Baga v. The United States Treasury Department Internal Revenue Service

MOTION to Dismiss for Lack of Jurisdiction Failure to State a Claim and Insufficient Service of Process

E.D. Pa.September 27, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA VITTORIA L. BAGA, ) ) Plaintiff, ) ) v. ) ) UNITED STATES TREASURY ) DEPARTMENT INTERNAL REVENUE ) SERVICE, ) ) Defendants. ) _______________________________________) Case No. 2:16-cv-03381-DCJ THE UNITED STATES’ MOTION TO DISMISS FILED ON BEHALF OF THE DEFENDANT THE UNITED STATES TREASURY DEPARTMENT INTERNAL REVENUE SERVICE The United States of America, as the proper party in interest and in place of the named federal defendant, the “United States Treasury Department Internal Revenue Service”, respectfully moves to dismiss this action for lack of subject matter jurisdiction, insufficient service of process, and failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(1), (5), and (6). The foundation for this motion, as more fully set forth in the memorandum of law filed herewith, is that the plaintiff has not satisfied the statutory or judicial prerequisites to qualify for relief under any statute that waives the sovereign immunity of the United States. Therefore, the court lacks subject matter jurisdiction to hear any claim for a tax refund because the plaintiff has not fully paid the outstanding tax liability or filed an administrative claim for refund. The court also lacks subject matter jurisdiction to hear plaintiff’s claims for declaratory and injunctive relief by virtue of the Anti-Injunction Act, 26 U.S.C. § 7421, and the tax exception to the Declaratory Judgment Act, 28 U.S.C. § 2201. Additionally, the court lacks subject matter Case 2:16-cv-03381-CDJ Document 3 Filed 09/27/16 Page 1 of 4 2 jurisdiction over the plaintiff’s claim for damages because the plaintiff has not exhausted her administrative remedies as required by 26 U.S.C. § 7433. Alternatively, the plaintiff has failed to state a claim upon which relief can be granted for a tax refund because she has failed to fully pay the outstanding tax liability or file an administrative claim for a refund. See Fed. R. Civ. P. 12(b)(6). The plaintiff has also failed to state a claim upon which relief can be granted for damages under 26 U.S.C. § 7433 because she has failed to exhaust administrative remedies, makes no allegations concerning which part of the internal revenue laws were violated by the IRS, and fails to allege any actual and direct economic damages caused by any alleged IRS violations. Id. Finally, the case should be dismissed because the Internal Revenue Service has not been properly served by the plaintiff with the complaint and summons. See Fed. R. Civ. P. 12(b)(5). WHEREFORE, the United States requests the Court dismiss the complaint against the Internal Revenue Service for lack of subject matter jurisdiction because the United States is immune from suit. Alternatively, the United States requests the Court dismiss the complaint for failure to state a claim upon which relief can be granted. Finally, the Court should dismiss the complaint for insufficient service of process. A memorandum of law and proposed order accompany this motion. // // // // // // Case 2:16-cv-03381-CDJ Document 3 Filed 09/27/16 Page 2 of 4 3 Dated: September 27, 2016 ZANE DAVID MEMEGER United States Attorney CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General /s/ Sean P. O’Donnell SEAN P. O'DONNELL Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 227 Washington, D.C. 20044 202-514-9641 (v) 202-514-6866 (f) Sean.P.O´Donnell@usdoj.gov Case 2:16-cv-03381-CDJ Document 3 Filed 09/27/16 Page 3 of 4 4 CERTIFICATE OF SERVICE I hereby certify that on this 27th day of September, 2016, I electronically filed the foregoing document with the Clerk of Court using the CM/ECF system, and that on the same date I have mailed the document by United States Postal Service to the following non-CM/ECF participants: Vittoria L. Baga 256 S. 16th Street Philadelphia, Pennsylvania 19102 /s/ Sean P. O'Donnell SEAN P. O'DONNELL Trial Attorney, Tax Division United States Department of Justice Case 2:16-cv-03381-CDJ Document 3 Filed 09/27/16 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA VITTORIA L. BAGA, ) ) Plaintiff, ) ) v. ) ) UNITED STATES TREASURY ) DEPARTMENT INTERNAL REVENUE ) SERVICE, ) ) Defendants. ) _______________________________________) Case No. 2:16-cv-03381-DCJ MEMORANDUM IN SUPPORT OF THE UNITED STATES’ MOTION TO DISMISS The United States of America, as the proper party in interest and in place of the named federal defendant1, has moved to dismiss plaintiff’s complaint for lack of subject matter jurisdiction, insufficient service of process, and failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(1), (5), and (6). This memorandum is submitted in support of the United States’ motion to dismiss. BACKGROUND Vittoria Baga filed suit against the United States claiming that the