Jurisdiction

Billy G. Asemani, Plaintiff v. United States of America , Defendant.

U.S. District Court, Mid. Dist. Pa.; CIV . 3:CV-04-0846, October 19, 2004.

[ Code Secs. 6330 and 7122]

Collection Due Process hearing: District court jurisdiction: Offer in compromise. --

An individual's action to set aside an IRS determination denying his offer in compromise (OIC) was dismissed for lack of subject matter jurisdiction. Because the OIC was not considered a collection alternative in a Collection Due Process hearing, the plaintiff was not entitled to a judicial review of the IRS 's denial of his OIC. In addition, none of the alternative grounds for the district court's jurisdiction offered by the plaintiff under the Mandamus Act, the Administrative Procedure Act and the Federal Torts Claims Act provided an opportunity for a judicial review of the IRS 's determination.

MEMORANDUM AND ORDER

NEALON, District Judge: The Plaintiff, Billy G. Asemani, initiated this civil action by the pro se filing of a document entitled "Petition for Review of Final Administrative Agency Action" on April 19, 2004, in which he challenges the denial of an Offer in Compromise that he submitted to the Internal Revenue Service ( IRS ). (Doc. 1). The Government filed a motion to dismiss the action for lack of subject matter jurisdiction on August 25, 2004. (Doc. 21). A brief in support of the motion was filed on August 31, 2004. (Doc. 22). Plaintiff filed a brief in opposition to the motion to dismiss on September 8, 2004, alleging only that the Government's motion to dismiss should be denied as it was filed untimely. ¹ (Doc. 23). The Government filed a reply brief on September 10, 2004, (Doc. 24). On September 17, 2004, the Plaintiff filed a request for an extension of time in which to file a brief on the issue of subject matter jurisdiction. Since the Plaintiff did not address the question of jurisdiction in his original brief in opposition to the motion to dismiss, he was granted an extension of time to file a supplemental brief on this issue. (Doc. 27). On September 27, 2004, the Plaintiff filed a supplemental brief in opposition to the Government's motion to dismiss. (Doc. 28). A reply was filed by the Government on October 12, 2004. (Doc. 29). The motion is ripe for consideration and, for the reasons that follow, will be granted.

Background

The Plaintiff submitted an Offer in Compromise, IRS Form 656, dated August 30, 2001, to the IRS attempting to settle his outstanding liabilities for the tax years 1997 and 1998. (Complaint, Doc. 1, Exhibit A). Plaintiff offered the amount of $20,000 in compromise of an obligation which the Government avers exceeds $500,000. Asemani stated an inability to pay as justifying his offer on the Form 656 that he submitted to the IRS . (Complaint, Doc. 1, Exhibit A). The IRS rejected Asemani's Offer in Compromise initially and at all levels of administrative appeal that the taxpayer pursued. The IRS found that the Plaintiff did indeed have an ability to pay his outstanding obligations. Plaintiff now contends that the decision of the IRS to deny his Offer in Compromise was and abuse of discretion by an administrative agency and that the finding that he had an ability to pay was made without any basis in fact. He requests this court to set aside the decision of the IRS and to remand the matter for further proceedings. The Government contends that this court lacks jurisdiction over Plaintiff's claim.

Discussion

The United States District Court for the Eastern District of Louisiana recently addressed a district court's jurisdiction to review the IRS 's actions in processing a taxpayer's Offer in Compromise in Desire Community Housing Corp. v. U.S., 2004 WL 838041 (E.D. La. March 3, 2004). There, the Court noted: "The authority to compromise a tax liability is stated in 26 U.S.C. §7122. The statute provides 'the Secretary may compromise any civil or criminal case arising under the internal revenue laws prior to reference to the Department of Justice for prosecution or defense.' Section (c) further states that 'the Secretary shall prescribe guidelines for officers and employees of the Internal Revenue Service to determine whether an offer-in-compromise is adequate and should be accepted to resolve a dispute'.... Under Treasury Regulation §301.7122-1(b), the Secretary may only compromise a tax liability on one of three grounds. They include (1) doubt as to liability; (2) doubt as to collectibility; and (3) the promotion of effective tax administration." Id. at *2. In Desire, the IRS denied the taxpayers Offer in Compromise because it was not processable due to the taxpayer's failure to comply with certain procedural requirements. The Court held that no jurisdiction existed to review the IRS 's determination.

