Opinion
Civil Action File No. 1:05-CV-0925-BBM.
April 11, 2006
ORDER
This pro se action is before the court on the Motion for Summary Judgment of Defendant United States of America [Doc. No. 16] and Plaintiff's Motions which have been characterized as (1) the Motion to Compel; (2) the Motion for Sanctions; (3) the Motion for In Camera Review; and (4) the Motion for Order (collectively, the "Motion to Compel") [Doc. No. 19].
I. Factual and Procedural Background
Plaintiff Karen K. Daniels ("Ms. Daniels") is an attorney who is licensed to practice law in the State of Georgia. On February 15, 2002, an Internal Revenue Service ("IRS") agent in Florida referred Ms. Daniel to the IRS Office of Professional Responsibility (the "IRS/OPR") f/k/a the IRS Director of Practice Office. The referral letter alleged that Ms. Daniels was a participant in an abusive tax scheme. The United States claims that "[i]ndividuals who are eligible to practice before the IRS may lose that eligibility for several reasons, including failure to properly file their own tax return(s) and/or failure to properly and fully pay their own taxes." (Shatz Decl. ¶ 4, Feb. 1, 2006.) As a result of the referral letter, the IRS/OPR opened an investigation into whether Ms. Daniels had improperly practiced before the IRS. IRS/OPR employees contacted other IRS employees to gather information about Ms. Daniels's tax filing and payment status and whether she had engaged in any act that qualified or may have qualified as practice before the IRS. During the investigation, IRS/OPR employees disclosed Ms. Daniels's tax return information to other IRS employees.
Ms. Daniels has objected to each of the six facts the United States has set forth in its Statement of Material Facts. Ms. Daniels asserts that these facts are inadmissible, irrelevant, and immaterial because they do not establish a defense to one of the two claims she has set forth in her Complaint. (See Pl.'s Resp. to Def.'s Statement of Material Facts ¶¶ 1-6.) Under the Local Rules of this court, Ms. Daniels's responses do not state valid objections to the United States' statements of fact. See L.R. 56.1B.(2)a.(1)-(2), N.D. Ga. Furthermore, the court notes that Ms. Daniels has failed to provide her own statement of material facts as required by this court's rules governing Summary Judgment motions. See L.R. 56.1B.(2)b., N.D. Ga.
On April 6, 2005, Ms. Daniels filed a Complaint, which the court understands to make two distinct claims: The first claim (the "Conferral Claim"), asserts that various confidentiality provisions of the Internal Revenue Code — namely, I.R.C. §§ 6103 ("Section 6103"), 7431 ("Section 7431"), and 7213 ("Section 7213") — categorically prohibit the IRS/OPR from disclosing a person's tax return or return information to other IRS employees, and that, in disclosing Ms. Daniels's tax return information to such officials, the IRS/OPR violated that prohibition. The second claim (the "Investigation Claim"), which Ms. Daniels offers in the alternative, asserts that the IRS/OPR may share a person's tax return information with certain other IRS employees only after determining that the person has in fact practiced before the IRS. The court understands Ms. Daniels to base her Investigation Claim on: (1) the same statutory provisions underlying her Conferral Claim; (2) Treasury Department Circular No. 230 ("Circular 230"), 31 C.F.R. § 10, et seq., (3) regulations promulgated by the Secretary of the Treasury governing legal practice before the IRS, particularly 26 C.F.R. §§ 601.501-509; and (4) provisions of the Internal Revenue Manual ("IRM"), particularly IRM §§ 1.11.2.1 and 8.10.1.1.3.2(1). Ms. Daniels further claims that she has never practiced before the IRS, and that the IRS/OPR never uncovered any evidence that she has ever practiced before it.
In determining the sources of law Ms. Daniels relies on for purposes of both her Conferral and Investigation Claims, the court has referenced Ms. Daniels's Complaint as well as her Motion Asking the Court to Deny Defendant's Motion for Summary Judgment.
Discovery in this action ended on January 15, 2006. (See Nov. 10, 2005 Order 1.) On February 6, 2006, the United States filed a Motion for Summary Judgment. On February 22, 2006, Ms. Daniels filed the Motion to Compel. Therein, Ms. Daniels seeks: (1) to compel the United States to respond to various discovery requests; (2) sanctions for the alleged failure of the Unites States to respond to these requests; (3) an in camera inspection of fifty-six pages of documents that the United States claims are privileged or otherwise protected from discovery; and (4) an Order deeming her requests for admissions to be admitted for failure to respond.
II. Summary Judgment Legal Standard
Summary judgment is proper under Federal Rule of Civil Procedure 56 "if . . . there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. . . ." Id. However, the non-movant must do more than "simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252. Accordingly, the non-movant may not avoid summary judgment with evidence that is "merely colorable or is not significantly probative." Raney v. Vinson Guard Serv., Inc., 120 F.3d 1192, 1196 (11th Cir. 1997). "Thus, to survive a motion for summary judgment, the nonmoving party must come forward with specific evidence of every element material to that party's case so as to create a genuine issue for trial." Johnson v. Morehouse Coll., Inc., 199 F. Supp. 2d 1345, 1352 (N.D. Ga. 2002) (Carnes, J.).
III. Analysis
In its Motion for Summary Judgment, the United States asserts that as a matter of statutory construction Sections 6103, 7431, and 7213 do not categorically prohibit intra-IRS disclosures of a person's tax return information and that, accordingly, Ms. Daniels's Conferral Claim does not state a proper grounds for relief. Ms. Daniels's pleadings do not address the United States' construction of the relevant statutes.
