Opinion
Case No. 04-598-KI.
March 29, 2005
John R. MacKinnon, Portland, Oregon, Pro Se Plaintiff.
Karin J. Immergut, United States Attorney, District of Oregon, Portland, Oregon, Jeremy N. Hendon, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, D.C., Attorneys for the Defendants.
OPINION AND ORDER
John R. MacKinnon, proceeding pro se, brings this action against the Internal Revenue Service ("IRS") appeals officers for a judgment that the appeals officers deprived him of his due process right to a face-to-face collection hearing, that their employment should be terminated as a result of that violation, and that MacKinnon should be provided a fair hearing. Before me is the Government's motion to dismiss (#8) under Federal Rule of Civil Procedure ("Rule") 12(b)(5) for failure to properly serve defendants, for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), and for failure to state a claim under Rule 12(b)(6).
BACKGROUND
MacKinnon failed to pay his federal income liabilities for the 1997 and 1998 tax years. By letter dated November 26, 2001, the IRS notified MacKinnon of its intent to levy under 26 U.S.C. § 6331 to collect his outstanding federal income tax liabilities and notified MacKinnon of his right to request an Appeals consideration prior to the levies. MacKinnon did not respond and on August 1, 2002, the IRS filed a Notice of Federal Tax Lien.
On August 8, 2002, the IRS sent MacKinnon Letter 3172 informing him of his right to a collection due process hearing. By letter dated August 26, 2002, MacKinnon notified the IRS of his desire to have an Appeals consideration under 26 U.S.C. §§ 6320, 6330 and his desire to audio record the hearing. By letter dated February 9, 2004, the IRS notified MacKinnon that he was not entitled to audio record his hearing because such action is only allowed in face-to-face conferences and that MacKinnon was not entitled to a face-to-face conference because the issues he raised in his Appeals consideration letter did not require one. The IRS offered MacKinnon the opportunity to have a telephone conference on March 10, 2004. MacKinnon responded by letter dated February 13, 2004, demanding a face-to-face hearing and expressing his continued intent to audio record such a hearing. MacKinnon did not participate in the March 10, 2004 scheduled telephonic conference.
On April 2, 2004, the IRS sent MacKinnon, by certified mail, a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 ("Notice of Determination") for the underlying income tax liabilities. The Notice of Determination informed him that the arguments he had raised in his request for Appeals consideration were frivolous and did not raise any collection alternatives, and that the proposed levy to collect the income taxes would not be restricted. Attached to the Notice of Determination was Attachment-Letter 3193, Notice of Determination, which outlined the reasons for the IRS's decision. As the attachments explained, the IRS appeals officer determined that the IRS complied with all applicable laws, regulations and administrative procedures. The appeals officer further found that MacKinnon's allegations concerning the liabilities were meritless.
LEGAL STANDARDS
A motion to dismiss brought pursuant to Rule 12(b)(1) addresses the court's subject matter jurisdiction. The party asserting jurisdiction bears the burden of proving that the court has subject matter jurisdiction over his claims. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
A Rule 12(b)(1) motion may attack the substance of the complaint's jurisdictional allegations even though the allegations are formally sufficient. St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). In deciding a Rule 12(b)(1) motion to dismiss, the court is not restricted to the pleadings but may rely on any evidence, including affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).
A motion to dismiss under Rule 12(b)(6) will only be granted if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.Gibson v. United States, 781 F.2d 1334, 1337 (9th Cir. 1986). The review is limited to the complaint, and all allegations of material fact are taken as true and viewed in the light most favorable to the non-moving party. Cassettari v. Nevada County, Cal., 824 F.2d 735, 737 (9th Cir. 1987).
DISCUSSION
The Government contends that MacKinnon's complaint must be dismissed on the basis that he did not properly serve the complaint within 120 days after filing it, that MacKinnon brought his case in the wrong court, and that he failed to state a due process claim upon which relief may be granted. The Government also argues that MacKinnon does not have a private right of action to seek the termination of the appeals officers' employment with the IRS.
I. Service of Process
The Government contends that plaintiff's action ought to be dismissed for insufficiency of process under Rule 12(b)(5). Rule 4(i)(1) provides that service upon the United States is effected by delivering a copy of the complaint to the United States Attorney in the district in which the action is brought, by sending a copy to the Attorney General of the United States and to the officer or agency. The complaint was filed on May 3, 2004, but the United States Attorney's Office in Portland, Oregon, the Attorney General of the United States, and the federal defendants were not served until October 14, 2004. Under Rule 4(m), plaintiff was required to serve the complaint no later than August 31, 2004.
Rule 4(m) permits the court to dismiss the action without prejudice or to direct that service be effected within a specified time, if service is not made within 120 days. The Ninth Circuit has recently reiterated that district courts have broad discretion under Rule 4(m), even without a showing of good cause, to extend the time within which to serve. United States v. 2,164 Watches, More or Less Bearing a Registered Trademark of Guess?, Inc., 366 F.3d 767, 772 (9th Cir. 2004). For example, a district court may extend time for service retroactively after the 120-day service period has expired. Id. I previously issued an order giving plaintiff until December 22, 2004 to serve the defendants in this case. Therefore, I do not dismiss plaintiff's complaint on the basis of failure to serve.