Here, Asemani claimed before the IRS that there was a doubt as to collectibility of his outstanding obligations as he purportedly did not have sufficient assets to pay his outstanding taxes, interest and penalties. The IRS rejected that contention. Plaintiff now requests this court to set aside the IRS 's determination and remand the mater to that agency.

In its first brief in support of its motion to dismiss, the Government argued that a taxpayer's only recourse in obtaining judicial review of a determination by the IRS to deny an Offer in Compromise is pursuant to 26 U.S.C. §§6630(c)(2)(iii) and 6320(c). This argument is well taken. Section 6630 of the Internal Revenue Code, addressing the notice and opportunity to be heard requirements before levy states, in relevant part:

(a)(1) In general. --No 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. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates....

(1) Requirement of investigation. --The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.

(2) Issues at hearing. --

(A) In general. --The person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including --

(i) appropriate spousal defenses;

(ii) challenges to the appropriateness of collection actions; and

(iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise.

26 U.S.C. §§6630(c)(2)(iii) (emphases added). As indicated by the Government, the IRS has not commenced collection activity and has not indicated that it intends to do so. Should the IRS commence collection of Plaintiff's outstanding obligations, he will then have an opportunity to have the denial of his Offer in Compromise reviewed under the above procedure. Outside this setting, the Internal Revenue Code provides no opportunity for the type of review that the Plaintiff now seeks.

In his supplemental brief, Asemani proffered three alterative grounds for this court's jurisdiction to address his claim, viz., mandamus jurisdiction, the Administrative Procedures Act ( APA ) and the Federal Tort Claims Act (FTCA). None of these grounds, however, provide an avenue for judicial review in a district court of the IRS 's decision to deny a taxpayer's Offer in Compromise.

The federal mandamus statute, 28 U.S.C. §1361 states: "The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff." As this court has previously noted:

Issuance of a writ of mandamus is carefully circumscribed and used "only in extraordinary situations," since it is a "drastic" remedy. Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 34 (1980) ( per curiam). The petitioner seeking mandamus must satisfy the "burden of showing that [his] right to issuance of the writ is 'clear and indisputable.'" Bankers Life & Casualty Co. v. Holland, 346 U.S. 379, 384 (1953) ( quoting United States v. Duell, 172 U.S. 576, 582 (1899). The Third Circuit has consistently adhered to this stringent standard. See, e.g., PAS v. Travelers Ins. Co., 7 F.3d 349, 357 (3d Cir. 1993) (denying writ of mandamus because it was not clear and indisputable that state claims were not preempted by ERISA); Sunbelt Corp. v. Noble, Denton & Associates, Inc., 5 F.3d 28 (3d Cir. 1993) (granting writ because it was clear and indisputable that district court did not have the legal authority to transfer a case to a district where personal jurisdiction was lacking); Travellers International AG v. Robinson, 982 F.2d 96, 98 (3d Cir. 1992), cert. denied, 113 S.Ct. 1946 (1993) (denying writ of mandamus because it was not clear and indisputable that petitioner was entitled to jury trial).

Hillyer v. Commissioner of Internal Revenue, 1994 WL 240348, *5 (M.D. Pa. Mar 30, 1994). Here, the Plaintiff has no clear and indisputable right to have the denial of his Offer and Compromise overturned. His remedies are circumscribed by the Internal Revenue Code as discussed above. Accordingly, he is not entitled to mandamus relief. See also Martin v. Commissioner of Internal Revenue [ 84-1 USTC ¶9183], 584 F.Supp. 977, 978 (N.D. Ohio 1984).

Similarly, the Administrative Procedures Act is inapplicable to this matter. "[T]he APA does not provide an independent source of jurisdiction, and in any case 'only applies to a final agency decision where there is no other adequate remedy.'" Helvie v. Beach, 2003 WL 22073142; at *3 (S.D. Fla. July 16, 2003) ( citing Einhorn v. DeWitt [ 80-2 USTC ¶9486], 618 F.2d 347, 350 (5th Cir. 1980). Moreover, the APA provides that "This chapter applies, according to the provisions thereof, except to the extent that --(1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law." 5 U.S.C. §701(a). As noted above, section 7122 of the Internal Revenue Code states that the "the Secretary may compromise any civil or criminal case arising under the internal revenue laws..." 26 U.S.C. §7122(a). The discretionary denial of the Plaintiff's Offer in Compromise by the IRS is not reviewable under the APA .

