Francis v. Internal Revenue Serv.
| Decision Date | 12 June 2020 |
| Docket Number | Civil Action No. 19-3177 (RBW),Civil Action No. 19-949 (RBW) |
| Parties | BRAD S. FRANCIS, et al., Plaintiffs, v. INTERNAL REVENUE SERVICE, Defendant. BRAD S. FRANCIS, et al., Plaintiffs, v. UNITED STATES OF AMERICA, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
The plaintiffs, Brad S. Francis and Christine C. Francis, proceeding pro se, initiated the above-captioned civil actions, Francis v. Internal Revenue Service (Francis I), Civ. Action No. 19-949, and Francis v. United States (Francis II), Civ. Action No. 19-3177, against the defendants, the United States of America; the Internal Revenue Service ("IRS"); Charles P. Rettig, in his official capacity as the Commissioner of the IRS; Michael R. Sherwin, in his official capacity as the Acting United States Attorney for the District of Columbia; and Sunita Lough, in her official capacity as the IRS Deputy Commissioner for Services and Enforcement (collectively, the "defendants"), pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C.§§ 701-706 (2018); the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552; the Privacy Act, 5 U.S.C. § 552a; the Internal Revenue Code, 26 U.S.C. §§ 1-9834 (2018); and the Fifth and Fourteenth Amendments to the United States Constitution, U.S. Const. amends. V & XIV. See First Amended Complaint for Injunctive Relief [ ], Francis I, Civ. Action No. 19-949 ("Francis I Compl." or the "Francis I Complaint") at 1, 26, ¶¶ 13, 16, 17; First Amended Complaint, Francis II, Civ. Action No. 19-3177 ("Francis II Compl." or the "Francis II Complaint") ¶¶ 3, 4, 7, 8, 16, 17, 21. Currently pending before the Court are (1) the Defendants' Motion to Dismiss . . . the First Amended Complaint ("FAC"), Francis I, Civ. Action No. 19-949 (); (2) the plaintiffs' Motion for Sanctions Under Federal Rule of Civil Procedure 11, Francis I, Civ. Action No. 19-949 ( ; and (3) the Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint ("FAC"), Francis II, Civ. Action No. 19-3177 (). Upon careful consideration of the parties' submissions,2 the Court concludes for the following reasons that it must grant the defendants' first and second motions to dismiss and deny the plaintiffs' motion for Rule 11 sanctions.
The plaintiffs have initiated a number of legal challenges related to their tax returns, both in this Court and in other courts. Because the procedural history of these legal challenges is pertinent to the resolution of the motions now pending before this Court, and to provide proper context, the Court will first address the procedural history of the plaintiffs' legal challenges. The Court will then specifically address the factual background relevant to the plaintiffs' legal challenges in the above-captioned cases.
The plaintiffs are no strangers to the federal court system. In 2016, they initiated a civil action in the United States District Court for the Western District of Missouri (the "Western District of Missouri"), challenging certain IRS actions related to their 2010 to 2015 tax returns. See Francis v. United States, No. 4:16-cv-0672-DGK, 2017 WL 1745605, at *1 (W.D. Mo. May 4, 2017), aff'd, 709 F. App'x 403 (8th Cir. 2018) (per curiam). The Western District of Missouri concluded that it lacked subject matter jurisdiction over the plaintiffs' claims and dismissed the case. See id. at *4. Thereafter, in 2018, the plaintiffs initiated another civil action in the Western District of Missouri, again challenging certain IRS activities related to their 2010 to 2015 tax returns, and the Western District of Missouri again concluded that it lacked subject matter jurisdiction over the plaintiffs' claims and dismissed the case. See Francis v. United States, No. 4:18-cv-0287-DGK, 2018 WL 4518973, at *1, 3 (W.D. Mo. July 23, 2018), aff'd, 770 F. App'x 314 (8th Cir. 2019) (per curiam). Both dismissals were affirmed by the Eighth Circuit. See Francis, 709 F. App'x at 403; Francis, 770 App'x at 314.
