Opinion
1:21-CV-00137-SPB
07-07-2022
DONALD CONKLIN III, Petitioner v. UNITED STATES DEPARTMENT OF TREASURY, INTERNAL REVENUE SERVICE, Respondents
REPORT AND RECOMMENDATION ON PETITION FOR WRIT OF MANDAMUS AND RESPONDENT'S MOTION FOR SUMMARY JUDGMENT IN RE: ECF NOS. 3, 17
RICHARD A. LANZILLO UNITED STATES MAGISTRATE JUDGE
I. Recommendation
It is respectfully recommended that the Respondents' Motion for Summary Judgment [ECF No. 17] be granted and the petition for writ of mandamus [ECF No. 3] be dismissed.
II. Report
A. Background
Petitioner Donald Conklin (“Conklin”) challenges the Internal Revenue Service's failure to send him a tax refund for tax year 2020. He filed a self-styled petition for a writ of mandamus on June 2, 2021. See ECF No. 3. His claim, however, is more appropriately construed as one seeking a refund under 26 U.S.C. § 7422. See, e.g., Davis v. Internal Revenue Servs., 2022 WL 612718, at *4 (E.D. Pa. Mar. 1, 2022) (construing claim as one seeking a tax refund under 26 U.S.C. § 7422); David v. Becker, 1999 WL 236597 at *1 (E.D. Mo. Mar. 3, 1999). Conklin claims that he was entitled to payment of $1800.00 in CARES Act Economic Impact Payments (“EIPs”). See Pub. L. No. 116-136, 134 Stat. 281 (2020). Conklin, who is currently incarcerated at the State Correctional Institution at Albion (“SCI-Albion”), acknowledges receiving the third EIP of $1,400.00, but claims to have not received a first payment of $1,200.00 and a second payment of $600.00. ECF No. 3, ¶ 5. He states that he was “instructed by the Pennsylvania Department of Corrections to file a tax form 1040 for tax year 2020, and to claiming the CARES Act payments that were not received.” Id. at ¶ 6. Conklin submitted his IRS Form 1040, but did not receive the CARES Act funds he claims he was owed. Id. ¶¶ 6-7. His petition names the United States Department of the Treasury and the United States Internal Revenue Service as Respondents.
The Internal Revenue Code provides administrative and judicial remedies for taxpayers alleging wrongful imposition or collection of tax. See 26 U.S.C. §§ 7422, 7429, 7432-33.
The Corona Aid Relief and Economic Security Act (“CARES Act”), “provided emergency financial assistance to Americans during the early days of the CO VID-19 pandemic through what are commonly referred to as economic impact payments (“EIPs”). Morton v. United States Virgin Islands, 2021 WL 6137867, at *1 (3d Cir. Dec. 29, 2021) (citing statute). The EIPs are actually “premised on a legal fiction that individuals are entitled to refunds of taxes they never owed.” Id. (citing Scholl v. Mnuchin, 494 F.Supp.3d 661, 687 (N.D. Cal. 2020).
The Respondents filed an Answer to Conklin's petition on February 14, 2022. ECF No. 12. They asserted that Conklin was issued all three CARES Act payments, but the IRS properly applied those payments to a non-tax debt incurred by Conklin. See id. at ¶ 8. Thus, they submit, this Court lacks jurisdiction under 26 U.S.C. 6402(g). Id. at ¶ 9. The Court scheduled a telephonic status conference for March 3, 2022 [see ECF No. 13], at which Conklin failed to appear. See ECF No. 14 (Minute Entry). The Respondents subsequently filed a motion for summary judgment. ECF No. 17. They contend that Conklin did receive the two missing CARES Act payments, but that the IRS offset those disbursements to satisfy a pre-existing non- tax debt under 26 U.S.C. § 6402(g). See ECF No. 17-1, p. 1. Conklin did not file a response in opposition to the motion.
B. Standard of Decision
Federal Rule of Civil Procedure 56(a) requires the court to enter summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Under this standard “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., Ml U.S. 242, 247-48 (1986). A disputed fact is “material” if proof of its existence or nonexistence would affect the outcome of the case under applicable substantive law. Anderson, Ml U.S. at 248; Gray v. York Newspapers, Inc., 957 F.2d 1070, 1078 (3d Cir. 1992). An issue of material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, Ml U.S. at 257; Brenner v. Local 514, United Bhd. of Carpenters and Joiners of Am., 927 F.2d 1283, 1287-88 (3d Cir. 1991).
