Knittell v. United States Department of Justice et al

MOTION to Dismiss for Lack of Jurisdiction

W.D. Tenn.April 24, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE JACKSON DIVISION EDWARD C. KNITTEL, ) ) Plaintiff, ) ) v. ) ) HON. JEFF SESSIONS, et al, ) ) Defendants. ) _______________________________________) Case No. 1:17-cv-01027-JDB-EGB DEFENDANTS’ MOTION TO DISMISS The United States of America, on behalf of the named defendants the United States Attorney General and the Commissioner of the Internal Revenue Service, moves to dismiss the complaint for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure for the reasons set forth in the Memorandum in Support attached hereto. Dated: April 24, 2017 Respectfully submitted, DAVID A. HUBBERT Acting Assistant Attorney General /s/ Stephanie Sasarak STEPHANIE SASARAK Trial Attorney Department of Justice Tax Division P.O. Box 227 Washington, D.C. 20044 Telephone: (202) 307-2089 Fax: (202) 514-6866 E-mail: stephanie.a.sasarak@usdoj.gov Of Counsel: LAWRENCE J. LAURENZI Acting United States Attorney Case 1:17-cv-01027-JDB-egb Document 10 Filed 04/24/17 Page 1 of 2 PageID 21 2 CERTIFICATE OF SERVICE I certify that on April 24, 2017, I electronically filed the foregoing Motion to Dismiss with the Clerk of the Court using the CM/ECF system, which shall send notification of that filing to all parties registered to receive such notice. Pro Se Plaintiff has been served with a copy of this document by first class mail sent to the following address: Edward C. Knittel P.O. Box 211 Trenton, Tennessee 38382 /s/ Stephanie Sasarak STEPHANIE SASARAK Trial Attorney, Tax Division U. S. Department of Justice Post Office Box 227 Washington, DC 20044 Telephone: (202) 307-2089 Fax: (202) 514-6866 Stephanie.A.Sasarak@usdoj.gov Case 1:17-cv-01027-JDB-egb Document 10 Filed 04/24/17 Page 2 of 2 PageID 22 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE JACKSON DIVISION EDWARD C. KNITTEL, ) ) Plaintiff, ) ) v. ) ) HON. JEFF SESSIONS, et al, ) ) Defendants. ) _______________________________________) Case No. 1:17-cv-01027-JDB-EGB MEMORANDUM IN SUPPORT OF THE DEFNDANTS’ MOTION TO DISMISS The United States of America, on behalf of the named defendants the United States Attorney General and the Commissioner of the Internal Revenue Service, moves to dismiss the complaint for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. The grounds for the motion are twofold. First, a writ of mandamus is inappropriate in this instance because the defendants have no mandatory or ministerial duty to sue a taxpayer in district court to collect a tax deficiency prior to collection administratively. Second, suits denominated as a mandamus action that seek to restrain the assessment and collection of taxes are barred by the Anti-Injunction Act, 26 U.S.C. § 7421. BACKGROUND The Internal Revenue Service (“IRS”) levied upon the plaintiff’s social security payments to satisfy his outstanding tax liability. (Compl. ¶¶ 8-9.) Plaintiff’s complaint alleges that because the United States did not file suit against him prior to the IRS levy, he has been deprived of his constitutional rights. (Id. ¶ 12.) Plaintiff seeks a remedy in the form of mandamus under 28 Case 1:17-cv-01027-JDB-egb Document 10-1 Filed 04/24/17 Page 1 of 5 PageID 23 2 U.S.C. § 1361. (Id. ¶ 1.) Specifically, he requests that the Court compel the defendants to initiate a judicial action related to plaintiff’s outstanding tax liability. (Id. p. 4, ¶ A.) LEGAL ANALYSIS I. The Court Lacks Subject Matter Jurisdiction to Grant Mandamus Relief Because the Defendants Owe No Duty to Commence a Civil Action Against the Plaintiff The United States district courts are vested with original jurisdiction under 28 U.S.C. § 1361 (“the Mandamus Act”) of “any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” This statute “has been construed uniformly to mean that mandamus will not lie unless the alleged duty imposes a mandatory or ministerial obligation.” Short v. Murphy, 512 F.2d 374, 377 (6th Cir. 1975). Thus, “[i]f the alleged duty is discretionary or directory, the duty is not ‘owed.’” Id. As threshold matter, the Mandamus Act does not waive sovereign immunity for suits against the sovereign itself. It only allows official capacity suits against individual officers. Harman v. Alliance Mortg. Co., 191 F. 3d 452 (6th Cir. 1999). In this case, the defendants discretion to commence a civil action for unpaid taxes does not constitute a waiver of sovereign immunity. Carelli v. Internal Revenue Serv., 668 F.2d 902, 902 (6th Cir. 1982). And, mandamus does not lie because defendants owe no duty to commence a civil action against the plaintiff to collect his unpaid tax liability. Section 7401 of the Internal Revenue Code provides “[n]o civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture, shall be commenced unless the Secretary [of Treasury] authorizes or sanctions the proceedings and the Attorney General or his delegate directs that the action be commenced.” 