Bright v. U.S., Civil Action No. 97-23.

• Decision Date: 21 July 2006
• Docket Number: Civil Action No. 97-23.
• Citation: 446 F.Supp.2d 339
• Parties: Leonard BRIGHT, Plaintiff v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

446 F.Supp.2d 339

Leonard BRIGHT, Plaintiff v. UNITED STATES of America, Defendant.

Civil Action No. 97-23.

United States District Court, E.D. Pennsylvania.

July 21, 2006.

Leonard Bright, Easton, PA, Pro se.

Dayna K. Olson, U.S. Dept. of Justice, Tax Division, Pat S. Genis, U.S. Attorney's Office, U.S. Dept. of Justice, Washington, DC, for Defendant.

MEMORANDUM OF DECISION

WELLS, United States Magistrate Judge.

I. INTRODUCTION

Plaintiff, Leonard Bright ("Plaintiff"), commenced this action against the United States of America, ("Defendant"), on January 3, 1997.¹ He alleges that the Internal Revenue Service ("IRS") levied against his wages without providing him prior notice of deficiency as required by 26 U.S.C. § 6212,² thereby denying him the opportunity to seek redetermination of the deficiency in the tax Court under 26 U.S.C. § 6213. Plaintiff also alleges the IRS failed to provide him notice of the intent to levy as required by 26 U.S.C. § 6331. He further alleges that the IRS failed to provide him notice of the September 27, 1994 and January 24, 1995 levies on his salary. Plaintiff seeks to recover damages for these procedural deficiencies under 26 U.S.C. § 7433. Defendant counters that it complied with the requirements of 26 .U.S.C. §§ 6212, 6331, inasmuch as it mailed any required notices to Plaintiff's last known address.

The Honorable Louis H. Pollak referred this matter to the undersigned on July 1, 2002 "to conduct all proceeding[s] and order the entry of judgment." (Doc. No. 74). Accordingly, on August 27, 2002, this court held a bench trial. Having considered the trial testimony, as well as the exhibits presented at trial, the court will determine³ Plaintiff's rights under 26 U.S.C § 7433. More specifically, this court must determine if the IRS recklessly or intentionally disregarded the requirement under § 6331 that Plaintiff be served notice of its intent to levy thirty days before the levies were issued to Plaintiff's employer.⁴

Plaintiff's claim requires the court to consider whether or not, when, and where the IRS sent a notice of intent to levy to Plaintiff before it sent levies on Plaintiff's salary to his employer on September 27, 1994 and January 24, 1995. Furthermore, the court must determine where Plaintiff actually lived at the time notice should have been sent as well as what his last known address was on the date notice should have been issued. As will be explained, the court finds that the notice of intent to levy prior to the September 27, 1994 levy was sent on November 22, 1993 but was not properly sent to Plaintiff's last known address. However, the court further finds that Plaintiff's cause of action for this procedural error accrued on October 18, 1994 and, hence, his complaint, filed on January 3, 1997, exceeded the applicable two-year statute of limitations. With respect to the levies of September 27, 1994 and January 24, 1995, the court finds that the IRS is not required by statute or regulation to provide notice of levy to a taxpayer. For this reason, Plaintiff cannot maintain a cause of action under § 7433 with respect to the September 27, 1994 and January 24, 1995 levies. Therefore, Judgment will be entered for Defendant.

II. FINDINGS OF FACT

Plaintiff and his family resided at 737 E. Madison, El Cajon, California, from April 1989 to July 1991. (N.T. 8/27/02 at 38, 208-09). From July 1991 to May 1993, Plaintiff and his family lived at 390 West Ferry Street, Buffalo, New York. Id. at 38, 209. From May 1993 to October 1994, Plaintiff and his family's residence was 867 Maryland Court, Whitehall, Pennsylvania. Id. at 210; Defendant's Exhibit ("Def.'s Ex.") 22. On October 18, 1994, Plaintiff relocated his wife and children to his inlaw's home at 182 Brinton Street in Buffalo, New York. Id. at 32-34, 40, 210. At this time, Plaintiff lived in his van, because he had no place to live near where he worked in Eastern Pennsylvania and New Jersey. Id. at 40-41. In addition, Plaintiff began using a Post Office Box in Kenilworth, New Jersey.⁵ Id. at 41, 210. In August 1995, Plaintiff received a refund from the IRS for $ 3082. Id. at 57. Plaintiff used this money to secure a family residence at 600 Mickley Run, Whitehall, Pennsylvania; the Bright family lived at this address from August 1995 to August 1997. Id. at 75, 210-11. Finally, from August 1997 through the time of trial, Plaintiff and his family resided at 687 South 25th Street, Easton, Pennsylvania. Id. at 211.

When Plaintiff filed his 1989 tax return late, on May 1, 1990, he listed 737 E. Madison, El Cajon, California as his address.⁶ (N.T. 8/27/02 at 114-15). On January 7, 1993, the IRS sent a request for Plaintiff to update his address; to 390 Ferry Street in Buffalo, New York. Plaintiffs Exhibit ("Pl.'s Ex.") 1; Def.'s Ex. 20A. Plaintiff received this mail and, on February 2, 1993, confirmed in writing that his address was 390 Ferry Street, Buffalo, New York. Id.; (N.T. 8/27/02 at 212). Although, in late 1994, Plaintiff submitted a return for the 1990 tax year,⁷ no address was listed on it. Pl.'s Ex. 4; Def.'s Ex. 9. On February 26, 1995, Plaintiff submitted late returns for the 1992 and 1993 tax years, he indicated his address as P.O. Box 280, Kenilworth, New Jersey. Def.'s Exs. 11, 12. On February 27, 1995, Plaintiff submitted a late tax return for the 1991 tax year. Pl.'s Ex. 10; Def.'s Ex. 10. This tax return again identified the Kenilworth, New Jersey, P.O. Box as his address. Id.

