Offenses by Officers and Employees of U.S.(1)

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7214- Offenses by U.S. Employees: Offenses by Officers and Employees of the United States

 

Part 2

   

[2002-1 USTC ¶50,356] Bill Max Overton, Plaintiff v. United States of America , Defendant

U.S. District Court, West. Dist. Okla., CIV-01-601-L, 3/19/2002

[Code Secs. 7402 and 7609 ]

Jurisdiction: District court: Sufficiency of complaint: Civil damages: Omnibus Taxpayer Bill of Rights: Summons to nontaxpayers: Notice to taxpayer.--The government was entitled to dismissal of an individual's complaint seeking damages for alleged violations of the Omnibus Taxpayer Bill of Rights for failure to state a claim. The taxpayer's complaint contained only conclusory allegations. In addition, the taxpayer failed to support his contention that the IRS violated Code Sec. 7609 by seeking bank records without sending him the required notice.
[Code Secs. 7214 and 7433 ]

Jurisdiction: District court: Sufficiency of complaint: Civil damages: Omnibus Taxpayer Bill of Rights: Offenses by officers and employees of the United States.--The government was entitled to dismissal of an individual's complaint seeking damages for alleged violations of the Omnibus Taxpayer Bill of Rights for failure to state a claim. The taxpayer's complaint contained only conclusory allegations. In addition, the taxpayer did not identify the IRS agent he claimed had knowingly demanded a greater sum than authorized by law, nor did he allege that the agent demanded the sum for the performance of any duty.
ORDER

LEONARD, District Judge:

On April 19, 2001 , plaintiff filed this action seeking damages for alleged violations of the Omnibus Taxpayer Bill of Rights. This matter is before the court on defendant's motion to dismiss and plaintiff's motion for summary judgment. Defendant seeks to dismiss the complaint for lack of subject matter jurisdiction, failure to state a claim, and on the ground that the claims are barred by the doctrine of res judicata. The standard governing a motion to dismiss is clear. A complaint should not be dismissed 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) (footnote omitted); Meade v. Grubbs, 841 F.2d 1512, 1526 (10th Cir. 1988). The complaint must be construed in the light most favorable to the plaintiff and all factual allegations in the complaint must be presumed to be true. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Meade, 841 F.2d at 1526. Furthermore, in examining plaintiff's complaint, the court must liberally construe plaintiff's allegations, as he is appearing pro se. Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). However, "in analyzing the sufficiency of the plaintiff's complaint, the court need accept as true only the plaintiff's well-pleaded factual contentions, not his conclusory allegations." Id. This is because "conclusory allegations without supporting factual averments are insufficient to state a claim on which relief can be based." Id.

Based on this standard, the court concludes that defendant's motion to dismiss for failure to state a claim must be granted. ¹ Plaintiff's complaint contains nothing more than conclusory allegations that the Internal Revenue Service ("IRS") violated various provisions of the Tax Code. Counts One through Sixteen simply allege that the IRS violated 26 U.S.C. §7609 by seeking to obtain records from 16 different banks without sending plaintiff the required notice. There are, however, no facts alleged that indicate how or when these alleged violations occurred. In his seventeenth claim, plaintiff asserts that he is entitled to damages because a "Revenue officer knowingly demanded greater sum than authorized by law". Complaint at 11. Plaintiff contends that this constitutes a violation of 26 U.S.C. §7614(a)(2), but he does not identify the revenue officer or agent who allegedly violated the statute nor does he allege that the unauthorized sum was demanded "for the performance of any duty", which is a prerequisite for liability under §7214(a)(2). See Overton v. United States [2000-1 USTC ¶50,148], 2000 WL 14724 at *4 (10th Cir. 2000). Moreover, from the exhibit attached to plaintiff's complaint, it appears that plaintiff cannot, within the confines of Fed. R. Civ. P. 11, make such an allegation as it appears that this claim is based on the assessment of a penalty for plaintiff's filing of an allegedly frivolous tax return. See Complaint at Exhibit B. As plaintiff's allegations are simply insufficient as a matter of law, dismissal is warranted.

In sum, the United States ' Motion to Dismiss Plaintiff's Complaint (Docket No. 4) is GRANTED. This action is dismissed without prejudice. In light of this ruling, Plaintiff's Motion for Summary Judgment (Docket No. 7); the United States ' Motion to Strike Plaintiff's Purported Motion and Brief for Summary Judgment (Docket No. 8); Plaintiff's Motion for Jury Trial (Docket No. 16); Plaintiff's Motion to Set Jury Trial (Docket No. 17); and Plaintiff's Motion to Compel Discovery (Docket No. 31) are DENIED. Judgment will issue accordingly.

It is so ordered this 19th day of March, 2002.

¹ The court, however, denies defendant's motion to dismiss for lack of subject matter jurisdiction. Construing plaintiff's allegations liberally, as the court must, the court finds that it has jurisdiction over this matter pursuant to 28 U.S.C. §1346(a)(1) and 26 U.S.C. §7432.

 

 

 

 

[2002-2 USTC ¶50,613] Bill Max Overton, Plaintiff-Appellant v. United States of America , Defendant-Appellee

(CA-10), U.S. Court of Appeals, 10th Circuit, 02-6117, 8/22/2002, 2002 U.S. App. LEXIS 17607. Affirming a District Court decision, 2002-1 USTC ¶50,356

[Code Secs. 7402 and 7609 ]

Jurisdiction: District court: Sufficiency of complaint: Civil damages: Omnibus Taxpayer Bill of Rights: Summons to nontaxpayers: Notice to taxpayer.--The government was entitled to dismissal of an individual's complaint seeking damages for alleged violations of the Omnibus Taxpayer Bill of Rights for failure to state a claim. The taxpayer's complaint contained only conclusory allegations. In addition, the taxpayer failed to support his contention that the IRS violated Code Sec. 7609 by seeking bank records without sending him the required notice.
[Code Secs. 7214 and 7433 ]

Jurisdiction: District court: Sufficiency of complaint: Civil damages: Omnibus Taxpayer Bill of Rights: Offenses by officers and employees of the United States.--The government was entitled to dismissal of an individual's complaint seeking damages for alleged violations of the Omnibus Taxpayer Bill of Rights for failure to state a claim. The taxpayer's complaint contained only conclusory allegations. In addition, the taxpayer did not identify the IRS agent he claimed had knowingly demanded a greater sum than authorized by law, nor did he allege that the agent demanded the sum for the performance of any duty.

Bill Max Overton, Midland , Tex. , pro se. David English Carmack, Curtis C. Pett, Phyllis J. Gervasio, Department of Justice, Washington , D.C. 20530 , for defendant-appellee.

