Opinion
CIVIL ACTION NO. 02-F-1084-S
May 8, 2003
RECOMMENDATION OF THE MAGISTRATE JUDGE
Gerald Joseph Fondren ("Fondren") appeals from a levy by the Internal Revenue Service ("IRS") on his property and claims both compensatory and punitive damages for alleged violations of the Internal Revenue Code. The case is before this court on the Motion to Dismiss filed by the United States ("the Government"). (Doc. 8, Jan. 14, 2003). Upon due consideration of supporting and opposing submissions and the relevant law, the Magistrate Judge recommends that the dismissal motion be GRANTED.
I. FACTUAL BACKGROUND
On June 4, 2001, Fondren requested and received a Collection Due Process ("CDP") hearing from the IRS to challenge a levy imposed on his property for unpaid income taxes in 1997 and a "frivolous return" penalty for his 1999 return. (Compl., Ex. B). The IRS instituted the levy based on determinations that Fondren did not file a valid return for 1997, and his purported return for 1999, filed with Forms W-2 which reported taxable income, not only contained zeroes on all lines reflecting income earned or taxes due but also attached statements outlining his belief that he had no reportable income and thus owed no federal income tax. (Compl., Ex. A.). In an August 30, 2001 "Notice of Determination Concerning Collection Action(s) Under Section 6330 of the Internal Revenue Code," the IRS validated the proposed levy for Fondren's 1997 but not his 1999 tax debt. (Compl., Ex. A at 3-5).
Fondren seeks to invalidate this administrative determination, and as grounds therefore, he asserts the following violations and procedural irregularities:
(a) That neither the deficiency notice nor his notice of entitlement to the CDP hearing "was signed by the Secretary or someone with delegated authority from him" (Compl. ¶¶ 13, 17(f), 20(a), 20(h));
(b) That the IRS failed to provide "the statutory 'Notice and Demand' for payment in connection with the alleged taxes due," as required by 26 U.S.C. § 6303 (a) and 6321(a) (Compl. ¶¶ 15, 17(e), 20(e));
(c) That the Appeals Officer refused to provide him with several requested documents at the hearing (Compl. ¶ 16), and did not obtain "verification from the Secretary that the requirements of any applicable law or administrative procedure have been met," as required by 26 U.S.C. § 6330 (c)(1), so that the determination could not take this verification into account as required by 26 U.S.C. § 6330 (c)(3)(A) (Compl. ¶¶ 20(b), (m));
(d) That the appeals officer "prematurely walked out of the hearing" before he had the opportunity to request several documents (Compl. ¶¶ 17(a)-(d), 20(n)) and also demonstrated a lack of the impartiality required by 26 U.S.C. § 6320 (b)(3) by saying, "You're not the first, Mr. Fondren" (Compl. ¶ 20(o));
(e) That imposing a levy under 26 U.S.C. § 6331 was illegal because "the regulations for Code Section 6331 are found in 27 Code of Federal Regulations which only has to do with alcohol, tobacco, and firearms and do not even mention income taxes" (Compl. ¶¶ 18, 20(k));
(f) That the Appeals Officer violated 26 U.S.C. § 7521 by refusing to permit him to audio tape record the hearing (Compl. ¶¶ 19, 20(1));
(g) That he was not liable to pay the frivolous return penalty, because (i) no document "imposing and supporting the imposition of the penalty" exists, (ii) any such document that does exist "was not signed by anybody having any delegation of authority to impose the penalty," and (iii) no regulation requires him to pay the penalty (Compl. ¶¶ 17(e), 20(c), (d), (f)); and
(h) That he was not liable to pay income tax at all, because no statute makes him as an individual liable to pay tax on his wages (Compl. ¶¶ 20(g), (j)).
