Hart v. U.S., No. 1:02 CV 147.

• Decision Date: 05 September 2003
• Docket Number: No. 1:02 CV 147.
• Parties: Kevin HART, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Northern District of Ohio

291 F.Supp.2d 635

Kevin HART, Plaintiff, v. UNITED STATES of America, Defendant.

No. 1:02 CV 147.

United States District Court, N.D. Ohio. Eastern Division.

September 5, 2003.

Kevin D. Hart, N. Olmsted, OH, Pro se.

Elizabeth Lan, United States Department of Justice, Washington, OH, for Defendant.

Memorandum of Opinion and Order

GAUGHAN, District Judge.

Introduction

This matter is before the Court upon the following motions: (1) Plaintiff's Motion of Writs of Habeas Corpus, Prohibition, Sui Juris, and Mandamus of Judicial Review of Law and Facts and Plaintiff's Protection of all Constitutional and Legal Rights Guaranteed under All Laws in the United States of America (Doc. 21); (2) Plaintiff's Motion for FRCP 11(c) Sanctions and Motion to Strike Pursuant to FRCP 12(f) against the United States of America (Doc. 23); and (3) defendant United States' Motion to Affirm and Dismiss (Doc. 20). This case arises out of the assessment of frivolous return penalties against plaintiff Kevin Hart by the Internal Revenue Service ("IRS") pursuant to 26 U.S.C. § 6702.

The issues presently before the Court are (1) whether plaintiff is entitled to full discovery and trial regarding the issues presented in his Amended Complaint; (2) whether defendant should be sanctioned and its Motion to Dismiss stricken because defendant inadvertently omitted one page from its fourteen-page Motion to Dismiss when it served the same upon plaintiff; (3) whether the determination of the IRS Appeals Office upholding the assessment of frivolous return penalties against plaintiff should be affirmed; and (4) whether the Court lacks subject matter jurisdiction over plaintiff's claims for injunctive and declaratory relief.

For the following reasons, the Court (1) DENIES plaintiff's Motion of Writs of Habeas Corpus; (2) DENIES plaintiff's Motion for Sanctions and Motion to Strike; and (3) GRANTS defendant's Motion to Affirm and Dismiss.

Facts

Plaintiff Kevin Hart, proceeding pro se, filed a Complaint in this Court on January 24, 2002, seeking declaratory and injunctive relief and costs relating to an allegedly invalid Notice of Determination issued by the IRS assessing frivolous tax return penalties against plaintiff. Plaintiff thereafter filed an Amended Complaint on May 7, 2003, in which he added additional factual allegations relevant to his claim that said Notice of Determination is invalid.

The following facts appear from the "Supplemental Appendix to the United States' Motion to Dismiss" (hereinafter "S.A.").¹ Plaintiff submitted tax returns for the years 1995 and 1996 in which he reported zero income. S.A. Exh. 2. The IRS then sent plaintiff two letters dated May 22, 1996 and July 16, 1997, informing him that his 1995 and 1996 returns were frivolous and offering him the opportunity to submit corrected returns within thirty days. S.A. Exh. 3. After plaintiff failed to correct these returns, the IRS assessed plaintiff a $500 frivolous return penalty on each return. S.A. Exh. 4. Plaintiff did not pay these penalties.

Thereafter, on April 7, 2001, the IRS sent plaintiff a "Final Notice of Intent to Levy and Notice of your Right to a Hearing." S.A. Exh. 5. This Notice advised plaintiff of the IRS' intent to levy plaintiff's property to collect the amount owed, and informed plaintiff of his right to request a hearing and appeals consideration within thirty days of the date of the Notice. S.A. Exh. 5.

Shortly thereafter, on April 23, 2001, plaintiff submitted IRS Form 12153 entitled "Request for a Collection Due Process Hearing." Plaintiff attached a letter thereto, in which he requested "all copies of the file that you're going to use at the hearing pursuant to the Freedom of Information Act and The Privacy Act." S.A. Exh. 6. On September 5, 2001, plaintiff submitted an "updated and corrected copy" of IRS Form 12153. S.A. Exh. 14. In a letter attached thereto, plaintiff requested that the IRS produce various documents relating to the legal authority of the IRS to impose the underlying income tax and frivolous penalties at issue. S.A. Exh. 14.²

In a letter dated November 5, 2001, the IRS responded to plaintiff's letter attachment to his September 5, 2001 Form 12153 as follows:

At the Collection Due Process hearing, we are required to (1) verify that the IRS office collecting the tax has met the requirements of various applicable law and administrative procedures; (2) hear any relevant issue relating to the unpaid tax; and (3) consider whether the proposed collection action balances the need for the efficient collection of the taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary.