Internal Revenue Service improperly assessed the trust fund recovery penalty against her and that she was “wrongfully & willfully targeted by the IRS.” Complaint, Doc. No. 1 at 5. The IRS assessed the trust fund recovery penalty against Baga for her role as the President of Interactive Worldwide Corporation, a company that manufactures wooden partitions and fixtures. Baga now claims that the trust fund recovery penalty was improperly assessed against her “because of taxes owed by 1 Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 1 of 14 2 her spouse,” who was the Vice President of Interactive Worldwide Corporation at the time of the assessment. Id. at 6. Without paying the tax liability underlying her claim for a tax refund, or filing an administrative claim for damages for unauthorized tax collection, Baga brought this suit seeking $300,000 in damages for “lost income as a result of inability to purchase real estate and economic damages” allegedly resulting from the filing of liens against her property by the IRS. Complaint, Doc. No. 1. at 7. Baga also seeks injunctive and declaratory relief directing the Internal Revenue Service to release all liens and to cease any collections activity. Id. at 6. Finally, Baga seeks the “withdrawal” of all penalties and interest assessed against her. Id. at 7. The United States now moves to dismiss for lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted, and insufficient service of process. ARGUMENT I. The plaintiff’s claims are barred because the United States is shielded from suit by sovereign immunity. The plaintiff’s claims for a tax refund, money damages, and injunction and declaratory relief are barred by sovereign immunity because the United States has not waived sovereign immunity and Baga has not met the jurisdictional prerequisites to bring a suit for a tax refund or for damages for unauthorized collection. Absent an express waiver, the United States and its agencies are each shielded from suit by sovereign immunity and a federal court is without subject matter jurisdiction to consider the complaint. White-Squire v. U.S. Postal Serv., 592 F.3d 453, 456 (3d Cir. 2010) (waiver must be explicit); Bullock v. Internal Revenue Service, 602 Fed.Appx. 58, 60 (3d Cir. 2015) (citing FDIC v. Meyer, 510 U.S. 471, 475 (1994). Both a claim for a tax refund under section 7422 and a claim for damages under section 7433 may only be Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 2 of 14 3 brought against the United States. See 26 U.S.C. §§ 7422(f), 7433(a). The agencies should be dismissed as improper parties. Although the United States is a proper party, sovereign immunity precludes the court from exercising jurisdiction over the plaintiff’s claims against the United States because Baga has failed to meet multiple jurisdictional prerequisites to suit. Each jurisdictional defect in the complaint will now be addressed in turn. a. Plaintiff’s claims for injunctive and declaratory relief are barred by sovereign immunity; the Court lacks jurisdiction over suits to restrain the assessment or collection of federal taxes. The plaintiff’s requests for injunctive and declaratory relief should be dismissed because the Court lacks subject matter jurisdiction over suits to restrain the assessment or collection of federal taxes. Morrow v. United States, 471 F.Supp.2d 19, 20 (D.D.C. 2007)(dismissing suit to enjoin collection activities of the IRS). The Tax Anti-Injunction Act, 26 U.S.C. § 7421(a), deprives the court of subject matter jurisdiction to hear any suit to restrain the assessment or collection of any tax. Zarra v. United States, 254 Fed.Appx. 931, 933 (3d Cir. 2007); Flynn v. United States, 786 F.2d 586, 589 (3d Cir. 1986); Allen v. IRS Comm’r, 624 F.Supp.2d 689, 695- 96 (N.D. Ohio 2008)(district court is deprived of jurisdiction to restrain the levy of taxpayer’s bank account). The purpose of the Tax Anti-Injunction act is to allow the United States to assess and collect taxes without judicial intervention, and “to require that the legal right to the disputed sums be determined in a suit for refund.” Zarra, 254 Fed.Appx. at 933 (quoting Williams Packing, 370 U.S. at 7 (internal quotations omitted)). The Tax Anti-Injunction Act contains fourteen statutory exceptions that would allow the court to hear injunction cases; none of these fourteen statutory exceptions apply here. Additionally, a judicially created equitable exception to the Tax Anti-Injunction Act allows the Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 3 of 14 4 court to exercise jurisdiction where (1) the United States cannot establish the merits of its claim when the facts and law are examined in the light most favorable to the government and (2) there is an independent basis for the court to exercise its equitable jurisdiction. Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962); Zarra, 254 Fed.Appx. at 933; Flynn, 786 F.2d at 589; Allen, 624 F.Supp.2d at 695096. Nevertheless, the Tax Anti-Injunction Act must be narrowly construed. See Bob Jones University v. Simons, 416 U.S. 725 (1974). The tax exception to the Declaratory Judgment Act, 28 U.S.C. § 2201, also deprives the court of jurisdiction over any claim for declaratory relief “with respect to Federal Taxes.” The scope of the tax exception to the Declaratory Judgment Act is at least as broad as the scope of the Tax Anti-Injunction Act. See Alexander v. Americans United Inc., 416 U.S. 752, 759 n.10 (1974); Bob Jones U. v. Simon, 416 U.S. 725, 732 n.7 (1974). As a result, declaratory judgments with respect to federal taxes are also outside of the court’s jurisdiction, and any attempt by the plaintiff to secure such a declaratory judgment should be dismissed. In this case, the court should dismiss the plaintiff’s request for injunctive and declaratory relief for lack of subject matter jurisdiction. The plaintiff requests a court order that the liens filed by the IRS, and “any interest & penalties” be “withdrawn.” Complaint, Doc. No. 1 at 7. It is undisputed, therefore, that the plaintiff is seeking an injunction to halt the assessment and collection of federal taxes. The United States has not consented to suit for injunctive and declaratory relief that restrains the assessment and collection of taxes, and the court lacks subject matter jurisdiction over these claims. No statutory exceptions to sovereign immunity apply to this case. The only statutory exception that is even remotely relevant is contained in section 6015(a). This section, commonly referred to as the “innocent spouse” provision, allows a court to issue an injunction to suspend a Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 4 of 14 5 levy or court proceeding while a due process hearing is pending on the validity of that levy. 26 U.S.C. § 6015(a). A taxpayer may be relieved of liability under the innocent spouse provision if: (1) the taxpayer is an individual who filed a joint return for a taxable year containing an understatement of tax attributable to erroneous items made by a different individual filing the joint return; (2) in signing the return the taxpayer did not know, or have reason to know, that the return contained an understatement; (3) it would be inequitable to hold the individual taxpayer liable; and (4) the innocent spouse claim is made no later than two years after the Secretary of the Treasury begins collection activities. 26 U.S.C. § 6015(b)(1). The innocent spouse provision does not apply. The tax liabilities underlying the complaint arise from the assessment of the trust fund recovery penalty, not from the filing of a joint tax return. The complaint does not assert that a jointly filed tax return contains erroneous items, or that the plaintiff had no knowledge or reason to know of erroneous items on any tax returns, or that it is inequitable to assess the trust fund recovery penalty against an officer of a company whose spouse is also an officer of the same company. Consequently, no statutory exception applies and the court lacks subject matter jurisdiction. The judicial exception to sovereign immunity does not apply to this case. The plaintiff cannot establish that there is no circumstance under which the United States will prevail in this action. Under the facts pled by the plaintiff, the United States is likely to succeed on the merits of its case because the plaintiff has failed to exhaust her administrative remedies, has not pled any direct economic damages, and has failed to plead any actionable claim under 26 U.S.C. § 7433 that the IRS or its employees have acted recklessly, knowingly, or negligently in violation of the Internal Revenue Code or its accompanying regulations. Also, there is no independent basis for the court to exercise subject matter jurisdiction to hear this case. See id. Therefore, sovereign Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 5 of 14 6 immunity prevents the court from hearing the plaintiff’s claims for injunctive and declaratory relief due to lack of subject-matter jurisdiction. b. Plaintiff’s claim for a tax refund is barred by sovereign immunity; the Court lacks jurisdiction because Baga has not exhausted available administrative remedies or paid the underlying liability. If the complaint is construed as an attempt to state a claim for a refund of the trust fund recovery penalty assessed against Baga, the Court lacks subject matter jurisdiction over such a claim because Baga has not exhausted all of her available administrative remedies or paid the portion of the underlying section 6672 penalty required before bringing a suit for refund. Generally, a taxpayer must fully pay an outstanding tax liability and seek a refund from the Internal Revenue Service before bringing a suit for refund in district court. United States v. Dalm, 494 U.S. 596, 602 (1990); Flora v. United States, 362 U.S. 145, 177 (1960). Absent satisfaction of these prerequisites, the United States has