Myles v. US

• Decision Date: 22 December 1992
• Docket Number: No. 92-CV-392.,92-CV-392.
• Citation: 810 F. Supp. 390
• Parties: Brother Gregory MYLES, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Northern District of New York

810 F. Supp. 390

Brother Gregory MYLES, Plaintiff, v. UNITED STATES of America, Defendant.

No. 92-CV-392.

United States District Court, N.D. New York.

December 22, 1992.

COPYRIGHT MATERIAL OMITTED

Friedman & Manning, P.C. (Jeremiah F. Manning, of counsel), Delmar, NY, for plaintiff.

U.S. Dept. of Justice (Eugene J. Rossi, of counsel), Washington, DC, Office of the U.S. Attorney (James C. Woods, Asst. U.S. Atty., of counsel), Albany, NY, for U.S.

MEMORANDUM-DECISION AND ORDER

HURD, United States Magistrate Judge.

Presently before this court is defendant's motion to dismiss plaintiff's complaint; plaintiff's cross-motion to amend his complaint; and defendant's motion for partial dismissal of plaintiff's proposed amended complaint.

Plaintiff alleges that since he is a member of a tax exempt religious order from which he receives no salary, he is exempt from paying any income taxes. He claims that he has paid $1,611.00 for taxes assessed in 1982, and is entitled to a refund. He also claims that he is exempt from tax liability for the years 1983 to the present, and that any assessment of tax should be abated. Defendant has filed the instant motion to dismiss for lack of subject matter jurisdiction based on sovereign immunity because plaintiff has failed to comply with the full payment rule, and he has failed to file a timely claim for a refund.

Plaintiff has filed a motion to amend his complaint and a memorandum in opposition to defendant's motion to dismiss. In his proposed amended complaint, plaintiff states that he has paid his taxes in full for the years 1982, 1989, 1990, and 1991, and that he has filed a claim for a refund for the years 1982 to date. Plaintiff, therefore, alleges that this court has jurisdiction to hear his claim for a refund. He seeks a refund for his 1982 tax payment, and declaratory and injunctive relief pertaining to his tax liability for the years 1983 to present. Defendant has responded by submitting a revised motion to dismiss based on plaintiff's proposed amended complaint. Defendant now concedes to the jurisdiction of the court with regard to plaintiff's claim for the 1982 taxable year, but still seeks dismissal for the remaining years, and contends that the United States is immune from injunctive and declaratory relief.

FACTS

Plaintiff, Brother Gregory Myles, is a member of the Christian Brothers Association (CBA), a religious organization, and has been assigned by the CBA to serve in the ministry of aiding New York State Police officers to understand death and its many complications. In exchange for his services, plaintiff is paid an annual salary by the State of New York. Upon receipt of such salary, plaintiff immediately transfers said monies directly to the CBA.¹ Nearly every aspect of plaintiff's life is controlled by the Christian Brothers. The CBA directs where the plaintiff will work and reside; structures his daily religious activities; controls his daily schedule; and most importantly for the instant action, CBA controls plaintiff's salary and determines the amount of any monies returned to him for living expenses. Plaintiff is under the direct control of the Provincial (head) of the CBA, and would face expulsion from the Brotherhood if he disobeyed the Provincial. Plaintiff joined the CBA in 1982, and since that time, has maintained that as a member of this religious organization, he is exempt from filing and paying income taxes.

On June 27, 1991, the District Director of the Internal Revenue Service (IRS) assessed unpaid income taxes against the plaintiff for the years 1982 through 1986. Since that time, the IRS has assessed income taxes against the plaintiff for the years 1987 and 1988. Plaintiff alleges to have paid income taxes for the years 1989 through 1991. On July 23, 1991, plaintiff paid his 1982 assessed income tax of $1,611.00, excluding interest and penalties. At that time, plaintiff filed a claim for a tax refund for the 1982 amount. On March 16, 1992, plaintiff paid $10.00 for each taxable year from 1983 to 1990, requesting that each payment be allocated to the tax allegedly owed, and notified the IRS of a refund claim for each year. Thereafter, on March 26, 1992, plaintiff filed this suit seeking a refund for the years 1982 through 1991, and an order directing abatement of any assessed income tax against plaintiff. After defendant filed its motion to dismiss, plaintiff filed a proposed amended complaint seeking, in addition to the former relief, declaratory and injunctive relief.

