Mamedova v. United States of America

MOTION to Dismiss for Lack of Jurisdiction WITH SUPPORTING MEMO

D.R.I.July 7, 2017

UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND SAIDA E. MAMEDOVA, ) ) Case No.: 1:17-cv-00188-S-LDA Plaintiff, ) ) v. ) ) UNITED STATES OF AMERICA, ) ) Defendant. ) UNITED STATES’ MOTION TO DISMISS The United States of America moves this Court for an order dismissing the Complaint in this action for lack of jurisdiction given that there is no waiver of sovereign immunity for the action. On April 17, 2017, the Internal Revenue Service issued a Notice of Levy to Florida Community Bank to collect federal income taxes assessed against Vadym Huzenko and Saida Mamedova with respect to the 2009 and 2010 tax years. See Complaint, Exhibit A. Ms. Mamedova seeks to challenge the levy with a wrongful levy action pursuant to 26 U.S.C. § 7426(a)(1). Complaint, p.1. Section 7426(a)(1) provides that, “[i]f a levy has been made on property . . . , any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.” 26 U.S.C. § 7426(a)(1) (emphasis added). As section 7426(a)(1) specifically prohibits Ms. Mamedova from bringing a wrongful levy action with respect to a levy to collect taxes assessed against her, there is no waiver of sovereign immunity for Ms. Mamedova’s Case 1:17-cv-00188-S-LDA Document 8 Filed 07/07/17 Page 1 of 3 PageID #: 51 - 2 - wrongful levy action, and the court, consequently, lacks jurisdiction over the action. Respectfully submitted, DAVID A. HUBBERT Acting Assistant Attorney General U.S. Department of Justice Tax Division /s/ Karen Wozniak KAREN WOZNIAK Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 55, Ben Franklin Station Washington, D.C. 20044 Telephone: (202) 307-1927 Facsimile: (202) 514-5238 E-mail: karen.e.wozniak@usdoj.gov Case 1:17-cv-00188-S-LDA Document 8 Filed 07/07/17 Page 2 of 3 PageID #: 52 - 3 - CERTIFICATE OF SERVICE I hereby certify that on July 7, 2017, the foregoing United States’ Motion to Dismiss as well as the accompanying Memorandum of Law in Support of the United States’ Motion to Dismiss was filed electronically using the Court’s ECF system. The filing is available for viewing and downloading from the ECF system. I further certify that on July 7, 2017, the foregoing was served on the following in the manner specified below: (1) Served Electronically through ECF on: Charles J. Reilly reillylaw1@aol.com (2) Served by depositing a copy in the United States mail, postage prepaid, and addressed to the following: not applicable /s/ Karen Wozniak KAREN WOZNIAK (CT20966) Trial Attorney, Tax Division Case 1:17-cv-00188-S-LDA Document 8 Filed 07/07/17 Page 3 of 3 PageID #: 53 - 1 - UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND SAIDA E. MAMEDOVA, ) ) Case No.: 1:17-cv-00188-S-LDA Plaintiff, ) ) v. ) ) UNITED STATES OF AMERICA, ) ) Defendant. ) MEMORANDUM IN SUPPORT OF THE UNITED STATES’ MOTION TO DISMISS The United States of America has moved to dismiss the Complaint in this action for lack of jurisdiction given that there is no waiver of sovereign immunity for the action. Under the doctrine of sovereign immunity, the United States, as sovereign, may only be sued to the extent that it consents to be sued. F.D.I.C. v. Meyer, 510 U.S. 471, 475, (1994); United States v. Sherwood, 312 U.S. 584, 586 (1941). Sovereign immunity is jurisdictional in nature, and the terms of the United States’ consent to be sued in a particular court defines that court’s jurisdiction to entertain the suit. Meyer, 510 U.S. at 475; Sherwood, 312 U.S. at 586; see also United States v. Mitchell, 463 U.S. 206, 212 (1983) (“It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction”). Waivers of the United States’ sovereign immunity must be unequivocally expressed and must be strictly construed in favor of the United States. United States v. Nordic Village, 503 U.S. 30, 33-34 (1992). “[T]he plaintiff bears the burden of establishing that” his or her “claims fall within an applicable waiver.