Opinion
CIVIL ACTION NO. V-03-66
October 3, 2003
MEMORANDUM AND ORDER
Pending before the Court is Respondent's Motion to Dismiss, or in the alternative, Motion for Summary Judgment (Dkt # 6). Having considered the Respondent's motion, the Movant's response, and the applicable law, the court has determined that the Respondent's Motion should be GRANTED.
Factual and Procedural Background
Movant, Betty J. Taylor, filed this case in state court on May 5, 2003. It was removed to this Court by the United States, In her initial pleading, Mrs. Taylor challenges a document filed at Volume 273, page 322 of the Lavaca County Records. This Volume and Page number correspond to the Volume and Page number citations on the internal records of a Notice of Federal Tax Lien ("NOFTL") filed against Mrs. Taylor. Mrs. Taylor, therefore, seeks to challenge the NOFTL which was filed by the IRS for unpaid income taxes arising out of the tax years 1993 through 1996. Mrs. Taylor challenges the NOFTL as a judgment lien created by a court that is not a court of the State of Texas or the United States. The statutory lien for which the NOFTL at issue in this case was filed against Mrs. Taylor in the Lavaca County records arose on July 20, 1998, by operation of law when the IRS made assessments against Mrs. Taylor for income taxes arising out of her 1993 through 1996 tax years, and gave Mrs. Taylor notice and demand for payment of the balance due.
This is not the first time that Mrs. Taylor has challenged a NOFTL filed by the IRS. On or about September 14, 1998, Mrs. Taylor and her husband, Robert Louis Taylor filed a suit to contest a previous NOFTL filed against them for unpaid taxes. That suit was filed in this Court against the United States and its employees as Civil No. V-98-081. Among other allegations included in the previous case was the allegation that "Notice of Lien and Notice of Levy were filed against the Petitioners on August 4, and August 5, 1995 in the County Clerk's office of Lavaca County, Texas, without benefit of judicial proceeding, thus violating due process of law as guaranteed by the 5th, and 14th articles of the Constitution of the United States of America." The Court dismissed Mrs. Taylor's previous suit, holding that the relief sought was barred by the Anti Injunction Act, Sovereign Immunity, and failure to state a claim. (See Order dated January 13, 2000).
Mr. Taylor challenges the Notice of Federal Tax Lien filed in the Lavaca County records for the same tax year and raises the same arguments in a related case (Civil No. V-03-067), which is also pending before this Court. Mr. Taylor has filed two previous actions concerning tax liens against him (Civil Nos. V-98-040 and V-98-081). Mrs. Taylor was a co-plaintiff in Civil No. V-98-081, but was not a party to Civil No. V-98-040.
Subject Matter Jurisdiction
Although the United States' initial argument for dismissal or summary judgment is on the grounds of res judicata or collateral estoppel, as a preliminary matter, the Court is obligated to consider its own jurisdiction before addressing the merits of the case. Accordingly, the Court will first consider whether it has subject matter jurisdiction. 1. The Anti-Injunction Act.
The Anti-Injunction Act, 26 U.S.C.A. § 7421 (West 2003), denies this court jurisdiction over any "suit for the purpose of restraining the assessment or collection of any tax," except in enumerated circumstances not applicable here. See 26 U.S.C.A. § 7421(a) (West 2003). In addition to the statutory exceptions to the Anti-Injunction Act, there is a narrow judicial exception to the Act as set out in Enochs v. Williams Packing Navigation Co., 370 U.S. 1, 7 (1962), in which the Court may maintain a taxpayer suit pursuant to its equity jurisdiction. Under Williams Packing, a district court may hear a taxpayer suit challenging the collection of a tax when 1) "it is clear that under no circumstances could the Government ultimately prevail," and 2) if equity jurisdiction otherwise exists. Williams Packing, 370 U.S. at 7; see also Jones v. U.S., 1998 WL 1113323 (S.D.Tex., Nov. 25, 1998).
The United States argues that this case should be dismissed pursuant to § 7421, and that the exceptions to the statute are not applicable here. In response, the Movant does not argue that her suit fits within one of the enumerated exceptions, but instead she seems to argue that the taxes were never assessed. (See Objection of Betty J. Taylor to Motion to Dismiss, Dkt, # 7, exhibit A).
It is clear that neither the statutory exceptions to the application of § 7421 nor the equitable exception to its application are appropriate here. Movant's claim is framed as a due process challenge to the IKS' lien and levy on the Movant's property, but a constitutional claim is not one of the statutory exceptions to § 7421. Additionally, although the scope of the equity exception to the Anti-Injunction Act is somewhat ambiguous, even under the broader view of the exception, requiring a showing that the legal remedy is unavailable, Movant fails to establish that her suit should go forward. Movant could have paid the tax and then filed a refund suit. See e.g. Jones, 1998 WL 1113323 at *2.
See, e.g., In re Dore Assoc. Contracting, Inc. v. United States, 45 B.R. 758, 760 (Bankr.E.D. Mich. 1985) (noting that Williams Packing may have been overruled by South Carolina v. Regan, 465 U.S. 367 (1984), which held that when no alternative remedy exists, the Anti-Injunction Act does not bar suit)).
2. The Declaratory Judgment Act
Additionally, the Court agrees with the United States that it does not have subject matter jurisdiction over this claim since the Movant seeks a declaratory judgment and such claim is barred by the Declaratory Judgment Act. See 28 U.S.C. § 2201 (1994) (allowing courts to declare the rights and other legal relations of interested parties, "except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code"). This action was not brought under section 7428 of the Internal Revenue Code.
26 U.S.C.A. § 7428 (West 2003) allows courts to enter declaratory judgments in cases relating to the status and classification of organizations under 501(c)(3).
3. Failure to state a claim
To the extent that Movant seeks relief other than an injunction or declaratory judgment, she has not stated a claim upon which relief can be granted since the United States clearly has the power to obtain a tax lien in its favor under 26 U.S.C. § 6321 and the exercise of that power is constitutional. See State of Michigan v. United States, 317 U.S. 338, 339 (1943); United States v. Second Nat'l Bank, 502 F.2d 535, 545 (5th Cir. 1974), cert denied, 421 U.S. 912 (1975). The Court believes that it is clear from the Internal Revenue Code that the United States is not required to reduce its tax assessments to judgments before filing a tax lien against Movant. First, § 6321 sets forth no such requirement. Second, this conclusion is supported by the fact that 26 U.S.C. § 7403(a) authorizes the United States to file suit to enforce a tax lien. Movant cites no authority in support of a contrary conclusion, merely asserting that § 6321 does not apply to individual income taxes without support.
Therefore, since the Court does not have jurisdiction over Movant's action for an injunction or declaratory judgment and since Plaintiff has not otherwise stated a claim upon which relief can be granted, Respondent's Motion to Dismiss is GRANTED.
It is SO ORDERED.