Green v. U.S.

Full title: GLADYS I. GREEN, Plaintiff, vs. UNITED STATES OF AMERICA, Defendant

Court: United States District Court, W.D. Oklahoma

Date published: Oct 16, 2003

Case Number CIV-02-1670-C (W.D. Okla. Oct. 16, 2003)

Opinion

Case Number CIV-02-1670-C

October 16, 2003

ORDER

ROBIN CAUTHRON, Chief Judge, District

Before the Court is the United States' Motion to Dismiss Complaint and for a More Definite Statement. Plaintiff filed a Response and the matter is now at issue.

Plaintiff filed the present action alleging various improper collection activities by the Internal Revenue Service relating to taxes on her deceased husband's estate. Defendant filed the present motion asserting the Court lacks subject matter jurisdiction or, in the alternative, that Plaintiff had failed to state a claim for relief.

As an initial matter the Court notes that Plaintiff concedes that her claims pursuant to Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971), cannot survive. Therefore, that claim will be dismissed with prejudice. Plaintiffs remaining claims are brought pursuant to 26 U.S.C. § 7426, 7430, 7431, 7432, and 7433.^_ Defendant seeks dismissal of the §§ 7431, 7432, and 7433 claims pursuant to Fed.R.Civ.P. 12(b)(1). At the outset, the Court must resolve the proper standard of review for these claims. Motions pursuant Rule 12(b)(1) are treated in two different ways, depending on the manner in which the complaint is attacked.

_ Defendant does not challenge Plaintiff's § 7426 claim in this motion. In addition, although Paragraph 3 of the Complaint asserts Plaintiff is also bringing a claim pursuant to 26 U.S.C. § 7430, the remainder of the Complaint offers no allegations in support of that statute.

First, a facial attack on the complaint's allegations as to subject matter jurisdiction questions the sufficiency of the complaint. In reviewing a facial attack on the complaint, a district court must accept the allegations in the complaint as true.

Second, a party may go beyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends. When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1).

Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995) (internal citations omitted). Here, Defendant's challenge is premised on whether Plaintiff is a "taxpayer" within the meaning of the statutes; therefore, the Court's power to resolve the dispute arises from the same statutes which give rise to Plaintiffs claim. "When subject matter jurisdiction is dependent upon the same statute which provides the substantive claim in the case, the jurisdictional claim and the merits are considered to be intertwined." Wheeler v. Hurdman, 825 F.2d 257, 259 (10th Cir. 1987) (citations omitted). Because resolution of the jurisdictional question is intertwined with the merits of the case, the Court must treat Defendant's motion as one brought pursuant to Rule 12(b)(6). See Holt, 46 F.3d at 1003; Wheeler, 825 F.2d at 259.

The standard of review for motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) is well established. Courts must accept as true all well-pleaded facts and view those facts in the light most favorable to the non-moving party. Sutton v. Utah State Sch. for Deaf and Blind, 173 F.3d 1226, 1236 (10th Cir. 1999). " [A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson. 355 U.S. 41, 45-46(1957).

Section 7431 claim

In Count Two of her Complaint, Plaintiff alleges the IRS violated § 7431 by disclosing unauthorized confidential information. The pertinent part of that statute reads as follows:

(1) Inspection or disclosure by employee of United States. — 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.

26 U.S.C. § 7431(a)(1) (emphasis added). As it relates to the present case, the operative phrase is "such taxpayer." Defendant argues Plaintiff does not qualify because she is not the taxpayer whose confidential information was allegedly disclosed. In her Response, Plaintiff relies onUnited States v. Williams. 514U.S. 527(1995), for the proposition that Plaintiff is the taxpayer because she is the person ultimately responsible for the tax. This argument is unavailing. Williams involved a claim pursuant to 28 U.S.C. § 1346(a) which includes a significantly broader class of potential plaintiffs. Further, the plaintiff inWilliams was suing to recover a wrongfully assessed tax that she had paid. The courts who have considered the issue have routinely held that claims pursuant to § 7431 may only be brought by the taxpayer whose information was disclosed. See Rivera v. Internal Revenue Service, 226 F. Supp.2d 345, 349 (D. Puerto Rico 2002); Norman E. Duquette. Inc. v. C.I.R. 110 F. Supp.2d 16, 23 (D.D.C. 2000); Wilkerson v. United States, 839 F. Supp. 440, 444 (E.D. Tex. 1993); Brown v. United States, 755 F. Supp. 285, 287 (N.D. Cal. 1990); Haywood v. United States, 642 F. Supp. 188, 192 (D. Kan. 1986). Because Plaintiff's complaint may be amended to correct the defect, the dismissal of Count Two is without prejudice.

