Powell v. Internal Revenue Service et al

MOTION to Dismiss for Lack of Jurisdiction

D.D.C.January 4, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DISTRICT OF COLUMBIA WILLIAM E. POWELL, ) ) Plaintiff, ) ) v. ) ) INTERNAL REVENUE SERVICE, et al., ) ) Defendants. ) _______________________________________) Case No. 16-cv-01682 (JEB) DEFENDANTS’ MOTION TO DISMISS COMPLAINT Defendants move, pursuant to Federal Rule of Civil Procedure 12(b)(1), to dismiss Plaintiff’s complaint for lack of subject matter jurisdiction. The complaint seeks to compel the disclosure of tax-related documents pursuant to 26 U.S.C. § 6103. However, there is no remedy at law under section 6103 to compel the Internal Revenue Service to disclose tax records. This Court therefore lacks subject matter jurisdiction, and Plaintiff’s complaint should be dismissed. Further, Plaintiff is not entitled to expeditious treatment of his claim under 28 U.S.C. § 1657, because dismissal of the complaint will moot Plaintiff’s request, and Plaintiff has failed to demonstrate good cause. Defendants’ motion to dismiss is supported by the accompanying memorandum and proposed order. # # # # # Case 1:16-cv-01682-JEB Document 21 Filed 01/04/17 Page 1 of 3 2 DATED: January 4, 2017 Respectfully submitted, CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General CHANNING D. PHILLIPS United States Attorney /s/Joycelyn S. Peyton JOYCELYN S. PEYTON Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 227 Washington, D.C. 20044 Tel: 202-514-6576 Fax: 202-514-6866 Joycelyn.S.Peyton@usdoj.gov Counsel for the United States Case 1:16-cv-01682-JEB Document 21 Filed 01/04/17 Page 2 of 3 3 CERTIFICATE OF SERVICE IT IS HEREBY CERTIFIED that service of Defendant’s Motion to Dismiss Amended Complaint at its attachments has been made on January 4, 2017 via the CM/ECF system, to the following recipients: WILLIAM E. POWELL 14565 Glastonbury Ave. Detroit, MI 48223 Pro se /s/ Joycelyn S. Peyton JOYCELYN S. PEYTON Trial Attorney, Tax Division U.S. Department of Justice Case 1:16-cv-01682-JEB Document 21 Filed 01/04/17 Page 3 of 3 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DISTRICT OF COLUMBIA WILLIAM E. POWELL, ) ) Plaintiff, ) ) v. ) ) INTERNAL REVENUE SERVICE, et al., ) ) Defendants. ) ______________________________________ ) Case No. 16-cv-01682 (JEB) MEMORANDUM IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS Pursuant to Federal Rule of Civil Procedure 12(b)(1), this Court should dismiss Plaintiff’s complaint for lack of subject matter jurisdiction. Plaintiff seeks to compel the disclosure of tax return information under Internal Revenue Code § 6103. 26 U.S.C. § 6103. But section 6103 does not provide a claim for relief, and thus a basis for jurisdiction does not exist. This Court therefore lacks subject matter jurisdiction, and Plaintiff’s complaint should be dismissed. In addition, Plaintiff has failed to demonstrate “good cause” to justify expediting this action under 28 U.S.C. § 1657. BACKGROUND Since 2014, Plaintiff William E. Powell has initiated four suits, including the present litigation, against the Internal Revenue Service (“Service”) seeking various tax-related documents. See Powell v. Internal Revenue Service, No. 2:14-cv-12626-SFC-MJH (E.D. Mich.) (“Powell I”); Powell v. Internal Revenue Service, No. 2:15-cv-11033-PDB-APP (E.D. Mich.) (“Powell II”); Powell v. Internal Revenue Service, No. 2:15-cv-11616-PDB-APP (E.D. Mich.) (“Powell III”). Specifically, in each of the prior three actions, Plaintiff has sought tax returns, Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 1 of 6 2 forms, attachments or tax computer data related to the Powell Printing Co. or to the estate of his father William A. Powell, and supposedly filed with the Service in the late 1980s or early 1990s.1 Plaintiff initiated the present action against the Service on August 17, 2016.2 Dkt. No. 1. He is again seeking tax records related to the Powell Printing Co. and to his father’s Estate, in addition to tax records related to himself and to the Andrew Powell Printing Co., the alleged parent company of Powell Printing Co. See Compl. at 9-10. The complaint alleges that, on July 5, 15, and 19, 2016, Plaintiff faxed at least twenty transcript requests to Return and Income Verification Services (“RAIVS”), the IRS office that processes transcript requests. Compl. at 