicial review to this
Court. As
the Defendants suggest, a suit against an IRS employee in his or
her official capacity is essentially a suit against the United
States. See Dugan, 372 U.S. at 620; Gilbert v. Dagrossa
[85-2 USTC ¶9665], 756 F.2d 1455, 1458 (9th Cir. 1985).
Plaintiffs' Complaint alleges failure, on the part of Defendants,
to follow various procedures in the course of their determination
of Plaintiffs' income tax liability. Plaintiffs' allegations are
limited to the actions of Defendants in their official capacity
and, therefore, fail to provide the necessary basis for the
imposition of personal liability under Gilbert. To
the extent Plaintiffs attempt to bring claims under Bivens
against Defendants for violations of their constitutional rights,
such claims must also be dismissed. As Defendants suggest, the
Ninth Circuit has refused to recognize a constitutional violation
arising from the collection of taxes. See Wages v. Internal
Revenue Service, 915 F.2d 1230, 1235 (9th Cir. 1990). Thus,
Plaintiffs' Complaint against the individual Defendants must be
dismissed. Such claims can only properly name the United States as
a defendant. CONCLUSION For
the reasons discussed above, Plaintiffs have failed to establish
subject matter jurisdiction and have failed to name the proper
party in their cause of action. As such, Defendants' Motion to
Dismiss is granted. Accordingly, IT
IS THEREFORE ORDERED that Defendant's Motion to Dismiss (Doc. #8)
is GRANTED. |