When determining whether a genuine issue of material fact remains for trial, the court must view the record and all reasonable inferences to be drawn therefrom in favor of the nonmoving party. Moore v. Tartier, 986 F.2d 682 (3d Cir. 1993); Clement v. Consol. Rail Corp., 963 F.2d 599, 600 (3d Cir. 1992); White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988). To avoid summary judgment, however, the nonmoving party may not rest on the unsubstantiated allegations of his or her pleadings. Instead, once the movant satisfies its burden of identifying evidence that demonstrates the absence of a genuine issue of material fact, the nonmoving party must go beyond his pleadings with affidavits, depositions, answers to interrogatories or other record evidence to demonstrate specific material facts that give rise to a genuine issue. Celotex Corp. v. Catrett, AM U.S. 317, 324 (1986).
Further, under Rule 56, a defendant may seek summary judgment by pointing to the absence of a genuine fact issue on one or more essential claim elements. The Rule mandates summary judgment if the plaintiff then fails to make a sufficient showing on each of those elements. When Rule 56 shifts the burden of production to the nonmoving party, “a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Celotex, AM U.S. at 323. See Harter v. G.A.F. Corp., 967 F.2d 846, 851 (3d Cir. 1992).
C. Discussion and Analysis
The Respondents argue that they are entitled to summary judgment because (1) this Court lacks subject matter jurisdiction to hear Conklin's claim pursuant to 26 U.S.C. § 6402(g), and (2) Conklin's delinquent child support obligations were properly set off against his CARES Act payments. Subject matter jurisdiction, of course, is a threshold determination. See Holy Spirit Ass 'n for Unification of World Christianity v. World Peace & Unification Sanctuary, Inc., 2022 WL 969057, at *5 (M.D. Pa. Mar. 30, 2022). Section 6402(g) deprives the federal courts of jurisdiction over claims relating to an offset of a tax refund: “No court of the United States shall have jurisdiction to hear any action, whether legal or equitable, brought to restrain or review a reduction authorized by subsection (c), (d), or (e).” See also Johnson v. United States, 2011 WL 6097755, at *3 (D.N.J. Dec. 6, 2011) (citing statute); Johnson v. I.R.S, 2001 WL 1175151, at *1 (E.D. Pa. 2001); 31 C.F.R. § 285.8(i) (“In accordance with 26 U.S.C. 6402(g), any reduction of a taxpayer's refund made pursuant to 26 U.S.C. 6402(e) or (f) shall not be subject to review by any court of the United States....”). Because Conklin's claim relates to an offset of a tax refund, this Court lack's jurisdiction to hear the matter under § 6402(g). See e.g., Davis v. United States Dept, of the Treasury, 2021 WL 121611, at *4 (M.D. La. Feb. 25, 2021).
Further, even if this Court had jurisdiction of the claim, the record establishes that the offset was proper and that Respondents are entitled to judgment as a matter of law. In support of their position, the Respondents have submitted various certified records from the IRS as well as a declaration from Sandra M. Bence, a bankruptcy specialist in SB/SE Deputy Commissioner Collection/Operations Support. 5eeECFNos. 17-2, 17-3. These records memorialize that Conklin's tax return was processed in April of 2021. See ECF No. 17-2, p. 5. The records further state that although the IRS determined Conklin was entitled to a refund of $1815.60, that refund was “offset to another agency; refund reduced by $1815.60.” Id. Ms. Bence declares that this “other agency” was listed in IRS records as “Office of Child Support Enforcement - Non-AFDC in the state of Pennsylvania.” ECF No. 17-3, ¶ 3. Conklin, as noted, did not respond to the Respondents' motion or challenge the authenticity of these documents.
The CARES Act prohibits economic impact payments from being offset to collect certain state and federal debts, but the debts do not include past due child support payments. See Jenkins v. Child Support Agency, 2022 WL 1404252, at *2 (W.D. Wis. May 4, 2022) (citing CARES Act). Under the Act, an eligible individual's economic impact payment can be offset up to the amount of the child support debt owed. See https://fiscal.treasury.gov/top/faqs-for-the-public-covid-19.html (“Your entire Economic Impact Payment authorized by the CARES Act can be offset, up to the amount of your child support debt.”) (last visited July 3, 2022). Thus, on the merits, the unchallenged evidence in the record establishes that Conklin's past due child support obligations were properly set off against his CARES Act payments.
III. Conclusion
The Court should grant the Respondents motion for summary judgment [ECF No. 17] and dismiss Conklin's petition [ECF No. 3].
IV. Notice to the Parties Concerning Objections
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1)(B) and (C), and rule 72.D.2 of the Local Rules of this Court, the parties are allowed fourteen (14) days from the date of service of a copy of this Report and Recommendation to file objections. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file timely objections will constitute a waiver of any appellate rights.