II. DISCUSSION
Proceeding pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the Government asserts sovereign immunity in moving for dismissal of Fondren's challenges to the determination of his income tax liability for 1997. The Government contends that Fed.R.Civ.P. 12(b)(6) dictates dismissal of Fondren's challenge to the frivolous return penalty because he has failed to state any actionable claims against the United States for violation of federal statutory rights. After careful scrutiny of the record, the Magistrate Judge concurs that immediate dismissal is appropriate insofar as Fondren has presented only legally frivolous claims. Nevertheless, in primary deference to Fondren's pro se status, and in the interests of judicial finality, the Court proceeds to discuss the substantive claims to demonstrate that no merit whatsoever attends them.A. RULE 12(b)(1) — LACK OF SUBJECT JURISDICTION 1. Standard
The court must first address whether it has subject matter jurisdiction because that question implicates the court's "very power to hear the case." Whitson v. Staff Acquisition, Inc., 41 F. Supp.2d 1294, 1296 (M.D. Ala. 1999), quoting Bell v. Hood, 327 U.S. 678, 682-683 (1946). The Government's claim of sovereign immunity poses a facial attack on the complaint, pursuant to Rule 12(b)(1), which "require[s] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion." Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990).
2. Rule 12(b)(1) Analysis
It is well-settled that the United States is immune from all suits brought against it except those specifically and explicitly permitted by act of Congress. Cohens v. Virginia, 19 U.S. 264, 411-12 (1821); Lane v. Pena, 518 U.S. 187, 192 (1996). Sovereign immunity is a jurisdictional matter; if the federal government is immune from a given suit, then the court lacks jurisdiction to entertain the suit. Mid-South Holding Co. v. United States, 225 F.3d 1201, 1204 (11th Cir. 2000). Accordingly, this Court must examine each claim in light of the jurisdictional statute identified. The court must read these statutes narrowly; if the grant of jurisdiction does not appear clearly and unequivocally in the statutory text, the court may not assume jurisdiction. Lane, 518 U.S. at 192.
Fondren asserts that the court has jurisdiction under 26 U.S.C. § 6330 (d), which provides that, when an IRS Appeals Officer makes a determination regarding a levy on a person's property,
[t]he 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.
(emphasis added). Thus, a preliminary inquiry is whether the Tax Court has jurisdiction of the underlying tax liability in controversy.
The Tax Court has jurisdiction under 26 U.S.C. § 6213 (a) to consider income tax deficiencies and pursuant to 26 U.S.C. § 6330 (d), the Tax Court — rather than this District Court — should determine Fondren's appeal of the IRS levy arising from his 1997 tax liability. The fact that Fondren challenges the pre-levy procedures rather than the underlying tax liability does not change this jurisdictional finding. The power to hear an appeal from the determination of the appeal officer (specifically granted by 26 U.S.C. § 6330 (d)) includes the power to hear an appeal from all aspects of that determination, provided that the court would have the power to consider the underlying liability. Silver v. Smith, 2002 WL 31367926, at *2 (W.D.N.Y. Sept. 5, 2002); Sepp v. Tracy, 2002 WL 741644, at *2 (D. Ariz. Mar. 4, 2002); Bartschi v. Tracy, 2001 WL 1338795, at *3 (D. Ariz. Sept. 5, 2001).
Since this is not the proper venue for the case, the claims regarding Plaintiffs 1997 tax liability are dismissed without prejudice pursuant to 28 U.S.C. § 1406. Plaintiff shall have 30 days from the date of the District Court's judgment to file his appeal with the Tax Court. 28 U.S.C. § 6330 (d)(1)(B).
The Tax Court does not have jurisdiction to consider penalties assessed for frivolous returns. 26 U.S.C. § 6672 (c)(2); Van Es v. Commissioner, 115 T.C. 324 (2000); Moore v. Commissioner, 114 T.C. 171, 175 (2000). Therefore, pursuant to 26 U.S.C. § 6330 (d), this court does have jurisdiction on Fondren's appeal as it relates to the IRS levy for the $500 penalty assessed on the 1999 frivolous return. Danner v. United States, 208 F. Supp.2d 1166 (E.D. Wash. 2002); Foster v. United States, 2002 WL 1396772, at *1 (D. Nev. May 10, 2002); Silver v. Smith, 2002 WL 31367926, at *1 (W.D.N.Y. Sept. 5, 2002).