Section 7432 claim

In Count Three of her Complaint, Plaintiff alleges the IRS violated § 7432 by appointing persons with a conflict of interest who failed to release certain liens on property owned by her and by her husband's estate. The relevant part of § 7432 reads:

(a) In general. — If any officer or employee of the Internal Revenue Service knowingly, or by reason of negligence, fails to release a lien under section 6325 on property of the taxpayer, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

26 U.S.C. § 7432(a) (emphasis added). Again, Plaintiff's right to bring this claim hinges on her status as "such taxpayer." Defendant argues that Plaintiff is not a taxpayer on the claims at issue. Plaintiff again relies on Williams. For the reasons set forth above, Plaintiff's reliance on Williams is ineffectual. Indeed, as with § 7431, the clear majority of courts considering claims pursuant to § 7432 have held that section provides a cause of action only to the individual from whom the IRS is trying to collect. See Rivera, 226 F. Supp.2d at 349;Ibraham v. United States. 123 F. Supp.2d 408, 409 (S.D. Ohio 2000);Soghomonian v. United States, 82 F. Supp.2d 1134, 1143 (E.D. Cal. 1999). The Court notes that Soghomonian makes clear that Plaintiff's assertion that she is an owner of the property on which an allegedly improper lien has been placed does not change the result. That case rejected a § 7432 claim by a wife who owned a half interest in property on which the IRS had placed a lien for taxes owed by her husband. In keeping with the majority, the Soghomonian court held a claim pursuant to § 7432 could be brought only by the person who owed the tax. Accordingly, Count Three of Plaintiff's Complaint will be dismissed. However, the dismissal will be without prejudice.

Section 7433 claim

In Count Four of her Complaint, Plaintiff alleges the IRS violated § 7433 by improperly collecting taxes and by appointing persons who collected taxes that were barred by law. The relevant part of § 7433 reads:

(a) In general. — If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

26 U.S.C. § 7433(a) (emphasis added). Once again, Defendant argues that Plaintiff is not the "taxpayer" contemplated by the statute and Plaintiff again relies on Williams to support her right to bring the claim. Plaintiffs argument is without merit, as noted above. As with §§ 7431 and 7432, the clear majority of decisions have held that only the person directly responsible for the tax has a § 7433 claim. See Ludtke v. United States, 84 F. Supp.2d 294, 300 (D. Conn. 1999); Wittmann v. United States, 869 F. Supp. 726, 731 (E.D. Mo. 1994); Ferrel v. Brown, 847 F. Supp. 1524, 1528 (W.D. Wash. 1993) (aff'd, 40 F.3d 1049 (9th Cir. 1994) (per curiam) (adopting district court opinion)); Wilkerson, 839 F. Supp. at 442-43; Matrix Dev. Corp. v. United States, 815 F. Supp. 297, 301 (E.D. Wis. 1993). Count Four of Plaintiffs Complaint will be dismissed without prejudice.

As set forth more fully herein, the United States' Motion to Dismiss Complaint is GRANTED. The request for more definite statement is mooted by these rulings. Counts Two, Three, and Four of Plaintiff's Complaint are DISMISSED without prejudice. To the extent Plaintiff wishes to amend her complaint, such amendment must be filed within the time limit set forth in the Scheduling Order, Count Five is dismissed with prejudice.

IT IS SO ORDERED.