Lastly, Plaintiff has not stated a cognizable claim under the Federal Tort Claims Act. "The FTCA was designed primarily to remove the sovereign immunity of the United States from suits in tort and, with certain specific exceptions, to render the Government liable in tort as a private individual would be under like circumstances.... The Act accordingly gives federal district courts jurisdiction over claims against the United States for injury caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." Sosa v. Alverez-Machain, _____ U.S._____, 124 S.Ct. 2739, 2747 (2004). However, as the Supreme Court further recognized "the Act also limits its waiver of sovereign immunity in a number of ways." Id. at 2747-8. Indeed, 28 U.S.C. §2680(c) specifically states that the waiver of immunity does not apply to "[a]ny claim arising in respect of the assessment or collection of any tax..." The United States District Court for the Eastern District of New York has considered this specific issue and has concluded that the §2860(c) exception to the FTCA bars a taxpayer's challenge to the IRS 's denial of an Offer in Compromise. Higgins v. United States [ 2003-2 USTC ¶50,563], 2003 WL 21693717 ( E.D. N.Y. May 27, 2003). See also, Wheeler v. Baugh, 2002 WL 373461 (W.D. Pa. Jan. 29, 2002) ("The United States has waived its immunity for certain tort claims under the Federal Tort Claims Act ('FTCA'), 28 U.S.C. §2671 et seq. and 1346(b), although this immunity does not apply to torts allegedly committed by the IRS concerning the assessment and collection of taxes; the FTCA in fact explicitly exempts from its coverage 'any claims arising in respect of the assessment or collection of any tax.' 28 U.S.C. §2680(c).")

Based on the forgoing, the court concludes that there is no subject matter jurisdiction to hear this case and, therefore, the Government's motion to dismiss will be granted.

An appropriate Order is attached.

ORDER

AND NOW , this 19 ^th day of October, 2004, consistent with the accompanying Memorandum of this date, IT IS HEREBY ORDERED THAT:

1) The Defendant's Motion to Dismiss, ( Doc. 21), is GRANTED.

2) The Clerk of Court is directed to close this case.

¹ Even assuming that the motion was filed untimely, subject matter jurisdiction can be examined at any time during the pendency of an action. Accordingly, Plaintiff's assertion must be rejected.

99-1 USTC ¶50,506] Andre Kimboko and Priscilla J. Kimboko, Plaintiffs v. United States of America, Defendant

U.S. District Court, Dist. Colo., Civ. 97-D-175, 4/15/99

[Code Secs. 6103 and 7433 ]

Return information: Disclosure of: Damages.--The IRS 's disclosure of return information on a Form 669-B, Certificate of Discharge of Property from Federal Tax Lien, to the taxpayers' escrow agent was permissible because the form was issued pursuant to a valid tax lien. Accordingly, the taxpayers were not entitled to damages for the disclosure of return information without their permission.

[Code Secs. 6325 and 7122 ]

Jurisdiction: Offers-in-compromise: Stipulation agreements: Liens and levies: Discharge of.--The trial court lacked subject matter jurisdiction over married bankrupt taxpayers' claim that the IRS violated the terms of a stipulated agreement by rejecting their offers-in-compromise without considering their application for partial payment of their tax liability. They cited no statutory provision granting them the right to compel the IRS to exercise its discretionary authority under Code Sec. 6325 . Further, the agreement stated that the IRS was merely willing to consider the taxpayers' offer-in-compromise or repayment plans.

[Code Secs. 6871 and 7402 ]

Prepetition tax liabilities: Discharge of: Assessment and collection: Injunction: Mootness.--Married bankrupt taxpayers' request for injunctive relief to prevent the collection of prepetition tax liabilities was moot because they had fully paid the liabilities prior to their request. However, they could pursue recovery of any overpayments or excessive collections pursuant to the refund provisions under Code Sec. 7422 .

[Code Secs. 6871 , 7402 and 7421 ]

Jurisdiction: Bankruptcy: Prepetition tax liabilities: Discharge of: Question of fact: Assessment and collection: Declaratory relief.--The trial court lacked jurisdiction over married debtors' request for a declaratory judgment that certain prepetition tax penalties were dischargeable. They did not plead allegations or facts to support their request, and the facts offered in their objection to the government's motion for summary judgment failed to prove that their remedy in a refund suit would be inadequate to repair injuries suffered by the erroneous assessment or collection of the penalties.

[Code Sec. 7402 ]

Jurisdiction: IRS employee conduct: Discrimination: Exhaustion of administrative remedies.--The trial court lacked jurisdiction over married debtors' claims that an IRS agent harassed the husband during a telephone conversation due to his race and national origin. Since the taxpayers did not name the agent as an individual defendant, their complaint constituted a tort claim against the government, as to which they failed to exhaust their administrative remedies.