26 U.S.C. § 7401. This statute neither requires the defendants to sue the plaintiff in federal district court, nor “does it limit the Commissioner’s discretion as to which administrative measures to pursue in a particular situation–whether a Case 1:17-cv-01027-JDB-egb Document 10-1 Filed 04/24/17 Page 2 of 5 PageID 24 3 penalty, a lien, a seizure, or prosecution.” Spahr v. Comm’r, 1983 WL 1595 (S.D. Tex. 1983); see also 26 U.S.C. § 6331 (expressly granting the Internal Revenue Service the ability to administratively collect tax by levy without filing a judicial action). A writ of mandamus is inappropriate in this instance because the defendants have no mandatory duty to sue a taxpayer in district court to recover a tax deficiency. Martin v. Comm’r, 584 F. Supp. 977, 979 (N.D. Ohio 1984), aff'd, 753 F.2d 1358 (6th Cir. 1985). Accordingly, this Court lacks subject matter jurisdiction over plaintiff’s compliant. Plaintiff’s constitutional claims are equally without merit. If plaintiff wishes to have his case determined by this Court, he must pay the full amount of the tax deficiency and file a claim for refund before he may challenge the correctness of the tax deficiency. 26 U.S.C. § 7422; Flora v. United States, 357 U.S. 63, 75 (1958). Statutory provisions requiring taxpayers to pay the full amount of the tax liability and submit a claim for refund before commencing a civil action does not deprive the taxpayer of due process. Zernial v. United States, 714 F.2d 431, 435 (5th Cir. 1983) (“The refund claim procedure provided in section 7422 adequately protects Zernial's due process rights.”) (citing Phillips v. Comm’r, 283 U.S.589, 597-601 (1931) (involving predecessor to section 7422); Martin 584 F. Supp. at 978 (holding that allowing a taxpayer to sue for a refund under section 7422 provides due process of law). II. The Court Lacks Subject Matter Jurisdiction Because the Anti-Injunction Act Prohibits Suits Seeking to Restrain the Assessment or Collection of Tax Section 7421 of the Internal Revenue Code, also known as the Anti–Injunction Act provides, in relevant part that “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.” 26 U.S.C. § 7421. As the Supreme Court has noted, “[t]he object of § 7421(a) is to withdraw jurisdiction from the state and federal courts to Case 1:17-cv-01027-JDB-egb Document 10-1 Filed 04/24/17 Page 3 of 5 PageID 25 4 entertain suits seeking injunctions prohibiting the collection of federal taxes.” Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962). Although plaintiff’s complaint does not specifically seek to restrain the assessment or collection of taxes, courts have held that the Anti– Injunction Act also precludes relief in the nature of mandamus where plaintiffs have simply cloaked an action for an injunction against the collection of taxes as a mandamus action. See, e.g., Dickens v. United States, 671 F.2d 969, 972 (6th Cir.1982) (“Although the plaintiffs attempt to cloak [their] lawsuit as an action in the nature of mandamus the action is actually tantamount to an action for an injunction to restrain ... an assessment of taxes ... and therefore falls within the bar of [the Anti–Injunction Act].”) There are two narrow exceptions to the Anti-Injunction Act: (1) where the aggrieved party has no alternative remedy; and (2) where the taxpayer is certain to succeed on the merits and the collection would cause irreparable harm. See South Carolina v. Regan, 465 U.S. 367, 374–76 (1984) (citing Enochs, 370 U.S. at 7.) Neither exception applies here. First, a tax refund suit under section 7422 is an alternative remedy. Regan, 465 U.S. 374-75 (plaintiff had an alternative remedy because “plaintiff had the option of paying the tax and bringing a suit for a refund”). Second, plaintiff’s complaint makes no showing that it is impossible for the government to prevail on the merits of the instant case, or that the collection of his tax liability via a levy on his social security benefits would cause him irreparable harm. Accordingly, the Court should dismiss plaintiff’s compliant for lack of subject matter jurisdiction under the Anti- Injunction Act. // Case 1:17-cv-01027-JDB-egb Document 10-1 Filed 04/24/17 Page 4 of 5 PageID 26 5 CONCLUSION Because the decision whether to bring suit in federal court is discretionary, the Court has no jurisdiction to order mandamus. To the extent that the plaintiff seeks to enjoin the government from collecting taxes, such an action is barred by the Anti-Injunction Act. Accordingly, the United States respectfully requests that the Court dismiss plaintiff’s complaint with prejudice. Dated: April 24, 2017 Respectfully submitted, DAVID A. HUBBERT Acting Assistant Attorney General /s/ Stephanie Sasarak STEPHANIE SASARAK Trial Attorney Department of Justice Tax Division P.O. Box 227 Washington, D.C. 20044 Telephone: (202) 307-2089 Fax: (202) 514-6866 E-mail: stephanie.a.sasarak@usdoj.gov Of Counsel: LAWRENCE J. LAURENZI Acting United States Attorney Case 1:17-cv-01027-JDB-egb Document 10-1 Filed 04/24/17 Page 5 of 5 PageID 27