Before: SEYMOUR, HENRY and BRISCOE, 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 ^*

HENRY, Circuit Judge:

After examining the briefs and 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); 10th Cir. R. 34.1(G). The case is, therefore, ordered submitted without oral argument.

Bill Max Overton, appearing pro se, filed an action raising seventeen claims against the United States ; each claim sought damages for alleged violations of the Omnibus Taxpayer Bill of Rights, Pub. L. No. 100-647, Title VI, Subtitle J (codified as amended in scattered sections of 26 U.S.C.), which Congress passed on November 10, 1988 . The government moved, pursuant to Fed. R. Civ. P. 8, 12(b)(1) and 12(b)(6), to dismiss Mr. Overton's complaint.

Construing Mr. Overton's allegations liberally pursuant to Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991), the district court determined it did have jurisdiction over this matter via 28 U.S.C. §1346(a)(1) and 26 U.S.C. §7432. The district court dismissed Mr. Overton's complaint, without prejudice, for failure to state a claim. The district court also denied Mr. Overton's motion for recusal. Mr. Overton now appeals.

Sixteen of Mr. Overton's allegations contend that the government violated 26 U.S.C. §7609 by seeking to obtain records from sixteen different banks without sending Mr. Overton any notice. We agree with the district court's conclusion that these allegations fail to state a claim because "no facts alleged . . . indicate[] how or when these alleged violations occurred." Rec. doc. 56, at 2, at 2 (Dist. Ct. Order, filed March 19, 2002 ).

Mr. Overton's remaining allegation charges that he is entitled to damages because a "Revenue officer knowingly demanded greater sum than authorized by law" in violation of 26 U.S.C. §7214(a)(2). Rec. doc. 1, at 11 (Complaint, filed Apr. 19, 2001 ). Apparently, Mr. Overton is challenging the government's assessment of his 1998 tax return as excessive. Mr. Overton does not identify the revenue officer or agent who allegedly violated the statute. In addition, a taxpayer may file suit for damages under this section only after a criminal conviction against the revenue officer or agent has been procured under this section. See Brunwasser v. Jacob [78-2 USTC ¶9603 ], 453 F.Supp. 567, 572-73 (E.D. Pa. 1978), aff'd, 605 F.2d 1194 (3d Cir. 1979); see also Detwiler v. United States [76-1 USTC ¶9140 ], 406 F.Supp. 695, 760 (E.D. Pa. 1975), aff'd, 544 F.2d 512 (3d Cir. 1976). We therefore conclude that the district court properly dismissed this count of Mr. Overton's complaint without prejudice.

Finally, we turn to Mr. Overton's contention that the district court acted with bias and prejudice against him and improperly failed to grant his recusal motion. We review the denial of a motion to recuse only for an abuse of discretion. United States v. Burger, 964 F.2d 1065, 1070 (10th Cir. 1992). "Conclusions, rumors, beliefs and opinions are not sufficient to form a basis for disqualification." Hinman v. Rogers , 831 F.2d 937, 939 (10th Cir. 1987). Rather, Mr. Overton must allege "with required particularity the identifying facts of time, place, persons, occasion and circumstances." Id.

In this case, Mr. Overton's motion is based solely on his own conclusions, beliefs and opinions, and a review of the record shows that the district court did not act with bias or prejudice in any of its rulings. We conclude that the district court did not abuse its discretion in denying Mr. Overton's recusal motion. ¹

Accordingly, we AFFIRM the orders of the district court.

^* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and 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 light of our resolution of the issues raised by Mr. Overton, we DENY Mr. Overton's Motion to Call Forward the Entire Trial Court Record. In that motion, Mr. Overton alleges that the district court erred in striking from the record certain lists of evidence pertaining to his allegations of bias and prejudice. We note that Mr. Overton filed this motion after the district court entered judgment against him. Moreover, the evidence to which Mr. Overton refers consists only of his unsupported allegations.

 

 

 

 

[2003-1 USTC ¶50,409] Robert Kahre, Plaintiff v. United States of America, as corporator and alter ego of the International Monetary Fund and the International Bank for Reconstruction and Development, Internal Revenue Service, an entity of unknown origin, Jerry L. Johnson, P. Thomas Menaugh, Sharilee Code, Nancy Mikesell, Linda Drake, John Doe individuals 1-50, Richard Roe Business or Government entities 51-100, Defendants.

U.S. District Court, Dist. Nev. ; CV-S-02-0375-LRH-LRL, March 10, 2003 .

[ Code Sec. 6330]

Collection Due Process: Jurisdiction: Tax Court v. District court. --

A federal district court lacked jurisdiction over an individual's challenge to an adverse Collection Due Process determination. Because the taxpayer was contesting both his underlying tax liability and the procedure by which the determination was made, judicial review lay with the Tax Court.

[ Code Sec. 7422]

Collection Due Process: Jurisdiction: Refund suit: Conditions precedent to suit: Payment of entire tax. --

An individual's challenge to an adverse Collection Due Process determination was dismissed. To the extent that the taxpayer sought a tax refund, the court lacked jurisdiction over his claim because he failed to pay the taxes in full before bringing suit.

[ Code Secs. 7402 and 7421]

Collection Due Process: Jurisdiction: Anti-Injunction Act: Declaratory Judgment Act: Constitutionality: Bivens-type claims. --

An individual's challenge to an adverse Collection Due Process determination was dismissed for lack of jurisdiction. His requests for injunctive and declaratory relief from the collection of taxes were barred by the Anti-Injunction and Declaratory Judgment Acts. Moreover, his attempt to bring Bivens-type claims against various federal employees for alleged violations of his constitutional rights was also dismissed because the Ninth Appellate Circuit does not recognize constitutional violations arising from the collection of taxes.

[ Code Secs. 7214, 7432 and 7433]

Collection Due Process: Damages: Improper assessment and collection actions: Crimes: Fraud or extortion by revenue agents: Exhaustion of administrative remedies. --

An individual who unsuccessfully challenged an adverse Collection Due Process determination was not entitled to an award of damages for the IRS's purportedly improper assessment and collection actions. Code Sec. 7214, which criminalizes certain acts of fraud or extortion committed by revenue agents, was inapplicable herein because there was no basis for implying a civil cause of action from that statute. Moreover, the taxpayer's failure to plead sufficient facts in his complaint to show that he had exhausted his administrative remedies in connection with damage claims under Code Sec. 7432 and Code Sec. 7433, resulted in the dismissal of those claims without prejudice.

[ Code Sec. 7402]

Collection Due Process: Jurisdiction: Sanctions: Fed. R. Civ. P. 11: Abusive conduct. --

An individual who, in his opposition to the government's motion to dismiss his challenge to an adverse Collection Due Process determination, included unsubstantiated, vituperative statements with regard to the character and professional ethics of the government's attorney was assessed sanctions for his abusive conduct. He was also admonished to refrain from making personal attacks in any further submissions to the court.