B. RULE 12(B)(6) — FAILURE TO STATE A CLAIM 1. Standard
The relevant question is thus whether, under the relevant Rule 12(b)(6) standard, Plaintiff has alleged sufficient facts to challenge the underlying frivolous return penalty."When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test . . . Moreover, it is well established that, in passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader." Id.
In appraising the sufficiency of the complaint, courts follow the well-established rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond a 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 threshold for a complaint to survive a motion to dismiss is "exceedingly low." Ancata v. Prison Health Servs., Inc., 769 F.2d 700, 703 (11th Cir. 1985). However, "conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal." Oxford Asset Management, Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002).
Because the plaintiff proceeds without counsel, the court is also bound to hold his pleadings to a less stringent standard and to construe them liberally. Hughes v. Rowe, 449 U.S. 5, 9 (1980); Leal v. Georgia Dept. of Corrections, 254 F.3d 1276, 1280 (11th Cir. 2001); Mederos v. U.S., 218 F.3d 1252, 1254 (11th Cir. 2000).
2. Rule 12(b)(6) Analysis: Frivolous Return Penalty
Liberally construed favorably to Fondren, the complaint presents two principal assertions: first, that because his due process hearing did not comply with 26 U.S.C. § 6330 (b), the Appeals Officer rendered an invalid determination to levy; and second, that the Government improperly imposed the frivolous return penalty against him.
The Court reviews this administrative determination for abuse of discretion, and accordingly, "must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." North Buckhead Civic Ass'n v. Skinner, 903 F.2d 1533, 1538-1539 (11th Cir. 1990). This inquiry must be "searching and careful," but "the ultimate standard of review is a narrow one." Id. at 1539. "Administrative decisions should be set aside in this context . . . only for substantial procedural or substantive reasons as mandated by statute, . . . not simply because the court is unhappy with the result reached." Id. For the reasons now explained, the Court concludes that the IRS Appeals Officer did not abuse her discretion in determining that Fondren had been afforded statutorily-required administrative procedures.
Section 6330(d) does not specify the standard of review a district court should apply to an appeal of a Notice of Determination by the IRS Appeals Office. However, where, as in the instant case, Plaintiff fails to aver the Section 6330(c)(2)(B) facts necessary to put the underlying tax liability in issue, the weight of decisional law indicates that the abuse of discretion standard is appropriate. See Loofbourrow v. C.I.R., 208 F. Supp.2d 698, 706 (S.D. Tex. 2002); Dean v. U.S., 2002 WL 31662299, at *4 (N.D. Fla. Oct. 23, 2002), citing Treas. Reg. § 301.6330-1(f), Q-F5 (2002); see also Davis v. Commissioner, 115 T.C. 35, 39 (2000); Goza v. Commissioner, 114 T.C. 176, 180 (2000).
a. COLLECTION DUE PROCESS HEARING (i). Deficiency Notice
Fondren frivolously contends that his deficiency notice lacked statutory authorization of the Secretary of Treasury or his delegate. (Compl. ¶¶ 17(f), 20(a)). The May 11, 2001 notice — attached to the complaint is signed by "Jeffrey A. Wilson, Chief, Automated Collection Branch," and the IRS delegated authority for transmission of such deficiency notices to the Automated Collection Branch Chiefs by Delegation Order 191 (rev. 2), effective October 1, 1999. Craig v. Commissioner, 119 T.C. 252, 263 (2002). Fondren proffers no credible challenge to Wilson's apparent authority, and his similar claim based on 26 U.S.C. § 2612 is meritless as the IRS imposed the penalty under 26 U.S.C. § 6702.
The court may properly consider documents attached to and incorporated into the complaint on a motion to dismiss. Arango v. United States Department of the Treasury, 115 F.3d 922, 923 n. 1 (11th Cir. 1997); See Brooks v. Blue Cross and Blue Shield of Florida, Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). ("[W]here the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiffs claim, then the Court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant's attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment.")
(ii). Notice and Demand
Fondren's complaint that he did not receive "the statutory 'Notice and Demand' for payment in connection with the alleged taxes due" merits short shrift. The referenced sections — 26 U.S.C. § 6303 (a) and 6321(a) — relate to the payment of income taxes, not the payment of frivolous return penalties. See Kelly v. U.S., 209 F. Supp.2d 981, 991 (E.D. Mo. 2002) (noting that "the provisions of § 6321 and § 6331 are not applicable to the CDP hearing, which address[es] the imposition of a penalty against Petitioner for filing a frivolous return").