II. Filing in Wrong Court
The Government contends that this court lacks jurisdiction because MacKinnon is arguing that he was not afforded a proper hearing under Section 6330, a claim which should properly be brought in the tax court not in the district court. 26 U.S.C. § 6330(d)(1) provides that a taxpayer may appeal a determination made by an appeals officer to the tax court, or, if the tax court does not have jurisdiction of the underlying tax liability, to a district court. Here, although MacKinnon alleges that this case involves a determination on employment taxes, for which jurisdiction over the appeal is vested in the district courts, the underlying tax liability actually involves income taxes. See 26 C.F.R. § 601.102(b)(2)(i) (employment taxes not within the jurisdiction of the tax court). The Notice of Determination sent to MacKinnon by the IRS on April 2, 2004, specifies that the type of tax is "1040A," which refers to income taxes, not employment taxes. See 26 C.F.R. § 1.6012-1(b)(6). Thus, jurisdiction does not lie with the district court.
MacKinnon also argues that he is not in fact appealing the Notice of Determination made by the appeals officer. Instead, he is appealing the denial of due process in the hearing procedures. However, contrary to MacKinnon's reading of the statute, 26 U.S.C. § 6330 was enacted for taxpayers to challenge not only the determination made by the IRS, but also to challenge any improprieties in the hearing itself. See Crawford v. Commissioner, 266 F.3d 1120, 1123 (9th Cir. 2001) (tax court has jurisdiction to consider constitutional issues asserted in context of deficiency challenges).
Furthermore, although MacKinnon denies that he is appealing the Notice of Determination with respect to tax liability, he does seek another collection due process hearing, presumably to contest his tax liability. Again, under 26 U.S.C. § 6330(d), when the proposed collection action at issue in a collection due process hearing involves an underlying income tax liability, as it does in this case, judicial review over any determination made in the hearing lies with the tax court, not the district court.
MacKinnon's failure to petition the proper court for review of the IRS's determination with respect to income tax liabilities is not, by itself, fatal to these claims, however, since section 6330(d) permits refiling in the proper court.
III. Fifth Amendment Violation
MacKinnon also asserts that he is seeking relief against the individual IRS agents for violating his Fifth Amendment right to procedural due process. Normally, that relief is available underBivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971):
In Bivens, the United States Supreme Court held that, in appropriate cases, government officials may be held personally liable for violations, committed under the color of government authority, of citizens' constitutional rights. Bivens gives an individual a federal common law basis to sue federal government actors if they violate the individual's constitutional rights.Adams v. Johnson, 355 F3d 1179, 1183 (9th Cir. 2004) (citations omitted).
However, MacKinnon argues that this is not a Bivens action because he is not "expanding any constitutionally based remedy" and he is not requesting monetary damages. In essence, he seeks review of the Notice of Determination by requesting that I direct the use of procedural protections he claims that defendants denied to him in the appeals proceeding. However, as explained above, I am powerless to do so.
Furthermore, to the degree any of MacKinnon's allegations may broadly be construed to request relief appropriate in a Bivens action against the individual defendants, the Ninth Circuit has foreclosed that opportunity. Adams, 355 F3d at 1186 ("Because the Internal Revenue Code gives taxpayers meaningful protections against government transgressions in tax assessment and collection, we hold that Bivens relief is unavailable for plaintiffs' suit against IRS auditors and officials.").
IV. No Private Right of Action to Force Termination of Employment of the IRS Agents
The only remaining issue is whether MacKinnon can obtain the additional relief he seeks: termination of the employment of the two IRS appeals officers.
To the extent MacKinnon seeks a declaratory judgment that the appeals officers violated his right to due process, this court does not have jurisdiction under the Declaratory Judgment Act. While generally the Declaratory Judgment Act provides any court with the authority to "declare the rights and other legal relations of any interested party," an exception excludes controversies "with respect to Federal taxes. . . ." 28 U.S.C. § 2201(a).
Public Law No. 105-206, Section 1203(a) (codified as a note to 26 U.S.C. § 7804), authorizes the Commissioner of the IRS to terminate the employment of any IRS employee for cause on charges of misconduct "if there is a final administrative or judicial determination that [the] employee [among other things, violated the federal constitutional rights of a taxpayer] in the performance of the employee's official duties." The decision whether to exercise the authority is expressly delegated to the Commissioner of the IRS, and the Commissioner's determination may not be appealed. Public Law No. 105-206, Section 1203(c). Given this express and nondelegable grant of discretion to the Commissioner of the IRS, and given the failure of Congress to otherwise provide for a private right of action to enforce Section 1203, a private party such as MacKinnon may not assert a claim to force the termination of an IRS employee's employment under that section.
CONCLUSION
For the foregoing reasons, I grant the Government's motion to dismiss (#8).IT IS SO ORDERED.