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000); see also Hayes v. United States, 539 F. Supp. 2d 393, 397 (D.D.C. 2008) (“A party bringing suit against the United States bears the burden of proving that the government has unequivocally waived its Case 1:17-cv-00188-S-LDA Document 8-1 Filed 07/07/17 Page 1 of 5 PageID #: 54 - 2 - immunity for the type of claim involved.”); Baker v. United States, 817 F.2d 560, 562 (9th Cir. 1987) (“A party bringing a cause of action against the federal government bears the burden of showing an unequivocal waiver of immunity.”). Saida Mamedova has failed to meet that burden. On May 2, 2011, and June 18, 2012, a delegate of the Secretary of the Treasury made income tax assessments against Vadym Huzenko and Saida Mamedova for the 2009 and 2010 tax years, respectively. IRS Account Transcripts for Vadym Huzenko and Saida Mamedova for the 2009 and 2010 income tax years, p.1. (herein after “2009 and 2010 IRS Account Transcripts”), attached hereto as Exhibits A and B, respectively; Complaint, Exhibit B. On April 17, 2017, the Internal Revenue Service issued a Notice of Levy to Florida Community Bank to collect the income taxes assessed against Mr. Huzenko and Ms. Mamedova for the 2009 and 2010 tax years.1 Complaint, Exhibit A. Ms. Mamedova seeks to challenge the levy with a wrongful levy action pursuant to 26 U.S.C. § 7426(a)(1). Complaint, p.1. Section 7426(a)(1), however, specifically prohibits a person from bringing a wrongful levy action with respect to a levy to collect taxes assessed against her. 26 U.S.C. § 7426(a)(1); see also McGinness v. U.S., I.R.S., 90 F.3d 143, 145 (6th Cir. 1996) (“the person asserting the wrongful levy claim must not be one against whom the tax is assessed”). Section 7426(a)(1) provides that “[i]f a levy has been made on property . . . , any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.” 26 U.S.C. § 7426(a)(1) (emphasis added). Consequently, there is no 1 On July 3, 2017, the Internal Revenue Service received $2,253.12 from Florida Community Bank in response to the Notice of Levy. Case 1:17-cv-00188-S-LDA Document 8-1 Filed 07/07/17 Page 2 of 5 PageID #: 55 - 3 - waiver of sovereign immunity for Ms. Mamedova’s wrongful levy action and the court lacks jurisdiction over the action. Ms. Mamedova claims that she did not file joint returns with her husband Vadym Huzenko for the 2009 and 2010 tax years, that she did not sign the returns for those years, that she did not earn any inome during those years, that she was not required to file returns for those years, and that she is not responsible for the income taxes for those years. Complaint, p. 2, ¶¶ 1, 2 and 14. Ms. Mamedova further claims that the income tax assessments against her for the 2009 and 2010 tax years were or are to be abated. Complaint, p.2, ¶¶ 4, 5 and 14. In short, Ms. Mamedova is challenging the validity of the income tax assessments against her for the 2009 and 2010 tax years. That challenge, however, does not change the fact that, as evidenced by the 2009 and 2010 IRS Account Transcripts, there are income tax assessments against Ms. Mamedova for the 2009 and 2010 tax years, and that, consequently, she cannot bring a wrongful levy action under section 7426(a)(1) with respect to a levy to collect the 2009 and 2010 taxes. 2009 and 2010 IRS Account Transcripts, p.1; 26 U.S.C. § 7426(a)(1). Furthermore, for purposes of an adjudication under section 7426(a)(1), “the assessment of tax upon which the interest or lien of the United States is based shall be conclusively presumed to be valid.” 26 U.S.C. § 7426(c). Consequently, a person suing under section 7426(a)(1) cannot challenge the validity of the assessment. 