ORDER

HICKS, District Judge: Pending before the Court is Defendants' motion to dismiss (#10) Plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), filed on August 15, 2002. The contents of the Plaintiff's opposition to the motion to dismiss, filed on September 16, 2002, and subsequent errata filed two days later prompted the Defendants to file a motion for rule 11 sanctions (#15), on October 22, 2002. Plaintiff filed an opposition to Defendant's motion for sanctions and a countermotion for sanctions (#16) on November 6, 2002. Plaintiff then filed a motion for oral argument and setting of hearing date on Defendant's motion for sanctions and his counter-motion for sanctions (#17), on the same day, as well as a memorandum in support of this motion. Defendants opposed Plaintiff's counter-motion for sanctions and motion for oral argument on November 21, 2002.

I. Background

On March 18, 2002, Plaintiff filed a 385 paragraph complaint, wherein he set forth 18 claims for relief alleging, inter alia, various violations of the Internal Revenue Code and of his constitutional rights resulting from assessment and collection activity undertaken by the Internal Revenue Service (IRS). It appears from his own exhibits that Plaintiff failed to file federal income tax returns for his 1992 and 1993 tax years. (Compl., vol. 2, ex. 60). In December of 1997, the IRS made assessments against the Plaintiff for income tax, interest, and penalties for both years. Id.

On March 8, 2001, the IRS sent to the Plaintiff a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. (Compl., vol. 1, ex. 1). The notice informed the Plaintiff that a Notice of Federal Tax Lien with regard to his income tax liabilities assessed for the years 1992 and 1993 had been filed and that he had a right to request a Collection Due Process Hearing. Id. Plaintiff filed a timely request for the hearing. (Compl., vol. 1, ex. 2).

Following the request, Defendant Jerry Johnson, and IRS Appeals Officer, conducted the hearing, and on February 14, 2002, mailed a Notice of Determination to the Plaintiff, which informed the Plaintiff that the tax lien should not be withdrawn. (Compl., vol. 2, ex. 74). The Notice also informed the Plaintiff of his right to dispute the determination in court by filing a petition with the United States Tax Court for a redetermination within 30 days from the date of the notice. Id. Plaintiff, instead chose to file the instant action in this court.

In his prayer for relief. Plaintiff requests that the Court release and expunge the Notice of Federal Tax Lien from public records; reverse the February 14, 2002, Notice of Determination, determine that the February 14, 2002, Notice of Determination violated his right to due process, declare that the 1992 and 1993 federal income tax assessments made against him are void, unlawful and made in violation of existing laws and regulations; declare that the assessment and collection activity used against the Plaintiff with regard to the 1992 and 1993 tax years was unlawful, oppressive and in violation of law; declare that the Plaintiff has no tax liability for 1992 and 1993; declare that the Plaintiff is not required to make any income tax return pertaining to 1992 and 1993; declare that the Gold Reserve Act of 1934, 48 Stat. 337, the Special Drawing Rights Act, 82 Stat. 188, the Articles of Agreement of the International Monetary Fund, and the Multilateral Economic Assistance Act of 1992, 106 Stat. 1633 are unconstitutional and void, or in the alternative, enjoin Congress from appropriating any funds to be used in connection to the acts; hold Defendants liable for any damages that were proximately caused by the alleged unauthorized disclosure of Plaintiff's return information; that the Defendants be turned over to the appropriate prosecuting agency or grand jury for investigation of the alleged disclosure or return information in violation of 26 U.S.C. s 7214; and that Plaintiff be awarded compensatory, punitive and consequential damages. (Compl., p. 80-83, Mot. Dismiss, p.3).

II. Analysis

Defendants contend that Plaintiff's complaint must be dismissed for lack of jurisdiction and for failure to state a claim upon which relief may be granted. The Court agrees.

A. Fed.R.Civ.P. 12(b)(1): Subject Matter Jurisdiction

Fed.R.Civ.P. 12(b)(1) permits a defendant to bring a motion to dismiss asserting a "lack of subject matter jurisdiction." Where subject matter jurisdiction is challenged under this rule, the plaintiff has the burden of proving jurisdiction in order to survive the defendant's motion. See Tosco v. Comtys. for a Better Env't, 236 F.3d 495, 499 (9th Cir. 2000). 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 entitled the plaintiff to relief. See Conely v. Gibson, 355 U.S. 41, 45-56 (1957). In deciding a motion to dismiss, the court may consider allegations contained in the complaint, exhibits attached to the complaint, as well as such affidavits and testimony as needed to resolve factual disputes concerning the existence of jurisdiction. See, e.g., Parks Scho. of Bus., Inc. v. Syminton, 51 F.3d 1480, 1484 (9th Cir. 1995); Federal Deposit Insurance Corp. v. Nichols, 885 F.2d 633, 635-36 (9th Cir. 1989). The Court is also cognizant of the fact that the Plaintiff is proceeding pro se, and as such his pleadings are to be liberally construed and held to a less stringent standard than a formal pleading drafted by a lawyer. See Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, courts should not assume the role of advocate for the pro se litigant. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).

The United States has sovereign immunity from suit unless it expressly waives that immunity by consent to suit. ¹ See United States v. Dalm [ 90-1 USTC ¶50,154; 90-1 USTC ¶60,012], 494 U.S. 596, 608 (1990). Sovereign immunity cannot be "avoided by naming officers and employees of the United States as defendants." Gilbert v. DaGrossa [ 85-2 USTC ¶9665], 756 F.2d 1455, 1458 (9th Cir. 1985). The burden is on the taxpayer to find and prove an "explicit waiver of sovereign immunity." Lonsdale v. United States [ 90-2 USTC ¶50,581], 919 F.2d 1440, 1444 (10th Cir. 1990). Therefore, a suit must be dismissed absent a showing of an express waiver of immunity by the United States to suit.