9- 10. Plaintiff further alleges that he never received a response from RAIVS regarding any of those requests, and that he therefore initiated the present action in order to obtain the requested records. Compl. at 10. Plaintiff’s prayer for relief asks this Court to enter an order, pursuant to 26 U.S.C. § 6103, directing the Service to (1) perform a search for any and all records responsive to Plaintiff’s requests, (2) demonstrate that the Service employed search methods “reasonably likely to lead to the discovery of records responsive to Plaintiff’s requests,” and (3) produce any and all tax records responsive to Plaintiff’s requests by a certain date. Compl. at 1, 12. Finally, Plaintiff seeks expedition of this action under 28 U.S.C. § 1657. 1 Plaintiff appears to be seeking evidence related to a possible breach of fiduciary duty or fraud perpetuated by third parties or the trustee of his deceased father’s estate. Compl. at p. 119; Opinion & Order on Defendant’s Motion to Dismiss at 3, Powell v. Internal Revenue Service, No. 2:14-cv-12626-SFC-MJH (E.D. Mich. 2015). 2 Although Plaintiff filed the instant suit against the Internal Revenue Service, the U.S. Department of Justice, and the U.S. Attorney for Michigan, Plaintiff’s assertions relate only to documents requested from the Internal Revenue Service. Defendants therefore treat the Internal Revenue Service as the only proper defendant in this litigation. Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 2 of 6 3 ARGUMENT This Court should dismiss the complaint because Plaintiff invokes Internal Revenue Code § 6103 to seek disclosure of agency records, but there is no claim for relief under that section for compelling disclosure of records. Accordingly, this Court lacks subject matter jurisdiction. In addition, Plaintiff has failed to demonstrate “good cause” pursuant to 28 U.S.C. § 1657. Thus, even if this Court treats Plaintiff’s complaint as an action filed under the FOIA, Plaintiff is not entitled to expedited treatment of this action. I. THERE IS NO REMEDY UNDER § 6103 FOR NONDISCLOSURE OF AGENCY RECORDS Section 6103 of the Internal Revenue Code does not provide a remedy for denial of agency records, and thus does not grant an independent basis for subject matter jurisdiction. Plaintiff’s complaint should therefore be dismissed. Section 6103(a) states: “Returns and return information shall be confidential, and except as authorized by this title ... no officer or employee of the United States.... shall disclose any return or return information obtained by him in any manner in connection with his service...” 26 U.S.C. § 6103(a). Section 6103 prohibits disclosure of tax return information except under limited and specific circumstances as set forth in the Code. 26 U.S.C. § 1, et seq. In Maxwell v. O’Neill, No. 00-01953, 2012 WL 31367754 (D.D.C. Sept. 12, 2002), however, this Court explicitly stated that “Section 6103 . . . cannot provide an independent basis for subject matter jurisdiction. Plaintiffs must therefore satisfy the requirements applicable under the FOIA for invoking the jurisdiction of this court.” Maxwell, 2012 WL 31367754 at * 4. See also Surgick v. IRS, No. 09-cv-03807 (D.N.J. 2010) (dismissing claim based upon section 6103 Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 3 of 6 4 of the Internal Revenue Code because “Section 6103 does not provide an independent, legally cognizable means to challenge the IRS’s non-disclosure of tax information and that a person requesting such information and seeking enforcement must abide by the mechanisms prescribed by FOIA.”). Plaintiff clearly invokes section 6103 as his basis for compelling production of the records he seeks. See Compl. at 1 (“William E. Powell, Plaintiff, brings this action against the Internal Revenue Service, Defendant, to compel compliance with the Confidentiality and Disclosure of tax returns and tax return information 26 U.S.C. 6103” [sic]); Compl. at ¶ 1 (“This honorable Court has jurisdiction over the action pursuant to 26 U.S.C. 6103 and 28 U.S.C. 1331”). Plaintiff appears to be under the mistaken belief that a suit under section 6103 will provide him with the relief he believes he was denied in Powell I-III. Plaintiff in fact admits that many of the records he is seeking in the present litigation were the subject of, and adjudicated in, Plaintiff’s prior FOIA suits. See Compl. at 12 (stating “Plaintiff has also requested these documents through the IRS FOIA and the IRS did not comply with Plaintiff [sic] FOIA Requests,” and citing to the prior Powell cases).3 However, the law is clear: section 6103 does not independently provide this Court with jurisdiction to grant the relief Plaintiff seeks. This Court should therefore dismiss Plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(1). 