Opinion
CV-S-01-932 RLH (RJJ)
February 28, 2002
ORDER (Motion to Dismiss and for Summary Judgment-#4)
Before this Court is Defendant's Motion to Dismiss and for Summary Judgment (#4) filed on October 11, 2001. The Court has also considered Plaintiffs Opposition (#7) filed on November 29, 2001 and Defendant's Reply (#10) filed on February 1, 2002.
Defendant moves this Court to dismiss the Plaintiff's complaint with respect to his claim regarding income taxes and for summary judgment regarding civil penalties.
Plaintiff argues, among other theories, about declaration authority and whether the Secretary of the Treasury sent notice or demand; who determined that Plaintiff should have been assessed frivolous return penalty; and why no statute makes him liable for income tax.
BACKGROUND
On August 9, 2001, Plaintiff Joseph M. Cosby filed a complaint for damages and a request to set aside an allegedly "invalid" collection due process determination issued pursuant to 26 U.S.C. § 6330. Plaintiff alleges that he requested a collection due process hearing in response to a notice of federal tax lien issued by the Internal Revenue Service ("IRS") to collect federal income taxes for the tax years 1994 through 1997, inclusive, and a civil penalty for the tax years 1996 and 1997.
The collection activity with respect to the civil penalty results from federal income tax returns filed in 1996 and 1997. Each of the returns had zeroes on all the lines of the return which reflected income or tax due to the government. Plaintiff also requested a refund of all of the taxes which he either withheld or paid for each year, Attached to the returns were two pages which set forth arguments as why Plaintiff did not believe that he owed federal income taxes for each of those years.
On June 11, 2001, a collection due process hearing Was held at the IRS office hi Las Vegas, Nevada. Present at the hearing were Gerald Bowcut, an IRS appeals officer and the Plaintiff Bowcut discussed the collection activity for the income taxes and civil penalties, while the Plaintiff presented arguments as to why the collection activity should not be taken. On July 12, 2001, the IRS sent-by certified mail- two Notices of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 ("Notice of Determination. one for the federal income taxes and the other for the civil penalties.
The Notice of Determination with respect to the federal income taxes informed Plaintiff that the IRS had considered his arguments, that they were frivolous, and therefore the notice of federal tax lien would not be withdrawn. The Notice of Determination also informed the Plaintiff that if he wished to appeal the notice, that he must do so with the United States Tax Court. The Notice of Determination with respect to the civil penalties informed the Plaintiff that he had acknowledged his signature on federal tax returns filed for 1996 and 1997. The Notice of Determination further stated that since the returns for those years were found to be frivolous, the civil penalty was correctly applied and the notice of federal tax lien would not be withdrawn. Plaintiff then filed the instant suit.
DISCUSSION
I. Jurisdiction
In 1998, Congress enacted 26 U.S.C. § 6330. This statute provides that prior to a tax levy, the IRS must provide notice and an opportunity for a collection duo process hearing. In order to have a collection due process hearing, a taxpayer must request one within 30 days of the date notice is given regarding his right to that hearing. 26 U.S.C. § 6330 (a)(2) and (a)(3)(B). 26 U.S.C. § 6330 (d) addresses the proceedings that occur after a hearing has taken place. Specifically, it states:
(1) Judicial review of determination. — The person "may within 30 days of a determination under this section, appeal such determination —
(A) to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter); or
(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States.
If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court.
(2) Jurisdiction retained at IRS Office of Appeals. — The Internal Revenue Service Office of Appeals shall retain jurisdiction with respect to any determination made under this section, including subsequent hearings requested by the person who requested the original hearing on issues regarding —
(A) collection actions taken or proposed with respect to such determination; and
(B) after the person has exhausted all administrative remedies, a change in circumstances with respect to such person which affects such determination.
Thus, under the statute, this Court would have jurisdiction if the Tax Court does not. The Tax Court retains jurisdiction Over any underlying tax liability. The Treasury Regulations point out when a Tax Court would have jurisdiction:
If the Tax Court would have jurisdiction over the type of tax specified in the CDP Notice (for example, income and estate taxes). then the taxpayer must seek judicial review by the Tax Court. If theta liability arises from a type of tax over which the Tax Court would not have jurisdiction, then the taxpayer must seek judicial review by a district court of the United States in accordance with Tide 28 of the United States Code.
Treas. Regs. § 301, 6330-1T, A-F3. In the instant case, the tax liabilities at issue arc Plaintiff's income taxes. Income taxes are the type of tax that is under the jurisdiction of the Tax Court. Thus, it would be irresponsible for this Court to address Plaintiffs grievance in the instant case without proper jurisdiction. Therefore, the Court shall dismiss Plaintiffs case and allow him to seek redress in the Tax Court, which retains proper jurisdiction in this case.
II. Summary Judgment
Since the Court has determined that it does not have proper jurisdiction with which to hear Plaintiff's case, it also does not have die jurisdiction to pea. judgment upon Defendants' Motion for Summary Judgment. Hence, the Court will not address that Motion at this time.
CONCLUSION
Accordingly, and for good cause appearing,
IT IS HEREBY ORDERED that Defendant's Motion to Dismiss (#4) is GRANTED. The Court is without jurisdiction to rule on the Motion for Summary Judgment (#4).