Plaintiff bases jurisdiction in this case on 28 U.S.C. §§1331, 2201, 1346, 26 U.S.C. §§6330(d)(1)(B), 7214(a), 7433, and 7431. 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). Plaintiff's reliance on 26 U.S.C. §6330 as a basis for the Court's subject matter jurisdiction and as a waiver of sovereign immunity is also misplaced. Section 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, it appears from the complaint that the Plaintiff is challenging both his underlying tax liability and the procedure by which the determination was made. However, when the underlying action rests on a plaintiff's "underlying income tax liability, judicial review over a determination made in a Collection Due Process hearing lies in the United States Tax Court, not the district court." Bartschi v. Tracy [ 2001-2 USTC ¶50,672], 88 A.F.T.R.2d 2001-6223, 2001 WL 1338795, *3 (D. Ariz. Sept. 5, 2001). See also Dimartino v. United States [ 2001-1 USTC ¶50,298], 87 A.F.T.R.2d 2001-1002, 2001 WL 260042, *2 (D. Nev. Jan. 29, 2001). Since Plaintiff's income tax liability is clearly at issue in this case, to the extent that Plaintiff's complaint contains claims relating to his underlying income tax liability and the Notice of Determination emanating from the Collection Due Process hearing, this Court does not have subject matter jurisdiction over those claims. ²

Nor can subject matter jurisdiction over Plaintiff's claims be based on 28 U.S.C. §1346(a)(1). This section requires a full payment of the tax before a refund suit can be maintained in a federal district court. Flora v. United States [ 60-1 USTC ¶9347], 362 U.S. 145 (1960). See also 26 U.S.C. §7422(a). Plaintiff does not claim that he has paid any of the tax liability at issue here to the IRS, therefore, he may not maintain a refund suit under section 1346 in this court.

Likewise, the Court is without any jurisdiction to grant Plaintiff the injunctive relief he seeks, as the Anti-Injunction Act provides that "[n]o 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 clearly withdraws from the courts jurisdiction the ability to grant injunctive relief despite the possible existence of jurisdiction over the suit in which such relief is sought. Moreover, the Court finds that no statutory or judicial exemptions to the Act are applicable to this case, see Cool Fuel. Inc. v. Connett [ 82-2 USTC ¶9559], 685 F.2d 309, 314 (9th Cir. 1982) (finding a refund action is an adequate remedy of law), and therefore, section 7421 does not provide subject matter jurisdiction for Plaintiff's claims for injunctive relief.

The Declaratory Judgment Act, 28 U.S.C. §2201 also does not grant subject matter jurisdiction for the declaratory relief Plaintiff requests. The statute clearly states that "[i]n a case of actual controversy within its jurisdiction, except with regards to Federal taxes ... any court of the United States ... declare the rights and other legal relations of any interested party ...." (Emphasis added). Plaintiff's request to have the Court review the IRS's actions with respect to the assessment and collection activities regarding the Plaintiff's federal income tax liabilities fall squarely within the exceptions of the Anti-Injunction Act and the Declaratory Judgment Act, and consequently, must be dismissed.

B. Fed.R.Civ.P. 12(b)(6): Failure to State a Claim

To resolve a Rule 12(b)(6) motion, the court must (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 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. Bd. of Dental Exam'r, 777 F.2d 462, 464 (9th Cir. 1985).

To the extent that Plaintiff attempts to bring claims against individual Defendants under Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388 (1971), for violations of his constitutional rights, such claims must also be dismissed. ³ The Ninth Circuit has refused to recognized a constitutional violation arising from the collection of taxes. Wages v. Internal Revenue Service, 915 F.2d 1230, 1235 (9th Cir. 1990). The Court is also aware of Plaintiff's contentions that the individual Defendants are not officers of the IRS, but agents of the International Monetary Fund, and that various statutes allow suit against foreign agents. These arguments have already been addressed and disposed of by another district court in Nevada involving the Plaintiff in this case. See Anderson v. Kahre, 87 A.F.T.R.2d 2001-989, 2001 WL 260081 *2 (D. Nev. Jan. 23, 2001).

In counts one through nine and eleven through fourteen, the Plaintiff claims that the assessment and collection actions of the IRS were in violation of the law and he is entitled to damages pursuant to 26 U.S.C. §§7214, 7432, and 7433.

Section 7214 criminalizes certain acts of fraud and extortion committed by revenue officers or agents. As such, there is "no basis for implying a civil cause of action" from this federal statute. Nordbrock v. United States [ 2000-1 USTC ¶50,247], 96 F.Supp.2d 944, 948 (D. Ariz. 2000) (citing cases). Section 7214 does not grant jurisdiction nor does it waive the government's sovereign immunity. Id. Any claim based on this statute must be dismissed.

Sections 7432 and 7433 of the Internal Revenue Code waive the sovereign immunity of the United States with regard to civil actions for damages where any officer or employee of the IRS knowingly or negligently fails to release a lien on the property of the taxpayer, or recklessly, intentionally or negligently disregards any provision of the Internal Revenue Code in connection with any collection of federal tax with respect to a taxpayer. Both provisions require a plaintiff to exhaust administrative remedies before filing suit. See 26 U.S.C. §§7432(d), and 7433(d). Failure to exhaust deprives the Court of jurisdiction. See Information Resources Inc. v. United States [ 92-1 USTC ¶50,053], 950 F.2d 1122 (5th Cir. 1992).

Here, Plaintiff has not plead sufficient facts in his complaint to show he has exhausted his administrative remedies. Berridge v. Heiser [ 98-1 USTC ¶50,122], 993 F.Supp. 1136, 1149 (S.D. Ohio 1997) (Plaintiff bears the burden of pleading, production, and proof). The Court will dismiss Plaintiff's claims regarding sections 7432 and 7433 without prejudice. If the Plaintiff has in fact followed the applicable treasury regulations and exhausted his administrative remedies, he may file an amended complaint containing only section 7432 and 7433 claims against the United States.

In count ten of the complaint, Plaintiff alleges that certain actions taken in the course of the assessment and collection of the tax liabilities assessed against him constitute unauthorized disclosures in violation of 26 U.S.C. §§6103 and 7213(a), and he is entitled to damages pursuant to 26 U.S.C. §7431. This is incorrect, however, as the Ninth Circuit has recently held that section 7433's exclusivity provision bars a suit for unauthorized disclosure of return information when the alleged disclosure occurs in connection with tax collection activity. Schwarz v. United States [ 2001-1 USTC ¶50,111], 234 F.3d 428, 433 (9th Cir. 2000). As noted above, Plaintiff has not made a showing to the Court that he has exhausted his administrative remedies as required by section 7433, and therefore, like the previous claims, this claim must be dismissed without prejudice.

Count ten also alleges that individual Defendants committed unauthorized inspections of his returns and/or return information by preparing, reviewing and signing the Summary Record? of Assessments on December 1, 1997, December 8, 1997, and May 3, 1999, respectively. If the individual Defendants did in fact inspect the returns during their preparation of the Summary Records of Assessments, such inspections would be authorized by 26 U.S.C. §6103(h)(1). Section 6103(h)(1) provides that "[r]eturns and return information shall, without written request, be open to inspection by or disclosure to offers and employees of the Department of the Treasury whose official duties require such inspection or disclosure for tax administration purposes." Tax administration includes assessment, collection, enforcement, litigation, publication, and statistical gathering function under such laws, statutes, or conventions. 26 U.S.C. §6103(B)(4)(b). Consequently, the allegation of damages pursuant to 7431 for wrongful inspection and/or disclosure of Plaintiff's returns and return information fail to set forth a claim upon which relief may be granted and should be dismissed.