ORDER AFFIRMING AND ADOPTING MAGISTRATE JUDGE'S RECOMMENDATION

DANIEL, District Judge:

This matter is before the Court on several pending motions. The matter was referred to Magistrate Judge Coan for a Recommendation, which was issued on April 14, 1998, and is incorporated herein by reference. See 28 U.S.C. §636(b), Fed. R. Civ. P. 72, D.C. COLO .LR. 72.4. In the Recommendation, Magistrate Judge Coan recommends that Plaintiffs' Motion to Withdraw the Reference, filed January 29, 1997, and Plaintiffs' Motion for a Leave of Court to Amend the Motion for Withdrawal of References Related to Adversary Proceedings Nos. 96-1611 PAC and 96-1610 RJB, filed April 22, 1997, be granted. Recommendation, at 19. The Magistrate Judge further recommends that Defendant's Motion to Dismiss, or in the Alternative, Motion for Summary Judgment, filed April 30, 1997, be granted and that the case be dismissed, excepting any remaining issues regarding the dischargeability of prepetition tax penalties in bankruptcy. Id. On April 28, 1998, Plaintiff filed a timely Objection, which necessitates a de novo determination as to those specified proposed findings or recommendations to which objection is made since the nature of the matter is dispositive. Fed. R. Civ. P. 72(b); 28 U.S.C. §636(b)(1).

I. Standard of Review

Defendant has moved to dismiss Plaintiffs' adversary complaints under Fed.R.Civ.P. 12(b)(1) and (6), or, in the alternative, for summary judgment under Fed.R.Civ.P. 56.

In ruling on a motion to dismiss, I " 'must accept all the well-pleaded allegations as true and must construe them in the light most favorable to the plaintiff.' " David v. County and City of Denver, 101 F.3d 1344, 1352 (10th Cir. 1996) (quoting Gagan v. Norton, 35 F.3d 1473, 1474 n.1 (10th Cir. 1994)). "A complaint may be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) only 'if the plaintiff can prove no set of facts to support a claim for relief.' " Id. (quoting Jojola v. Chavez, 54 F.3d 488, 490 (10th Cir. 1995)). Pro se pleading are to be construed liberally. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, a pro se litigant's "conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be granted." Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 55(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The moving party bears the initial burden of proof showing that there is an absence of any issues of material fact. Celotex Corp. V. Catrett, 477 U.S. 317, 323 (1986). The movant need not negate the non-movant's claim, but need only point to an absence of evidence to support the non-movant's claim. Celotex, 477 U.S. at 325. If the moving party meets this burden, the non-moving party may not rest upon its pleadings, but must come forward with specific facts showing that there is a genuine issue for trial as to the elements essential to the non-moving party's case. Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324. In applying the summary judgment standard, the court construes the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. Blue Circle Cement, Inc. v. Board of County Comm'rs , 27 F.3d 1499, 1503 (10th Cir. 1994).

II. Discussion

Plaintiffs first object to the Magistrate Judge's findings with regard to the Internal Revenue Service's (" IRS ") rejection of Plaintiffs' offers-in-compromise. Specifically, Plaintiffs argue that Defendant violated the September 5, 1991 Stipulation between Plaintiffs and Defendant by rejecting their offers-in-compromise without considering Plaintiffs' application for partial payment of their tax liability under 26 U.S.C. §6325(b)(1). Objection, at 3, 18; See Stipulation, Case No. 90-18638 DEC, at 3, ¶m (September 5, 1991) (hereinafter "Stipulation"). Section 6325(b)(1) states that the IRS "may issue a certificate of discharge of any part of the property subject to any lien imposed under this chapter" (emphasis added), if the IRS determines that the property's fair market value is at least twice the value of the IRS 's lien on property plus all other liens having priority over the IRS 's lien. Plaintiffs have not cited any statutory provision granting them the right to bring a cause of action to compel the IRS to exercise its discretionary authority under section 6325(b)(1). Furthermore, the Stipulation states only that the IRS "is willing to consider" Plaintiffs' offers-in compromise or repayment plans. I find that such language provides no grounds on which to bring a cause of action for violation of the Stipulation's terms. I therefore conclude that this Court lacks subject matter jurisdiction to hear Plaintiffs' claim on this issue.