not waived sovereign immunity, and the court lacks subject-matter jurisdiction to hear a refund suit. See 28 U.S.C. § 1346(a)(1); 26 U.S.C. § 7422(a); Flora, 357 U.S. at 75. The only exception to the so-called full payment rule occurs when the tax at issue is divisible, as is the case with trust fund recovery penalties assessed against the plaintiff in this case pursuant to 26 U.S.C. § 6672. See, e.g., Boynton v. United States, 566 F.2d 50, 55-57 (9th Cir. 1977). In such cases, the taxpayer “need only pay the divisible amount of the penalty assessment attributable to a single individual’s withholding before instituting a refund action.” Id. at 52. The taxpayer may only file a refund suit in district court if the IRS rejects the administrative claim or disregards the claim for more than six months. 26 U.S.C. §§ 7422(a), 6532(a). Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 6 of 14 7 Here, the plaintiff seeks the refund of all monies recovered by the Internal Revenue Service. Complaint, Doc. No. 3 at 6. There is no evidence or suggestion that the plaintiff has paid any of the trust fund recovery penalties in question or filed an administrative claim for a refund with the Internal Revenue Service. As a result, there is no waiver of sovereign immunity and the court lacks subject matter jurisdiction over any claim for a tax refund raised in plaintiff’s complaint and the case should be dismissed. c. Plaintiff’s claim for damages under section 7433 should be dismissed for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. A fair reading of the plaintiff’s pro se complaint is that it attempts to state a claim for damages pursuant to 26 U.S.C. § 7433. To the extent that this is the case, the complaint should be dismissed for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(1), (6). 1. Plaintiff’s claim for damages is barred by sovereign immunity; the court lacks jurisdiction because Baga has not exhausted her administrative remedies. The court does not have subject matter jurisdiction over the plaintiff’s claim because she has failed to exhaust administrative remedies by bringing a claim for damages with the IRS that conforms with 26 C.F.R. § 301.7433-1. A court “shall not” award civil damages for unauthorized collection actions “unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.” 26 U.S.C. § 7433(d)(1). To exhaust administrative remedies as required by section 7433(a), an administrative claim for damages due to unauthorized collection must contain information identifying the taxpayer, the grounds for the claim, a description of injuries, the amount of the claim, and the signature of the taxpayer or taxpayer’s representative. Treas. Reg. § 301-7433- 1(e); Venen v. United States, 38 F.3d 100, 103 (3d Cir.1994)(holding that failure to comply with Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 7 of 14 8 administrative exhaustion requirement deprives district court of jurisdiction even though the IRS has received actual notice of the claim). Furthermore, “[a]n action for damages filed in federal district court may not be maintained unless the taxpayer has filed an administrative claim pursuant to [Treas. Reg. § 301-7433-1(e)].” Treas. Reg. § 301-7433-1(a); see also Venen, 38 F.3d at 103. The Third Circuit has long recognized failure to exhaust administrative remedies creates a jurisdictional bar to bringing suit pursuant to section 7433(a). Venen, 38 F.3d at 103; Kenny v. United States, Civil Action No. 08-3921 (GEB), 2009 WL 276511, at *7 (D.N.J. 2009). The plain language of 26 U.S.C. § 7433(d) prevents a court from awarding a judgment for damages “unless the court determines that the plaintiff has exhausted the administrative remedies” available within the Internal Service. 26 U.S.C. § 7433(d)(1). This language is preceded by the headings “Limitations,” and “Requirement that administrative remedies be exhausted.” Id. Given that damages “shall not be awarded” without administrative exhaustion, the court is limited to hearing cases that have already satisfied the administrative exhaustion requirement. See Venen, 38 F.3d at 103; Kenny, 2009 WL 276511, at *7. Recent cases in the Third Circuit have questioned in dicta whether a failure to exhaust administrative remedies before bringing suit pursuant to section 7433(a) creates a jurisdictional bar to suit, or is merely an element of a claim for relief. See Roseman v. United States, No. 14- 6502, 2015 WL 3903505, at *2 (E.D. Pa. 2015). In Venen v. United States, the Third Circuit Court of Appeals dismissed a claim for damages under section 7433 for lack of subject matter jurisdiction because the plaintiff failed to exhaust administrative remedies. 