Opinion
C. A. 6:23-272-BHH-KDW
02-09-2023
Andrew Marshall McElrath, Plaintiff, v. Internal Revenue Service and United States of America, Defendants.
REPORT AND RECOMMENDATION
KAYMANI D. WEST UNITED STATES MAGISTRATE JUDGE
Andrew Marshall McElrath (“Plaintiff”), proceeding pro se and in forma pauperis, filed this action against the Internal Revenue Service (“IRS”) and United States of America (collectively Defendants). Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.), this matter has been referred to the undersigned for all pretrial proceedings. For the reasons that follow, the undersigned recommends the district judge dismiss this case without prejudice and without issuance and service of process.
I. Factual Background
Plaintiff claims he was doing home repairs and lawn care from 2019 to 2021 until Covid caused him to lose work. ECF No. 1-1 at 2. Plaintiff says he had to draw unemployment for a short period of time, and he paid taxes on the unemployment. Id. Plaintiff states the United States government issued stimulus checks during this period, and he did not receive his check. Id. at 2-3. Plaintiff claims he was unable to pay his rent and he became homeless and lost his girlfriend. Id. at 3. Plaintiff alleges he lived in his car, and he walked door to door begging for work in exchange for food. Id. Plaintiff claims he had a dog, and because he was unable to feed him, the dog died. Id. at 3-4. Plaintiff alleges he attempted suicide by hanging which resulted in him having nerve damage, slurred speech and migraines. Id. at 4. Plaintiff says he filed taxes and claimed the stimulus payments as a tax credit, and he received a refund in the amount of $3,650. Id. Plaintiff claims the IRS withheld his refund without cause. Id. Plaintiff seeks the return of his tax refund and other monetary damages. Id. at 5-6.
II. Discussion
A. Standard of Review
Plaintiff filed this Complaint pursuant to 28 U.S.C. § 1915, which permits an indigent litigant to commence an action in federal court without prepaying the administrative costs of proceeding with the lawsuit. To protect against possible abuses of this privilege, the statute allows a district court to dismiss a case upon a finding that the action fails to state a claim on which relief may be granted or is frivolous or malicious. 28 U.S.C. § 1915(e)(2)(B)(i), (ii). A finding of frivolity can be made where the complaint lacks an arguable basis either in law or in fact. Denton v. Hernandez, 504 U.S. 25, 31 (1992). A claim based on a meritless legal theory may be dismissed sua sponte under 28 U.S.C. § 1915(e)(2)(B). See Neitzke v. Williams, 490 U.S. 319, 327 (1989); Allison v. Kyle, 66 F.3d 71, 73 (5th Cir. 1995).
Pro se complaints are held to a less stringent standard than those drafted by attorneys. Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). A federal district court is charged with liberally construing a complaint filed by a pro se litigant to allow the development of a potentially meritorious case. Erickson v. Pardus, 551 U.S. 89, 94 (2007). In evaluating a pro se complaint, the plaintiff's allegations are assumed to be true. Merriweather v. Reynolds, 586 F.Supp.2d 548, 554 (D.S.C. 2008). The mandated liberal construction afforded to pro se pleadings means that if the court can reasonably read the pleadings to state a valid claim on which the plaintiff could prevail, it should do so. Nevertheless, the requirement of liberal construction does not mean that the court can ignore a clear failure in the pleading to allege facts that set forth a claim currently cognizable in a federal district court. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir. 1990).
B. Analysis
Plaintiff asks the court to order Defendants to pay him his stimulus checks that he claimed via a tax credit on his tax return. ECF No. 1 at 6. Stimulus checks, otherwise known as Economic Impact Payments, were authorized pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provided a $1,200 tax credit for eligible individuals in the form of an advance refund on 2020 income taxes. 26 U.S.C. § 6428(a), (f). The Consolidated Appropriations Act (“CAA”) provided a second tax credit to eligible individuals in the amount of $600, and the American Rescue Plan Act (“ARPA”) provided a third tax credit, in the amount of $1,400 to eligible individuals, in the form of an advance refund for 2020- and 2021-income taxes, respectively. 26 U.S.C. § 6428A(a), (f); § 6428B(a), (g).
Although Plaintiff filed his lawsuit against the United States and the IRS seeking payment of a tax refund, Plaintiff's lawsuit is necessarily one against the United States. “A suit or proceeding [for refund of internal revenue tax] may be maintained only against the United States and not against any officer or employee of the United States (or former officer or employee) or his personal representative.” 26 U.S.C. § 7422(f)(1). The United States consents to be sued in the district court for refund of taxes only when the taxpayer has followed the conditions set forth in 26 U.S.C. § 7422(a). 26 U.S.C. § 7422(a) states:
No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof.
Plaintiff alleges he filed a tax return where he claimed the stimulus payments as a tax credit and the IRS withheld his $3,650 refund. Plaintiff, however, failed to allege he filed an administrative claim as required by section 7422(a) of the Internal Revenue Code. As such, Plaintiff has not exhausted his administrative remedies, and the court lacks jurisdiction over Plaintiff's request for a tax refund at this time.
Plaintiff's claims for monetary damages stemming from Defendants' purported violation of his civil rights are also barred by the doctrine of sovereign immunity. Under the principle of sovereign immunity, individuals may not sue the United States or its agencies without their consent. United States v. Mitchell, 463 U.S. 206, 212 (1983). The United States has not waived sovereign immunity in suits claiming constitutional torts, see Radin v. United States, 699 F.2d 681, 684-85 (4th Cir. 1983), and the bar of sovereign immunity cannot be avoided by naming agencies such as the Internal Revenue Service as a defendant, as federal agencies operate as the United States itself. Hawaii v. Gordon, 373 U.S. 57, 58 (1963).
III. Recommendation
For the foregoing reasons, the undersigned recommends that the court dismiss this
Complaint without prejudice and without issuance and service of process.
IT IS SO RECOMMENDED.
The parties are directed to note the important information in the attached “Notice of Right to File Objections to Report and Recommendation.”