Plaintiffs next argue that IRS agent Neil disclosed Plaintiffs' tax return information without their prior written authorization in violation of 26 U.S.C. §6103, entitling them to damages under 26 U.S.C. §7433. Plaintiffs specifically assert that agent Neil unlawfully issued a Certificate of Discharge (Form 669-B) containing tax return information to Plaintiffs' escrow agent without Plaintiffs' authorization. Objection, at 3-4. Section 6103, however, authorizes an IRS employee to "disclose tax return information in the issuance of liens and levies" without first obtaining the taxpayer's written authorization. Long v. United States [92-2 USTC ¶50,431], 972 F.2d 1174, 1180 (10th Cir. 1992); 26 U.S.C. §6103(k)(6). Moreover, the IRS regulations permit disclosure of return information "to apply the provisions of the Code relating to establishment of liens against [the taxpayer's] assets, or levy on, or seizure, or sale of, the assets to satisfy any such [tax] liability," if such collection efforts "cannot properly be accomplished without making such disclosure." 26 C.F.R. §301.6103(k)(6)-1(b)(6). Here, it is undisputed that agent Neil issued the Form 669-B to collect under a valid IRS lien. Plaintiffs even acknowledge that the IRS Form 669-B is "a collection instrument, similar to a levy." Objection, at 10. Finally, Plaintiffs provide no evidence as to how the IRS can otherwise properly accomplish the collection without issuing the Form 669-B. After reviewing the record in this case in the light most favorable to Plaintiffs, I nevertheless conclude that IRS agent Neil's actions were lawful under 26 U.S.C. §6103(k)(6).

Plaintiffs' next objection claims that Defendant violated 11 U.S.C. §362(a)(4) for allegedly filing a lien on Plaintiffs' property to recover new prepetition tax liabilities in excess of the amount Defendant originally reported during the Chapter 13 proceedings. Objection, at 5-6. Section 362(a)(4) states that a petition for bankruptcy proceedings "operates as a stay, applicable to all entities of . . . any act to create, perfect, or enforce any lien against property of the [petitioner's] estate." 11 U.S.C. §362(a)(4). Plaintiffs claim that these new taxes, consisting of tax liabilities for the fourth quarters of 1987 and 1989, had already been paid or discharged in their Chapter 13 proceedings. Id. Upon review of the record, I conclude that there still remains a question as to whether such tax liabilities were discharged in Plaintiffs' Chapter 13 proceedings. Magistrate Judge Coan recommends that this Court refer to the bankruptcy judge the core issue of whether such prepetition tax penalties, assessed against Plaintiffs, were discharged. Recommendation, at 10 n.2. A district court may refer core proceedings arising under title 11 to the district bankruptcy judge for determination. 28 U.S.C. §157(a)-(b)(1). "Core proceedings include . . . determinations as to the dischargeability of particular debts." Id. §157(b)(2)(l). I therefore adopt the Magistrate Judge's recommendation on this issue as stated in her Recommendation. See Recommendation, at 9-10 & n.7.

I deny Plaintiffs' request for an injunction to prevent collection of their prepetition tax liabilities from the fourth quarters of 1987 and 1989. See Objection, at 13-14. Since Magistrate Judge Coan submitted her Recommendation on April 14, 1998, Plaintiffs have fully paid their tax liabilities involved in this proceeding. See Plaintiffs' Motion to Seek Nullification of Application of the "Declaration Judgment Act" in this Case and Impart Additional Claims, at 2-3, Exhibits B, C. Therefore, I conclude that Plaintiffs' request for injunctive relief is moot. Plaintiff may pursue recovery of any overpayments or excessive collections through the Internal Revenue Code's refund provisions under 26 U.S.C. §7422.

Plaintiffs' Objection further requests that this Court grant Plaintiffs declaratory relief by holding that their prepetition tax penalties are dischargeable and that Plaintiffs are entitled to a refund without following the Internal Revenue Code's refund procedure. Objection, at 13. Magistrate Judge Coan recommends that Plaintiffs' prayers for declaratory relief be denied for lack of subject matter jurisdiction under the Declaratory Judgment Act, 28 U.S.C. §2201. Recommendation, at 10-11. I agree.