C. Fed.R.Civ.P. 11: Motion for Sanctions

On October 22, 2002, the Defendants filed a motion for Rule 11 sanctions, premised on the contents of Plaintiff's opposition to the Defendant's motion to dismiss. Specifically, Plaintiff attacked the character and professional ethics of Defense Counsel Virginia C. Lowe, describing her as "[b]eing grossly, corrupt, fraudulent, amoral, unethical, and a prostitute ...." (Opp'n, p. 25). Plaintiff went on to state that Ms. Lowe "is a known and consummate liar, corrupt, amoral and unethical." Additionally, offensive remarks can be found on pages 4 and 6 of the Plaintiff's opposition as well.

According to Ms. Lowe's declaration, she has complied with the procedural requirements of Fed.R.Civ.P. 11, in submitting the motion. (Lowe Decl., ¶2). In response, Plaintiff has filed his own motion for sanctions, and a motion for oral argument on the matter.

Rule 11 empowers federal courts to impose sanctions upon any signer of a paper "when a motion is frivolous, legally unreasonable, or without factual foundation, or brought for an improper purpose." Operating Engineers Pension Trust v. G.C. Wallace, Inc., 159 F.R.D. 536, 540 (D. Nev. 1994). Abusive language toward opposing counsel can constitute harassment and has no place in documents filed before the Court. See Coats v. Pierre, 890 F.2d 728, 734 (5th Cir. 1989).

Plaintiff's decision to include unsubstantiated, vituperative statements with regard to the character and professional ethics of Ms. Lowe plainly constitutes a violation of Rule 11. Id. The question then becomes what is the proper sanction for the Plaintiff's conduct. Monetary sanctions ordinarily are payable to the court because the purpose of Rule 11 is deterrence rather than compensation. See Johnson v. A.W. Chesterton Co., 18 F.3d 1362, 1365 (7th Cir. 1994). However, in certain circumstances, awards of fees and costs to the opposing party are authorized. See Fed.R.Civ.P. 11(c)(1)(A); Margolis v. Ryan, 140 F.3d 850, 854-55 (9th Cir. 1998). In this case, Defendants request that Plaintiff be sanctioned $1,500,00, which would cover Defendants fees and act as a deterrent to future harassment by the Plaintiff. The Court agrees and sanctions Plaintiff in the amount of $1,500.00, and admonishes the Plaintiff to refrain from making personal attacks in any further submissions to the Court.

IT IS THEREFORE ORDERED that Defendants' motion to dismiss (#10) is GRANTED and any and all of Plaintiff's claims for relief other than those claims based on 26 U.S.C. §§7432 and 7433, are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction and failure to state a claim.

IT IS FURTHER ORDERED that any and all of Plaintiff's claims for relief that state causes of action against the United States of America on the basis of 26 U.S.C. §§7432 and 7433 are DISMISSED WITHOUT PREJUDICE for failure to exhaust administrative remedies. Plaintiff may amend his complaint within 30 days of this order to comply with the contents herein. He may not include the IRS or any individual Defendants in any amended complaint.

IT IS FURTHER ORDERED that Defendants' motion for rule 11 sanctions (#15) is GRANTED and sanctions are imposed upon Plaintiff in the amount of $1,500.00 payable to the Clerk of Court for United States District Court of Nevada.

IT IS FURTHER ORDERED that Plaintiff's counter-motion for sanctions (#16) and motion for oral argument (#17) are both DENIED.

¹ Entities such as the IRS, are not amenable to suit, as they are not real parties in interest. See Blackmar v. Guern. 342 U.S. 512, 514 (1952).

² Even though Plaintiff filed his complaint in an improper Court, Plaintiff may re-file his complaint as it perturns to his underlying tax liability in Tax Court. See 26 U.S.C. §6330(d).

³ Such a suit would also be barred by the statute of limitations for a personal injury claim in Nevada. See Nev. Rev. Stat. 11.190(4)(e).

 

 

 

 

[2003-2 USTC ¶50,539] Bill Max Overton, Plaintiff v. United States of America, Defendant.

U.S. District Court, West. Dist. Texas, Middland-Odessa Div.; MO-02-CA-169, May 27, 2003 .

[ Code Secs. 7214 and 7433]

Collection actions: Unauthorized actions: Civil damages: Cause of action: Revenue agent: Criminal conviction. --

The district court granted the government's motion to dismiss an individual's suit alleging improper assessment of taxes because the claim was not related to the collection of taxes. Although the taxpayer's suit was not explicit, the court construed it as seeking damages against the U.S. pursuant to Code Sec. 7433, which applies only to certain unauthorized collection actions. Further, the taxpayer's claim under Code Sec. 7214 was dismissed because the requirement that there be a criminal conviction against a revenue agent before maintaining such an action was not fulfilled.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND DENYING DEFENDANT'S REQUEST FOR AN ORDER PROHIBITING FUTURE ACTIONS AGAINST DEFENDANT AND ITS EMPLOYEES REGARDING TAXES

JUNELL, District Judge: BEFORE THE COURT are Defendant's Motion to Dismiss and For Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes filed January 28, 2003 ; Plaintiff's Reply to Defendant's Answer to the Complaint, filed February 10, 2003 ; Defendant's Supplemental Motion to Dismiss and For Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes, filed February 14, 2003 ; and Plaintiff's Reply to Defendant's Motion to Deny Due Process, filed on February 27, 2003 . On May 8, 2003 , the Court held a hearing on Defendant's Motion to Dismiss and For Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes. After due consideration of the filings of the parties, as well as the arguments made at the hearing on May 8, the Court is of the opinion that Defendant's Motion to Dismiss should be GRANTED, but Defendant's Request for Order Prohibiting Future Actions Against Defendant and Its Employees should be DENIED.

STANDARD OF REVIEW

The standard of review for motions to dismiss under 12(b)(1) is the same as the standard of review for failure to state a claim upon which relief can be granted under Rule 12(b)(6). Hospital Bldg. Co. v. Rex Hosp. Trustees, 425 U.S. 738, 742, n.1 (1976). When considering a motion to dismiss for failure to state a claim, the Court accepts all well-pleaded facts as true, and views them in a light most favorable to the non-movant. See Capital Parks, Inc. v. Southeastern Advertising and Sales System, Inc., 30 F.3d 627, 629 (5th Cir. 1994) (citations omitted). The Court also may "consider matters of which [it] may take judicial notice," Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir. 1996), and matters of public record. See 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure §1357 (2d Ed. 1990). A district court need not resolve unclear questions of law in favor of the non-movant. See Kansa Reinsurance Co. v. Congressional Mortgage Corp., et al., 20 F.3d 1362, 1366 (5th Cir. 1994) (citation omitted). A motion under Rule 12(b)(6) should be granted only if it appears beyond doubt that the plaintiff could prove no set of facts in support of his claim that would entitle him to relief. See Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).

