Weisman v. C.I.R.
| Decision Date | 30 June 2000 |
| Docket Number | Civil Action No. 97-CV-5302(DGT). |
| Citation | 103 F.Supp.2d 621 |
| Parties | Kenneth WEISMAN, Plaintiff, v. COMMISSIONER INTERNAL REVENUE SERVICE, Secretary of the Treasury, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Kenneth Weisman, Auburndale, NY, pro se.
Department of Justice, Civil Trial Section, Northern Region by Bartholomew Cirenza, Washington, DC, for Defendants.
Defendant United States, improperly sued as "Commissioner Internal Revenue Service, Secretary of the Treasury,"1 moves for dismissal of plaintiff's action under Rule 12(b) of the Federal Rules of Civil Procedure for lack of jurisdiction and/or failure to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(1) & (6). In response, plaintiff pro se Kenneth Weisman ("Weisman") has filed two affidavits in opposition to the Government's motion, thus supplementing the voluminous documentation submitted with his initial complaint and motion for a preliminary injunction.
In 1989, Weisman was hired by International Fashions, Inc. ("IFI"), where he was employed until the beginning of September 1990. See Pl.'s Aff. Supp. Mot. Permanent Inj., Ex. 000002 () .3 Weisman contends that in 1989 he filed a W-4 with IFI, claiming only two exemptions. See id. Weisman further alleges that his oral employment contract with IFI included an agreement that his salary would be approximately $1,000 per week, after taxes, making his gross pay approximately $1,500 per week. See id. Weisman is apparently unable to submit any documentary evidence to support his allegations regarding this salary arrangement, however, because he claims to have never received any pay-stubs from IFI and to have cashed his weekly paychecks at IFI's bank.4
While Weisman's 1989 federal and state tax withholdings were short by only $800, see Ex. 000122, his 1990 W-2 reflected gross income of $49,634.60, and federal income tax withheld of only $878.14, see Ex. 000153; see also Mem. Supp. Def.'s Mot. Dismiss, Ex. A [hereinafter Mem. Supp.]. Weisman's Social Security, state, and city tax withholdings for 1990 were adequate.5 See id. Only the federal income tax withholding was so notably deficient.
On April 15, 1991, Weisman sent a letter to the IRS requesting an extension of time to file his 1990 federal income tax return. See Exs. 000001-05. Weisman explained that he believed IFI was ultimately responsible for the unpaid income tax since, according to his oral employment agreement, IFI was supposed to be withholding the proper taxes from his paychecks each week and remitting the tax to the IRS. See id. at 000002. Weisman informed the IRS that he had already reported IFI to its Tax Fraud division, but he also expressed a willingness to work out a payment schedule. See id. Weisman also enclosed a copy of an undated letter he allegedly had sent to the president of IFI, Gunther Zissitch ("Zissitch"), requesting that Zissitch immediately send him $9,722.20 (the amount Weisman estimated was withheld from his paychecks for federal taxes but never actually sent to the IRS). See id. at 000004-05.
More than a year later, the IRS responded to Weisman's April 1991 letter by demanding, both in August and September of 1992, that he file his 1990 tax return. See Exs. 000006-08. On September 22, 1992, Weisman wrote another letter to the IRS, attaching the initial April letter, reiterating his belief that IFI had defrauded the IRS, and explaining that he was still awaiting resolution of the tax fraud complaint he filed against his former employer. See Exs. 000009-15. In response, the IRS sent him a copy of the W-2 issued by IFI and instructed him to complete a tax return using this information. See Exs. 000016-19. Weisman refused to do so on the grounds that the information in the W-2 was wrong and that he believed his employer was involved in tax fraud. See Exs. 000026-40.
Beginning in early 1993, Weisman was in contact with numerous Problem Resolution officers ("PROs") in the IRS's Brooklyn, New York office regarding his 1990 taxes. See Exs. 000041-86. In March of 1993, the IRS again instructed Weisman to file his 1990 tax return using the W-2 IFI had provided. See Exs. 000042-47. Instead, Weisman continued to assert that the W-2 was incorrect, and he continued to work with PROs to try to correct the mistake. See, e.g., Exs. 000048-63. On June 22, 1993, while Weisman's claims were still being evaluated by various PROs, a Notice of Deficiency, seeking $11,779 in income tax due for 1990, was sent to Weisman's home address by certified mail. See Mem. Supp., Ex. B. Weisman did not respond to this notice and continues to maintain he never actually received it. See Aff. of Kenneth Weisman dated Oct. 28, 1999, ¶ 2.6
Throughout early 1994, Weisman's allegation that the W-2 issued by IFI was incorrect continued to be investigated by PRO Donald Mallozzi. See Exs. 000068-120. In March of 1994, Mallozzi sent a letter to IFI, see Ex. 000070, and in July, after receiving no response, recommended that the company be audited, see Ex. 000087. However, nothing in the record indicates that IFI was ever audited.
