Summary
holding that IRS was not subject to suit in its own name
Summary of this case from Carter-Boyd v. Dep't of Treasury Internal Revenue Serv.Opinion
02 CV 499 (ARR)
May 27, 2003
OPINION AND ORDER
Plaintiff pro se William J. Higgins commenced this action on January 17, 2002, and filed an amended complaint on August 30, 2002. Distilling his allegations from the lengthy, rambling, and repetitive amended complaint, the court understands plaintiff to allege that the defendants tortiously and unconstitutionally refused to accept his compromise offer as a complete discharge of the tax liability he owes Defendants move to dismiss the complaint. For the reasons given below, the motion is granted.
BACKGROUND
According to defendants, in 1998 the Secretary of the Treasury made an assessment against plaintiff for unpaid taxes in connection with the 1997 taxable year. A second assessment came in 1999 for unpaid taxes in connection with the 1996 taxable year. In March of 2001, plaintiff submitted an "offer in compromise" to the Internal Revenue Service (IRS) in an effort to discharge his tax liability. The IRS rejected the compromise offer on July 31, 2001, and plaintiff appealed. At the time defendants moved to dismiss the complaint, the appeal was pending. According to plaintiff, it has since been rejected. See Pl. Letter/Mot. dated Apr. 1, 2003, ¶ 2; see also Tr. of Settlement Conf. dated Apr. 2, 2003, at 3.
Plaintiff does not contest these facts. The court relies on defendants' representation of pertinent events as plaintiff's complaint and opposition to defendants' motion are not entirely lucid.
Although he lists 34 causes of action, Amended Compl. at 14-15, plaintiff essentially makes three allegations. He argues that his offer in compromise "was rejected with tort liability, aggravated harassment, abuse of discretion, authority and caused substantial mental anguish, pain and suffering to this Plaintiff." Amended Compl. at 6. Second, plaintiff contends that he was denied his constitutional due process rights, as the IRS did not "allo[w] this taxpayer to go to the Appeals Process." Id. at 19. Finally, reading his opposition papers in tandem with the amended complaint, the court interprets plaintiff's general allegations of unconstitutional conduct as an equal protection claim. He argues that the IRS "do[es] not pursue certain social economic classes of citizens," namely rich taxpayers, while targeting people of "lesser economic value." Pl. Opp. at 10. Plaintiff seeks damages and injunctive relief.
DISCUSSION
The IRS is not subject to suit in its own name and is therefore dismissed as a defendant. E.g., Dubay v. IRS, No. 96 Civ. 1399, 1997 U.S. Dist. LEXIS 1967, at *4 (D. Conn. Feb. 7, 1997). Plaintiff's due process claim is now moot, as he has received a decision from the IRS on his appeal. As discussed in detail below, the court must dismiss his remaining claims against the other defendants for lack of jurisdiction.
Negligence Claims
All negligence claims against the United States and the IRS officers fail on sovereign immunity grounds. "The United States, as sovereign, is immune from suit save as it consents to be sued . . ., and the terms of the consent to be sued in any court define the court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586 (1941) (citations omitted). Tort claims against the United States are authorized by the Federal Tort Claims Act (FTCA), which "constitutes a limited waiver by the United States of its sovereign immunity." Millares v. United States, 137 F.3d 715, 719 (2d Cir. 1998) (citations omitted). However, "the FTCA's waiver of sovereign immunity does not apply to claims `arising in respect of the assessment or collection of . . . taxes.'" Aetna Casualty Surety Co. v. United States, 71 F.3d 475, 477 (2d Cir. 1995), quoting 28 U.S.C. § 2680(c). Plaintiff contends that he "is not arguing assessment of collection of a tax liability but is only attempting to respectfully compromise such. . . ." Pl. Opp. at 3. However, the Second Circuit has interpreted the § 2860(c) exception to the FTCA broadly to bar claims such as plaintiff's, which are related to if not directly concerned with the assessment or collection of tax liabilities. See Aetna Casualty, 71 F.3d at 478, see also Hallock v. United States, No. 02 Civ. 942, 2003 U.S. Dist. LEXIS 4851, at *10-11 (N.D.N.Y. Mar. 21, 2003). All of plaintiff's tort claims arise in respect to the collection of taxes; he therefore cannot proceed with them against defendant United States.
Plaintiff's claims against defendants Rossetti and Hassis also founder upon the shoals of sovereign immunity. A tortfeasor may be sued in his individual capacity if he did not commit the alleged wrongdoing while acting in the scope of his federal employment. B A Marine Co., Inc. v. American Foreign Shipping Co., Inc., 23 F.3d 709, 713 (2d Cir. 1994). However, "[b]ecause an action against a federal agency or federal officers in their official capacities is essentially a suit against the United States, such suits are also barred under the doctrine of sovereign immunity, unless such immunity is waived." Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 510 (2d Cir. 1994); see also Dubay v. Scott, No. 98 Civ. 29, 1998 U.S. Dist. LEXIS 16348, at *4 (D. Conn. Sept. 30, 1998) ("Suits against IRS employees in their official capacities are essentially suits against the United States."). In his amended complaint, plaintiff states unequivocally that he intends to sue Rossetti and Hassis in their official capacities: "The actions of the Defendants et al [sic] in particular IRS et al [sic] which gave rise to this complaint were shockingly taken within the scope of their employment. This complaint goes more to the actions taken by Defendants in their official capacities." Amended Compl. at 62. The court thus construes the negligence claims against Rossetti and Hassis as claims against the United States and dismisses them for the reasons given above.