FACTUAL AND PROCEDURAL HISTORY

On November 21, 2002, Plaintiff Bill Max Overton, proceeding pro se, filed his Original Complaint, in which he alleges that Defendant United States of America unreasonably demanded payments for the filing of frivolous returns in 1998 and 2000. Plaintiff states that under §6241 of the Taxpayer Bill of Rights, he may recover damages for unreasonable actions taken by the Internal Revenue Service ("IRS") in connection with the collection of Federal taxes. Plaintiff further claims that the IRS violated Internal Revenue Code §7214 by knowingly demanding a sum greater than that authorized by law when it demanded payments for frivolous returns in 1998 and 2000.

On January 28, 2003, Defendant moved to dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. In its Motion to Dismiss, Defendant claims that Plaintiff fails to allege a violation of the Internal Revenue Code. Therefore, Defendant requests that Plaintiff's claim be dismissed. Additionally, Defendant asks the Court to enter an Order prohibiting Plaintiff from filing future actions against Defendant and its employees regarding taxes because Plaintiff has a history of filing frivolous pleadings.

In response to Defendant's Motion to Dismiss, Plaintiff filed a Reply Brief on February 10, 2003. In his reply, Plaintiff states that he has presented a claim for which relief may be granted and that the entry of an order prohibiting future filings would deny his right to due process.

Subsequently, Defendant responded to Plaintiff's Reply on February 14, 2003. In its Supplemental Motion to Dismiss, Defendant reiterates its request for dismissal of Plaintiff's Complaint. Further, Defendant states that if Plaintiff is requesting that Defendant prove liability on the frivolous returns, the case be dismissed for lack of jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1).

Finally, on February 27, 2003, Plaintiff filed another reply to Defendant's Motion to Dismiss. In his final reply, Plaintiff simply restates the arguments he previously presented in his Original Complaint and first Reply Brief.

DISCUSSION

1. 26 U.S.C. §§7433 and 7214

Defendant seeks to dismiss Plaintiff's Complaint for failure to state a claim upon which relief can be granted. Defendant's Motion to Dismiss states that although Plaintiff's Complaint does not specifically refer to Internal Revenue Code §7433, it arguably can be construed under the section. According to Defendant, §7433 allows a taxpayer to bring a civil action for damages against the United States when an officer or agent of the Internal Revenue Service recklessly, intentionally or negligently disregards any provision of the Internal Revenue Code in connection with the collection of taxes. According to Defendant, although Plaintiff could bring suit under §7433 if his complaint involved the collection of taxes, he cannot maintain an action under the section here because his claim involves the wrongful assessment of taxes. Thus, according to Defendant, Plaintiff has failed to allege a violation of §7433 and has failed to state a claim upon which relief can be granted under the section.

Further, Defendant claims that Plaintiff has failed to meet the criteria to bring a cause of action under section §7214 of the Internal Revenue Code. Defendant states that an action may only be maintained under §7214 after an officer or agent has been criminally convicted for the illegal assessment of taxes. Therefore, Defendant concludes, since Plaintiff has failed to allege that an employee was criminally convicted for the illegal assessment of taxes, Plaintiff cannot maintain a cause of action under §7214.

In response to Defendant's arguments, Plaintiff cites to the Taxpayer's Bill of Rights, not §7214, and states that the provisions of the section provide for civil redress, not criminal sanctions. Therefore, Plaintiff argues, his complaint should not be dismissed because he has stated a legitimate claim and he should be granted the relief he seeks. However, for the reasons discussed below, the Court finds that Plaintiff fails to state a claim upon which relief may be granted under either §7433 or §7214.

Although Plaintiff does not specifically cite to §7433, the language he quotes from the Taxpayer Bill of Rights has been codified within that section of the Internal Revenue Code. Nevertheless, Plaintiff cannot maintain an action under §7433. Section 7433 is a provision that allows for civil damages for certain unauthorized collection actions, but not for the improper assessment of taxes. Shaw v. United States [ 94-1 USTC ¶50,254], 20 F.3d 182, 184 (5th Cir. 1994). The instant action is not a collection action, rather it involves the assessment of taxes. Therefore, because the claim brought by Plaintiff is not related to a collection action, it cannot be maintained under §7433 and his complaint must be dismissed.

Further, with regard to his claim brought under §7214, Plaintiff states that Defendant recklessly or intentionally disregarded a provision of the Internal Revenue Code or a regulation promulgated under the code in violation of the section. However, §7214 sets forth the remedies available against an employee of the IRS who engages in criminal behavior when acting pursuant to a revenue law of the United States. Thus, a taxpayer may only file suit under §7214 if a criminal conviction has been procured against a revenue officer or agent. Rains v. Internal Revenue Service [ 82-2 USTC ¶9679], 1982 U.S. Dist. LEXIS 15933, *7 (W.D. Tex. 1982) (citing Brunwasser v. Jacob [ 78-2 USTC ¶9603], 453 F.Supp. 567, 573 (W.D. Pa. 1978), aff'd 605 F.2d 1194 (3rd Cir. 1978). Plaintiff has failed to present the name of any officer or agent convicted for the illegal collection of taxes. Accordingly, he has failed to present a claim for which relief may be granted under the section and his claim pursuant to §7214 must be dismissed.

2. Order Prohibiting Future Filings

Defendant requests that the Court enter an order prohibiting Plaintiff from filing any further income tax related complaints. Defendant requests such an order because the Tenth Circuit has previously warned Plaintiff that the continued filing of frivolous lawsuits may result in the imposition of filing restrictions. Defendant notes that this is the third frivolous action filed by Plaintiff under §7214.

A court has the authority under 28 U.S.C. §1651(a) to enjoin litigants who abuse the court system. Harrelson v. USA, 613 F.2d 114 (5th Cir. 1980). However, the instant claim is the first complaint filed by Plaintiff in this Court. Therefore, at this time, the Court finds that it is not appropriate for it to enter such an order. Thus, Defendant's Request for an Order Prohibiting Future Filings is denied.

Accordingly, IT IS HEREBY ORDERED that Defendant United States of America's Motion to Dismiss is GRANTED.

IT IS FURTHER ORDERED that Defendant United States of America's Motion for Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes is DENIED.

