Petrie v. CIR, CV-S-88-74-PMP.
| Decision Date | 05 April 1988 |
| Docket Number | No. CV-S-88-74-PMP.,CV-S-88-74-PMP. |
| Citation | 61 AFTR 2d 88,686 F. Supp. 1407 |
| Parties | Branka PETRIE, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE, Defendant. |
| Court | U.S. District Court — District of Nevada |
Branka Petrie, pro se.
Mark Fraase, Thomas Carlucci, Trial Attys., Tax Div., U.S. Dept. of Justice, Washington, D.C., for defendant.
In this action, BRANKA PETRIE ("Plaintiff"), appearing pro se, claims that the Commissioner of Internal Revenue ("Defendant") has unlawfully assessed and levied upon her wages, (, her "toke envelopes" or tips), in an effort to collect allegedly delinquent federal income taxes.1 On February 3, 1988, Plaintiff filed a Complaint and Motion for Preliminary and Permanent Injunction (# 1), in which she asserts that the levy is invalid on various procedural grounds, and seeks to enjoin the IRS from enforcing the levy. On February 4, 1988, the Court denied Plaintiff's Application for Temporary Restraining Order (# 2), filed February 3, 1988. Defendant filed a Motion to Dismiss (# 5), and an Opposition to Motion for Preliminary Injunction (# 6), concurrently on February 11, 1988, to which Plaintiff filed an Opposition (# 7) on February 17, 1988.
The Court heard oral argument from both parties on February 18, 1988, at which time the Court instructed the parties to file affidavits and documents in connection with their respective positions. On February 23, 1988, Plaintiff filed an Affidavit and Statement of Financial Facts (# 10). Defendant filed the Declaration of Revenue Officer Magana (# 12), and a Supplemental Opposition to Motion for Preliminary Injunction (# 13), on February 25 and 29, 1988, respectively. Plaintiff filed an Affidavit in Opposition to Defendant's Supplemental Opposition (# 14) on March 9, 1988.
For the reasons discussed below, the Court must deny Plaintiff's Motion for Preliminary and Permanent Injunctive Relief.
Plaintiff is employed at Caesar's Palace as a blackjack dealer. On April 5, 1984, a Statutory Notice of Deficiency (IRS Form 5601) was sent to Plaintiff, pursuant to 26 U.S.C. § 6212, stating that the Internal Revenue Service ("IRS") had determined a deficiency for the 1980 tax year. (# 13, Declaration of Joe Magana, ¶ 12, Exhibit D attached thereto.) Plaintiff did not file a petition contesting the assessment with the Tax Court, despite the fact that the Statutory Notice of Deficiency explicitly notified Plaintiff of her right to do so. In a letter dated May 10, 1984, Plaintiff acknowledged receipt of the notice of deficiency. (Id., ¶ 13, Exhibit E attached thereto.) On August 3, 1984, a Second Notice of Delinquent Tax Account (IRS Form 4839) was sent to Plaintiff. (Id., ¶ 15, Exhibit G attached thereto.) Attached to Defendant's Exhibit G is a letter from Plaintiff dated August 8, 1984 in which she denies any tax liability.
On September 11, 1984, pursuant to 26 U.S.C. § 6303, a Statement of Tax Due on Federal Tax Return (IRS Form 3552) indicating an assessment of $5,691.24 for income taxes due for the 1980 tax year was sent to Plaintiff.2 (Id., ¶ 16, Exhibit H attached thereto.) In a letter dated September 17, 1984, Plaintiff again denied any tax liability, and demanded an administrative hearing. (Id., ¶ 17, Exhibit I attached thereto.)
Revenue Officer Stephen Harrison made a field call on Plaintiff on October 15, 1984 in an attempt to arrange for collection of the delinquent taxes. Plaintiff was apparently most uncooperative. (# 13, Declaration of Stephen Harrison, ¶ 5.)
Following a telephone call on October 30, 1984, at which time Plaintiff apologized for being so abrupt during Officer Harrison's field call, she requested an appointment concerning the delinquent taxes. On November 13, 1984, Plaintiff met with Officer Harrison at the local IRS district office, and Plaintiff demanded an administrative hearing. Officer Harrison informed that the time for filing a petition in Tax Court for the 1980 tax year had expired, and advised her that she could either pay the delinquent taxes and file a refund suit in federal district court or face seizure of her assets and/or a levy on a her wages. (Id, ¶¶ 6, 7.)
