Opinion
Case No. 01cv00125 BTM(JFS)
September 17, 2001
ORDER GRANTING MOTION TO DISMISS AMENDED COMPLAINT
Defendant has filed a Motion to Dismiss Plaintiffs' First Amended Complaint. For the reasons discussed below, Defendant's motion is GRANTED.
I. BACKGROUND
This action was filed on January 23, 2001. In their original Complaint, Plaintiffs sought judicial review of a notice of determination issued by the IRS Appeals Office under section 6630(d)(1) of the Internal Revenue Code. The Complaint also alleged that various IRS employees failed to perform their job, lied to Plaintiffs, threatened Plaintiffs, or otherwise engaged in conspiracy or "evildoing."
In an order dated July 3, 2001, the Court dismissed Plaintiffs' claim under 26 U.S.C. § 6330 (d)(1) with prejudice on the ground that Plaintiffs' claim was untimely. However, the Court gave Plaintiffs leave to file an amended complaint setting forth a claim under 26 U.S.C. § 7433, which provides for damages against the United States where "any officer or employee of the internal Revenue Service recklessly or intentionally, or by reason of negligence, disregards any provision of [the tax code]."
Plaintiffs also attempted to assert tort claims against the IRS and IRS employees in MacLeod v. Internal Revenue Service, Case No. 99cv1088 BTM(JFS). Plaintiffs' First Amended Complaint in Case No. 99cv1088 asserted a cause of action against the IRS based upon the alleged tortious conduct of an IRS employee, Mr. Macardle, who allegedly verbally attacked Plaintiffs, in an order dated August 7, 2000, the Court dismissed this cause of action with prejudice, holding that the conduct at issue was not actionable under the FTCA and that the United States had not waived its sovereign immunity with respect to this claim. Plaintiffs' First Amended Complaint also asserted a cause of action against various IRS employees for acts of "evildoing," conspiracy, incompetence, and dishonesty, which the Court construed as an action under 26 U.S.C. § 7433. This cause of action was dismissed without prejudice. Subsequently, Plaintiffs filed a Second Amended Complaint which asserted' a new cause of action under the Privacy Act but did not include a cause of action under 26 U.S.C. § 7433. Plaintiffs' Second Amended Complaint was dismissed without prejudice pursuant to the Court's June 4, 2001 Order Granting Defendant's Motion for Summary Judgment.
Plaintiffs filed their "Amended Complaint Setting Forth a Claim Under 26 U.S.C. § 7433" on July 27, 2001. Defendant has filed a motion to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6).
II. DISCUSSION
The Court has explained to Plaintiffs on two separate occasions that a prerequisite to filing suit under section 7433 is the exhaustion of administrative remedies. (See Order Granting Motion to Dismiss filed on 8/8/00 (Case No. 99cv1088) and Order Granting Motion to Dismiss filed on 7/5/01 (Case No. 01cv00125)). In these same orders, the Court explained that to state a claim under section 7433, Plaintiffs must identify a specific section of the Internal Revenue Code that the employees allegedly violated. See Inman v. Commissioner of the I.R.S., 75 A.F.T.R.2d 95-1821 (E.D. Cal. 1995) (citing Gonsalves v. I.R.S., 975 F.2d 13, 16 (1st Cir. 1992)) ("[T]he taxpayer must be able to `point to [a] specific statute or regulation which these tactics might have violated.'").
Although Plaintiffs' Amended Complaint purports to state a claim under section 7433, Plaintiffs do not identify a specific section of the Internal Revenue Code that the IRS employees allegedly violated. Instead, Plaintiffs make vague allegations regarding "bizarre and illegal behavior" of government employees.
Moreover, Plaintiffs have not shown that they have exhausted their administrative remedies. Under 26 C.F.R. § 301.7433-1 (e), a claimant seeking damages under Section 7433 must, inter alia, send a claim in writing to the District Director of the district in which the taxpayer resides. The claim must include the grounds for the claim, a description of the injuries incurred, and the dollar amount of the claim. Id. Plaintiffs have not presented evidence of their compliance with 26 C.F.R. § 301.7433-1 (e), nor do they allege that they have complied. Therefore, the Court must dismiss Plaintiffs' Amended Complaint.
III. CONCLUSION
For the reasons discussed above, Defendant's motion to dismiss [12-1] is GRANTED. Due to Plaintiffs' repeated failure to state a claim under 26 U.S.C. § 7433 and failure to establish exhaustion of administrative remedies, the Amended Complaint is dismissed with prejudice.