Hallinan v. U.S.

• Decision Date: 08 August 2007
• Docket Number: Civil Action No. 06-1706 (RMC).
• Citation: 498 F.Supp.2d 315
• Court: U.S. District Court — District of Columbia
• Parties: Patrick J. HALLINAN & Suzanne M. Hallinan, Plaintiffs, v. UNITED STATES of America, Defendant.

498 F.Supp.2d 315

Patrick J. HALLINAN & Suzanne M. Hallinan, Plaintiffs, v. UNITED STATES of America, Defendant.

Civil Action No. 06-1706 (RMC).

United States District Court, District of Columbia.

August 8, 2007.

Patrick J:

Hallinan, Rotterdam, NY, Pro se.

Suzanne M. Hallinan, Rotterdam, NY, Pro se.

Beatriz T. Saiz, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

COLLYER, District Judge.

Plaintiffs Patrick and Suzanne Hallinan filed a pro se Complaint against the United States alleging that the Internal Revenue Service ("IRS"), through its "principals, officers, agents, and/or employees," violated various sections of the Internal Revenue Code and the Code of Federal Regulations. See Compl. at 4-17. This is one of numerous pro se boilerplate complaints that have recently been filed in the this Court alleging a litany of tax code violations against the IRS. See, e.g., Gaines v. United States, 424 F.Supp.2d 219, 221 (D.D.C.2006) (collecting cases); Ross v. United States, 460 F.Supp.2d 139, 141 (D.D.C.2006) (dozens of individuals have filed similar complaints in a pro se capacity in the D.C. District Court). Plaintiffs seek monetary damages amounting to $10,000 per "disregard with intent to defeat the provisions" of the Internal Revenue Code. Compl. at 18, Remedy ¶ 1. Plaintiffs also seek "replevin" of "any and all property taken" from them without due process of law, further damages as the court sees as proper, and an injunction to prevent defendants from "further acting in disregard of law or regulation." Id., ¶¶ 2-4.

The Government now moves to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that this Court lacks subject matter jurisdiction or, alternatively, pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that Plaintiffs have failed to state a damages claim on which relief can be granted. See Def.'s Mot. at 1. The Court will grant the Government's motion and will dismiss Plaintiffs' damages claim under Rule 12(b)(6) because Plaintiffs failed to exhaust their administrative remedies, a prerequisite to a civil suit for damages under 26 U.S.C. § 7433. The Court will also dismiss Plaintiffs' claim for injunctive relief under Rule 12(b)(1) for lack of subject matter jurisdiction.

I. LEGAL STANDARDS

The Government moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and, in the alternative, pursuant to Rule 12(b)(6). "[I]n passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993). Under Rule 12(b)(1), which governs motions to dismiss for lack of subject matter jurisdiction, a plaintiff bears the burden of establishing by a preponderance of the evidence that the Court possesses jurisdiction. See Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C.2002); Pitney Bowes, Inc. v. U.S. Postal Serv., 27 F.Supp.2d 15, 19 (D.D.C.1998). It is well established that, in deciding a motion to dismiss for lack of subject matter jurisdiction, a court is not limited to the allegations set forth in the complaint "but may also consider material outside of the pleadings in its effort to determine whether the court has jurisdiction in the case." Alliance for Democracy v. Fed. Election Comm'n, 362 F.Supp.2d 138, 142 (D.D.C.2005); see Lockamy v. Truesdale, 182 F.Supp.2d 26, 30-31 (D.D.C.2001).

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). "[A] plaintiff's obligation to provide the `grounds' for `entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise the right of relief above a speculative level." Bell Atl. Corp. v. Twombly, ___ U.S. ___, ___ _ ___, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (internal citations omitted). The Court must treat the complaint's factual allegations — including mixed questions of law and fact — as true, drawing all reasonable inferences in the plaintiffs favor. See Macharia v. United States, 334 F.3d 61, 64, 67 (D.C.Cir.2003); Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C.Cir.2003). But the Court need not accept as true inferences unsupported by facts set out in the complaint or legal conclusions cast as factual allegations. Browning, 292 F3d at 242. In deciding a 12(b)(6) motion, the Court "may only consider the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the court may take judicial notice." Gustave-Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C.2002) (citation omitted).