(iii). Demand for Documents and Verification
Fondren correctly recites the following requirement of 26 C.F.R. § 301.6203-1: "[i]f the taxpayer requests a copy of the record of assessment, he shall be furnished a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed." Nonetheless, no statute or regulation requires the Appeals Officer to produce at a CDP hearing any of the documents requested by Fondren. See (Compl. ¶ 16, Ex. C); Craig v. Commissioner, 119 T.C. 252, 262 (2002); see also Nestor v. Commissioner, 118 T.C. 162 (2002). Nor does 26 U.S.C. § 6330 (c)(1) require the Appeals Officer to provide the taxpayer with verification that the requirements of any applicable law or administrative procedure have been met; instead, the Appeals Officer need only obtain such verification before issuing a determination. See Nestor, 118 T.C. at 166-167, see also Cole v. U.S., 2002 WL 31495841, at *6 (W.D. Mich. Oct. 21, 2002) (finding an identical claim frivolous and noting that "it is sufficient that the Appeals Officer attested to satisfaction of all applicable law and administrative procedure"). In fact, the Notice in question reveals that the Appeals Officer did secure the requisite verification by reviewing transcriptions of Fondren's "case history" and computer data. See (Compl. ex. A at 6).
See also Craig, 119 T.C. at 262-263 (stating that "Section 6330(c)(1) does not require the Appeals Officer to rely on a particular document to satisfy the verification requirement imposed by that section"); Hoffman v. U.S., 209 F. Supp.2d 1089, 1094 (W.D. Wash. 2002) (stating that "an Appeals Officer may rely on computer transcripts that contain the requisite information in order to verify an assessment").
Equally unavailing is Fondren's claim that the Appeals Officer should have documented that "the Secretary authorized the instant collection action and that the Attorney General or his delegate 'directed' that this collection action be commenced as they are required to do pursuant to Code Section 7401. . . ." (Compl. ¶ 16(e)). For purposes of section 6330(a), either the Secretary or his delegate may issue a final notice of intent to levy. See 26 U.S.C. § 7701 (a) (11) (B) and (12) (A)(i), 7803(a)(2). The evidentiary submissions attached to the complaint indicate that Fondren received the requisite "Notice of Intent to Levy" from the Commissioner's duly authorized delegate — the Chief of the Automated Collection Branch. Moreover, this claim by Fondren erroneously relies on provisions of 26 U.S.C. § 7401 which apply only to judicial actions for the recovery of tax deficiencies. (iv). Behavior of the Appeals Officer
See Nestor, 118 T.C. at 165 ("Plaintiffs Notice of Levy was signed by the Chief of the Automation Branch, an IRS employee, which satisfies the requirements of § 6330(a)(1)"); Craig, 119 T.C. at 263; Light v. U.S., 2002 WL 1465963, at *3 (D. Nev. May 15, 2002) ("The Chief of the Automated Collection Branch sent Plaintiff Letter 1058, 'Final Notice-Notice of Intent to Levy and Notice of Your Right to a Hearing,' which is the notice that §§ 6330 and 6331 require. Compl. (# 1), Exhibit C. This official had the authority to send such a notice.")
See Snyder v. C.I.R., 70 T.C.M. 479 n. 4 (1995) (noting that "sec. 7401 is part of subch. A (Civil Actions by the United States) of ch. 76 (Judicial Proceedings) of the I.R.C. The section has nothing to do with the deficiency procedures set forth in subch. B of ch. 63 of the Code").
Plaintiff charges that the IRS Appeals Officer "prematurely walked out of the hearing" before Plaintiff had the opportunity to request the following:
(a) The document that supported the imposition of the penalty (such as IRS Form 330 attached as Exhibit C) or the "signed" document as referred to in 26 U.S.C. § 6751(b) which would reveal the names of the Defendant's employees who imposed the "frivolous" penalty.