* * * * * *

Secondly, it is the Service's position that in cases where a taxpayer's request for a collection due process hearing only states moral, religious, political, constitutional, conscientious or similar grounds to support his/her position, Appeals will not consider those grounds in the Due Process/Equivalent hearing pursuant to IRC Section 6320/6330. In fact, Appeals will not consider those grounds in any case in our jurisdiction. See Regulations § 601.106(b), Statement of Procedural Rules.

The attachment to your request raises issues pertaining to the legal authority of the Internal Revenue Service. Such matters have previously been addressed by the courts and WILL NOT BE ADDRESSED AT YOUR HEARING.

S.A. Exh. 17 (emphasis in original). The IRS then explained that it "will consider any other issue relating to the propriety of the proposed enforcement action or any other qualifying issue," including proposals regarding collection alternatives. S.A. Exh. 17.

The CDP hearing was held on December 12, 2001. In attendance were IRS Settlement Officers Spencer Dolin and Douglas Kane, as well as plaintiff and a Mr. Joe Tornichio, whom plaintiff identified as his "representative." S.A. Exh. 20 at 3-4, 7. At that hearing, plaintiff insisted that he had properly designated Mr. Tornichio as his power of attorney and demanded that Mr. Tornichio be recognized as plaintiff's representative during the hearing. S.A. Exh. 20 at 7. Plaintiff further insisted that the Settlement Officers identify the specific statutes and/or code sections that allowed them to reject Mr. Tornichio as his representative. S.A. Exh. 20 at 11, 18.

Settlement Officer Dolin reiterated repeatedly that the IRS was not going to discuss the issue of representation at the CDP hearing and that the purpose of said hearing was to determine whether and how plaintiff was going to pay the assessed penalties. S.A. Exh. 20 at 11, 12, 14, 15. Plaintiff then unilaterally terminated the hearing, stating that "[t]his hearing is over with if you guys aren't going to talk about [the issue of representation]. We're going to move out." S.A. Exh. 20 at 21.

Thereafter, on December 31, 2001, the IRS sent plaintiff a "Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330." S.A. Exh. 23. The Notice of Determination states, in pertinent part:

It has been determined that no relief is to be granted and that the proposed levy action is sustained. The Internal Revenue Service has complied with code and procedural requirements in collecting the tax.

S.A. Exh. 23. The Notice further states that plaintiff may appeal the IRS determination by filing a complaint in District Court within thirty days. S.A. Exh. 23.

On January 24, 2002, plaintiff filed his Complaint in this Court. On March 5, 2002, this Court sua sponte dismissed plaintiff's Complaint without prejudice for lack of subject matter jurisdiction on the grounds that the Tax Court had jurisdiction over this matter. Defendant filed a Motion for Reconsideration, which was subsequently granted by this Court on March 13, 2003.

Shortly thereafter, on May 7, 2003, plaintiff filed his Amended Complaint. Therein, plaintiff alleges generally that the December 12, 2001 CDP hearing is null and void (and therefore, the Notice of Determination is invalid) because (1) the IRS Settlement Officers lacked the requisite authority to conduct the hearing; and (2) the manner in which the hearing was conducted was unreasonable and contrary to law. Plaintiff requests declaratory relief, injunctive relief and reimbursement of all his costs incurred in bringing this action.

On May 29, 2003, defendant filed a Motion to Affirm and Dismiss. On that same date, plaintiff filed his "Motion of Writs of Habeas Corpus, Prohibition, Sui Juris, and Mandamus of Judicial Review of Law and Facts and Plaintiff's Protection of all Constitutional and Legal Rights Guaranteed under All Laws in the United States of America" (hereinafter "Motion for Writs"). On June 20, 2003, plaintiff filed his Motion for FRCP 11(c) Sanctions and Motion to Strike Pursuant to FRCP 12(f). Each of these three Motions are currently before this Court and will be discussed separately.

I. Plaintiff's Motion of Writs of Habeas Corpus, Prohibition, Sui Juris, and Mandamus of Judicial Review of Law and Facts and Plaintiff's Protection of all Constitutional and Legal Rights Guaranteed under All Laws in the United States of America ("Motion of Writs")

In his Motion of Writs, plaintiff seeks relief from an Order entered by this Court on May 16, 2003 which provides that "[t]he case will be decided on briefs in that this is an action for review of an administrative record." See May 16, 2003 Order (Doc. 19). Plaintiff strenuously objects to this Order, arguing that it violates his due process rights by depriving him of the opportunity to conduct discovery and to present and cross-examine witnesses at a "full blown" jury trial. Thus, plaintiff requests that this Court "vacate its Order of May 16, 2003, and, find good cause exists to issue a new Order," entitling plaintiff to present his case and put forth all evidence before a jury.³

Under the Internal Revenue Service Restructuring and Reform Act of 1998, 112 Stat. 685, 746, Congress enacted ...