II. DISCUSSION

A. Damages Claim

Plaintiffs invoke the Court's subject matter jurisdiction under 26 U.S.C. § 7433, which provides a cause of action to taxpayers for certain violations of Title 26 of the U.S.Code. See Compl. ¶ 1. That statute provides:

If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States. Except as provided in [26 U.S.C. §] 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.

26 U.S.C. § 7433(a). Plaintiffs also invoke this Court's jurisdiction pursuant to the Administrative Procedure Act (28 U.S.C. § 1361) and the All Writs Act (28 U.S.C. § 1651). Compl. at 2 ¶¶ A(2)-(4), C(3). Plaintiffs then allege a litany of 39 counts against the Government, the crux of which is that the IRS disregarded and continues to disregard certain sections of the IRS Code while engaged in collection activity.

First, it should be noted that, because Section 7433 is an aggrieved taxpayer's "exclusive remedy for recovering damages," neither the Administrative Procedure Act nor the All Writs Act can provide a basis for jurisdiction over a taxpayer's damages claims. Ross v. United States, 460 F.Supp.2d 139, 148-49 (D.D.C. 2006). Thus, the Court has no jurisdiction over Plaintiffs' damages claims under those statutes.

Second, Section 7433 allows suits for damages against the United States; however, it explicitly requires that "[a] judgment for damages shall not be awarded ... unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service." Id. § 7433(d)(1). The IRS, in turn, has promulgated regulations that mandate that damages actions under Section 7433 "may not be maintained unless the taxpayer has filed an administrative claim." 26 C.F.R. § 301.7433-1(e). A plaintiff claiming actual, direct economic damages as in this case must submit an administrative claim "in writing to the Area Director, Attn: Compliance Technical Support Manager of the area in which the taxpayer currently resides," and include (1) the taxpayer's name and contact information, (2) the grounds for the claim, (3) a description of the injuries incurred by the taxpayer, (4) the dollar amount of the claim, and (5) the signature of the taxpayer or his duly authorized representative. 26 C.F.R. § 301.7433-1(e)(1), (2). The regulations also make clear that the taxpayer should include any supporting documentation, evidence, and correspondence with the IRS. Id. Until the IRS rules on a properly filed claim, or six months pass without a ruling, no civil action for damages will lie. 26 C.F.R. § 301.7433-1(d), (e)(2); see also Gaines, 424 F.Supp.2d at 221-22; Turner v. United States, 429 F.Supp.2d 149, 151 (D.D.C. 2006).

Plaintiffs do not allege in their Complaint or Opposition to the Government's Motion to Dismiss that they filed the appropriate administrative claim in accordance with 26 C.F.R. § 301.7433-1(e).¹ Pursuing administrative remedies is an element of the claim. Therefore, the burden is on Plaintiffs to present some non-conclusory factual allegations that they exhausted their administrative remedies. See Twombly, 127 S.Ct at 1965. Because Plaintiffs have not done so, the Court must dismiss Plaintiffs' complaint for failure to state a claim under Section 7433.²

B. Claim for Injunctive Relief

Plaintiffs also seek an injunction to prevent the IRS from any further tax collection activity. Compl. at 19. This request is barred by the Anti-Injunction Act ("AIA"), which provides:

[N]o suit for the purpose of restraining the assessment or collection of any tax shall 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); see also Hibbs v. Winn, 542 U.S. 88, 102-03, 124 S.Ct. 2276, 159 L.Ed.2d 172 (2004). As the Supreme Court has noted, "[t]he object of § 7421(a) is to withdraw jurisdiction from the state and federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes." See Enochs v. Williams Packing & Nay. Co., 370 U.S. 1, 5, 82 S.Ct 1125, 8 L.Ed.2d 292 (1962). The AIA serves two purposes: "It responds to the Government's need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement judicial interference; and it require[s] that the legal right to the disputed sums be determined in a suit for refund." Hibbs, 542 U.S. at 103, 124 S.Ct. 2276 (citations and internal quotations omitted). A...