Opinion
Civil Action No. C-1-01-834
December 11, 2002
REPORT AND RECOMMENDATION THAT DEFENDANT'S MOTION TO DISMISS (DOC. 5) BE GRANTED, AND THIS CASE CLOSED
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NOTICE TO THE PARTIES REGARDING THE FILING OF OBJECTIONS TO THIS RR
REPORT AND RECOMMENDATION THAT DEFENDANT'S MOTION TO DISMISS (DOC. 5) BE GRANTED, AND THIS CASE CLOSED
This is a civil action filed against the Internal Revenue Service ("IRS"). In his pro se complaint, plaintiff H. Michael Vonderheide, a federal taxpayer, complains that: (1) in October 1997, he entered into a repayment agreement with the IRS; (2) under the terms of that agreement, he was to pay past-due federal income taxes to the IRS for tax years 1989 and 1993 through 1996; (3) in compliance with the agreement, he paid the IRS installment payments of $214.00 per month beginning in November 1997; (4) each payment was accompanied by a payment "coupon" which the IRS sent to him; (5) in June 1999, the IRS stopped mailing payment coupons to him; (6) despite the lack of coupons, he continued to make monthly installment payments to the IRS; (7) he then attempted to contact the IRS in order to determine why he was not receiving payment coupons; (8) in October 1999, IRS officials advised him that he was not receiving the coupons because his installment agreement was cancelled the previous May ( i.e., in May 1999); and (9) he made his last monthly payment in November 1999, and sent no monies to the IRS thereafter. Doc. 1 at 4-6.
Because plaintiff appears pro se, each of his complaint allegations have been liberally construed in his favor. See Williams v. Browman, 981 F.2d 901, 903 (6th Cir. 1992) ( per curiam).
I.
In his three-count complaint, plaintiff contends that the IRS: (1) violated his constitutional and/or federal statutory rights by acting as described above (Complaint Count I), (2) violated 26 U.S.C. § 6065 when it failed to "verify" unspecified documents (Count II); and (3) exceeded the ten-year statute of limitations period applicable to tax collection cases when it included his 1989 taxes in the repayment agreement, and otherwise sought to collect his back taxes for the prior tax year, 1988 (Count III).
In response to these three claims, the IRS has filed a motion to dismiss. See docs. 5 (motion), 7 (plaintiff's opposition memorandum). The motion is premised upon both Fed.R.Civ.P. 12(b)(1) and 12(b)(6). The IRS argues, under Rule 12(b)(1), that the Court lacks subject matter jurisdiction over plaintiff's claims. The IRS contends, under Rule 12(b)(6), that plaintiff fails to state a claim upon which relief can be granted.
In ruling on a motion premised upon both 12(b)(1) and 12(b)(6), the Court "must accept as true all of the well-pleaded allegations of the complaint, construing those allegations in the light most favorable to the plaintiff." Rossborough Mfg. Co. v. Trimble, 301 F.3d 482, 489 (6th Cir. 2002). "For a dismissal to be proper, it must appear beyond doubt that the plaintiff would not be able to recover under any set of facts that could be presented consistent with the allegations of the complaint." Id. (internal quotations deleted).
II.
The IRS's arguments are addressed in turn.
A. Subject Matter Jurisdiction
With respect to subject matter jurisdiction, the Court notes that a taxpayer is limited, by the IRS Code and the federal government's sovereign immunity, to bringing an "unlawful tax collection" cause of action under one statute: 26 U.S.C. § 7433. See id. § 7433(a) (specifying that such a claim "shall be the exclusive remedy for recovering damages [from the IRS] . . ."). Section 7433 permits a taxpayer, such as plaintiff, to seek relief — against the United States, and in a United States District Court — "[i]f, in connection with any collection of Federal tax . . . any [IRS] officer or employee . . . recklessly or intentionally, or by reason of negligence disregards any provision of this title, or any regulation promulgated under this title. . . ." Id.
