Opinion
EP-04-CA-0004-DB.
September 2, 2004
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Defendant the United States of America's "Brief In Support of United States' Motion to Dismiss" ("Motion to Dismiss"), filed in the above-captioned cause on May 26, 2004. On June 3, 2004, Plaintiff Craig F. Reinhart, proceeding pro se, filed "Rebuttal To Defendants' [ sic] Motion To Dismiss" ("Response"). Defendant filed a Reply on June 10, 2004. After due consideration, the Court is of the opinion that Defendant's Motion should be granted for the reasons stated below.
BACKGROUND
Plaintiff filed his federal income tax return (Form 1040A) for tax year 2001, claiming zero taxable wages and requesting a refund of his tax withholding. Accompanying return was a Form 1099-R from Wachovia Bank showing that he received $30,037 in taxable retirement distributions during 2001 and had withholding of $6,007. Plaintiff also attached a document which set forth his position that his wages should not have been considered taxable income.
Upon receipt of the aforementioned materials, the Internal Revenue Service (IRS) determined that Plaintiff had additional unreported income for 2001 consisting of 1099 income from the Pacesetter Corporation in the amount of $28,682 and interest income form Patelco Credit Union of $15. The IRS computed Plaintiff's tax return to include these additional amounts of income and determined a balance due, including penalties and interest, of $15, 132. Additionally, the IRS assessed Plaintiff with a $500 frivolous return penalty. On October 10, 2003, the IRS sent Plaintiff a notice of deficiency informing him of its determination.
On January 6, 2004, Plaintiff filed a "Motion That The Court Declare Invalid The IRS' [ sic] Determination Of October 6, 2003" ("Complaint"). The instant Motion followed, wherein Defendant moves to dismiss the case for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(1), and for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6). Because the Court will dismiss this cause under a Rule 12(b)(1) standard, it need not address Defendant's second basis.
STANDARD
Rule 12(b)(1) allows a party to move to dismiss an action for lack of subject matter jurisdiction. On a motion brought under Rule 12(b)(1), which the Court must consider before any other challenge, Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994), a court must dismiss a cause for lack of subject matter jurisdiction "when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998) (internal quotation marks removed) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996)).
DISCUSSION
In essence, Plaintiff brought this cause to challenge the IRS's alleged "illegal" determination that the figures reported in his 2001 income tax return were not properly reported. The consequence of this omission resulted in the IRS assessing a $500 frivolous return penalty on top of the additional tax owed. The Court is inclined to agree with Defendant that it appears from his writings that Plaintiff's true intent is to bring this civil action in an effort to gain a refund, instead of being levied a tax and a penalty.
Title 26 United States Code § 7422, governs civil actions for refunds. Section 7422(a), in pertinent part, provides: "No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claims for refund or credit has been duly filed with the Secretary, according to the provisions of law. . . ."
Although a valid Form 1040 can constitute a claim for refund, Defendant avers that the forms filed by Plaintiff failed to constitute a valid return. Beard v. Commissioner, 82 T.C. 766 (1984), aff'd, 793 F.2d 139 (6th Cir. 1986) (return must represent reasonable attempt to satisfy requirements of tax law). This submission does not constitute a return or a claim for refund. See Nicholls v. United States, 575 F. Supp. 320, 322 (D.C. Minn. 1983). The Internal Revenue Code requires the taxpayer to pay the disputed tax in full and then begin the administrative proceedings followed by a civil suit in the appropriate federal court if necessary. 26 U.S.C.A. § 7422(a); Flora v. United States, 357 U.S. 63, 74-75, 78 S. Ct. 1079, 1086, 2 LED.2d 1165 (1958; Commissioner v. McCoy, 484 U.S. 3, 6-8, 108 S.Ct. 217, 219, 98 LED.2d 2 (1987).
In the cause at hand, Defendant avers that Plaintiff's Form 1040A for 2001 claiming a refund based on the assertion that he had "zero" in income or wages for 2001 was not a reasonable attempt to comply with the Internal Revenue code or relevant common law. The Court agrees. Assuming, arguendo, that the penalty was not justified, Plaintiff did not abide by the precepts of 26 U.S.C. § 7422(a) — he did not properly file a claim for refund or credit with the Secretary disputing that the IRS's initial assessment was flawed. Here, Plaintiff did not properly adhere to the statutory prerequisites for bringing a tax refund action, and therefore, the Court lacks subject matter jurisdiction.
CONCLUSION
For the reasons stated above, the Court is of the opinion that Plaintiff's claim should be dismissed for lack of subject matter jurisdiction.
Accordingly, IT IS HEREBY ORDERED that Defendant the United States of America's "Motion to Dismiss" is GRANTED. IT IS FURTHER ORDERED that the above-captioned cause is DISMISSED WITH PREJUDICE.