Opinion
Case No. 4:03 MC 003
March 17, 2004
REPORT AND RECOMMENDATION
This matter is before the Court on United States' Motion to Dismiss. (Dkt. #6). Pursuant to 28 U.S.C. § 636(b)(1)(B) granting authority for United States Magistrate Judges to submit proposed findings of fact and recommendations for disposition of motions for dismissal or summary judgment, I recommend that Defendant's motion be granted.
ANALYSIS
On October 17, 2003, the Internal Revenue Service (IRS) issued summonses to First Community Federal Credit Union and Portage Commerce Bank directing them to appear "to give testimony" and "produce for examination . . . books, records, papers, and other data" regarding Plaintiff's tax liability. (Dkt. #1, Exhibits). Michael Perkowski, in his capacity as President of Mainline Fire Sprinkler Corporation, received notice of these summonses the same day, along with detailed instructions for challenging them. Id. These instructions specifically informed Plaintiff that if filing a petition to quash a summons, it "must mail a copy of [the] petition by certified or registered mail to the person summoned and to the IRS." This instruction is consistent with relevant federal law. See 26 U.S.C. § 7609(b)(2)(B). On November 6, 2003, Plaintiff initiated the present action by filing a Petition to Quash Third Party Summonses. (Dkt. #1).
A proceeding to quash a subpoena issued by the IRS is, in effect, a civil suit against the United States. See Clay v. United States, 199 F.3d 876, 879 (6th Cir. 1999). It is "fundamental" that the United States, as sovereign, "is immune from suit without its consent." Id. As the Supreme Court recently reiterated, "[j]urisdiction over any suit against the Government requires a clear statement from the United States waiving sovereign immunity." United States v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003).
Pursuant to 26 U.S.C. § 7609, which articulates the procedures applicable to actions challenging third-party summonses, "any person who is entitled to notice of a summons" has "the right to begin a proceeding to quash such summons." 26 U.S.C. § 7609(b)(2). The United States district courts have "jurisdiction to hear and determine any proceeding brought under subsection (b)(2)." Thus, section 7609 constitutes a waiver of the United States' sovereign immunity. However, as is well recognized, the extent of jurisdiction conferred by section 7609 (i.e., the extent of the waiver of sovereign immunity) "must be strictly construed." Clay, 199 F.3d at 879.
Pursuant to section 7609, the party seeking to quash a summons must initiate such action "not later than the 20th day after the day such notice is given in the manner provided in subsection (a)(2)." 26 U.S.C. § 7609(b)(2). Furthermore, the party seeking to quash a summons is required to "mail by registered or certified mail a copy of the petition" to the person or entity summoned as well as the IRS. 26 U.S.C. § 7609(b)(2)(b).
Defendant asserts that Plaintiff has failed to comply with the express requirements of § 7609. Specifically, Defendant asserts that Plaintiff failed to deliver by registered or certified mail copies of the Petition to Quash to the IRS, First Community Federal Credit Union, or Portage Commerce Bank. Plaintiff acknowledged at oral argument that he had failed to comply with the service requirements detailed in section 7609(b)(2)(B). Because the extent of the government's waiver of its sovereign immunity under section 7609 must be "strictly construed," failure to comply with the statute's service requirements deprives the Court of jurisdiction over Plaintiff's action. See Clay, 199 F.3d at 879; Wade v. Internal Revenue Service, 2000 WL 293688 at *1 (10th Cir., Mar. 21, 2000) ("failure to comply with § 7609(b)(2)(B) is a jurisdictional defect"); Norfleet v. United States, 2002 WL 1396494 at *l-3 (E.D.N.C., May 22, 2002) (same).
It must also be noted that Mainline Fire Sprinkler Corporation is being represented in the present matter by Michael Perkowski, its President. However, Mr. Perkowski is not an attorney and, therefore, cannot represent Mainline in this matter. See Rodgers v. Arlington Heights School District No. 25, 171 F. Supp.2d 773 (N.D. Ill. 2001). Plaintiff's claim, therefore, is subject to dismissal on this basis as well.
CONCLUSION
Having determined that Plaintiff failed to properly serve a copy of his petition on the IRS, First Community Federal Credit Union, or Portage Commerce Bank, I recommend that the Court lacks jurisdiction over the present action. I further find that Mainline is not represented in this matter by licensed legal counsel as required by law. Accordingly, I recommend that Defendant's motion be granted and the present action be dismissed.
OBJECTIONS to this Report and Recommendation must be filed with the Clerk of Court within ten (10) days of the date of service of this notice. 28 U.S.C. § 636(b)(1)(C). Failure to file objections within the specified time waives the right to appeal the District Court's order. Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).
Respectfully submitted,