Opinion
CV-S-03-0615-DWH (PAL)
January 15, 2004
ORDER
Before the court is defendant's motion to dismiss (#5). Plaintiff has opposed (#9), Defendant did not reply. As the time for reply has passed the matter is now before the court for decision.
I. Factual Background
Plaintiff filed suit under 28 U.S.C. § 1346(a)(1) alleging (1) that the United States Department of Treasury is in violation of the Separation of Powers Doctrine; (2) that plaintiff has no statutory liability for taxes; (3) that the collection of income tax by employees of the Internal Revenue Service ("IRS") is a violation of the laws passed by Congress; and (4) that there is no law passed by Congress establishing a liability for income tax or allowing employees of the IRS to seize property in connection with the payment of income taxes. (Compl. (#1) at 5.)
Plaintiff requests relief in the form of an order to defendant (1) to cease all collection actions; (2) to "reimburse plaintiff the amounts that the IRS applied to the payment of the income taxes from Federal withholding from all years from November 12, 1973 for Dana J. Ross, until the present time, plus interest and punitive damages as equity relief dictates"; and (3) to reimburse plaintiff the costs incurred in bringing this action. ( Id. at 5-6.)
II. Analysis
A. Standard on Motion to Dismiss for Lack of Subject Matter Jurisdiction
Dismissal is appropriate when the district court lacks subject matter jurisdiction over the claim. See Fed.R.Civ.P. 12(b)(1). Federal subject matter jurisdiction must exist at the time the action is commenced. See Morongo Band of Mission Indians v. California State Ed. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988), cert. denied, 488 U.S. 1006 (1989). A Rule 12(b)(1) motion may either attack the sufficiency of the pleadings to establish federal jurisdiction, or allege an actual lack of jurisdiction which exists despite the formal sufficiency of the complaint. See Thornhill Publ'g Co., Inc. v. General Tel. Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979); Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). In reviewing a motion to dismiss based on lack of subject matter jurisdiction, the court may consider affidavits or any other evidence properly before the court. Sommatino v. U.S., 255 F.3d 704, 710 n. 3 (9th Cir. 2001).
B. Sovereign Immunity Bars Plaintiff's Action Against the United States
The United States may be sued only to the extent that it has consented to suit by statute. U.S. v. Dalm, 494 U.S. 596, 608 (1990). Any waiver of sovereign immunity cannot be implied but must be unequivocally expressed and is strictly construed in favor of the sovereign. U.S. v. Testan, 424 U.S. 392, 399-400 (1976); Fostvedt v. U.S., 978 F.2d 1201, 1202-03 (10th Cir. 1992). Thus, no suit may be maintained against the United States unless the suit is brought in compliance with the terms of a specific statute under which the United States has consented to be sued. Testan, 424 U.S. at 399-400. Where the United States has not consented to suit or the plaintiff has not met the terms of the statute, the court lacks subject matter jurisdiction and the action must be dismissed. See Fed.R.Civ.P. 12(h)(3); Fostvedt, 978 F.2d at 1204.
Plaintiff has the burden of identifying specific statutes waiving the government's sovereign immunity and showing that the requirements of such statutes have been met. Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir. 1983). In his complaint, plaintiff alleges jurisdiction on the basis of 28 U.S.C. § 1346(a)(1). While § 1346(a)(1) does waive sovereign immunity for taxpayer refund suits, it is limited by "other statutory provisions which qualify a taxpayer's right to bring a refund suit upon compliance with certain conditions." Dalm, 494 U.S. at 601. In this case, plaintiff cannot rely on section 1346(a)(1)'s limited waiver of sovereign immunity because he failed to show that he has complied with these conditions. 26 U.S.C. § 7422(a) requires a taxpayer to file a claim for refund or credit with the IRS prior to bringing suit. See id. at 601-602. Furthermore, relief under § 1346(a)(1) is only available where plaintiff has paid the full amount of tax assessed and then seeks a refund. Flora v. U.S., 362 U.S. 145, 177 (1960); see also Latch v. U.S., 842 F.2d 1031, 1033 (9th Cir. 1988). Because plaintiff's complaint fails to allege either that he first filed a claim for refund with the IRS or that he has paid the disputed taxes in full, § 1346(a)(1) is unavailable to waive the government's sovereign immunity. As such, plaintiffs refund claim must be dismissed for lack of subject matter jurisdiction.
Moreover, plaintiff's suit is also barred by the Anti-Injunction Act, 26 U.S.C. § 7421, and the tax exception provision of the Declaratory Judgment Act, 28 U.S.C. § 2201. The former provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed," while the latter prohibits declaratory judgments in matters relating to federal taxes. See Fostvedt, 978 F.2d at 1203. While there are exceptions to the prohibitions of both statutes, because plaintiff has not alleged that any apply, and it is clear to this court that none do, plaintiff's claims must be dismissed for lack of subject matter jurisdiction.
III. Conclusion
Accordingly, IT IS ORDERED that defendant's motion (#5) be GRANTED.
The clerk shall enter judgment accordingly.