Marsoun v. U.S.

• Decision Date: 23 December 2008
• Docket Number: Civil Action No. 07-2078 (JDB).
• Citation: 591 F.Supp.2d 41
• Parties: Michael R. MARSOUN, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. District Court — District of Columbia

591 F.Supp.2d 41

Michael R. MARSOUN, Plaintiff, v. UNITED STATES, Defendant.

Civil Action No. 07-2078 (JDB).

United States District Court, District of Columbia.

December 23, 2008.

Michael R. Marsoun, Kealakekua, HI, pro se.

Duston K. Barton, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

JOHN D. BATES, District Judge.

Plaintiff Michael Marsoun alleges that the Internal Revenue Service ("IRS") has acted in disregard of federal tax law and regulations in connection with the collection of taxes for tax years 1990 through 2003. He seeks damages against defendant United States pursuant to 26 U.S.C. § 7433 and the U.S. Constitution. Presently pending before the Court is defendant's motion to dismiss the amended complaint for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted. For the reasons that follow, the Court concludes that plaintiff has failed to state a claim upon which relief can be granted and, therefore, will dismiss this case pursuant to Fed.R.Civ.P. 12(b)(6).

BACKGROUND

Section 7433(a) of the Internal Revenue Code ("Code") authorizes taxpayers to bring an action for civil damages against any officer or employee of the IRS who acts in disregard of the Code or its implementing regulations in connection with collection activity. The provision authorizing this cause of action states:

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 section 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.

26 U.S.C. § 7433(a).

Section 7433(d)(1), however, limits such actions, by providing 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." 26 U.S.C. § 7433(d)(1). In accordance with this provision, the IRS has promulgated regulations that establish procedures to be followed by a taxpayer who believes that IRS officers or employees have disregarded provisions of the tax code in their collection activities. See 26 C.F.R. § 301.7433-1. Specifically, these regulations require that, prior to bringing suit in court, an aggrieved taxpayer must first submit his or her claim "in writing to the Area Director, Attn: Compliance Technical Support Manager[,] of the area in which the taxpayer currently resides," and further require that the claim must include:

(i) The name, current address, current home and work telephone numbers and any convenient times to be contacted, and taxpayer identification number of the taxpayer making the claim;

(ii) The grounds, in reasonable detail, for the claim (include copies of any available substantiating documentation or correspondence with the Internal Revenue Service);

(iii) A description of the injuries incurred by the taxpayer filing the claim (include copies of any available substantiating documentation or evidence);

(iv) The dollar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable (include copies of any available substantiating documentation or evidence); and

(v) The signature of the taxpayer or duly authorized representative.

26 C.F.R. § 301.7433-1(e). If such a claim is filed and the IRS has either issued a decision on the claim or has allowed six months to pass from the date of filing without acting on it, the taxpayer may proceed to file suit in federal district court pursuant to 26 U.S.C. § 7433(a). See 26 C.F.R. § 301.7433-1(d)(1). The regulations also allow the taxpayer to file suit immediately after the administrative claim is submitted if the administrative submission occurs during the last six months of the two-year limitations period. 26 C.F.R. § 301.7433-1(d)(2).

Plaintiff alleges that the United States, through the IRS and its employees, has unlawfully taken the position that he owes taxes for the period 1990 to 2003, and has disregarded the provisions of the Internal Revenue Code and its regulations in the course of pursuing collection activities against him. Am. Compl. at 5-25. Plaintiff enumerates 27 "counts" of alleged IRS misconduct, reciting a litany of Internal Revenue Code provisions and regulations, and attaching a 50-paragraph statement of facts in support thereof recounting his lengthy correspondence with the IRS for the tax years at issue. His allegations against the IRS fall into the following categories: (1) failure to produce documents demonstrating that he is liable for taxes; (2) failure to provide notice of a requirement to keep records, make statements, or file tax returns; (3) failure to prepare or execute substitute tax returns on his behalf, and disclose such returns to him; (4) failure to lawfully make or record proper assessments of taxes against him; (5) failure to provide notices, hearings and supervisory approval concerning any tax deficiencies; (6) improper use of his social security number; (7) unlawful attempts to collect taxes through improper notices of liens and levies issued without proper procedures; and (8) conducting a campaign of harassment against him. Id. Plaintiff seeks an award of damages for violations of the Internal Revenue Code pursuant to 26 U.S.C. § 7433.¹ Id. at 25-26. He also seeks an award damages for violation of his constitutional right to due process, pursuant to Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).

STANDARD OF REVIEW

"[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); see Leatherman v. Tarrant Cty. Narcotics and Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993); Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C.Cir.1979). Therefore, the factual allegations must be presumed true, and plaintiffs must be given every favorable inference that may be drawn from the allegations of fact. Scheuer, 416 U.S. at 236, 94 S.Ct. 1683; Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.Cir.2000). However, the Court need not accept as true "a legal conclusion couched as a factual allegation," nor inferences that are unsupported by the facts set out in the complaint. Trudeau v. Federal Trade Comm'n, 456 F.3d 178, 193 (D.C.Cir.2006) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)).

In considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court is mindful that all that the Federal Rules of Civil Procedure require of a complaint is that it contain "`a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to `give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); accord Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (per curiam). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the "grounds" of "entitle[ment] to relief," a plaintiff must furnish "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Bell Atl. Corp., 127 S.Ct. at 1964-65; see also Papasan, 478 U.S. at 286, 106 S.Ct. 2932. Instead, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp., 127 S.Ct. at 1965 (citations omitted).

DISCUSSION

I. Damages Actions under 26 U.S.C. § 7433

Defendant moves to dismiss plaintiff's damages claim under 26 U.S.C. § 7433 on the ground that plaintiff has failed to exhaust his administrative remedies, characterizing this deficiency as a matter of subject matter jurisdiction. In making this request, defendant urges the Court to reconsider its prior decisions holding that the statutory exhaustion requirement is not jurisdictional, but instead is an affirmative defense. See Def.'s Mem. at 3-16. This Court has twice conducted a full analysis of the argument raised by defendant—first, in Turner v. United States, 429 F.Supp.2d 149 (D.D.C.2006), and then in Ross v. United States, 460 F.Supp.2d 139 (D.D.C.2006). In both cases, the Court held that, under Arbaugh v. Y & H Corp., 546 U.S. 500, 515-16, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006), and Avocados Plus, Inc. v. Veneman, 370 F.3d 1243, 1248 (D.C.Cir.2004), the exhaustion requirement in section 7433 is nonjurisdictional because Congress did not rank the limitation as jurisdictional in "clear, unequivocal terms." Defendant contends that reconsideration is warranted because, after the issuance of those decisions, the Supreme Court limited Arbaugh and that, in any event, this Court has not fully considered whether the terms of section 7433(d) satisfy the "clear, unequivocal" standard.

The Court first considers defendant's contention that the Supreme Court has limited Arbaugh in John R. Sand & Gravel Co. v. United States, ___ U.S. ___, 128 S.Ct. 750, 169 L.Ed.2d 591 (2008). Nothing in that case, however, suggests that Arbaugh has been limited. In John R. Sand & Gravel, the...