Constitutional Claims
Plaintiff argues that he has been deprived of equal protection of the laws in violation of the Fourteenth Amendment because the IRS "practices discrimination and bias against . . . citizens of lesser economic value" while turning a blind eye to wealthy tax scofflaws. Amended Compl. at 13. Plaintiff's equal protection claim for damages against the United States is barred on sovereign immunity grounds. Soffer v. United States, No. 01 Civ. 945, 2002 U.S. Dist. LEXIS 9497, at *15 (S.D.N.Y. Mar. 20, 2002); see also FDIC v. Meyer, 510 U.S. 471, 478, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). As levied against defendants Rossetti and Hassis, plaintiff's equal protection allegation is similarly hamstrung. The court construes this claim against these defendants as an action brought pursuant to the Supreme Court's holding in Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). "In a Bivens action, alleged victims of constitutional violations by federal officials may recover damages despite the absence of any statute specifically conferring such a cause of action." Robinson, 21 F.3d at 510. However, "because the Internal Revenue Code provides taxpayers with adequate legal remedies to redress unlawful tax assessments and collections, a Bivens remedy is generally unavailable in the tax context." Soffer, 2002 U.S. Dist. LEXIS 9497, at *16 n. 6; see also Schadl v. Kupinse, No. 99 Civ. 844, 2001 U.S. Dist. LEXIS 10351, at *9 (D. Conn. Mar. 29, 2001); Webb v. Smith, No. 97 Civ. 787, 1997 U.S. Dist. LEXIS 11308, at *7 (S.D.N.Y. Aug. 4, 1997). Cf. Yalkut v. Gemignani, 873 F.2d 31, 35 (2d Cir. 1989). Plaintiff has opportunities to remedy this allegedly unconstitutional conduct in internal IRS proceedings and cannot therefore bring it in federal court.
Even assuming that a Bivens action against a tax official were proper, plaintiff has not pleaded the elements of an equal protection claim. An equal protection claim has two essential elements: "`(1) the [plaintiff], compared with others similarly situated, was selectively treated; and (2) that such selective treatment was based on impermissible considerations such as race, religion, intent to inhibit or punish the exercise of constitutional rights, or malicious or bad faith intent to injure a person.'" Diesel v. Town of Lewisboro, 232 F.3d 92, 103 (2d Cir. 2000), quoting LeClair v. Saunders, 627 F.2d 606, 609-10 (2d Cir. 1980). Plaintiff has not alleged that he has been selectively treated in a manner pertinent to his claim. He fully admits that he owes back taxes, but he insists that the IRS unfairly refused to accept his compromise offer. However, in discussing his equal protection claim, he does not allege that the IRS considers wealthy citizens' offers in compromise any differently than his. Plaintiff instead makes conclusory allegations about the IRS's general enforcement practices, insisting that the agency lets wealthy citizens squirrel away their income overseas in tax shelters without penalty. See Amended Compl. ¶ 12-13. These statements do not establish that the IRS discriminates against poorer citizens when they make offers in compromise, nor do these statements meet plaintiff's obligations to include minimally sufficient factual allegations in his complaint for the purposes of pleading an equal protection violation. See O'Diah v. New York City, No. 02 Civ. 274, 2002 U.S. Dist. LEXIS 15507, at *38 (S.D.N.Y. Aug. 22, 2002).
Injunction
Although his complaint is far from clear, it appears that plaintiff requests an injunction to enjoin defendants from collecting on his federal tax liabilities. The Anti-Injunction Act prevents the court from entertaining any suit in which the plaintiff demands that the IRS be restrained from assessing or collecting any tax. 26 U.S.C. § 7421 (a). Although there is a narrow exception to the Anti-Injunction Act,see Enochs v. Williams Packing Co., 370 U.S. 1, 5 (1962), the exception does not apply in this instance. "Only if it is . . . apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim" to the taxes owed can a plaintiff proceed with a suit for an injunction. The gravamen of plaintiff's amended complaint is that defendants refused to accept his offer in compromise. Since such a decision is committed to the discretion of the IRS, it is doubtful that defendants will be unable to argue that they can collect the full amount owed by plaintiff.
CONCLUSION
For the reasons given above, defendants' motion to dismiss is granted. The Clerk of the Court is instructed to enter judgment accordingly.
SO ORDERED.