38 F.3d 100, 103 (3d Cir. 1994). The Supreme Court stated in 2006 that unless Congress “clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional,” statutory limitations on Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 8 of 14 9 claims are non-jurisdictional and should be treated as essential elements of a claim for relief. Arbaugh v. Y&H Corp., 546 U.S. 500, 515 (2006). In doing so, the Supreme Court held that the threshold number of employees for application of Title VII was an essential element of a plaintiff’s claim for relief in an employment discrimination context, and did not raise a jurisdictional issue. See id. The Third Circuit has never directly addressed whether the Supreme Court’s dicta in Arbaugh applies in the context of section 7433 of the Internal Revenue Code, and therefore the Third Circuit’s ruling in Venen remains good law. See Bullock, 602 Fed.Appx. at 60 n.3; Roseman, 2015 WL 3903505, at *2. Furthermore, the direct application of Arbaugh, a case interpreting Title VII, is inappropriate in a tax suit under the Internal Revenue Code. The plain language of section 7433 therefore precludes application of Arbaugh here. In this case, Baga has failed to file an administrative claim with the IRS seeking damages under section 7433 prior to bring suit, and has therefore failed to exhaust administrative remedies. Consequently, the court lacks jurisdiction to hear the plaintiff’s claim for damages and the complaint should be dismissed. 2. Alternatively, the plaintiff has failed to state a claim upon which relief can be granted under section 7433. If the court finds that it has jurisdiction over Baga’s claim for damages, the complaint should be dismissed for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Baga’s complaint fails to state a claim because she has not exhausted all administrative remedies, has pled no direct harms proximately caused by the IRS, and has not indicated any conceivable way that any IRS employee or officer has acted recklessly, knowingly, or negligently in violation of any internal revenue statute or regulation. 26 U.S.C. § 7433(a). Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 9 of 14 10 A complaint may be dismissed for failure to state a claim upon which relief can be granted if the complaint does not contain sufficient factual matter, when accepted as true, to state a claim for relief that is plausible on its face. Connelly v. Lane Constr. Corp., 809 F.3d 780, 786 (3rd Cir. 2016)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 678 (2007). A claim is facially plausible when the pleadings contain sufficient factual content that “allows the court to draw the reasonable inference that the defendant is liable for the alleged misconduct.” Id. (quoting Twombly, 550 U.S. at 678). Failure to properly exhaust administrative remedies is a fatal flaw that requires dismissal of a claim for damages premised upon section 7433. See Good v. I.R.S., 629 Fed.Appx. 185, 188 (3d Cir. 2015); Bullock, 602 Fed.Appx. at 60 n.3; Chocallo, 299 Fed.Appx. at 118; Roseman, 2015 WL 3903505, at *2. To state a claim for damages for unauthorized collection the plaintiff must plead that an employee of the IRS recklessly, intentionally, or negligently disregards any provision of the Internal Revenue Code or regulation promulgated thereunder. 26 U.S.C. § 7433(a). Recovery is only allowed for “actual, direct economic damages” that are the “proximate result” of the reckless, intentional, or negligent actions of any IRS employee. 26 U.S.C. § 7433(b)(1). These damages can only be recovered after the plaintiff has exhausted all available administrative remedies “within the Internal Revenue Service.” 26 U.S.C. § 7433(d)(1). Taking all allegations raised in the complaint as true, no facially plausible claim for relief has been stated because the plaintiff has failed to exhaust administrative remedies prior to filing suit. See 26 U.S.C. § 7433(d)(1). Moreover, the complaint makes no allegations concerning the section of the Internal Revenue Code or Treasury Regulation that was purportedly violated by an IRS employee. Instead, the complaint makes conclusory allegations that when the IRS assessed the trust fund recovery penalty against Baga, the “[p]laintiff was wrongfully & willfully targeted Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 10 of 14 11 by the IRS because of taxes owed by her spouse.” Complaint, Doc. No. 1 at 6. The complaint also fails to allege any direct economic damages proximately caused by the reckless, intentional, or negligent actions of any IRS employee. See 26 U.S.C. § 7433(b)(1). Instead, the complaint seeks $300,000 because a federal tax lien negatively affected Baga’s credit, allegedly prevented her from purchasing real estate, and caused “emotional anguish” that is not substantiated by any evidence. Id.; Complaint, Doc. No. 1 at 6. Therefore, the plaintiff has failed to state a claim upon which relief can be granted and the complaint should be dismissed. See Fed. R. Civ. P. 12(b)(6). 