FINAL JUDGMENT

On this day, the Court entered an Order granting Defendant's Motion to Dismiss and denying Defendant's request for an Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes. The Court now enters its Final Judgment pursuant to Federal Rule of Civil Procedure 58.

Accordingly, IT IS HEREBY ORDERED that Defendant's Motion to Dismiss is GRANTED.

IT IS FURTHER ORDERED that Defendant's Request For Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes is DENIED.

IT IS FURTHER ORDERED that the above-captioned cause is DISMISSED WITH PREJUDICE, with the Parties to bear their own costs.

IT IS FINALLY ORDERED that all other pending motions, if any, are DENIED AS MOOT.

 

 

 

 

 

[2003-2 USTC ¶50,572] Russell Mortland and Tina Mortland, Plaintiffs v. Internal Revenue Service, FNU Ward, Employee ID 0469647209, William C. Hsieh, Employee ID 95-02575, Lang, Star Tran, Inc. & Capital Metro Transportation Authority, Defendants.

U.S. District Court, West. Dist. Texas, Austin Div.; A-03-CA-115-SS, June 25, 2003 .

[ Code Sec. 7402]

Jurisdiction of courts: Suit against the United States: Consent by government. --

Married taxpayers who alleged that the IRS and its agents violated various statutes failed to demonstrate that the government had waived, by statute or otherwise, its sovereign immunity. With respect to each alleged statutory violation, jurisdiction was lacking because the taxpayers failed to state a claim or comply with required statutory procedures.

[ Code Sec. 7602]

Examination of books and witnesses: Jurisdiction: Presumed financial status audit. --

Married taxpayers who alleged that the IRS and its agents violated various statutes failed to demonstrate that the government had waived, by statute or otherwise, its sovereign immunity. The taxpayers alleged the IRS improperly used a presumed financial status audit to determine their unreported income without a reasonable indication that there was a likelihood of such income. However, there was no precedent allowing taxpayers to bring a cause of action against the government to enforce that statute. Moreover, in light of Forms W-2 and certain correspondence from the taxpayers, it was likely that they had unreported income.

[ Code Sec. 6343]

Release of levy and return of property: Effect of release. --

Married taxpayers who alleged that the IRS and its agents violated various statutes failed to demonstrate that the government had waived, by statute or otherwise, its sovereign immunity. The court interpreted their claim under Code Sec. 6343(e), which applies when the IRS and a taxpayer have reached an agreement that a tax is not collectible. The taxpayers failed to state a claim because they failed to allege, and the record did not indicate, the existence of such an agreement.

[ Code Sec. 7214]

Crimes: Offenses by officers and employees of the United States. --

Married taxpayers who alleged that the IRS and its agents violated various statutes failed to demonstrate that the government had waived, by statute or otherwise, its sovereign immunity. The taxpayers failed to state a claim under Code Sec. 7214(a) because they did not allege that an IRS agent had been discharged or criminally charged with violation of a statute.

[ Code Sec. 6203]

Assessments: How assessment is made: Form 4340. --

Married taxpayers who alleged that the IRS and its agents violated various statutes failed to demonstrate that the government had waived, by statute or otherwise, its sovereign immunity. The record demonstrated that the IRS validly assessed both taxpayers' tax liabilities and provided a Form 4340 certificate of assessment. The RACS006 form that the IRS provided was not an improper assessment form.

[ Code Sec. 6871]

Bankruptcy and receivership: Claims for taxes in bankruptcy proceedings: Discharge of debt. --

Married taxpayers failed to demonstrate that the government violated their bankruptcy discharge. The tax years in issue were either within three years of their bankruptcy petition or after their discharge. As a result, the tax liabilities were not discharged in the bankruptcy proceeding.

[ Code Sec. 3402]

Employment taxes: Withholding: Constitutionality. --

Married taxpayers who alleged that the IRS wrongfully ordered the husband's employers to ignore his W-2 forms and withhold taxes from his paycheck according to the IRS's instructions provided no authority waiving the government's immunity to such a suit. Moreover, they failed to support their claims that they should not be subject to withholding under Code Sec. 3402. Contrary to the taxpayers' contentions, the withholding statute did not violate due process.

JUDGMENT

SPARKS, District Judge: BE IT REMEMBERED on the 24th day of June 2003 the Court entered its order dismissing the plaintiffs' claims against the defendants and granting summary judgment on the plaintiffs' fifth cause of action, the Court enters the following:

IT IS ORDERED, ADJUDGED, and DECREED that the plaintiffs Russell Mortland and Tina Mortland's first through fourth and sixth through tenth causes of action against the defendants United States of America, Internal Revenue Service employees William C. Hsieh, Ward and Lang, Star Tran, Inc. and Capital Metro Transportation Authority are DISMISSED WITHOUT PREJUDICE pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, and that plaintiffs TAKE NOTHING in their fifth cause of action against defendants, and that all costs of suit are taxed against the plaintiffs, for which let execution issue.

ORDER

BE IT REMEMBERED on the 24th day of June 2003 the Court reviewed the file in the above-styled cause, specifically Federal Defendants' Motion to Dismiss or for Summary Judgment [#4], Defendants Capital Metro Transportation Authority and Star Tran, Inc.'s Motion to Dismiss [#11], and Plaintiffs' response thereto [#13]. Having considered the motions and response, the case file as a whole and the applicable law, the Court enters the following opinion and orders.

Background

The plaintiffs in this case, Russell and Tina Mortland, live in Driftwood, Texas. See Am. Compl. at ¶2. They sue the Internal Revenue Service ("IRS") and three of its employees: William Hsieh, Ms. Ward and Mr. Lang. Id. The plaintiffs challenge the IRS's attempts to assess and collect their income tax liabilities for the years 1996 through 2000 and the IRS's current withholding of income taxes from their paychecks. The exhibits attached to the amended complaint indicate the IRS assessed the amount owed by Russell Mortland for 1999 at $2,416.78 and for 2000 at $36,673.53, and Tina Mortland's amount due for 1999 at $766.59 and $2,859.13 for 2000 (all amounts include penalties and interest due). Id. at Ex. A-B. On March 12, 2003 , the IRS sent a letter to Star Tran, Russell Mortland's employer, instructing it to ignore Mortland's Form W-4 and withhold taxes according to its instructions. Id. at Ex. F. The plaintiffs request a show cause hearing at which the IRS should produce documentation showing the IRS has authority to collect the amount sought; an injunction against the IRS's further collection activity until all claims are resolved; an injunction against Capital Metro Transit Authority and Star Tran's future withholding from Russell Mortland's paycheck; reimbursement of funds withheld from Russell Mortland's paycheck; termination of IRS employees who have committed misconduct; punitive damages; and court costs. Id. at ¶ ¶22-28.