26 U.S.C. § 7426(c); Shannon v. United States, 521 F.2d 56, 59 (9th Cir. 1975); see also Aspinall v. United States, 984 F.2d 355, 357 (10th Cir. 1993). Not only is there no waiver of sovereign immunity permitting Ms. Mamedova’s action against the United States, her action, which seeks to prevent the collection of 2009 and 2010 income taxes by levy, is expressly prohibited by the Anti-Injunction Act. 26 U.S.C. § 7421(a). Subject to certain exceptions not applicable here, the Anti-Injunction Act, 26 U.S.C. 7421(a), provides that, “no suit for the purpose of restraining the assessment or collection of any tax shall Case 1:17-cv-00188-S-LDA Document 8-1 Filed 07/07/17 Page 3 of 5 PageID #: 56 - 4 - 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(a). Given that there is no waiver of sovereign immunity permitting Ms. Mamedova’s action, Case 1:17-cv-00188-S-LDA Document 8-1 Filed 07/07/17 Page 4 of 5 PageID #: 57 - 5 - the action should be dismissed for lack of jurisdiction.2 Respectfully submitted, DAVID A. HUBBERT Acting Assistant Attorney General U.S. Department of Justice Tax Division /s/ Karen Wozniak KAREN WOZNIAK Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 55, Ben Franklin Station Washington, D.C. 20044 Telephone: (202) 307-1927 Facsimile: (202) 514-5238 E-mail: karen.e.wozniak@usdoj.gov 2 Ms. Mamedova claims that she “has no adequate remedy at law to irreparable harm if the funds are not immediately returned and no further levy action is taken.” However, 26 U.S.C. § 6511 allows a taxpayer to file an administrative claim for credit or refund of a tax overpayment and 26 U.S.C. § 7422(a) authorizes suits for recovery of any tax alleged to have been erroneously or illegally assessed or collected. 26 U.S.C. §§ 6511 and 7422(a). In addition, the collection due process procedures under 26 U.S.C. §§ 6320 and 6330 were previously made available to Ms. Mamedova with respect to the income tax assessments for 2009 and 2010. Pursuant to 26 U.S.C. § 6320, the IRS is required to notify a taxpayer of the filing of a notice of lien within five business days after the filing of the notice. 26 U.S.C. § 6320(a). Pursuant to 26 U.S.C. § 6330, the IRS is required to notify a taxpayer at least thirty days prior to making the first levy on the taxpayer’s property or right to property with respect to an unpaid tax for a given taxable period. 26 U.S.C. § 6330(a). Under both sections 6320 and 6330, the taxpayer has the right to request a collection due process hearing within thirty days. See 26 U.S.C. §§ 6320(a)(3)(B) and 6330(a)(3)(B). The taxpayer is entitled to one hearing under section 6320 and one hearing under section 6330 with respect to a given tax period. 26 U.S.C. §§ 6320(b)(2) and 6330(b)(2). If the taxpayer timely requests a hearing, the hearing is held by the IRS Office of Appeals and the taxpayer may, in general, raise “any relevant issue relating to the unpaid tax or the proposed levy” at the hearing. 26 U.S.C. §§ 6320(b)(1) and (c) and 6330(b)(1) and (c)(2)(A). The taxpayer may raise challenges to the underlying tax liability if he or she did not receive a statutory notice of deficiency for the tax liability or did not otherwise have an opportunity to dispute the liability. 26 U.S.C. §§ 6320(c) and 6330(c)(2)(B). Within thirty days of the IRS Office of Appeals’ determination in connection with a collection due process hearing under section 6320 or 6330, the taxpayer may seek judicial review of the determination by appealing the determination to the United States Tax Court. 26 U.S.C. §§ 6320(c) and 6330(d)(1). As noted on the 2009 and 2010 IRS Account Transcripts, collection due process notices of intent to levy and collection due process notices of lien filing were previously issued to Vadym Huzenko and Saida Mamedova with respect the 2009 and the 2010 tax years. 2009 and 2010 IRS Account Transcripts, p.2. Case 1:17-cv-00188-S-LDA Document 8-1 Filed 07/07/17 Page 5 of 5 PageID #: 58 Case 1:17-cv-00188-S-LDA Document 8-2 Filed 07/07/17 Page 1 of 5 PageID #: 59 Case 1:17-cv-00188-S-LDA Document 8-2 Filed 07/07/17 Page 2 of 5 PageID #: 60 Case 1:17-cv-00188-S-LDA Document 8-2 Filed 07/07/17 Page 3 of 5 PageID #: 61 Case 1:17-cv-00188-S-LDA Document 8-2 Filed 07/07/17 Page 4 of 5 PageID #: 62 Case 1:17-cv-00188-S-LDA Document 8-2 Filed 07/07/17 Page 5 of 5 PageID #: 63