Opinion
Civil Action No. 05-4777 (FLW).
May 3, 2006
ORDER
This matter having been opened to the Court by Christopher J. Christie, United States Attorney for the District of New Jersey and Dashiell C. Shapiro, Assistant United States Attorney, as counsel for Defendants Mark Everson, the Commissioner of the Internal Revenue Service, and J. Alfe, a Revenue Officer for the Internal Revenue Service (together "Defendants"), on Defendants' Motion, pursuant to Fed.R.Civ.P. 12(b)(1) and (6), to Dismiss the Complaint of Plaintiff Harvey S. Goldberg, pro se, for lack of subject matter jurisdiction or, alternatively, for failure to state a claim for which relief is available; and written opposition having been filed by Plaintiff, and the Court having considered the Motion pursuant to Fed.R.Civ.P. 78; and it appearing that:
1. Although Plaintiff's Complaint satisfies the liberal notice requirements established in Fed.R.Civ.P. 8(a)(2), it does not present with great clarity the complete factual background underlying this case. However, the Court is satisfied that Plaintiff's Complaint presents those minimum facts essential to the disposition of Defendants' Motion to Dismiss. After liberally construing Plaintiff's pro se pleadings, Haines v. Kerner, 404 U.S. 519, 520 (1972); Alston v. Parker, 363 F.3d 229, 234 (3d Cir. 2004), I conclude that I lack subject matter jurisdiction over his claims, and, further, that to the extent jurisdiction may be appropriate, Plaintiff fails to state a claim for which relief is available. Consequently, his Complaint is dismissed.
2. Plaintiff is a plumber and the sole proprietor of a business in Egg Harbor Township, New Jersey. See Plaintiff's Complaint ("Compl.") at ¶ 1. On July 8, 2005, Defendant Alfe, in his official capacity as a Revenue Officer of the Internal Revenue Service ("IRS"), sent Plaintiff a Form 3174(p) collection letter ("collection letter"), which apprised Plaintiff of the intention of the IRS to collect certain unpaid taxes owed by Plaintiff through enforced collections See Plaintiff's "Verified Affidavit" ("Pf. Aff.") at ¶ 2; Compl. at Ex. A. The collection letter informed Plaintiff that such enforced collection "may include placing a levy on [Plaintiff's] bank accounts, wages, receivables, commissions," and "could also involve seizing and selling [Plaintiff's] property, such as real estate, vehicles, or business assets." Compl. at Ex. A. The collection letter instructed Plaintiff to pay the outstanding amount due to avoid commencement of such enforced collection, and included an attachment itemizing that amount. Id. The letter also instructed Plaintiff that if he did not agree with the IRS' decision to pursue enforced collection he could submit a Collections Appeals Request (Form 9423). Id.
3. In two letters dated July 18, 2005, Plaintiff responded to Defendant Alfe regarding the July 10, 2005 collection letter. Compl. at Ex. B. In his first letter, Plaintiff expressed surprise over two IRS levies against certain payments receivable from Lowe's Home Improvements (for whom Plaintiff ostensibly had performed service), and a third against Plaintiff's personal bank account. Id. Plaintiff also explained that, although he was aware of the existence of certain outstanding business tax debts, he was unaware of any outstanding personal income tax debt. Id. He stated that, in his opinion, the IRS had violated his due process rights by failing to properly notice him of any outstanding personal income tax debt before resorting to enforced collection. Id. Plaintiff demanded the IRS cease levying against his assets and "meet me in a court of competent jurisdiction. . . ." Id.
4. In his second letter, Plaintiff asserted that he was under no obligation to pay taxes generally. Compl. at Ex. B. He explained:
It appears that you are proceeding on the assumption or presumption that I am a "person liable for" or a "person made liable for" a tax, and that I am one subject to your authority.
Mr. Alfe, if that is the case, you are in error and you are proceeding on an erroneous assumption or presumption. I deny any claim of any obligation and any claim that I am one who is eligible for or subject to a tax or that I have any requirement to waive my fundamental rights. I further deny that I have any obligation to attend a meeting with you or to give personal testimony or respond to questions about my personal affairs or that you have any facts or basis of authority to make any levy on my bank accounts, wages, receivables, commissions, etc[.] or to make any inquiry of me.
I know of nothing that makes me subject to or liable for any internal revenue tax. Any personal forms or returns that I may have submitted in the past were submitted because of misinformation and disinformation that originated from your Service[,] which implied that some obligation existed when in fact no obligation actually did. All such documents submitted under those false pretenses are hereby repudiated.