Analysis

The Federal Defendants (the United States and its three employees) move to dismiss the plaintiffs' claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Defendants Capital Metro Transportation Authority ("Capital Metro") and Star Tran, Inc. ("Star Tran") move to dismiss plaintiffs' claims against them pursuant to Rule 12(b)(6). The plaintiffs have filed a response to these motions.

In deciding whether to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, "the Court must take the factual allegations as true, resolving any ambiguities or doubts regarding the sufficiency of the claim in favor of the plaintiff." Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993). The Court should then dismiss only if "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, 78 S.Ct. 99, 102 (1957). A court grants summary judgment if the moving party shows there is no genuine issue of material fact and it is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c). In deciding summary judgment, the Court construes all facts and inferences in the light most favorable to the nonmoving party --here, the plaintiffs. Hart v. O'Brien, 127 F.3d 424, 435 (5th Cir. 1997), cert. denied, 119 S.Ct. 868 (1999). The standard for determining whether to grant summary judgment "is not merely whether there is a sufficient factual dispute to permit the case to go forward, but whether a rational trier of fact could find for the nonmoving party based upon the record evidence before the court." James v. Sadler, 909 F.2d 834, 837 (5th Cir. 1990).

Both parties bear burdens of producing evidence in the summary judgment process. See Celotex Corp. v. Catrett, 106 S.Ct. 2548 (1986). First, "[t]he moving party must show that, if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the nonmoving party to carry its burden of proof." Hart, 127 F.3d at 435. The nonmoving party must then "set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations or denials of its pleadings." Id. However, "[n]either `conclusory allegations' nor `unsubstantiated assertions' will satisfy the non-movant's burden." Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996).

I. Doctrine of Sovereign Immunity

The United States contends this Court has no jurisdiction over the above-styled cause because it is immune from suit under the doctrine of sovereign immunity. The United States, along with its agents sued in their official capacity, is immune from suit unless it expressly consents to be sued by statute or otherwise. United States v. Sherwood, 312 U.S. 584, 586 (1941). Suits against federal agencies such as the IRS are construed as suits against the United States, invoking sovereign immunity. Perez v. United States [ 2002-2 USTC ¶50,795], 312 F.3d 191, 194 (5th Cir. 2002). ¹ A statutory waiver "must be unequivocally expressed in statutory text" and "will be strictly construed, in terms of its scope, in favor of the sovereign." Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092 (1996). Thus, the Court must dismiss for lack of subject matter jurisdiction any lawsuit that does not comply with the express requirements in the statutory waiver. See United States v. White Mountain Apache Tribe, 537 U.S. 465, 123 S.Ct. 1126, 1131-32 (2003). For example, a taxpayer may sue the United States for a tax refund under 26 U.S.C. §7422, but he must comply with the terms of the statute, including the requirement that he pay the taxes assessed and file an administrative claim for refund before filing a lawsuit. See 26 U.S.C. §7422; Shanbaum v. United States [ 94-2 USTC ¶50,512], 32 F.3d 180, 182 (5th Cir. 1994). The plaintiffs do not assert this statute or allege they have fulfilled the statutory prerequisites to suit. Additionally, Congress has expressly forbidden suits under the Federal Tort Claims Act arising from the assessment or collection of taxes and suits for injunctive relief restraining the assessment or collection of taxes. See 28 U.S.C. §2860(c); 26 U.S.C. §7421(a). In this case, the plaintiffs seek to avoid sovereign immunity by alleging the defendants committed violations of various other statutes. To determine whether the Court has subject matter jurisdiction over the plaintiffs' claims against the United States and its agents, the Court must examine whether the plaintiffs have stated a claim under each statute and complied with the procedures outlined in the statute.

II. Violation of 26 U.S.C. §3412

In their first cause of action, the plaintiffs contend IRS agent Ward violated 26 U.S.C. §3412 by evaluating plaintiffs' tax liability according to a presumed financial status audit. Ward signed the IRS Form 4549 that evaluated both plaintiffs' taxes due for 1999 and 2000. See Am. Compl. at Ex. A-B. The statute the plaintiffs assert, 26 U.S.C. §3412, does not exist. However, because the plaintiffs are proceeding pro se, the Court construes the allegations in their complaint more permissively. See Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594 (1972); SEC v. AMX Int'l, Inc., 7 F.3d 71, 75 (5th Cir. 1993). Construing the complaint broadly, it seems the plaintiffs are arguing Ward presumed income that was not reported in calculating their taxes due. The Court will therefore construe this claim as a claim under 26 U.S.C. §7602(e), which states:

The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.

26 U.S.C. §7602(e). The Court can find no precedent indicating citizens can bring a cause of action against the United States to enforce this section, and the statute itself provides no waiver of sovereign immunity. Instead, the context in which this section typically arises is a suit by the IRS to enforce a summons issued under 26 U.S.C. §7602 or a suit by a taxpayer to quash such a summons. See United States v. Moore [ 92-2 USTC ¶50,454], 970 F.2d 48 (5th Cir. 1992); Barquero v. United States [ 94-1 USTC ¶50,188], 18 F.3d 1311 (1994).

Even if the United States did waive its sovereign immunity in 26 U.S.C. §7602(e), the plaintiffs' claim fails because they have produced no evidence in response to the United States' summary judgment motion supporting their allegation that the IRS used a presumed financial status audit in determining their unreported income. The Government has provided evidence that it discovered plaintiffs likely had unreported income through W-2 forms and correspondence from the plaintiffs. See Gov't Ex. 1-2. Thus, to the extent the Court has subject matter jurisdiction over this cause of action, which is highly unlikely, the plaintiffs have not substantiated their claim with any evidence at all and summary judgment is appropriate.

III. Violation of 15 U.S.C. §1692

In their second and seventh causes of action, the plaintiffs contend IRS agents Ward and William Hsieh violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §1692, by failing to advise the plaintiffs of their due process rights concerning the collection of debts or their right to appeal under IRS procedures. Assuming the United States waived its sovereign immunity under the FDCPA, the plaintiffs have failed to state a claim under the FDCPA because unpaid income taxes are not considered debts for purposes of the act. See, e.g., In re Westberry [ 2000-1 USTC ¶50,513], 215 F.3d 589, 591 (6th Cir. 2000); Beggs v. Rossi, 145 F.3d 511, 512 (2d Cir. 1998); Staub v. Harris, 626 F.2d 275 (3d Cir. 1980). Accordingly, the second and seventh causes of action are dismissed pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted.

IV. Violation of 26 U.S.C. §3432

In their third cause of action, the plaintiffs allege agent Hsieh violated 26 U.S.C.