(b) The Federal ID numbers of the Defendant's employees who imposed the "frivolous penalty."
(c) The Delegation Orders from the Secretary delegating to those persons who imposed the "frivolous penalty" their authority for doing so [footnote omitted].
(d) The official job description(s) of those IRS employees who imposed the "frivolous" penalty . . .
Part (e) of this paragraph indicates that Fondren did manage to demand that the Appeals Officer provide him with a Treasury regulation granting United States employees the power to impose the "frivolous return" penalty; part (f) indicates that Fondren also gave notice of his intent to challenge the underlying liability because he did not receive a statutory deficiency notice. Clearly, any objectionable behavior by the Appeals Officer did not deter him from advancing his claims.
No statute or regulation requires the IRS to provide at the CDP hearing any of the documents demanded. Moreover, Fondren makes no allegation of non-compliance with the standard for impartiality set by 26 U.S.C. § 6320 (b)(3) that the officer conducting the hearing "[have] no prior involvement with respect to the unpaid tax." The plaintiff has not alleged that the Appeals Officer had such involvement. (v). Location of the Regulations
See Gillett v. U.S., 233 F. Supp.2d 874, 883 (W.D. Mich. 2002) ("Courts have likewise rejected as 'frivolous' the argument that the IRS failed to offer proof that those who determined and imposed the penalties were authorized to do so."); Kelly, 209 F. Supp.2d at 989 (rejecting identical argument as information sought was not required to be disclosed by the IRS in a CDP hearing and was irrelevant to plaintiffs underlying claims).
Moreover, the Appeals Officer spoke the literal truth. Plaintiff is by no means the first person to have made the arguments he makes. See Craig v. Commissioner, 119 T.C. 252 (2002).
In a patently frivolous argument, Fondren suggests the illegality of a levy imposed under 26 U.S.C. § 6331 because "the regulations for Code Section 6331 are found in 27 Code of Federal Regulations which only has to do with alcohol, tobacco, and firearms and do not even mention income taxes." (Compl. ¶¶ 18, 20(k)). The Government's authority to act pursuant to this tax code does not rest solely on the regulations in Title 27, and Fondren presents no persuasive authority to the contrary. See e.g., 26 C.F.R. § 301.6331-1 and Brown v. United States, 35 Fed. Cl.258, 269-70 (1996), aff'd, 105 F.3d 621 (Fed. Cir. 1997).
(vi). Tape Recording of the Hearing
In pertinent part, 26 U.S.C. § 7521 (a)(1) provides:
Any officer or employee of the Internal Revenue Service in connection with any in person interview with any taxpayer relating to the determination or collection of any tax shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the taxpayer's own expense and with the taxpayer's own equipment.
Whether the Appeals Officer properly refused Fondren's request to record the hearing depends on whether an "in-person interview," as referenced in Section 7521, includes due process hearings under 26 U.S.C. § 6330.
In interpreting an ambiguous statute, courts look first to the plain meaning of the words used, according to them their ordinary, nontechnical meanings unless the context otherwise requires. See CBS, Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1222 (11th Cir. 2001). In Webster's Third International Dictionary 1184 (Philip Babcock Gove, ed., 1981), the relevant definition of the word "interview" is as follows (def. 1 b): "a meeting face to face: a private conversation; usually a formal meeting for consultation." See Id. at 1223 ("In order to determine the common usage or ordinary meaning of a term, courts often turn to dictionary definitions for guidance . . ." to confirm common sense impressions about the ordinary meaning of words). An "interview" does not ordinarily encompass a hearing by a judicial or administrative tribunal for a decision-making purpose, and the word cannot accurately describe Fondren's CDP hearing.
This Court's determination is consistent with relevant judicial precedent: see, e.g., McCleskey v. Kemp, 753 F.2d 877, 900 (11th Cir. 1985) (stating that "in-person interviews" with witnesses deemed unnecessary in light of attorney's ability to cross-examine them at trial); Devine v. Cleland, 616 F.2d 1080, 1088-89 (9th Cir. 1980) (stating "in-person interviews" required by court order contrasted with "evidentiary hearings").
