Scott v. U.S.

• Citation: 608 F.Supp.2d 73
• Decision Date: 17 April 2009
• Docket Number: Civil Action No. 07-1529 (ESH).
• Parties: Robert SCOTT, et al., Plaintiffs, v. UNITED STATES, et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 73

608 F.Supp.2d 73

Robert SCOTT, et al., Plaintiffs, v. UNITED STATES, et al., Defendants.

Civil Action No. 07-1529 (ESH).

United States District Court, District of Columbia.

April 17, 2009.

Robert Scott, Mobile, AL, pro se.

Linda Casoria-Scott, Mobile, AL, pro se.

Yonatan Gelblum, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

ELLEN SEGAL HUVELLE, District Judge.

Plaintiffs Robert Scott and Linda Casoria-Scott have filed an amended pro se complaint alleging in twenty-seven "counts" that the Internal Revenue Service ("IRS") has unlawfully required plaintiffs to file tax returns and has disregarded provisions of the Internal Revenue Code and its regulations in the course of pursuing collection activities against plaintiffs, all in violation of the United States Constitution and 26 U.S.C. § 7433. Plaintiffs seek monetary damages as their only remedy. Plaintiffs' tax protests also formed the basis for an earlier case brought by plaintiffs, which was dismissed by this Court. See Scott v. United States ("Scott I"), 416 F.Supp.2d 116, 118-19 (D.D.C.) (Huvelle, J.), reconsid. denied, No. 05-CV-2043, 2006 WL 1274763 (D.D.C. May 8, 2006), motion for relief from judgment denied, No. 05-CV-2043, 2007 WL 1792293 (D.D.C. Apr. 13, 2007). The instant complaint consists of boilerplate recitations similar to those employed in Scott I and the myriad of other tax protest suits filed in this Court, and is essentially identical to the complaint dismissed by Judge Bates in Marsoun v. United States, 591 F.Supp.2d 41 (D.D.C.2008). The government has filed a motion to dismiss the 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 set forth below, the government's motion will be granted.

BACKGROUND

Plaintiffs are residents of Alabama. (See Am. Compl. at 1, 3.¹) In 2005, they filed a boilerplate complaint in Scott I, wherein they alleged that the government had disregarded various provisions of the Internal Revenue Code ("Code") relating to the assessment, recording, collection and levy of taxes owed by plaintiffs from 2001 onward. See Compl. ¶ 7, Scott I, No. 05-CV-2043 (D.D.C. filed Oct. 14, 2006). The Court dismissed that action because plaintiffs had failed to administratively exhaust their claims in accordance with the procedures established by 26 C.F.R. § 301.7433-1, as required by 26 U.S.C. § 7433(d)(1). See Scott I, 416 F.Supp.2d at 118-19; see also Marsoun, 591 F.Supp.2d at 42-43 (discussing exhaustion requirements). The Court reasoned that plaintiffs' failure to exhaust deprived the Court of subject matter jurisdiction over their claims. Scott I, 416 F.Supp.2d at 119. Subsequently, this Court concluded in Wesselman v. United States ("Wesselman I") that "it is now clear that, although exhaustion is not a jurisdictional requirement, failure to exhaust is nevertheless fatal under Federal Rule of Civil Procedure 12(b)(6)." 498 F.Supp.2d 326, 328 (D.D.C.2007) (Huvelle, J.) (citing Ross v. United States, 460 F.Supp.2d 139, 145-47 (D.D.C.2006) (Bates, J.); Lindsey v. United States, 448 F.Supp.2d 37, 61 (D.D.C. 2006) (Walton, J.)) (emphasis in original).²

Shortly after Wesselman I, plaintiffs initiated this second action on August 27, 2007. Their initial complaint named the United States as defendant and stated that this was "an action for damages" pursuant to 26 U.S.C. § 7433, based on the IRS's alleged disregard of "certain sections of the IRS Code while engaged in collection activity regarding [p]laintiffs." (Original Compl. [Dkt. # 1] at 1 & n. 1.) Plaintiffs supported the initial complaint with exhibits showing that the collection activity at issue overlapped, at least in time, with the activity at issue in Scott I. (See id., Exs. 1-2 (addressing tax year 2002).) Consistent with Wesselman I, the Court dismissed plaintiffs' complaint sua sponte on August 31, 2007, because plaintiffs had again "failed to allege that they exhausted their administrative remedies," thus making it "clear from the face of their complaint that they have failed to state a claim on which relief can be granted." Scott v. United States ("Scott II"), No. 07-CV-1529, 2007 WL 2506446, at *1 (D.D.C. Aug. 31, 2007).

