Opinion
NO: C-1-01-834
March 31, 2003
ORDER
This matter is before the Court on the Magistrate Judge's Report and Recommendation that Defendant's Motion to Dismiss Be Granted and This Case Closed (doc. 8) and Plaintiff's Objections, styled as a Motion to Review (doc. 10)
This is a pro se civil complaint against the Internal Revenue Service ("IRS") in which the plaintiff, who owed federal taxes for tax years 1989 and 1993 through 1996, contends that his rights have been violated when the IRS stopped sending him repayment coupons in June 1999 and cancelled his installment agreement without notice in May 1999. On December 4, 2001, plaintiff brought a three-count Complaint, contending that the IRS (1) violated his constitutional and/or federal statutory rights by acting as described above, (2) violated 26 U.S.C. § 6065 when it failed to verify unspecified documents, and (3) exceeded the ten-year statute of limitations period applicable to tax collection cases when it included his 1989 taxes in the repayment agreement, and otherwise sought to collect back taxes for the prior tax year, 1988 (doc. 1)
The IRS filed a Motion to Dismiss on April 5, 2002 premised on both Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction and Fed.R.Civ.P. 12(b)(6) for failure to state a claim (doc. 5). On December 11, 2002, the Magistrate Judge recommended that the IRS' Motion be granted and this case be closed (dcc. 8). Plaintiff filed his objections to the Magistrate Judge's Report and Recommendation on January 30, 2003, (doc. 10) and this matter is now ripe for the Court's review.
The Magistrate Judge's Report and Recommendation
The Magistrate Judge found that the Plaintiff is limited by the IRS Code and the federal government's sovereign immunity, to bringing an unlawful tax collection case under 26 U.S.C. § 7433(a), which specifies that such a claim shall be the exclusive remedy for recovering damages from the IRS (doc. 8). The Magistrate Judge found that the Plaintiff is barred from proceeding under Section 7433 because he has failed to suggest that he has exhausted his administrative remedies under Section 7433(d)(1), and that even if he had done so, his Complaint was not filed within the two-year statute of limitations fixed in Section 7433(d)(3) (Id.). The Magistrate Judge further found that even if Plaintiff could overcome his subject matter jurisdiction bar, his claims would fail on the merits (Id.). The Magistrate Judge found that Plaintiff's Complaint of a lack of due process does not rise to the level of a constitutional violation, that the IRS was acting within its statutory authority under 26 U.S.C. § 6159(a) when it entered into a repayment plan with Plaintiff, that the burden to verify under 26 U.S.C. § 6065 is on the taxpayer rather than the IRS, and that tax year 1988 is not at issue in this suit because it was not part of the repayment plan nor has the IRS claimed tax liability for 1988 (Id.). The Magistrate Judge stated that the Plaintiff's liability for 1989 is evidenced in Vonderheide v. United States, No. 98-3336, 1999 WL 220134, at *1 (6th Cir. March 18, 1999) (Id.). Finally, the Magistrate Judge noted that to the extent Plaintiff seeks declaratory and/or injunctive relief, he is prohibited from doing so under the Anti-Injunction Act, 26 U.S.C. § 7421(a), and the Declaratory Judgment Act, 28 U.S.C. § 2201(a) (Id.)
Plaintiff's Objections first center on the theory that the Magistrate Judge erred in relying on 26 U.S.C. § 7433, as such statute pertains to damages (doc. 10). Plaintiff emphasizes that he has not claimed damages (Id.). As such, he argues that the six year statute of limitations of 28 U.S.C. § 2401(a) applies to this matter (Id.). He further argues that he exhausted his administrative remedies when he requested explanation for why his installment agreement was cancelled, and never received such explanation (Id.). He argues that he has of yet to receive the thirty-day notice required prior to cancellation of an installment plan under 26 U.S.C. § 6159(5) (Id.). Finally, he argues that he is not barred from declaratory and injunctive relief because the Federal Rules of Civil Procedure provide that "Relief in the alternative or of several different types may be demanded." Fed.R.Civ.P. 8(a)(3).
The Court finds that Plaintiff's Objections are devoid of merit, and as such affirms the Magistrate Judge's Report and Recommendation. The Magistrate Judge properly disposed of Counts II and III of Plaintiff's Complaint because the burden to verify under 26 U.S.C. § 6065 is on the taxpayer rather than the IRS, and because the tax year 1988 is not at issue in this suit because it was not part of the repayment plan nor has the IRS claimed tax liability for 1988. Plaintiff's assertion that his tax liability for 1989 is outside the ten year statute of limitations (doc. 1) is not well-taken, as the IRS assessed Plaintiff's tax liability for 1989 within the ten-year limitations period set forth in 26 U.S.C. § 6502(a)(1). See Vonderheide v. United States, No. 98-3336, 1999 WL 220134, at *1 (6th Cir. March 18, 1999)
As for the remaining Count I, Plaintiff has conceded, in bold print, that he has no damage claims. Any such claims for recovering money damages would indeed be barred by 26 U.S.C. § 7433, as this Court finds the Magistrate Judge's reasoning well-taken that Plaintiff has not met the requirements of that statute. The Court further finds well-taken the Magistrate Judge's conclusion that none of Plaintiff's allegations rise to the level of a constitutional violation. If the IRS was in violation of the notice requirements of 26 U.S.C. § 6159(5), a declaration that the IRS must adhere to the Code and was in violation of the Code in this case is barred by 28 U.S.C.S. § 2201(a) of the Declaratory Judgment Act. See Girvin v. United States, No. C-1-96-913, 2000 U.S. Dist. LEXIS 21544, at *2.3 (S.D. Ohio April 6, 2000) Equitable relief in the form of an injunction is also barred. 28 U.S.C. § 2201(a). Id. Plaintiff misconstrues Fed.R.Civ.P. 8, a procedural rule setting forth general forms of pleading, to arrive at the faulty conclusion that he is entitled to relief specifically barred to him in this case under statute.
Plaintiff's Complaint smacks of disingenuousness, especially in light of his history of frivolous litigation against the IRS. In 1999, the Sixth Circuit levied sanctions of $1200 against Plaintiff, stating that "Tax protestors who assert frivolous claims may be legally assessed damages in the district court and on appeal. Vonderheide, 1999 WL 220134, at *2 citing Schoffner v. Commissioner, 812 F.2d 292, 294 (6th Cir. 1987) (per curiam). The Court reminds Plaintiff that "taxes are what we pay for a civilized society" Compania General De Tabacos de Filipinas v. Collector of Internal Revenue, 275 U.S. 87 at 100 (1929) (Holmes, dissenting). The Court levies no sanctions in this instance but dismisses Plaintiff's case as lacking merit.
Proper notice was given to Plaintiff under Title 28 U.S.C. § 636(b)(1)(C), including the notice that Plaintiff would waive further appeal if he failed to file an objection to the Magistrate Judge's Report and Recommendation in a timely manner. See United States v. Walters, 638 F.2d 947, 949-50 (6th Cir. 1981)
Having reviewed this matter de novo, pursuant to Title 28 U.S.C. § 636, the Court concludes that the Magistrate Judge's Report and Recommendation is correct. Accordingly, the Court hereby ADOPTS the Magistrate Judge's Report and Recommendation That Defendant's Motion to Dismiss be Granted, and This Case Closed (doc. 8), AFFIRMS the Magistrate Judge's recommended decision (Id.), GRANTS Defendant's Motion to Dismiss (doc. 5) and DISMISSES this case with prejudice.
SO ORDERED.