Adopting a similar construction of the statute, the IRS has consistently recognized that material distinctions — between interviews with auditors and revenue officers and hearings with Appeals Officers — preclude application of § 7521 at appeals hearings. As explained in Internal Revenue Manual (IRM) 8.7.2 effective May 2, 2002,
See IRS Notice 89-51, 1989-1 C.B. 691, an "administrative pronouncement," which provides guidance on the definition of "in-person interview" under 26 U.S.C. § 7520 (b)(2), the predecessor to § 7521:
For purposes of section 7520 of the Code, the term "taxpayer interview" means a meeting between an officer or employee of the Examination function, the Employee Plans and Exempt Organization function, or the Collection function of the Service, and a taxpayer or authorized representative, as defined in section 7520(b)(2), when the determination or the collection of any tax is at issue.See also, IRS Litigation Guideline Memorandum, 1991 LGM GL-17, 1991 WL 1167959 (1991), which states:
[I]t is our position that section 7521 does not apply to taxpayer conferences which involve the issuance of rulings, determination letters or technical advice, or routine telephone conversations between taxpayers or their authorized representatives and Service personnel. It is also our position that section 7521 does not apply to an administrative appeals conference. Because a taxpayer's appearance at an administrative appeals conference is voluntary, the provisions of the Administrative Procedure Act, as more fully discussed below, would also not apply to give a taxpayer any right to a verbatim recording.
Prior to enactment of IRC 7521, Service Compliance functions voluntarily allowed audio recordings. Appeals decided to follow this practice at that time. IRC 7521, enacted in 1988, provided for the allowance of audio recordings of conferences relative to the determination or collection of a tax, between the taxpayer and the Internal Revenue Service, provided that the Service was given at least ten (10) days advance notice of the taxpayer's intent to record the conference. Although Appeals makes liability and collectibility determinations, Appeals' procedures differ from Examination and Collection function contacts that are not discretionary for the taxpayer. Since contact with Appeals is discretionary for the taxpayer, it was determined that IRC 7521 was not applicable to appeals.
Although such IRS interpretative statements do not have the force of law, they are entitled to judicial deference. b. LIABILITY FOR FRIVOLOUS RETURN PENALTY
See, e.g., Washington State Dept. of Social and Health Services v. Guardianship Estate of Keffeler, 123 S.Ct. 1017, 1026 (2003) ("While . . . administrative interpretations are not products of formal rulemaking, they nevertheless warrant respect . . ."); Christensen v. Harris County, 529 U.S. 576, 587 (2000) (holding that "interpretations contained in formats such as opinion letters are 'entitled to respect' under our decision in Skidmore v. Swift Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944), but only to the extent that those interpretations have the 'power to persuade'"); Reno v. Koray, 515 U.S. 50, 61 (1995) (stating that internal agency guideline, which is not "subject to the rigors of the Administrative Procedur[e] Act, including public notice and comment," entitled only to "some deference") (internal quotation marks omitted).
Fondren's 1999 tax return included a W-2 income statement for $37,703.28, but Fondren made "zero" entries in all spaces designated for income earned or taxes due. The IRS is empowered to assess a civil penalty of $500 against any individual who files what purports to be an income tax return if: (1) the document filed either does not contain information on which the substantial correctness of the self-assessment may be judged or contains information that on its face indicates that the self-assessment is substantially incorrect; and (2) such conduct arises either from a position which is frivolous or from a desire which appears on the purported return to delay or impede the administration of federal income tax laws. 26 U.S.C. § 6702 (a). That Fondren's purported return satisfies this statutory definition for a frivolous return penalty is simply not debatable.