Compl. at Ex. B. Plaintiff further declared: "I deny that I am subject to or liable for any tax . . ." and "I am not one whom the United States or the State has authority to destroy. I am immune from your statutory scheme as a matter of right and not because of any statutory privilege." Id. He also stated: "I find no revenue law that imposes a tax on any activity (or property) that has anything to do with me, and I find no revenue law that makes me subject to or liable for any revenue tax." Id. Plaintiff also advised: "I have every desire to obey all laws that apply to me, but I am fearful that any participation with you or your Service will constitute a voluntary waiver of those rights and moot any further claim to those rights." Id. Plaintiff's letter concluded with a demand for documents that he set forth in thirty-four separate requests. Id. Among others, Plaintiff demanded documents or records demonstrating that Plaintiff is subject to "any revenue tax imposed by the United States of America." Id. The record does not contain evidence of any further correspondence between Plaintiff and Defendants.
5. On October 5, 2005, Plaintiff filed a Complaint against Defendants seeking an "immediate release of unlawfully obtained levy"; a "Writ of Reception or all property seized under the pretext, sham and subterfuge of collecting a tax"; "[p]unitive damages, pre[-] and post[-] judgment interest, and costs of suit and attorneys['] fees as allowed by law"; and such other relief the Court deems appropriate. Compl. at pg. 2. Plaintiff's Complaint is not a model of clarity. As far as the Court can discern, Plaintiff asserts that Defendants' enforced collections procedures violate Plaintiff's due process rights because Plaintiff is not obligated to pay taxes under United States law. Plaintiff also demands a jury trial on all issues. Id. at pg. 3.
6. Concurrent with the filing of his Complaint, Plaintiff also submitted a motion seeking an Order requiring Defendants to show cause why the Court should not enter a preliminary injunction, pursuant to Fed.R.Civ.P. 65(a), restraining Defendants and any agents, servants, and employees from further enforcing any levy against Plaintiff's assets, and why Defendants should not be compelled to return any assets seized from Plaintiff pending the outcome of this litigation. Compl. at pg. 2.
7. On November 14, 2005, Defendants filed the instant Motion in which they seek dismissal of Plaintiff's Complaint on two grounds. First, Defendants assert that pursuant to Fed.R.Civ.P. 12(b)(1), the Court lacks jurisdiction over Plaintiff's claim. Second, Defendants argue that, pursuant to Fed.R.Civ.P. 12(b)(6), Plaintiff's Complaint fails to state a claim for which a legal remedy is available.
8. On December 2, 2005, Plaintiff filed written opposition to Defendants' Motion. As far as the Court can discern, in his opposition brief Plaintiff clarifies that he does not challenge "the constitutionality and propriety of the United States' system of taxation" but rather, only Defendants' assumption that Plaintiff is a taxpayer as defined under federal law, and thus obligated to pay a tax. Pf. Opp. Br. at 1-2.
9. A facial attack on a court's jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) "is directed to the sufficiency of the pleading as a basis for subject matter jurisdiction." The Med. Soc'y of New Jersey v. Herr, 191 F. Supp. 2d 574, 578 (D.N.J. 2002). Thus, normally, a court "must only consider the allegations of the complaint and the documents referenced therein and attached thereto in the light most favorable to the plaintiff." Gould Electronics Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). However, under Fed.R.Civ.P. 12(b)(6), which authorizes a court to dismiss a complaint 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, 355 U.S. 41, 45-46 (1957), courts must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Id. Nevertheless, courts are not required to credit bald assertions or legal conclusions alleged in the complaint. Id. Similarly, legal conclusions draped in the guise of factual allegations do not benefit from the presumption of truthfulness. Id. The inquiry is not whether plaintiff will ultimately prevail, but whether he is entitled to offer evidence to support his claims. Id.
10. Before discussing Defendants' arguments, it should be noted that the United States is the proper party defendant in this case. See Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985) ("a suit against IRS employees in their official capacity is essentially a suit against the United States."); Bell v. Rossotti, 227 F. Supp. 2d 315, 320 (M.D. Pa. 2002) (same); Barnard v. Pavlish, No. 97-CV-0236, 1998 WL 247768 at *5 (M.D. Pa. March 30, 1998) ("Moreover, the claims asserted against [an IRS agent] relating to his official tax assessment and collection duties must be treated as a suit against the United States."), aff'd, 187 F.3d 625 (3d Cir. 1999). However, the Court will not dismiss Plaintiff's Complaint to allow for substitution of the United States as a party defendant because such an amendment would prove futile. See Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000) ("An amendment is futile if the amended complaint would not survive a motion to dismiss"). Id.