While Officer Harrison recalls that he handed Plaintiff a Final Notice of Intention to Levy (IRS Letter 1058), Defendant is unable to produce a copy of such final notice. (Id., ¶ 7.) Plaintiff then threatened to "have a rifle waiting" for Officer Harrison if he returned to her home. Following this incident, Officer Harrison completed an Assault or Threat of Assault Report (Id., ¶¶ 7-8.)
A Notice of Levy on Wages, Salary, and Other Income (IRS Form 668-W) was served on Desert Palace, Inc., d/b/a Caesar's Palace, on December 21, 1984, to collect the delinquent federal tax liability of Plaintiff for the 1980 tax year. (Id., ¶ 9, Exhibit K attached thereto.) On January 4, 1988, a Notice of Levy was served on the Caesar's Palace Casino "Toke Committee,"3 in order to collect the delinquent taxes, in addition to the federal tax delinquencies of other Caesar's Palace employees. The members of the Toke Committee indicated their refusal to comply with the levy.
On January 15, 1988, United States Magistrate Lawrence Leavitt issued a Warrant for Entry, whereupon IRS agents entered Caesar's Palace Casino and seized tips belonging to Plaintiff, except for the daily exemption allowed pursuant to 26 U.S.C. § 6334(d). (# 5, Declaration of Joe Magana, ¶ 8, Exhibits 3, 4 attached thereto.) On January 21, 1988, the Toke Committee informed the IRS that they would comply with the Notice of Levy served on January 4, 1988, at which time arrangements were made whereby tips subject to levy are being accumulated by the Toke Committee and paid to the IRS on a weekly basis. (Id., ¶ 10).
MOTION TO DISMISS DENIED:
UNITED STATES NOT PROPER DEFENDANT AND SERVICE OF PROCESS NOT FATALLY DEFECTIVE
Defendant's Motion to Dismiss (# 5) is based on the assertion that the United States is the only proper party defendant, and that service of process is defective as violative of Fed.R.Civ.P. 4(c)(2)(A) and 4(d)(4) and/or (5). Defendant has simply misstated the law with regard to the first contention. Furthermore, the Court rejects the notion that failure to comply with Rule 4's technical requirements always requires dismissal of the action, and follows the Ninth Circuit in holding that such failure is excusable under the circumstances.
Defendant seeks to substitute the United States as the real party in interest and to dismiss this action due to improper service, pursuant to Fed.R.Civ.P. 12(b)(5). This contention is without merit. Far from being the real party in interest in this action, the United States waives sovereign immunity pursuant to 26 U.S.C. § 7422, "Civil actions for refund," only when "a claim for refund or credit has been duly filed with the Treasury Secretary, according to the provisions of law in that regard,...." 26 U.S.C. § 7422(a), "No suit prior to filing claim for refund"; Matya v. United States, 478 F.2d 330, 331-32 (8th Cir.1973) (quoting Buck v. United States, 466 F.2d 481, 483 (10th Cir.1972)); Buck v. Dist. Director of Internal Revenue, 369 F.Supp. 1281, 1282 (S.D.Tex.1973). Defendant cites 26 U.S.C. § 7422(c), "Suits against collection officer a bar," however, this provision is inapposite.
Defendant is quick to point out that technical defects in the service of process apply even if the Court determines that the Commissioner of Internal Revenue is the proper party defendant to this action (¶ 5, p. 3, n. 1). Defendant correctly asserts that under Fed.R.Civ.P. 4(d)(5), the United States must be properly served when an officer or agency of the United States is named as a party. Since as a matter of law the Commissioner, not the United States, is the proper defendant in this action, service of process is governed by Fed. R.Civ.P. 4(d)(5).
The record reflects that Plaintiff personally served the Summons and Complaint upon the United States Attorney for the District of Nevada, and that a copy of the Summons and Complaint was served upon Defendant. There is no indication that the Attorney General has been served in any manner. Nevertheless, neither the United States Attorney for the District of Nevada nor Defendant deny receiving the Summons and Complaint in a timely manner. Indeed, the receipt of such notice has enabled Defendant to answer Plaintiff's Complaint and Motion for Injunctive Relief, and to participate in the proceedings before the Court.4 Under the circumstances, therefore, Defendant cannot be heard to claim lack of proper notice of Plaintiff's action.5
In Borzeka v. Heckler, 739 F.2d 444 (9th Cir.1984), the Ninth Circuit was presented with precisely this same issue, and reversed the Nevada District Court which had dismissed a pro se complaint for failure to comply with the technical requirements of service under Rules 4(d)(4) and (5). In Borzeka, the Secretary of Health and Human Services, under circumstances virtually identical to those of this action, argued that when Rule 4(d)(5)'s personal service requirement has not been complied with, dismissal of the complaint is always required.
The Ninth Circuit panel rejected this...
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