Numerous federal courts have upheld the IRS's $500 sanction pursuant to 26 U.S.C. § 6702 (a), where, as here, a tax form declares that an individual had no income, but attached W-2 reflect wages, tips, or other compensation. See Ruble v. U.S. Government, Dept. of Treasury, I.R.S., 159 F. Supp.2d 1381, 1384 (N.D. Ga. 2001); Thompson v. United States, 1999 WL 302453, at *2 (N.D. Ga. 1999) (defining a frivolous return as one which "contains information that on its face indicates that the self assessment is substantially incorrect"); Goodmon v. Commissioner of Internal Revenue, 761 F.2d 1522, 1524 (11th Cir. 1985) (concluding that a return supported the finding of fraud because "it contained either zeros or Fifth Amendment objections on all lines of the return despite the fact that [the taxpayer] had earned $24,573.90"); Hyslep v. U.S., 765 F.2d 1083, 1084 (11th Cir. 1985); Madison v. United States, 752 F.2d 607, 609 (11th Cir. 1985) (holding that when it is apparent from the face of the complaint that the return is frivolous, the penalty § 6702 penalty was proper and the complaint must be dismissed for failure to state a claim).
Section 6702 requires Fondren to pay a $500 penalty if he files a frivolous income tax return; no implementing regulation is required to impose this liability. See Hoffman v. U.S., 209 F. Supp.2d 1089, 1094 (W.D. Wash. 2002). The IRS, through the authority delegated to that agency by the Secretary ( see 26 C.F.R. § 301.7701-9), is authorized to assess and collect penalties against a taxpayer who files a frivolous income tax return. Accordingly, courts have flatly rejected as frivolous the claim that an IRS employee is not a "delegate" of the Secretary of the Treasury. McCullough v. Secretary of Treasury, 621 F. Supp. 750, 752 (N.D. Miss. 1985).
See, e.g., Koenig v. C.I.R., 2003 WL 403061 (U.S. Tax Ct. Feb. 24, 2003) (finding frivolous and groundless the petitioner's argument that the notice of deficiency was invalid because it was not signed by the Secretary or someone with delegated authority from the Secretary); Rennie v. I.R.S., 216 F. Supp.2d 1078, 1082 (E.D. Cal. 2002); Harrison v. U.S., 211 F.R.D. 394, 396 (D. Nev. 2002) ("This argument, that IRS employees are not 'delegates' of the Secretary of the Treasury has been previously rejected."); Hoffman v. U.S., 209 F. Supp.2d 1089, 1094 (W.D. Wash. 2002).
Fondren's final contention — that no statute establishes an underlying liability for the income tax to which the penalties relate — has been roundly, routinely, and summarily rejected for good cause which need not be analyzed on Fondren's insubstantial submissions.
See also Hyslep v. U.S., 765 F.2d 1083, 1084 (11th Cir. 1985) (stating that "the argument that individual wage earners are not subject to income tax is completely frivolous and without merit"); see Simanonok v. Commissioner, 731 F.2d 743, 744 (11th Cir. 1984) (finding argument that individual wage earners are not persons subject to tax is "completely without merit").
V. CONCLUSION
Based on the foregoing analysis, it is the Recommendation of the Magistrate Judge that the Motion of the Defendant United States to Dismiss this action be GRANTED with all claims arising from and relating to the frivolous return penalty assessed for Plaintiff Fondren's 1999 tax return being dismissed with prejudice pursuant to Fed.R.Civ.P. 12(b)(6), and all claims arising from and relating to Plaintiff Fondren's 1997 tax liability being dismissed without prejudice, pursuant to Fed.R.Civ.P. 12(b)(1), with leave to re-file them in Tax Court. It is the Magistrate Judge's further Recommendation that the costs of this action be assessed against the Plaintiff.ORDER
The clerk of the court is ORDERED to file the Recommendation of the Magistrate Judge and to serve by mail a copy thereof on the parties to this action. The parties are DIRECTED to file any objections to the said Recommendation within a period of 13 days from the date of mailing to them. Any objections filed must specifically identify the findings in the Magistrate Judge's Recommendation objected to. Frivolous, conclusive, or general objections will not be considered by the District Court.
Failure to file written objections to the proposed findings and recommendations in the Magistrate Judge's report shall bar the party from de novo determination by the district court of issues covered in the report and shall bar the party from attacking on appeal factual findings in the report accepted or adopted by the district court except upon grounds of plain error or manifest injustice. Nettles v. Wainwright, 677 F.2d 404 (11th Cir. Unit B. 1982). See Stein v. Reynolds Securities, Inc., 667 F.2d 33 (11th Cir. 1982). See also Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981, en banc), adopting as binding precedent all of the decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.