Opinion
05cv0476 Electronically Filed.
July 15, 2005
MEMORANDUM OPINION
I. Introduction
This is an injunction action brought pursuant to 28 U.S.C. § 6330. Plaintiff, Constance G. Larson, alleges that defendants, United States of America, Department of the Treasury, Internal Revenue Service ("IRS"), and Commissioner of the Internal Revenue Service, levied upon her for unpaid income and employment taxes without providing a Collection Due Process ("CDP") hearing or properly considering her Offer-in-Compromise. Plaintiff seeks to enjoin the IRS collection actions against her.
Specifically, plaintiff claims that, based on a finding that she was a responsible party of Larson Contracting, Inc., the IRS assessed civil penalties on her for the 2002 third and fourth quarter tax periods. (Compl. ¶ 6.) As required by statute, on April 19, 2004, defendants mailed plaintiff a Notice of Levy and Collection, to which she timely responded, allegedly requesting a CDP hearing and submitting an Offer-in-Compromise. (Id. ¶ 7-8.) Beginning in January, 2005, plaintiff's representative had several conversations with IRS Appeals Officers. (Id. ¶ 9.) Plaintiff's representative did not intend these conversations to constitute a CDP hearing and the Officers allegedly did not indicate that such conversations constituted a hearing. (Id. ¶ 11-12.) Plaintiff thus claims that she had no CDP hearing before subsequently receiving a "Notice of Determination" denying her administrative appeal of the tax assessment and civil penalties. (Id. ¶ 13, 17.) She also claims that the Officers did not consider her Offer-in-Compromise before levying on her property. (Id. ¶ 14, 18.) On this basis, plaintiff requests that the Court enjoin the IRS levy placed on her for failure to pay taxes.
Defendants have filed a motion to dismiss plaintiff's complaint under Fed.R.Civ.P. 12(b)(5), arguing that, although plaintiff served the IRS with the summons and complaint, she did not also properly serve the Attorney General of the United States and the United States Attorney for the Western District of Pennsylvania, as required by Fed.R.Civ.P. 4(i). Defendants also move to dismiss plaintiff's complaint, arguing under Fed.R.Civ.P. 12(b)(1) and 12(b)(6) that the Court has no jurisdiction over this case, as the injunctive relief sought is barred by the Anti-Injunction Act, 26 U.S.C. § 7421, and plaintiff did not timely file her motion to enjoin the collection action against her.
II. Standard of Review
Fed.R.Civ.P. 12(b)(5) states "the following defenses may at the option of the pleader be made by motion . . . (5) insufficiency of service of process." Thus, if the plaintiff improperly served the defendant, the defendant may move to dismiss on that basis.
A Fed.R.Civ.P. 12(b)(1) motion to dismiss asserts that the Court in which a complaint was filed "lack[s] . . . jurisdiction over the subject matter" of the complaint. Two types of attack — facial and factual — can be made pursuant to a 12(b)(1) motion. When defendants attack a complaint on its face, they "assert that considering the allegations of the complaint as true, and drawing all reasonable inferences in favor of plaintiffs, the allegations of the complaint are insufficient to establish a federal cause of action." Mullen v. Thompson, 155 F. Supp. 2d 448, 451 (W.D. Pa. 2001). See Mortenson v. First Federal Savings and Loan Association, 549 F.2d 884, 891 (3d Cir. 1977).
Alternatively, when a defendant launches a factual attack on subject matter jurisdiction, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims."Mortenson, 594 F.2d at 891. See Gould Electronics Inc. v. U.S., 220 F.3d 169, 176 (3d Cir. 2000). In 12(b)(1) motions, the burden of proof is on the plaintiff to show that jurisdiction exists. Coles v. City of Philadelphia, 145 F. Supp. 2d 646, 649 (E.D. Pa. 2001), citing Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666 (1974). Here, defendants attack the Court's jurisdiction on the face of the complaint.