3. Leave to amend the complaint should be denied because amendment would be futile. Allowing the plaintiff leave to amend the complaint would be futile because she must file an administrative claim for damages before filing suit under section 7433. Leave to amend a complaint that fails to state a claim under Rule 12(b)(6) must generally be granted unless the amendment would fail to cure the deficiency in the complaint. Hughes v. UPS, No. 15-1690, 2016 U.S. App. LEXIS 1682, at *12-13 (3d Cir. 2016)(citing Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000)). The court has discretion to deny leave to amend if the court justifies its reason for doing so. Fauver, 213 F.3d at 115 (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Here, allowing amendment of the complaint would be futile because the plaintiff has failed to exhaust all available administrative remedies for her tax refund claim and her claim for damages. The plaintiff’s complaint will remain deficient under Rule 12(b)(6) until Baga exhausts all available administrative remedies. Allowing amendment at this stage would fail to correct this facial deficiency with the plaintiff’s case. Leave to amend the complaint should be denied. II. The complaint should be dismissed for insufficient service of process. The complaint should be dismissed for insufficient service of process because the Internal Revenue Service has not been properly served with the summons or complaint. To properly Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 11 of 14 12 serve an agency, officer, or employee of the United States, the plaintiff is required to serve a copy of the summons and complaint upon the agency itself by registered or certified mail, the United States Attorney for the district where the action is brought, and the Attorney General of the United States in the District of Columbia. Fed. R. Civ. P. 4(i)(1), (2). In this case, only the United States Attorney for the Eastern District of Pennsylvania and the Attorney General were properly served with a copy of the summons and complaint. See Doc. No. 1. Therefore, the complaint should be dismissed for insufficient service of process. CONCLUSION The complaint must be dismissed for lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted, and insufficient service of process. The plaintiff has failed to exhaust administrative remedies for her claims for a tax refund and for damages, and improperly seeks injunctive and declaratory relief in violation of the Tax Anti-Injunction Act and the tax exception to the Declaratory Judgment Act. Therefore, the complaint should be dismissed because the court lacks jurisdiction. Fed. R. Civ. P. 12(b)(1). Moreover, the plaintiff has failed to state a claim upon which relief can be granted under 26 U.S.C. § 7433 because she has failed to exhaust administrative remedies, is seeking damages for “mental anguish” that are not allowed by the plain language of section 7433, and has failed to contend that any IRS employee has acted in violation of any internal revenue statute or regulation. Fed. R. Civ. P. 12(b)(6). The plaintiff also fails to state a claim upon which relief can be granted for a tax refund because she has failed to file a claim for a refund with the IRS or to pay any of the outstanding tax liabilities. Id. Finally, the complaint should be dismissed for insufficient service of process because no party in this action was properly served with the summons and complaint. Fed. R. Civ. P. 12(b)(5). Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 12 of 14 13 DATED: September 27, 2016 Respectfully Submitted, /s/ Sean P. O'Donnell SEAN P. O'DONNELL Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 227 Washington, D.C. 20044 202-514-9641 (v) 202-514-6866 (f) Sean.P.O´Donnell@usdoj.gov Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 13 of 14 14 CERTIFICATE OF SERVICE I hereby certify that on this 27th day of September, 2016, I electronically filed the foregoing document with the Clerk of Court using the CM/ECF system, and that on the same date I have mailed the document by United States Postal Service to the following non-CM/ECF participants: Vittoria L. Baga 256 S. 16th Street Philadelphia, Pennsylvania 19102 /s/ Sean P. O'Donnell SEAN P. O'DONNELL Trial Attorney, Tax Division United States Department of Justice Case 2:16-cv-03381-CDJ Document 3-1 Filed 09/27/16 Page 14 of 14 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA VITTORIA L. BAGA, ) ) Plaintiff, ) ) v. ) ) UNITED STATES ) TREASURY DEPARTMENT ) INTERNAL REVENUE SERVICE, ) ) Defendants. ) _______________________________________) Case No. 2:16-cv-03381-DCJ ORDER Upon consideration of the United States’ Motion to Dismiss on behalf of the Internal Revenue Service, and the Court finding good cause to grant the motion, it is hereby ORDERED that: 1. The United States is substituted for the Defendants the United States Treasury Department and the Internal Revenue Service; 2. The motion to dismiss is GRANTED; and 3. The Plaintiffs’ Complaint is dismissed without leave to amend. Signed this day of , 2016. C. DARNELL JONES, II United States District Judge Case 2:16-cv-03381-CDJ Document 3-2 Filed 09/27/16 Page 1 of 1