Plaintiffs appealed that dismissal [Dkt. # 4], but because defendant had not yet been served, the D.C. Circuit considered the appeal without any appearance by the government. (Mem. in Supp. of United States' Mot. to Dismiss Am. Compl. ["Mot."] at 1.) On April 25, 2008, in an unpublished disposition [see Dkt. # 5], the D.C. Circuit remanded for reconsideration in light of the Supreme Court's decision in Jones v. Bock, 549 U.S. 199, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007). See Scott v. United States, 275 Fed.Appx. 21, 2008 WL 1885481, at *1 (D.C.Cir.2008) (per curiam). The Court of Appeals noted reasoned that Jones v. Bock "consider[ed] a provision similar to the one at issue here" and concluded that "`failure to exhaust is an affirmative defense,'" such that "litigants `are not required to specially plead or demonstrate exhaustion in their complaints.'" Id. (quoting 529 U.S. at 921, 120 S.Ct. 1913). The government then entered an appearance before the Court of Appeals and sought rehearing on the grounds that Jones was inapplicable because exhaustion was a jurisdictional prerequisite to an action under § 7433. (Mot. at 1.) On July 30, the D.C. Circuit denied rehearing in a one-page order but clarified that its earlier order "merely remanded for reconsideration in light of Jones v. Bock, without addressing whether exhaustion under 26 U.S.C. § 7433(d)(1) is jurisdictional or not," and that "the United States may enter an appearance and present its arguments on that issue to the district court on remand." Order at 1, Scott v. United States, No. 07-5310 (D.C.Cir. July 30, 2008) (per curiam) (citation omitted).

After plaintiffs served the government [see Dkt. # 8], the government filed a motion to dismiss for lack of jurisdiction or, in the alternative, for failure to state a claim. [Dkt. # 10.] Plaintiffs then filed a 27-count amended complaint on January 12, 2009. [Dkt. # 13.] Counts 1 through 18 are based on a cause of action for alleged violations of plaintiffs' 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).³ (See id. at 9-22.) Counts 19 through 27 are based on a cause of action for alleged violations or unlawful disregard of the Internal Revenue Code, pursuant to 26 U.S.C. § 7433.⁴ (See id. at 22-26.) Specifically, the counts appear to allege that the IRS violated or disregarded:

• 26 U.S.C. § 6001 and 26 C.F.R. § 1.6001-1, by failing to notify plaintiffs of their obligation to file tax returns (Counts 1 and 2);

• 26 U.S.C. § 6020 and 26 C.F.R. § 301.6020-1, by failing to prepare or "subscribe" any substitute tax returns in plaintiffs' names (Counts 3 through 6);

• 26 U.S.C. § 6103 and 26 C.F.R. § 301.6103(c)-1, by failing to disclose to plaintiffs, upon their request, any tax returns or substitute tax returns bearing plaintiffs' names (Counts 7 and 8);

• 26 U.S.C. § 6109 and 26 C.F.R. § 301.6109-1, by improperly requiring that plaintiffs obtain and provide Social Security numbers (Counts 9 and 10);

• 26 U.S.C. §§ 6201-6202 and 27 C.F.R. § 70.1 et seq., by failing to correctly or permissibly assess the taxes owed by plaintiffs (Counts 11 through 13);

• 26 U.S.C. §§ 6202-6203 and 26 C.F.R. § 301.6203-1, by failing to properly record those tax assessments and to provide plaintiffs with copies upon request (Counts 14 through 17) • 26 U.S.C. § 6211, by failing to promulgate regulations regarding the determination of tax deficiencies (Count 18);

• 26 U.S.C. § 6301, by failing to develop procedures and processes for supervisory review of decisions to issue liens and levies or to seize property (Count 19);

• 26 U.S.C. § 6303, by failing to give notice of the amount of unpaid taxes owed and the need for payment (Count 20);

• 26 U.S.C. § 6304, by harassing plaintiffs in connection with collection activities (Count 21);

• 26 U.S.C. §§ 6320 and 6330, by failing to give plaintiffs an opportunity to contest tax liability in response to a lien or levy (Count 22);

• 26 U.S.C. § 6321, by failing to give plaintiffs a formal demand for payment or proper notice before asserting liens for failing to pay (Count 23);

• 26 U.S.C. § 6751, by failing to verify supervisory approval of initial penalty determinations (Count 24);

• 26 U.S.C. § 6322, by asserting liens for which no assessment was made in accordance with 26 U.S.C. § 6203 and 26 C.F.R. § 301.6203-1 (Count 25);

• 26 U.S.C. § 6323, by failing to certify notices of lien as required by Alabama state law as a condition of filing (Count 26); and

• 26 U.S.C. § 7213, by unlawfully disclosing plaintiffs' tax return information by filing notices of liens in amounts for which no records of assessment exist (Count 27).

(Am. Compl. at 9-26.) Plaintiffs subsequently withdrew Count 22 in light of a congressional amendment to 26 U.S.C. § 6330(d) that gives the Tax Court exclusive jurisdiction over such claims. (See Pl.'s Opp'n to Def.'s Mot. to Dismiss at 14; see also Mot. at 20.)

Although the amended complaint recites a hodgepodge of statutes, regulations, and publications, it contains few facts specific to this action beyond plaintiffs' names, their state of residence, and the names of various IRS officials and employees. Instead, plaintiffs concurrently filed a separate "Statement of Facts" under oath that summarizes their lengthy correspondence with the IRS for the tax years at issue. (See generally Statement of Facts ["SOF"] [Dkt. # 12].)⁵ The government responded with the instant motion. [Dkt. # 15.]

ANALYSIS

I. STANDARD OF REVIEW

"[I]n passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject...