Opinion
Case No. 4:04-CV-56-2 (CDL).
September 30, 2004
ORDER
The Court presently has pending before it Defendants' Motion to Dismiss. Defendants contend that this Court lacks subject matter jurisdiction over the action and that Plaintiff has failed to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12 (b) (1), (6). For the reasons set forth below, the Court finds that Plaintiff has failed to state a claim upon which relief can be granted. Defendants' motion is therefore granted, and Plaintiff's claims are dismissed with prejudice.
FACTS
Plaintiff William J. Wright is an African American male who was born in Columbus, Georgia, where he currently resides. Plaintiff paid federal income taxes from 1963 to 1995, and he recently filed a claim for a federal income tax refund. The IRS rejected Plaintiff's refund claim as frivolous. Following the rejection, Plaintiff filed this action to recover the federal income taxes he paid from 1963 to 1995, approximating the amount to be $25,000.
Plaintiff did not specifically state it in his Complaint, but it is clear from the allegations and relief sought that Plaintiff is African American.
Plaintiff urges the Court to hold that the "Income Tax Law of 1913" is unconstitutional as applied to African Americans, including himself, and asks the Court to enjoin the IRS from taxing him in the future. Plaintiff alleges that a pattern and practice of government-sanctioned discrimination against African Americans has resulted in Plaintiff and other African Americans "not [being] received" as citizens of the United States as contemplated by the Fourteenth Amendment. He cites a number of examples of discriminatory government action, ranging from local (e.g., Columbus, Georgia's discriminatory hiring policy during the 1950s) to state (e.g., Georgia's actions with regard to segregated schools during the 1950s) to federal (e.g., United States Supreme Court's decision in Plessy v. Ferguson, 163 U.S. 537 (1896)).
The Court assumes that Plaintiff is referring to the Underwood Tariff Act of 1913, Pub.L. No. 63-16, § II, 38 Stat. 114, 166-81, the first income tax law enacted pursuant to the Sixteenth Amendment.
Plaintiff argues that imposing an income tax on persons who are not citizens of the United States is unconstitutional for lack of nexus between the government and the person to be taxed. He further argues that taxing the income of persons "not received" as citizens due to discriminatory government action violates the guarantees of equal protection and due process under the Fifth Amendment.
MOTION TO DISMISS STANDARD
In reviewing a Motion to Dismiss under Rule 12 (b) (6), the Court must accept all factual allegations contained in Plaintiff's Complaint as true. Brown v. Crawford County, 960 F.2d 1002, 1010 (11th Cir. 1992). A Motion to Dismiss under Rule 12 (b) (6) should only be granted if it is "clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Powell v. United States, 945 F.2d 374, 375 (11th Cir. 1991).DISCUSSION
At its core, Plaintiff's Complaint alleges that Plaintiff is not received as a full citizen of the United States — that he does not enjoy many of the benefits of citizenship. For that reason, he argues, it is unconstitutional for the government to collect income taxes from him. It is true that Plaintiff recounts a lamentable history of discrimination against African Americans. However, there is no basis in the law for the Court to find that, because of past discrimination against African Americans, the United States government has no valid jurisdiction to tax Plaintiff's income.
The United States income tax laws are enacted pursuant to the Sixteenth Amendment to the United States Constitution, which provides: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." U.S. Const. amend. XVI. The Sixteenth Amendment does not state that Congress may only impose an income tax on U.S. citizens, and the tax laws made pursuant to the Sixteenth Amendment contain no such limitation. The Underwood Tariff Act of 1913, which Plaintiff refers to as the "Income Tax Law of 1913," imposed a tax on income "arising or accruing . . . to every citizen of the United States, whether residing at home or abroad, and to every person residing in the United States, though not a citizen thereof. . . ." Underwood Tariff Act of 1913, Pub.L. No. 63-16, § II, 38 Stat. 114, 166. Though the Underwood Tariff Act has long been superseded, see Revenue Act of 1916, Pub.L. No. 64-271, § 902, 38 Stat. 756, 801, today's Internal Revenue Code still "imposes an income tax on the income of every individual who is a citizen or resident of the United States." 26 C.F.R. § 1.1-1 (2004).
Citizenship and residence are both recognized as constitutional bases for income taxation. The Supreme Court has held that Congress has the power to tax income on the basis of U.S. citizenship alone. Cook v. Tait, 265 U.S. 47, 56 (1924) (upholding tax on income derived from U.S. citizen's property located in Mexico, even though the U.S. citizen was a permanent resident of Mexico). The Supreme Court has also held that residence provides substantive jurisdiction to tax income because a resident enjoys the benefits of residence and therefore must share responsibility for the costs of government. New York ex rel. Cohn v. Graves, 300 U.S. 308, 312-13 (1937) ("That the receipt of income by a resident of the territory of a taxing sovereignty is a taxable event is universally recognized. Domicil itself affords a basis for such taxation.").
Plaintiff in this case admits that he is a citizen of the United States; he argues that though he is a citizen in a technical sense, he is not a citizen in the real sense of the word and should not be taxed. The Court notes that this argument has been rejected on numerous occasions by the United States Tax Court. See, e.g., Avery-Carter v. Comm'r, 66 T.C.M. (CCH) 1596 (1993); Scott v. Comm'r, 66 T.C.M. (CCH) 606 (1993), aff'd, 19 F. 3d 12 (4th Cir. 1994); Wiggins-El v. Comm'r, 42 T.C.M. (CCH) 1033 (1981).
Plaintiff asks the Court to adopt his stratified definition of citizenship and find that he is not a true U.S. citizen — but only for the purposes of income taxation. The Court must, however, adhere to the definition provided by the Fourteenth Amendment, which does not qualify the word citizen: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." U.S. Const. amend. XIV § 1. Plaintiff was born in Columbus, Georgia, and he has not been expatriated or otherwise lost his United States citizenship. Plaintiff is, therefore, a citizen of the United States. Even if Plaintiff were not a citizen of the United States, the government would still have a valid basis to tax his income: residence. Plaintiff currently resides in Georgia and is therefore a resident of the United States. Thus, Plaintiff is subject to United States income tax laws by virtue of being both a citizen and a resident of the United States. Though the Internal Revenue Code may provide some exception under which Plaintiff's income is excluded from taxation, the United States Constitution does not.
CONCLUSION
For the foregoing reasons, the Court grants Defendants' Motion to Dismiss.IT IS SO ORDERED.