Ulrich v. U.S.

Full title: ALLAN W. ULRICH and BETTY J. FASSETT, Plaintiffs, UNITED STATES OF…

Court: United States District Court, N.D. New York

Date published: Sep 25, 2003

3,03-CV-0625 (N.D.N.Y. Sep. 25, 2003)

Opinion

3,03-CV-0625

September 25, 2003

DECISION and ORDER

THOMAS McAVOY, District Judge

Plaintiff commenced the instant action seeking to "recover over-payment of federal income taxes for all years." Plaintiffs contend that "the IRS and the Treasury Department have collected and enforced the collection of income tax in violation of separation of powers," that wages are not taxable income, and that there is no "Section 1 of Title 26 of the Internal Revenue Code imposed a tax on income, but lists no corresponding section establishing a liability for the tax." Plaintiffs seek and order requiring the United States of America (1) "to refund all monies paid in the disguise of income tax by the plaintiffs from the first working years in which tax was withheld (approx. 18^th birthday) to the present;" (2) "order the defendant to reimburse all costs associated with bringing this action;" and (3) Order the IRS (i.e. the Government) to stop all current and any future collection attempts on plaintiffs."

The United States moves to dismiss on the grounds that: (1) the Court lacks subject matter jurisdiction; and (2) the Complaint fails to state a claim upon which relief can be granted.

Plaintiffs' Complaint must be dismissed because it does not appear that they have properly complied with 26 U.S.C. § 7422 which provides that:

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, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof.

There is no indication that Plaintiffs properly or timely filed a Form 843 (claim for refund). See Crimson v. United States, 550 F.2d 1205 (1977).

To the extent Plaintiffs seek injunctive relief, it is barred by 26 U.S.C. § 7421 (a) (1994), which provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person." A narrow judicial exception to § 7421 allows such a suit when (1) the disputed assessment is unquestionably incorrect, (2) the plaintiff will suffer irreparable injury if forced to pay, and (3) the plaintiff is without an adequate remedy at law. See Enochs v. Williams Packing Navigation Co., 370 U.S. 1, 5-7 (1962). Plaintiffs' claim does not fit within the exception.

Even assuming plaintiffs properly filed claims with the IRS, their claims are frivolous. Congress has statutorily authorized a tax on wages.See 26 U.S.C. § 3101 ("[T]here is hereby imposed on the income of every individual a tax. . . ."); 26 U.S.C. § 3402. Furthermore, Congress' power to impose an income tax and the definition of income to include wages have been upheld as constitutional. See, e.g., Ficalora v. Commissioner of Internal Revenue, 751 F.2d 85, 87 (2d Cir. 1984). Finally, the delegation of the administration of the collection of taxes to the Internal Revenue Services is not an unconstitutional violation of the separation of powers. The IRS is simply enforcing the laws established by Congress and promulgating regulations within the guidelines set forth by Congress. See, e.g., 26 U.S.C. § 3501

Accordingly, Defendant's motion to dismiss is GRANTED and the Complaint is DISMISSED.

IT IS SO ORDERED.