When the Court considers a Rule 12(b)(6) motion to dismiss, the issue is not whether plaintiff will prevail in the end, or whether recovery appears to be unlikely or even remote. The issue is limited to whether, when viewed in the light most favorable to plaintiff, and with all well-pleaded factual allegations taken as true, the complaint states any valid claim for relief. In this regard, the Court will not dismiss a claim merely because plaintiff's factual allegations do not support the particular legal theory she advances. Rather, the Court is under a duty to independently examine the complaint to determine if the factual allegations set forth could provide relief under any viable legal theory. See 5A Charles Alan Wright Arthur R. Miller, Federal Practice Procedure § 1357, at 337 n. 40 (2d ed. 1999). See also Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
It is on this standard that the Court has reviewed defendants' motion. Based on the pleadings of record and the briefs filed in support and opposition thereto, this Court finds that it does not have jurisdiction to hear this case and therefore will grant defendants' motion to dismiss.
III. Discussion
A. The Period of Time that Plaintiff Has to Satisfy Proper Service Upon the United States Has Not Yet Expired
Defendants first argue that plaintiff's complaint must be dismissed because she did not properly serve the United States, as required by Federal Rule of Civil Procedure 4(i). Rule 4(i) provides:
i) Serving the United States, Its Agencies, Corporations, Officers, or Employees
(1) Service upon the United States shall be effected
(A) by delivering a copy of the summons and of the complaint to the United States attorney for the district in which the action is brought . . . and
(B) by also sending a copy of the summons and of the complaint by registered or certified mail to the Attorney General of the United States at Washington, District of Columbia.
Plaintiff counters this argument with Federal Rule of Civil Procedure 4(m), which allows plaintiff "120 days after the filing of the complaint" to serve the United States. As the 120th day after the date on which plaintiff filed the complaint does not occur until August 8, 2005, plaintiff is still within the time limit for service of her complaint. Therefore, this Court finds defendants' first argument in support of the motion to dismiss to be without merit.
B. The Anti-Injunction Act Prohibits This Court From Enjoining IRS Tax Collection
Defendants next argue that under the Anti-Injunction Act, 26 U.S.C. § 7421, this Court is prohibited from exercising jurisdiction over plaintiff's motion to enjoin the IRS levy. The Anti-Injunction Act states:
(a) Tax. Except as provided in sections 6015(e), 6212(a) and (c), 6213(a), 6225 (b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), 7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.
26 U.S.C. § 7412(a). In addition to the statutory exceptions listed, a judicial exception to the Anti-Injunction Act exists so that jurisdiction over an injunction request may be appropriate where "(1) under no circumstances can the government ultimately prevail on the merits; and (2) the taxpayer will suffer irreparable injury without injunctive relief." Elias v. Connett, 908 F.2d 521, 525 (9th Cir. 1990) (emphasis added).See also, Enochs v. Williams Packing Navigation Co., 370 U.S. 1, 6-8 (1962) (establishing that unless both irreparable injury to plaintiff and the government's inability to prevail are shown, "§ 7421(a) bars any suit for an injunction").
Although plaintiff is correct in asserting that 26 U.S.C. § 6330 permits judicial review of a notice of determination, plaintiff's complaint never requests such review, asking only that the Court grant an injunction on the IRS levy. Plaintiff's complaint states: "Plaintiff taxpayer brings this action to enjoin an Internal Revenue Service (IRS) levy without either providing a Collection Due Process ("CDP") hearing or considering Plaintiff's Offers-in-Compromise on their merits." (Compl. ¶ 5) (emphasis added). Regarding this injunction request, plaintiff makes no claim of, and the Court finds no evidence of, a statutory exception to the Anti-Injunction Act. Furthermore, plaintiff does not qualify for the judicial exception to the Anti-Injunction Act because, contrary to her allegations, there is a strong likelihood that the Court would find she was not denied a CDP hearing. See Stewart v. Commissioner of Internal Revenue Service, 2004 WL 838045, *1-3 (W.D.Pa. 2004) (holding that an informal meeting between IRS officer "Phillips" and plaintiff constituted a CDP hearing, despite IRS officer's statements that the meeting was "'an informal meeting and not the due process hearing;'" also holding that telephone conversations between IRS officer "Kennedy" and plaintiff constituted a CDP hearing, despite officer's failure to state that it was a hearing). Therefore, the Court finds that the Anti-Injunction Act precludes jurisdiction over plaintiff's action for an injunction on the IRS levy on her property.
