Opinion
No. 3:06cv874.
May 31, 2006
MEMORANDUM
Presently before the Court for disposition is Plaintiff Randall Jennette's Complaint and Motion to Proceed In Forma Pauperis. For the reasons that follow, we will dismiss the Complaint pursuant to 28 U.S.C. § 1915(e)(2).
I. Background
Plaintiff filed the instant Complaint pursuant to the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962. His allegations, in their entirety, are as follows:
Defendants are alleged to beening [sic] involved in the promotion of racketeering by using the Collection Due Process Hearing Procedure as a vehicle to ensure unauthorized collections to continue. Plaintiff proved to Defendants that the IRS Collection actions were not authorized by the Commissioner of the IRS by showing that a proper assessment as outlined under the IRC and made into law under the CFR has been skirted by agents of the IRS. Defendants claim they need not adhere to such written requirements of those particular IRS guidelines and appropriate law. Plaintiff claims such requirements are binding.
II. Discussion
A complaint that is filed in forma pauperis is subject to a preliminary review by the district court.
Notwithstanding any filing fee, or any portion thereof, that may have been paid, the court shall dismiss the case at any time if the court determines that (A) the allegation of poverty is untrue; or
(B) the action or appeal —
(i) is frivolous or malicious;
(ii) fails to state a claim on which relief may be granted; or
(iii) seeks monetary relief against a defendant who is immune from such relief.28 U.S.C. § 1915(e)(2).
Plaintiff alleges that the defendants are agents of the IRS who violated RICO by attempting to collect an IRS debt after the IRS had made an improper assessment. As agents of the IRS, the defendants are entitled to sovereign immunity unless such immunity has been waived. Koss v. United States, 69 F.3d 705, 707 (3d Cir. 1995); Beneficial Consumer Discount Co. v. Poltnowicz, 47 F.3d 91, 94 (3d Cir. 1995). RICO does not waive sovereign immunity. Donahue v. Federal Bureau of Investigation, 204 F. Supp. 2d 169, 173-74 (D. Mass. 2002).
Furthermore, Plaintiff may not bring a claim pursuant to RICO against IRS collection agents because 26 U.S.C. § 7433 provides the exclusive remedy.
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 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) (emphasis added).
Therefore, we will dismiss the Complaint with prejudice. We dismiss with prejudice because any attempt to amend the complaint to state a 26 U.S.C. § 7433 claim would be futile. See Grayson v. Mayview State Hospital, 293 F.3d 103, 110 (3d Cir. 2002) (requiring that a district court dismissing a case pursuant to 28 U.S.C. 1915(e)(2) for failure to state a claim must allow the plaintiff leave to amend unless amendment would be inequitable or futile). Plaintiff alleges that defendants made collection efforts even though he proved that there had not been a proper assessment. This allegation cannot support a claim under 26 U.S.C. § 7433. See Bloom v. United States, 220 F. Supp. 2d 382, 391-92 (M.D. Pa. 1999) (holding that 26 U.S.C. § 7433 does not provide a cause of action for collection activities undertaken in conjunction with an erroneous tax assessment); Hart v. United States, No.CIV.A.96-5639, 1997 WL 732466, at *1 (E.D. Pa. Nov. 21, 1997) ("Section 7433(a) was not intended to confer a cause of action where taxes have been improperly assessed . . . or where collection activities have followed invalid assessments.") (citations omitted). "Taxpayers who wish to challenge the IRS' calculation of their tax liability must file either a petition for redetermination in the Tax Court . . . or a refund action in a district court." Bloom, 220 F. Supp. 2d at 392. Therefore, leave to amend would be futile and we will dismiss with prejudice. An appropriate order follows.
Moreover, 26 U.S.C. 7433 does not provide jurisdiction unless the plaintiff has exhausted his administrative remedies.Venen v. United States, 38 F.3d 100, 103 (3d Cir. 1994). Plaintiff has pleaded no facts to establish that he exhausted his administrative remedies.