Additionally, Weisman sent Mallozzi "estimated" tax returns reflecting what he calculated his tax liability for 1990 would be using the figures on IFI's W-2 (Weisman owed the IRS $3,708), see Ex. 000074, and using the figures Weisman maintained were actually correct (Weisman was entitled to a refund of $2,270), see Ex. 000077. A June 15, 1994 report completed by Mallozzi and sent to Weisman reduced his tax liability to $4,586 from the $11,779 originally assessed by the IRS. See Exs. 000081-85. When the amended tax liability figure was reduced by $878 (the amount of income tax withholding reported on IFI's W-2), Weisman's debt to the IRS came to $3,708, plus interest and penalties. See id.
On July 25, 1994, Weisman submitted to Mallozzi a Form 1040 "U.S. Individual Income Tax Return — 1990," he had completed using the earnings and withholding figures he believed were correct and that reflected that a refund of $2,270 was due. See Exs. 000095-98. Along with the Form 1040, Weisman submitted a Form 656 "Offer in Compromise," offering to settle his 1990 tax assessment for zero dollars. See Ex. 000091. In a cover letter, Weisman explained that he believed his offer was fair because he had promptly informed the IRS of the discrepancy in his W-2 and because he was willing to forfeit the refund he felt he was actually entitled to. See Ex. 000089-90. Additionally, both the cover letter and the Offer in Compromise indicated that the IRS had applied a 1993 tax refund due Weisman and his current wife against the 1990 deficiency. See id.; see also Ex. 000091. His Offer in Compromise was rejected by the IRS, however, because when it was considered (in October of 1994), Weisman had still not officially filed a 1990 tax return.7
On October 26, 1994, Weisman met with an officer in the IRS Tax Audit department to discuss his case. See Ex. 000134. Because his primary complaint — the inaccurate W-2 — was not satisfactorily addressed during this meeting, Weisman requested that his case be transferred to an IRS Appeals Officer. See Ex. 000135. On April 19, 1995, Weisman finally met with an Appeals Officer, Headley Lewis ("Lewis"). See Ex. 000138. According to Weisman, Lewis was not familiar with the facts of Weisman's case and refused to look at the documentation Weisman had brought with him. See Compl. ¶ 3c. Instead, Lewis agreed to review the IRS's administrative file and re-contact Weisman before rendering any decision. See Ex. 000139. Two weeks later, Weisman called Lewis to inquire about the status of his case; Lewis allegedly responded: "You are not my only case and if you do not want an automatic denial of your appeal you must wait for me to contact you." Ex. 000169; Permanent Inj. Mot. ¶ 11.
An entire year passed before Weisman heard anything more from the IRS. Then, in late April 1996, Weisman received a statutory Notice of Claim Disallowance dated April 24, 1996. See Ex. 000140. The caption of the letter recited the following information:
Kind of Tax: Income
Tax Period Ended: 12/31/90
Amount Claimed: $15,215.008
Amount Allowed: $5,423.00
Person to Contact: H. Lewis
Contact Telephone Number: (516)539-6249
Id. The body of the Notice read, in pertinent part:
We considered your protest and the evidence and arguments in support of the above claim for refund of tax and, after making necessary adjustments, are allowing a part of the claimed amount.
....
If you wish to bring suit or proceedings for recovery of any tax, penalties, or other moneys for which this disallowance notice is issued, you may do so by filing such a suit with the United States District Court having jurisdiction .... The law permits you to do this within 2 years from the mailing of this letter.
See id. (emphasis added).
Disturbed that the Appeals Office had retained his case for an entire year, during which time interest and penalties had continued to accrue, Weisman contacted the IRS Procedures Unit on May 2, 1996 to find out how long the appeals process usually takes. See Ex. 000142. On that date, for the first time, Weisman was told about Form 4598. See id.; see also Ex. 000142. Specifically, Weisman was informed that when a taxpayer fails to receive a W-2, or when a W-2 is inaccurate, a Form 4598 should be filed by the taxpayer. See Ex. 000143. The IRS then contacts the taxpayer's employer and sets a ten day deadline for the employer to respond to the allegations contained in the form. See id. If the employer does not respond, the taxpayer is permitted to submit his or her own W-2 figures, along with supporting documentation. See id.; see also Ex. 000252 () ("If an employer does not respond to the 4598,...
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