Opinion
NO. 3-02-CV-0365-BD (L)
August 15, 2002
MEMORANDUM ORDER
Defendant United States of America has filed a motion to dismiss this pro se tax refund case for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. For the reasons stated herein, the motion to dismiss for lack of jurisdiction is granted.
Plaintiff George E. Plum earned $459,930 in wages from his employer, Texas Oncology, P.A., in 1998. A total of $121,716.26 was withheld by the employer and remitted to the Internal Revenue Service. In his 1998 federal income tax return, plaintiff stated that he earned no income, claimed $8,800 in deductions, and sought a refund of $121,717. The IRS initially treated this filing as a valid return with a math error and computed plaintiff's tax liability at $152,251. Plaintiff protested this assessment. Following a collection due process hearing, an appeals officer determined that the case should have been processed under IRS deficiency procedures. A statutory notice of deficiency was issued on March 13, 2002. As part of this notice, plaintiff was advised of his right to contest the deficiency by filing a petition in the United States Tax Court within 90 days. No such action was initiated by plaintiff. Instead, plaintiff filed suit in federal district court seeking a refund of his withholding tax.
Plaintiff alleges that $131,626.51 was withheld by Texas Oncology in 1998. However, his W-2 statement and form 1040 reflect that the proper amount of withholding tax was $121,716.26
Succinctly stated, plaintiff contends that he is entitled to refund of all monies withheld by his employer and remitted to the IRS for the 1998 tax year because his wages do not constitute taxable gross income within the meaning of 26 U.S.C. § 61. Despite the patent frivolity of this argument, the court lacks subject matter jurisdiction to even consider the claim.
It is well settled that wages constitute taxable income. See Loofbourrow v. Commissioner, 208 F. Supp.2d 698 (S.D. Tex. 2002) (citing Commissioner v. Kowalski, 434 U.S. 77, 83, 98 S.Ct. 315, 54 L.Ed.2d 252 (1977) and numerous other cases).
A federal district court has jurisdiction over a tax refund case pursuant to 28 U.S.C. § 1346(a)(1). However, the party seeking a refund must make full payment of all tax liability and file an administrative claim for a refund. See Flora v. United States, 362 U.S. 145, 177, 80 S.Ct. 630, 647, 4 L.Ed.2d 623 (1960); Humphreys v. United States, 62 F.3d 667, 672 (5th Cir. 1995). See also Gustin v. Internal Revenue Service, 876 F.2d 485, 488 (5th Cir. 1989) ("Failure to file a claim for a refund deprives the court of subject matter jurisdiction."). Although a valid tax return can constitute a claim for a refund, the return must "furnish sufficient information to allow the IRS to make a reasonable and intelligent investigation and evaluation of the taxpayer's claim." Porcaro v. United States, 1999 WL 1249329 at *2 (E.D. Mich. Oct. 25, 1999), quoting Estate of Hale v. United States, 876 F.2d 1258, 1262 (6th Cir. 1989). More particularly, a claim for refund:
must set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Commissioner of the exact basis thereof. The statement of the grounds and facts must be verified by a written declaration that is made under the penalties of perjury. A claim which does not comply with this paragraph will not be considered for any purpose as a claim for refund or credit.
Treas. Reg. § 301.6402-2(b)(1). Here, plaintiff filed a tax return indicating a "zero" tax liability This does not constitute a valid return and fails to comply with the administrative requirements for claiming a refund. See, e.g. Porcaro, 1999 WL 1249329 at *3 (rejecting argument that tax return reflecting zero income constituted valid claim for refund); Fearis v. Commissioner, 548 F. Supp. 408, 410 (N.D. Tex. 1982) (same).
Defendant has submitted a three-page typewritten statement by plaintiff which apparently was submitted as part of his 1998 tax return. In this statement, which is not signed or verified, plaintiff contends that he is entitled to a refund of withholding tax pursuant to 26 U.S.C. § 6402 and "13 Supreme Court decisions, 9 Internal Revenue Code Sections, 3 Privacy Act Notice provisions, and numerous other references." (Def. App. at 5). This vague, conclusory, and frivolous assertion does provide "sufficient information to allow the IRS to make a reasonable and intelligent investigation and evaluation of the taxpayer's claims." Porcaro, 1999 WL 1249329 at *2. As a result, it does not satisfy the requirements for claiming a refund.
Accordingly, defendant's motion to dismiss for lack of subject matter jurisdiction is granted.
SO ORDERED.