On November 22, 1993, the IRS sent Plaintiff a notice of intent to levy for the 1990 tax year. (N.T. 8/27/02 at 134-35); Def.'s Ex. 21, page 10. The notice was sent to 737 E. Madison, El Cajon, California.⁸ Almost a year later, on September 27, 1994, the Laguna Nigel, California IRS office served a notice of levy for the 1989 and 1990 tax years on Plaintiffs employer. Pl.'s Ex. 2; Def.'s Ex. 14. Plaintiffs copy of this notice was sent to the El Cajon, California address.⁹ This court finds that Plaintiff first learned of this levy on October 18, 1994, when the money was actually levied from his salary for the first time. (N.T. 8/27/02 at 32-34). This levy was released on December 16, 1994 by the Mountainside, New Jersey IRS office. Pl.'s Ex. 6; Def.'s Ex. 18. However, on January 24, 1995, the Laguna Nigel, California IRS office served a new levy for the 1990 tax year on Plaintiffs employer. Pl.'s Ex. 7; Def.'s Ex. 15. Plaintiffs copy of this notice was sent to 182 Brinton Street, Buffalo, New York. Id. This levy was released on March 2, 1995 by the Mountainside, New Jersey IRS office. Pl.'s Ex. 11; Def.'s Ex. 19.

The parties do not dispute, therefore, the court finds that, based on the September 27, 1994 levy, the IRS deducted the following amounts from Plaintiffs salary:

                October 18, 1994:      $ 395.88
                October 25, 1994:      $ 395.88
                November 1, 1994:      $ 193.47
                November 8, 1994:      $ 193.47
                November 16, 1994:     $ 193.47
                November 22, 1994:     $ 193.47
                November 29, 1994:     $ 193.47
                December 6, 1994:      $ 193.47
                December 13, 1994:     $ 193.47
                December 20, 1994:     $ 193.47
                December 28, 1994:     $ 193.47
                

The parties do not dispute, therefore, the court finds that, based on the January 24, 1995 levy, the IRS deducted the following amounts from Plaintiff's salary:

                February 14, 1995:    $ 193.47
                February 22, 1995:    $ 193.47
                February 28, 1994:    $ 193.47
                March 7, 1994:        $ 193.47
                March 14, 1995:       $ 193.47
                

On October 18, 1994, the day the first levy was taken from Plaintiffs salary, Plaintiff and his family were packed and prepared to move from Whitehall, Pennsylvania to Bethlehem, Pennsylvania. (N.T. 8/27/02 at 32-33). Plaintiff intended to use his October 18, 1994 salary to pay the remainder of the security deposit owed on the new residence. Id. at 33-34. However, after the levy of October 18, 1994, his bank account retained only $ 106, which was insufficient to accomplish this goal. Id. at 34, 39. Unable to satisfy the balance of the security deposit, Plaintiff and his family could not move to Bethlehem as planned. Id. at 39-40. Inasmuch as the Brights had already terminated their lease in Whitehall, Pennsylvania, they could not return there. Id. at 40. Faced with this dilemma, Plaintiff decided to move his wife and children to his in-laws' home at 182 Brinton Street, Buffalo, New York. Id. at 40, 210. While his family moved to Buffalo, Plaintiff lived out of his van to be near his work in Eastern Pennsylvania and New Jersey, until an August 1995 IRS refund allowed him to secure a family residence in Whitehall. Id. at 75.

Thus, as a result of the September 27, 1994 levy, Plaintiff incurred additional rental and fuel fees for the rental moving truck on October 18, 1994. Id. at 221. The September 27, 1994 levy also caused Plaintiff to live apart from his family from October 18, 1994 until August 1995. This separation caused the following additional expenses: (1) cost to sleep and shower in a hotel once a week; id. at 100; (2) separate meals for himself, id.; (3) he used his company vehicle to drive to and from Buffalo every weekend, (13 cents a mile), and, (4) expense to drive his personal vehicle to the law library once a week (twenty miles round trip), id. at 259-60; and (5) a higher mortgage interest rate in 1998, because the IRS levies still appeared on both credit reports and a $ 7000 welfare lien appeared on his wife's credit report.¹⁰ Id. at 259.

III. CONCLUSIONS OF LAW

The United States can only be sued in instances where Congress expressly has waived the federal government's sovereign immunity. Kabakjian v. United States, 267 F.3d 208, 211 (3d Cir.2001); Gandy Nursery, Inc. v. United States, 318 F.3d 631, 636 (5th Cir.2003). Plaintiff's lawsuit involves the explicit waiver of sovereign immunity contained in 26 U.S.C. § 7433, which allows taxpayers to sue the United States for unauthorized collection actions. Specifically, a taxpayer can sue the United States for the "(1) actual,...