Opinion
CV-S-02-0920-LRH-PAL
December 1, 2003
ORDER
Before the Court is Defendant's motion for summary judgment (Docket No. 13). For the following reasons, the Court will grant the Defendant's motion.
STANDARD
A motion for summary judgment is a procedure that terminates, without a trial, actions in which "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A summary judgment motion may be made in reliance on the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any." Id.
The movant is entitled to summary judgment if the nonmoving party, who bears the burden of persuasion, fails to designate "`specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett. 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P. 56(e)). Thus, to preclude a grant of summary judgment, the nonmoving party must set forth "`specific facts showing that there is a genuine issue for trial.'"Matsushita Elec. Indust. Co., Ltd, v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)). The substantive law defines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All justifiable inferences must be viewed in the light most favorable to the nonmoving party. County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001) (citing Zenith Radio Corp., 475 U.S. at 587).
Although the nonmoving party has the burden of persuasion, the party moving for summary judgment bears the initial burden of showing the absence of a genuine issue of material fact. Metro Indust., Inc. v. Sammi Corp., 82 F.3d 839, 847 (9th Cir. 1996). That burden is met by showing an absence of evidence to support the nonmoving party's case. Celotex Corp., 477 U.S. at 325. The burden then shifts to the nonmoving party to set forth specific facts demonstrating that there is a genuine issue for trial. Liberty Lobby, Inc., 477 U.S. at 250. In meeting this burden, the nonmoving party must go "beyond the pleadings and by its own evidence present specific facts showing that there is a genuine issue for trial." Far Out Prod, v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001) (citing Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996)) (quotations omitted).
DISCUSSION
Defendant's motion for summary judgment points out that Plaintiff litigated a related case before United States District Court Judge Kent J. Dawson. See Sheppard v. United States of America, CV-S-02-0673-KJD (RJJ), Order (No. 18) dated April 29, 2003. This Court adopts and incorporates Judge Dawson's order of April 29, 2003. As in the case decided by Judge Dawson, Plaintiff raises a number of meritless issues in this case regarding his federal taxes for 1990, 1992, and 1995.
Defendant points out that Plaintiff's complaint is riddled with frivolous arguments and jurisdictional problems. First, Defendant is correct that this Court does not have jurisdiction to adjudicate Plaintiff's claims regarding his income tax. 26 U.S.C. § 6330(d)(1). Under 26 U.S.C. § 7442, the U.S. Tax Court has jurisdiction over matters of federal income tax, including levies imposed for the purpose of collecting taxes. See Krugman v. Comm'r, 112 T.C. 230, n. 6 (1999) (noting that with respect to an underlying income tax liability, "the Tax Court has jurisdiction to review determinations under sec. 6330 relating to proposed levies"). Therefore, to the extent Plaintiff's action involves his underlying income tax liability, this Court lacks jurisdiction to review Plaintiff's claims.
Second, Plaintiff's remaining arguments are without merit. In fact, Plaintiff raises many of the same arguments that were found to be without merit in his previous litigation regarding his taxes from 1990, 1992, and 1995. Moreover, arguments nearly identical to those put forth by the Plaintiff have been found to be frivolous by courts in this circuit and other circuits as well.
For example, Defendant points out that Plaintiff's argument suggests that wages are not income. This argument is frivolous and has been repeatedly rejected by the Ninth Circuit Court of Appeals. See Olsen v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985). Plaintiff apparently makes this argument in regards to both his FICA tax assessments as well as income tax assessments. As noted in Olsen, however, the argument is without merit.
Plaintiff also makes frivolous claims that the Internal Revenue Service ("IRS") deprived him of a fair Collection Due Process hearing ("CDP"), including in regards to delegation of authority and verification from the Secretary. Plaintiff made the same claims in his previous action in federal court. These arguments are commonplace in tax — protester litigation and have been routinely dismissed.
Regarding delegation, "[t]here is no requirement under internal revenue laws or regulations that the Appeals officer give the taxpayer a copy of the delegation of authority from the Secretary to the person (other than the Secretary) who signed the verification required under section 6330(c)(1)." See e.g. Nestor v. Commisioner, 118 T.C. 162, 166-67 (2002).
Regarding verification from the Secretary, courts have routinely held that an IRS appeal officer's reliance on IRS "Form 4340" (Certificates of Assessments and Payments) is enough "verfication" that the correct administrative procedures were followed in the respective assessment.See Davis v. Commissioner, 115 T.C. 35, 40 (2000). "Certificates of Assessments and Payments are routinely used to prove that tax assessment has in fact been made. They are presumptive proof of a valid assessment."Id. at 40 (internal quotes omitted) (quoting Guthrie v. Sawyer, 970 F.2d 733, 737 (10th Cir. 1992). The record in this case clearly indicates that the IRS appeal officer relied on a Form 4340 to determine that the assessments had been made properly and the appropriate administrative procedures were followed.
Plaintiff's one remaining argument is that he was not allowed to tape record his CDP hearing. However, Plaintiff has failed to demonstrate how this prejudiced him in any way. Moreover, even if this were an error on the part of the IRS hearing officer, Plaintiff has not demonstrated any procedural inadequacies in the CDP hearing. Thus, remand would be futile to correct such an error.
SANCTION
Plaintiff has filed a frivolous action with this Court. Plaintiff was well aware that many of the arguments he put forth in his complaint were frivolous, because they were found to be so in his previous action before United States District Court Judge Kent J. Dawson. Accordingly, a sanction amount of $1000.00 is warranted in this case given the Plaintiff's previous bad faith and vexatious demeanor in the related litigation before Judge Dawson. See Sheppard v. United States of America, CV-S-02-0673-KJD(RJJ), Order (No. 19) dated April 29, 2002, at 4. (imposing $750.00 sanction for prosecuting a frivolous case), The sanction is imposed under the Court's inherent power. Fink v. Gomez, 239 F.3d 989, 993-94 (9th Cir. 2001). The Court finds that the Plaintiff acted recklessly and in bad faith when he sought to prosecute an action that he was clearly aware lacked any merit. He will, therefore, be sanctioned.
Based on a review of the complaint filed in the instant action and the complaint filed in the action before Judge Dawson, the Court finds that Plaintiff was aware that his claims lacked merit when he filed his complaint with this Court. Thus, after a finding of recklessness and bad faith, the Court could also impose sanctions under 28 U.S.C. § 1927, for the Plaintiff's filings subsequent to his complaint. See In re Keegan Mgmt. Co., 78 F.3d 431 (9th Cir. 1996).
CONCLUSION
IT IS THEREFORE ORDERED that Defendant's motion for summary judgment (Docket No. 13) is hereby GRANTED.
IT IS FURTHER ORDERED that Plaintiff is hereby sanctioned $1000.00, which Plaintiff is ordered to pay to Defendant.
IT IS SO ORDERED.