The only statutory exception that could apply to plaintiff's situation, although not claimed by plaintiff herself, is found in 26 U.S.C. § 6330(e)(1), which states
[I]f a hearing is requested under subsection (a)(3) (B), the levy actions which are the subject of the requested hearing . . . shall be suspended for the period during which such hearing, and appeals therein, are pending. . . . Notwithstanding the provisions of section 7421(a), the beginning of a levy or proceeding during the time the suspension under this paragraph is in force may be enjoined by a proceeding in proper court, including the Tax Court. The Tax Court shall have no jurisdiction under this paragraph to enjoin any action or proceeding unless a timely appeal has been filed under subsection (d)(1) and then only in respect of the unpaid tax or proposed levy to which the determination being appealed relates.26 U.S.C. § 6330(e)(1). Nonetheless, if this action was an appeal from an (a)(3)(B) CD P hearing, plaintiff would have no need to request an injunction, as any levy action would automatically be stayed, pending resolution of the appeal. Furthermore, as stated below, plaintiff's failure to request judicial review in a timely fashion renders this possible exception moot.
C. Plaintiff Filed for Review After the Thirty Day Statute of Limitations
Finally, defendants argue that, to the extent that plaintiff's complaint could be considered a request for judicial review of the CDP determination, it is time-barred and this Court lacks jurisdiction to hear it.
Regarding judicial review of a CDP determination, the Internal Revenue Code states:
(d) Proceeding after hearing. —
(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." 26 U.S.C. § 6330(d)(1)
(emphasis added).
The plain language of the statute, as well as Tax Court decisions made pursuant to it, indicate that the 30 days in which plaintiff has to request review begins when the CDP determination is made, not when plaintiff receives the determination, as plaintiff alleges in her Brief in Opposition to Defendant's Motion to Dismiss. See e.g., Jones v. Commissioner of Internal Revenue, T.C. Memo 2003-29 (2003) (finding that petitioners had thirty days from the "DEC 18, 2001" date stamp on their determination to file with the Tax Court); Offiler v. Commissioner of Internal Revenue, 114 T.C. 492, 498 (2000) ("The determination by Appeals is the focus of any review in the Court under section 6330(d), and that section specifies that a petition must be filed within 20 days of such a determination.");Moorhous v. Commissioner of Internal Revenue, 116 T.C. 263, 268-69 (2001) ("[S]ection 6330(d)(1) provides the taxpayer will have 30 days following the issuance of such determination letter to file a petition for review with the Tax Court or Federal District Court"). Furthermore, "statutory periods are jurisdictional and cannot be extended." Jones, T.C. Memo 2003-29.
Here, plaintiff makes no attempt to deny that her complaint was filed more than thirty days after the March 9, 2005 date of the "Notice of Determination Concerning Collection Action(s)." Instead, plaintiff simply states that she received the determination "well after" the date it was sent and claims that it was filed "as soon as possible," following her hire of new counsel. Because the case law cited above and the statute establishes that the thirty days in which plaintiff can file for judicial review begin on the day the CDP determination is made, and because no law plaintiff has cited indicates that equitable tolling is warranted in this situation, plaintiff's case is time-barred, and this Court does not have jurisdiction to hear it.
Accordingly, defendants' motion to dismiss will be granted.
An appropriate order follows.
ORDER OF COURT
AND NOW, this 15th day of July, 2005, after considering defendants' motion to dismiss, plaintiff's response in opposition thereto, and supporting memorandum, for the reasons set forth in the accompanying Memorandum Opinion, IT IS HEREBY ORDERED that defendants' motion to dismiss (doc. no. 3) is GRANTED with prejudice.Judgment is hereby entered in favor of defendant and against plaintiff.
The clerk shall mark the docket as closed.