Plaintiff is barred from proceeding under § 7433 in this case for two reasons. First, plaintiff fails to suggest in his complaint that he exhausted his administrative remedies with the IRS, which is a prerequisite to suit. See § 7433(d)(1). Second, even if exhaustion were to have occurred, plaintiff would still have violated the two-year limitations period found in § 7433(d)(3). That statutory provision provides that suit must be brought "within 2 years after the date the right of action accrues." Id. Accrual, for purposes of § 7433, occurs once the taxpayer has "a reasonable opportunity to discover all essential elements of a possible cause of action." 26 C.F.R. § 301.7433-1(g)(2). As plaintiff admits in his complaint, he knew that his installment plan was cancelled by the IRS sometime during October 1999. See supra. He thus had two years thereafter — or until October 31, 2001 at the very latest — in which to file his complaint. He did not so act until December 4, 2001, see doc. 1 at 1, i.e., more than one month after the end of October.
Plaintiff's complaint is thus subject to dismissal on lack-of-jurisdiction grounds.
B. Failure to State a Claim
Assuming, arguendo, that plaintiff could overcome his subject matter jurisdiction bar, his multiple claims would each fail on the merits.
As a preliminary matter, although plaintiff complains of a lack of due process, none of his allegations rise to the level of a constitutional violation. Cf Vonderheide v. IRS, No. C-1-96-161, 1996 WL 679678, at *1 n. 3 (S.D.Ohio Aug. 22, 1996).
Second, the IRS was acting well within its authority when it entered into a repayment plan with plaintiff, see 26 U.S.C. § 6159(a) (authorizing the use of such plans), and did not violate plaintiff's statutory rights by doing so. Although the IRS is permitted to terminate a repayment plan, id. §§ 6159(b)(2)-(b)(4), it must provide the taxpayer with thirty days' notice of its intent to terminate, unless it "believes that collection of any tax to which an agreement . . . relates is in jeopardy." Id. § 6159(b)(5). Assuming the facts pled in plaintiff's complaint are true, it is difficult to determine whether or not he contends that the IRS reasonably believed that its effort — to collect back taxes from him — was in jeopardy when it cancelled his repayment plan in May 1999. Even if the Court assumes, arguendo, that the IRS did not then believe its collection effort was in jeopardy, and that the IRS failed, prior to that time, to provide plaintiff with the required thirty-day notice to terminate, plaintiff's complaint nonetheless fails to state a claim because: (1) his exclusive remedy is to sue under § 7433, see, e.g., Ranciato v. United States, No. A.300 CV 1024 (JCH), 2001 WL 58827, at *2 (D.Conn. Jan. 23, 2001); and (2) as noted above, plaintiff neither exhausted his administrative remedies for a § 7433 claim, nor timely filed his complaint seeking damages under § 7433. Count I of plaintiff's complaint is thus subject to dismissal.
The second and third counts of plaintiff's complaint are easily resolved in the IRS's favor. In Count II of his complaint, plaintiff refers to the "verification" requirement of 26 U.S.C. § 6065, but that requirement places an obligation upon the taxpayer, not the IRS, to make tax returns under the penalty of perjury. See Rich v. Cripe, No. 97-6405, 1998 WL 894835, at *2 (6th Cir. Dec. 15, 1998). Count III of plaintiff's complaint concerns his tax returns for tax years 1988 and 1989. Tax year 1988 is not at issue in this suit because: (1) plaintiff does not contend that it was subject to his repayment plan, see doc. 1; and (2) the IRS acknowledges that plaintiff has no tax liability for 1988. See doc. 5 at 16. The IRS may attempt collection for tax year 1989, on the other hand, because, as was made clear by the Sixth Circuit Court of Appeals in plaintiff's prior pro se tax litigation, the IRS assessed plaintiff's 1989 tax liability within the ten-year limitations period set forth in 26 U.S.C. § 6502(a)(1). See Vonderheide v. United States, No. 98-3336, 1999 WL 220134, at *1 (6th Cir. Mar. 18, 1999).
Finally, to the extent that plaintiff seeks declaratory and/or injunctive relief as a remedy in this case, see doc. 1 at 12, he is prohibited from doing so under the Anti-Injunction Act, 26 U.S.C. § 7421(a), and the Declaratory Judgment Act, 28 U.S.C. § 2201(a). See Girvin v. United States, No. C-1-96-913, 2000 WL 805212, at *1-2 (S.D.Ohio 2000).
III.
The Court thus RECOMMENDS that the IRS's motion to dismiss be GRANTED, and this case CLOSED.