Section 7431 provides in pertinent part:
If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.
I.R.C. § 7431(a)(1); cf. I.R.C. § 7213(a)(1) (providing criminal penalties for unlawful disclosure of a person's return or return information). Section 6103, in turn, "lays down a general rule that `returns' and `return information' as defined therein shall be confidential." Church of Scientology of Ca. v. I.R.S., 484 U.S. 9, 10 (1987). Section 6103(h)(1), however, provides an exception to that general confidentiality rule:
Section 6103 defines the term "return" to mean:
any tax or information return, declaration of estimated tax, or claim for refund required by, or provided for or permitted under, the provisions of this title which is filed with the Secretary by, on behalf of, or with respect to any person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists which are supplemental to, or part of, the return so filed.
I.R.C. § 6103(b)(1). Section 6103 defines the term "return information" to mean, in part:
a taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense.
I.R.C. § 6103(b)(2)(A).
Returns and return information shall, without written request, be open to inspection by or disclosure to officers and employees of the Department of the Treasury whose official duties require such inspection or disclosure for tax administration purposes.
I.R.C. § 6103(h)(1). The statute defines "tax administration" to mean:
(i) the administration, management, conduct, direction, and supervision of the execution and application of the internal revenue laws or related statutes (or equivalent laws and statutes of a State) and tax conventions to which the United States is a party, and
(ii) the development and formulation of Federal tax policy relating to existing or proposed internal revenue laws, related statutes, and tax conventions, and
(B) [the] assessment, collection, enforcement, litigation, publication and statistical gathering functions under such laws, statutes, or conventions.
I.R.C. § 6103(b)(4)(A)(i)-(ii) (B).
Ms. Daniels has not alleged that the IRS/OPR's investigation of her did not constitute "tax administration" within the broad meaning of that term specified in Section 6103(b)(4). Ms. Daniels has also not alleged that any IRS officer or employee disclosed her tax return information to a person who was not an officer or employee of the Department of the Treasury or that any disclosure was made to such officers or employees whose official duties did not require such disclosure. See I.R.C. § 6103(h)(1). Ms. Daniels's Conferral Claim must therefore be DISMISSED. See Fed.R.Civ.P. 12(b)(6) (empowering the court to dismiss a claim for "failure to state a claim upon which relief can be granted.").
The United States has not directly responded to Ms. Daniels's Investigation Claim. As indicated by the court's analysis of Ms. Daniels's Conferral Claim, however, Sections 7431, 6103, and 7213 do not explicitly require that the IRS/OPR determine that a person has practiced before the IRS prior to disclosing the person's tax return information to other Treasury Department officials. Furthermore, neither the court nor Ms. Daniels has identified any basis for finding such a requirement to be implicit in the statutory language. The same may be said of the provisions of Circular 230, 26 C.F.R. §§ 601.501-509, and IRM §§ 1.11.2.1 and 8.10.1.1.3.2(1), all of which Ms. Daniels has cited in support of her Investigation Claim. Ms. Daniels's Investigation Claim therefore must also be DISMISSED. See Fed.R.Civ.P. 12(b)(6).
Ms. Daniels claims that the Secretary of the Treasury has promulgated regulations governing the practice of attorneys with Circular 230 and that, subject to 5 U.S.C. § 500(b), a person who practices before the Treasury Department must fulfill certain requirements, such as being a member in good standing of the bar of the highest court of a state. (See Br. in Supp. of Pl.'s Mot. Asking the Ct. to Deny Def.'s Mot. 3.) Ms. Daniels, however, has not cited to a specific provision of Circular 230 — nor has the court identified one — regulating the sort of intra-IRS communications at issue in this action.
26 C.F.R. §§ 601.501-509 govern, among other things, "the representation of taxpayers before the Internal Revenue Service under the authority of a power of attorney." 26 C.F.R. § 601.501(a). Again, Ms. Daniels has pointed to no provision — and the court could not identify one — regulating the sort of intra-IRS communications at issue in this action.
IRM § 1.11.2.1 specifies, in several subsections, its own authoritativeness as a "single, official source of IRS instructions to staff." IRM § 1.11.2.1(3) (internal quotations omitted). IRM § 8.10.1.1.3.2, on the other hand, implicates the requirement that "Internal Revenue Service employees . . . make a written report to the Director of Practice when the employee has reason to believe that an attorney . . . has violated the rules set forth in . . . Circular [230]." IRM § 8.10.1.1.3.2(1). Again, neither IRM provision explicitly limits the sort of intra-IRS communications at issue in this action, and Ms. Daniels has not argued that any such limitation may be implicit in the statutory language. See Tavano v. Comm'r, 986 F.2d 1389, 1390 (11th Cir. 1993) (citing United States v. Horne, 714 F.2d 206, 207 (1st Cir. 1983) for the proposition that the IRM's provisions are not mandatory).
IV. The Motion to Compel
As all the claims in this action have been dismissed, Ms. Daniels's Motions to Compel; for Sanctions; for In Camera Review; and for Order [Doc. No. 19] are DENIED AS MOOT.
V. Summary
The Motion for Summary Judgment of the United States [Doc. No. 16] is GRANTED. Plaintiff's Motions which have been characterized as (1) the Motion to Compel; (2) the Motion for Sanctions; (3) the Motion for In Camera Review; and (4) the Motion for Order [Doc. No. 19] are DENIED AS MOOT.
IT IS SO ORDERED.