11. To the extent Plaintiff's Complaint asserts a tort claim against Defendants, it is barred by the Federal Tort Claims Act. See 28 U.S.C. § 2680(c), and the Court lacks subject matter jurisdiction. It is well settled that the United States is a sovereign, and, as such, is immune from suit unless it has expressly waived such immunity and consented to be sued. FDIC v. Meyer, 510 U.S. 471, 475 (1994); Matsko v. U.S., 372 F.3d 556, 558 (3d Cir. 2004). The IRS enjoys sovereign immunity as an agency of the United States unless that immunity has been waived by Congress. See Jorden v. National Guard Bureau, 799 F.2d 99, 102 n. 3 (3d Cir. 1986), cert. denied sub nom. Sajer v. Jorden, 484 U.S. 815 (1987). Sovereign immunity is not defeated by the act of naming officers and employees of the United States as defendants in a suit that properly is against the United States. Larson v. Domestic Foreign Commerce Corp., 337 U.S. 682, 688 (1949); Gilbert, 756 F.2d at 1458; Watts v. IRS, 925 F. Supp. 271, 275 (D.N.J. 1996) (suit against IRS employees acting in their official capacities is "in effect an action against the United States and is barred by the doctrine of sovereign immunity").
12. While the United States has waived its sovereign immunity for certain tort claims under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671 et seq. and 1346(b), it has not waived its sovereign immunity for common law torts allegedly committed by the IRS concerning the assessment and collection of taxes. See 28 U.S.C. § 2680(c). To be sure, a suit based on the assessment or collection of taxes is expressly excluded from the FTCA's waiver of sovereign immunity. See e.g., Fishburn v. Brown, 125 F.3d 979, 981-982 (6th Cir. 1997); Aetna Casualty Surety Co. V. United States, 71 F.3d 475, 478 (2d Cir. 1995); Nat'l Commodity Barter Ass'n v. Gibbs, 886 F.2d 1240, 1246 (10th Cir. 1989); Capozzoli v. Tracey, 663 F.2d 654, 658 (5th Cir. 1981); Lang v. Rubin, 73 F. Supp. 2d 448, 450 (D.N.J. 1999); Pugh v. Internal Revenue Service, 472 F. Supp. 350, 352 (E.D. Pa. 1979). This is so because another compensatory scheme exists for challenges to taxation. See Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 427 n. 5 (1995).
13. Further, the injunctive relief Plaintiff seeks is specifically prohibited by the Anti-Injunction Act, 26 U.S.C. § 7421(a), which, with states — with limited exceptions not relevant here — "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." The purpose of the Anti-Injunction Act is to permit the government to assess and collect taxes it determines to be owed, without judicial intervention. See Enochs v. Williams Packing Navigation Co., 370 U.S. 1, 7 (1962). Section 7421(a) applies not only the assessment and collection of the actual tax, but to activities relating to the assessment or collection of taxes. See Linn v. Chivatero, 714 F.2d 1278, 1282 (5th Cir. 1983). Consequently, under this clear statutory mandate, the Court must dismiss any action that seeks the release or cancellation of a federal tax lien. Bob Jones University v. Simon, 416 U.S. 725, 743 (1974) (holding courts must adhere to the plain meaning of the Anti-Injunction Act).
14. Finally, notwithstanding his specific arguments, it is clear from the record that Plaintiff's true motive is to prevent the collection of validly assessed taxes based on his recondite belief that he is not subject to federal tax laws, and, although he earns money, not involved in any revenue taxable activity. Such contentions are wholly without merit, and do not warrant the considerable time and resources the Court has ben forced to devote to this matter.
The itemized invoice lists unpaid tax amounts from 1997, 2000, and 2001, which, together with penalties and interest, totals $203,843. Compl. at Ex. A.
As a general matter, courts ruling on a motion to dismiss may not consider matters extraneous to the complaint. Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). An exception to the general rule is that a "document integral to or explicitly relied upon in the complaint" may be considered "without converting the motion [to dismiss] into one for summary judgment." Id. (quoting Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)). Accordingly, the Court will consider the letters attached to Plaintiff's Complaint, as they are integral to understanding his claim.
Specifically, 28 U.S.C. § 2680(c) exempts from the FTCA any claim "arising in respect of the assessment or collection of any tax. . . ." Courts have interpreted 28 U.S.C. § 2680(c) liberally "to encompass any activities of an IRS agent even remotely related to his or her official duties." Capozzoli, 663 F.2d at 658. See also Childress v. Northrop Corp., 618 F. Supp. 44 (D.D.C. 1985) (interpreting § 2680(c) to bar a claim alleging constitutional violations; collecting and discussing other cases).
Moreover, "because Congress has created an extensive scheme providing remedies to a plaintiff complaining of the conduct of government officials in connection with tax assessments and collections" Plaintiff's Complaint cannot be read to assert a claim against Defendants pursuant to Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388 (1971). See Shreiber v. Mastrogiovanni, 214 F.3d 148 (3d Cir. 2000) (holding that aBivens remedy should not be inferred for allegations of unconstitutional actions by IRS agents).
Accordingly, and for good cause shown:
IT IS on this 3rd day of May, 2006, hereby
ORDERED that Defendant's Motion to Dismiss Plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(1) and (6) is GRANTED, and it is further,
ORDERED that the Clerk shall mark this case CLOSED.