3 For example, one of the documents that Plaintiff seeks in the present litigation is the “IMF MFT 30 COMPLETE 1040 WILLIAM A. POWELL.” Compl. at 10. Plaintiff previously sought this same document in Powell II, and was informed that the Service had performed a search and that there were no documents responsive to Plaintiff’s request. The Court agreed and dismissed Plaintiff’s complaint with prejudice on December 29, 2016. Opinion and Order at 7, Powell v. Internal Revenue Service, No. 2:15-cv-11033-PDB-APP. Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 4 of 6 5 II. PLAINTIFF IS NOT ENTITLED TO EXPEDITE THIS ACTION Plaintiff’s request for expedition of this action should be denied because this Court’s dismissal of the complaint will moot expedited treatment of Plaintiff’s claim for relief. However, even if this Court treats this case as an action brought under the FOIA rather than under Internal Revenue Code § 6103, Plaintiff is not entitled to expedition because he has failed to demonstrate good cause. The time frame within which the Court will consider this civil action is within the Court’s discretion, and it could expedite this case if Plaintiff shows “good cause.” 28 U.S.C. § 1657(a). Under section 1657, “‘good cause’ is shown if a right under . . . a Federal Statute (including rights under section 552 of title 5 [the FOIA]) would be maintained in a factual context that indicates that a request for expedited consideration has merit.” Id. There is nothing in the complaint that suggests this case merits or requires expedited treatment by this Court. For example, there is no suggestion that Plaintiff contends it has an unusually urgent need for the requested records. Before amendments to the FOIA in 1984, section 552 required that “[e]xcept as to cases the court considers of greater importance, [FOIA] proceedings . . . take precedence on the docket over all cases and shall be assigned for hearing and trial or for argument at the earliest practicable date and expedited in every way.” 5 U.S.C. § 552(a)(4)(D) (1982) (repealed 1984). Congress repealed that provision in 1984, however, and enacted section 1657, which gives the Court discretion over when, and how quickly, to consider FOIA matters. Pub. L. No. 98-620 at §§ 401, 402, 98 Stat 3335 (1984). The Court is no longer required to give expedited consideration to all FOIA suits, and Plaintiff has not shown that there is good cause under Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 5 of 6 6 section 1657 to do so in this case. Thus, even if this Court treats this case as an action brought under the FOIA, the Service asks the Court to dismiss this request for relief. DATED: January 4, 2016 Respectfully submitted, CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General CHANNING D. PHILLIPS United States Attorney /s/Joycelyn S. Peyton JOYCELYN S. PEYTON Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 227 Washington, D.C. 20044 Tel: 202-514-6576 Fax: 202-514-6866 Joycelyn.S.Peyton@usdoj.gov Counsel for the United States Case 1:16-cv-01682-JEB Document 21-1 Filed 01/04/17 Page 6 of 6 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DISTRICT OF COLUMBIA WILLIAM E. POWELL, ) ) Plaintiff, ) ) v. ) ) INTERNAL REVENUE SERVICE, et al., ) ) Defendants. ) ______________________________________ ) Case No. 16-cv-01682 (JEB) [Proposed] ORDER GRANTING DEFENANTS’ MOTION TO DISMISS Defendants having moved to dismiss Plaintiff’s complaint under Fed. R. Civ. P. 12(b)(1); and the Court having reviewed all pleadings and papers thereto; it is hereby ORDERED that: 1. The Defendants’ motion to dismiss is GRANTED, and Plaintiff’s complaint is hereby DISMISSED. ____________________________________ JAMES E. BOASBERG UNITED STATES DISTRICT JUDGE Dated: _______________, 2017 cc: William E. Powell Pro se Joycelyn S. Peyton Counsel for Defendants Case 1:16-cv-01682-JEB Document 21-2 Filed 01/04/17 Page 1 of 1