The Declaratory Judgment Act prohibits a court from declaring the rights of litigating parties with regard to federal taxes. Wyoming Trucking Ass'n, Inc. v. Bentsen, 82 F.3d 930, 932-33 (10th Cir. 1996). The jurisdictional boundaries of claims for declaratory or injunctive relief in tax matters are drawn by the Anti-Injunction Act, 26 U.S.C. §7421. See id. (citing Bob Jones University v. Simon [74-1 USTC ¶9438], 416 U.S. 725, 733 n.7 (1974)); McCarthy v. Marshall [84-1 USTC ¶9141], 723 F.2d 1034, 1037 (1st Cir. 1983). Under the Anti-Injunction Act, a party must challenge excessive or wrongful IRS tax assessments by first filing a refund claim with the IRS unless "(1) it is clear that under no set of circumstances could the government ultimately prevail, and (2) equity jurisdiction would otherwise exist." Wyoming Trucking Ass'n, 82 F.3d at 933.

Plaintiffs' claims for declaratory relief fail to demonstrate that equity jurisdiction would otherwise exist under Wyoming Trucking Ass'n. A court has equity jurisdiction to grant declaratory relief in tax proceedings only if the taxpayer has pleaded and proven "facts establishing that his remedy in the Tax Court or in a refund suit is inadequate to repair any injury that might be caused by the erroneous assessment or collection of an asserted tax liability." Commissioner of Internal Revenue v. Shapiro [76-1 USTC ¶9266 ], 424 U.S. 614, 629 (1974). Plaintiffs have neither raised any allegation nor plead any facts in their Amended Complaint which would entitle them to relief under the Declaratory Judgment Act. Instead, Plaintiffs seek to introduce facts through their Objection, presumably in support of equity jurisdiction over their claim for declaratory relief. These alleged facts, even if true, still fail to demonstrate that Plaintiffs' remedy in a refund suit would be inadequate to repair the injury suffered by an erroneous assessment or collection. I therefore find that Plaintiffs lack subject matter jurisdiction to bring their claims for declaratory relief.

Finally, Plaintiffs object to the Magistrate Judge's findings with regard to their discrimination claims under 42 U.S.C. §§1981, 1983. Plaintiffs claim that agent Neil unlawfully harassed Plaintiff Andre Kimboko in a telephone conversation due to Kimboko's race and national origin. In her Recommendation, the Magistrate Judge correctly determined that since Plaintiffs have not named agent Neil as an individual defendant in this action, their discrimination claims are only cognizable as tort claims against the United States under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §2671, et seq. Recommendation, at 11. Moreover, in order for this court to have jurisdiction to hear FTCA claims, a plaintiff must first exhaust all administrative remedies with the appropriate agency. 28 U.S.C. §2675(a); Nero v. Cherokee Nation of Oklahoma , 892 F.2d 1457, 1463 (10th Cir. 1989). Plaintiffs' Objection, however, provides no evidence that Plaintiffs sought or received such remedies. Instead, Plaintiffs direct this court towards evidence, which Plaintiffs argue supports their substantive discrimination claims. I therefore conclude that this Court lacks jurisdiction to hear Plaintiffs section 1981 and 1983 claims.

In light of Plaintiffs' full payment of their tax liabilities and upon further review of the record in this case, I find Plaintiffs' remaining objections in their Objection to be without merit.

For the reasons stated above, the Court concludes that the Magistrate Judge's Recommendation should be affirmed and adopted. Accordingly, it is

ORDERED that the April 14th, 1998 Recommendation of Magistrate Judge Coan is AFFIRMED. It is

FURTHER ORDERED that Plaintiffs' Motion for Withdraw of the Reference and Plaintiffs' Motion for a Leave of Court to Amend the Motion for Withdrawal of References Related to Adversary Proceedings Nos. 96-1611 PAC and 96-1610 RJB is GRANTED. It is

FURTHER ORDERED that Plaintiffs' Motion to Dismiss, or in the Alternative, Objection to the January 22, 1997 Order by Bankruptcy Judge and Plaintiffs' Motion for Leave of Court to Seek Disqualification of the Current Presiding Bankruptcy Judge is DENIED. It is

FURTHER ORDERED that Defendant's Motion to Dismiss or in the Alternative, Motion for Summary Judgment is GRANTED in accordance with the Recommendation, excepting any issues regarding the dischargeability of the prepetition tax penalties for the fourth quarters of 1987 and 1989 in bankruptcy. It is

FURTHER ORDERED that the bankruptcy judge enter a ruling on issues of whether Plaintiffs' tax liabilities for the fourth quarters of 1987 and 1989 were discharged in Plaintiffs' Chapter 13 proceedings, to the extent such issues still exist.

FURTHER ORDERED that all remaining outstanding motions be DENIED as moot. It is

FURTHER ORDERED that this case is dismissed with prejudice.