DISCUSSION

When resolving a motion to dismiss for lack of subject matter jurisdiction, the court must accept as true the material allegations of the complaint. Atlantic Mutual Insurance Co. v. Balfour MaClaine Int'l. Ltd., 968 F.2d 196, 198 (2d Cir.1992). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). "In appraising the sufficiency of the complaint ... the accepted rule is that a complaint should not be dismissed ... unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Heine v. Colton, Hartnick, Yamin & Sheresky, 786 F.Supp. 360, 363 (S.D.N.Y.1992). In addition, the burden of proving the existence of subject matter jurisdiction lies with the party alleging jurisdiction. Thomson v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 675, 86 L.Ed. 951 (1942).

I. Sovereign Immunity.

Defendant's principal argument in support of its motion to dismiss is based on sovereign immunity. The doctrine of sovereign immunity stands for the proposition that courts cannot exercise jurisdiction over the United States unless the Government has specifically consented to the jurisdiction of the court. District Courts, therefore, may not entertain suits against the United States unless the United States consents to be sued, "and the terms of its consent to be sued in any court defines that court's jurisdiction to entertain the suit." Lehman v. Nakshian, 453 U.S. 156, 160, 101 S.Ct. 2698, 2701, 69 L.Ed.2d 548 (1981). Therefore, "like a waiver of immunity itself, which must be unequivocally expressed, ... the limitations and conditions upon which the government consents to be sued must be strictly observed and exceptions thereto are not to be implied." Id. at 161, 101 S.Ct. at 2701 (citations omitted). Therefore, plaintiff may only bring the present suit by complying with the terms and conditions that the law has provided the court with the jurisdiction to decide. In the present matter, the federal law that grants jurisdiction to the court is 28 U.S.C. § 1346(a)(1), and 26 U.S.C. §§ 6532(a)(1) and 7422(a).

A. Full Payment Rule.

The Supreme Court decided long ago that as a prerequisite to subject matter jurisdiction in any suit for an income tax refund, the taxpayer must make full payment of the assessed amount, including any penalties and interest. 28 U.S.C. § 1346(a)(1); Flora v. United States, 362 U.S. 145, 149, 80 S.Ct. 630, 632, 4 L.Ed.2d 623 (1960) (hereinafter "Flora II"); Magnone v. United States, 902 F.2d 192, 193 (2d Cir.1990) (per curiam), cert. denied, 498 U.S. 853, 111 S.Ct. 147, 112 L.Ed.2d 113 (1990); Irving v. Gray, 479 F.2d 20, 25 (2d Cir.1973); Greenhouse v. United States, 738 F.Supp. 709, 713 (S.D.N.Y.1990) (hereinafter "Greenhouse I") ("It is well settled that, under the full payment rule, a federal court has jurisdiction over a tax refund suit only after the taxpayer has made full payment of the assessment, including penalties and interest."); Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d 1165 (1958) (hereinafter "Flora I"); U.S. v. Forma, 784 F.Supp. 1132, 1137 (S.D.N.Y.1992).

With respect to the year 1982, the U.S. has conceded that this court has jurisdiction over plaintiff's claim for a refund. Plaintiff has fully paid the assessed tax for 1982, and has filed a timely claim for a refund with the IRS.² Therefore, this Court will exercise jurisdiction over plaintiff's claim that he is entitled to a refund for the 1982 taxable year.

The plaintiff's claims with respect to the years 1983 to 1990, however, present this Court with problems of jurisdiction. As stated above, in order for a Court to exercise jurisdiction, the plaintiff must have fully paid the assessed tax for each of the years in question.³ This he has failed to do. Plaintiff has only paid $10.00 in income tax for each of the 1983-1990 taxable years.⁴ In his letter to the IRS, plaintiff's counsel writes: "The intent of this payment is to pay part of the income tax alleged to be owned sic each year, and file a claim for a refund." (emphasis added). However, plaintiff can only be excused from the full payment rule, by paying a part of his tax, if he alleges that he is entitled to the one recognized exception to this rule. See Magnone v. United States, 733 F.Supp. 613, 615 n. 3 (S.D.N.Y.1989) ("The only exception to this prohibition against partial payment relates to divisible tax assessments, such as deficiencies in an employer's withholdings, which are not at issue in this case."); Martinon v. Fitzgerald, 306 F.Supp. 922, 925 (S.D.N.Y.1968), aff'd per curiam, 418 F.2d 1336 (2d Cir. 1969). Plaintiff has made no such allegation.

Therefore, since plaintiff has not paid the full tax assessed for each year, and thus not satisfied a prerequisite to jurisdiction, this Court is without jurisdiction to determine whether plaintiff is entitled to a refund for those years. Magnone, 902 F.2d at 193. The Supreme Court, while recognizing the hardship that would be caused by requiring a taxpayer to pay the full assessment before bringing a refund suit, noted the right of a taxpayer to appeal any deficiency assessment to the Tax Court without paying a cent. Flora II, 362 U.S. at 147, 80...