Then, in 2018, the plaintiffs initiated yet a third civil action, this time in this Court, again challenging certain IRS actions related to their 2010 to 2016 tax returns. See Order at 2 (Apr.12, 2019), Francis v. Internal Revenue Serv., Civ. Action No. 18-823, ECF No. 14. On March 31, 2019, this Court issued a non-final Order,3 dismissing the majority of the plaintiffs' claims, but allowing the plaintiffs' FOIA improper policy or practice claim to proceed, see Order at 1-2 (Mar. 31, 2019), Francis, Civ. Action No. 18-823, ECF No. 12. The following day, the plaintiffs initiated Francis I, see Complaint for Injunctive Relief at 1 (filed Apr. 1, 2019), Francis I, Civ. Action No. 19-949, challenging certain IRS activities related to their 2014 to 2017 tax returns and their 2010 to 2017 TXMODA transcripts, see generally Francis I Compl. The defendants then filed their first motion to dismiss, see Defs.' 1st Mot. to Dismiss at 1, and the plaintiffs filed their motion for Rule 11 sanctions, see Pls.' Sanctions Mot. at 1. While those motions were pending resolution in Francis I, the plaintiffs initiated Francis II, see Complaint at 1, Francis II, Civ. Action No. 19-3177 (filed Oct. 22, 2019), challenging certain IRS activities related to their 2010 to 2017 tax returns, see Francis II Compl. at 1, and the defendants filed their second motion to dismiss in Francis II, see Defs.' 2d Mot. to Dismiss at 1. The Court thereafter consolidated Francis I and Francis II. See Order at 2-3 (Apr. 27, 2020), Francis I, Civ. Action No. 19-949, ECF No. 15. The defendants' first and second motions to dismiss and the plaintiffs' motion for Rule 11 sanctions are the subjects of this Memorandum Opinion.
In the Francis I and Francis II Complaints, the plaintiffs advance several legal challenges relating to the IRS's treatment of their 2014 to 2017 tax returns and their requests to receive the 2010 to 2017 TXMODA transcripts. See generally Francis I Compl.; Francis II Compl. The Court will separately address each set of challenged IRS actions.
The plaintiffs submitted tax returns to the IRS for the 2014 to 2017 tax years. Upon review of these tax returns, the IRS determined that the plaintiffs had asserted frivolous positions and penalties were assessed against the plaintiffs for those alleged transgressions. See Francis II Compl. ¶¶ 48-57; see also Pls.' Sanctions Mot., Exhibit ("Ex.") B10 (Letter from Christine L. Davis, Program Manager, RICS, IVO, to Brad S. & Christine C. Francis (Apr. 3, 2018) ("2014 Notice")) at 1 (); id., Ex. C2 (Notice of Penalty Charge ("2015 Notice")) at 2 (); id., Ex. D1 (Letter from Christine L. Davis, Program Manager, RICS/IVO to Brad S. & Christine C. Francis (May 25, 2017) ("2016 Notice")) at 1 (); id., Ex. E1 (Letter from Christine L. Davis, Program Manager, RICS/IVO to Brad S. & Christine C. Francis (Apr. 6, 2018) ("2017 Notice")) at 1 (). The plaintiffs contend that "the[ir] tax returns were archived in a Federal Records Center shortly after receipt by the IRS and before they could be included in the Customer Account Data Engine . . . Individual Master Files[,]" Francis I Compl. ¶ 41 (emphasis removed), and therefore "were [ ] not used in making any determination about the [plaintiffs'] tax liabilities[,]" id. ¶ 46.
On December 6, 2018, the plaintiffs mailed an IRS "Form 4506 . . . to the [IRS] [Return Income Verification Services ('RAIVS')]" unit in Kansas City, Missouri (the "Kansas City RAIVS unit"), id. ¶ 28, requesting "certified copies of the original tax returns ([ ] Form[s] 1040) that the IRS received from the [plaintiffs][,] including attachments such as [F]orms 4852,W-2[s], affidavits, etc.[,]" id. ¶ 27, for the 2014 to 2017 tax years, see id. ¶ 26. "On February []6, 2019, the . . . [Kansas City] RAIVS[] [unit] denied [the] [p]laintiffs['] request[.]" Id. ¶ 32. In response, on February 18, 2019, the plaintiffs sent an appeal to the "IRS Appeals" office in Riverside, California (the "Riverside IRS Appeals office"). Id. ¶ 35. "No determination was mailed [to the plaintiffs] within the [twenty]-day time period as provided by 26 C.F.R. § 601.702(c)(1)(iii)[.]" Id. ¶ 39. However, on July 16, 2019, the IRS released to the plaintiffs copies of their "2014 to 2017 Form 1040 federal income tax returns" "as a matter of administrative discretion[.]" Defs.' 1st Mot. to Dismiss, Ex. 1 ().
"On July 11, 2017, [the] [p]laintiffs called (800) 908-9946 . . . [,] requesting copies of copies of the [the] TXMODA A series of [t]ranscripts" for the 2010 to 2016 tax periods, Francis I Compl. ¶ 73; see Francis II Compl. ¶ 28, and "[o]n July 19, 2017, [they] confirmed [their] request . . . in writing[,]" Francis I Compl. ¶ 74. However, the IRS employee with whom they spoke did not provide them with the requested TXMODA transcripts. See id. ¶ 76; see Francis II Compl. ¶ 29. Then, "[o]n November 8, 2017, [one of the plaintiffs] [again] c[alled] (800) 908-9946 . . . [,] request[ing] [their] TXMODA series transcripts" for the 2013 to 2016 tax periods. Francis I Compl. ¶ 77; see Francis II Compl. ¶ 28. The IRS employee with whom the plaintiff spoke "refused...
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