Swanson v. Internal Revenue Service , 956 F. Supp. 2d 291 ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RUTHIE MICHELLE SWANSON, )
)
Plaintiff, )
)
v. ) Civil Action No. 11-1990 (BAH)
)
INTERNAL REVENUE SERVICE, )
)
Defendant. )
MEMORANDUM OPINION
The pro se plaintiff, Ruthie Michelle Swanson, sues the Internal Revenue Service (“IRS”)
for allegedly deducting $18,148.04 from her Social Security payments between 2006 and 2011 to
satisfy an outstanding tax bill. Compl., ECF No. 1, at 1-3. The United States has moved for
summary judgment under Rule 56 the Federal Rules of Civil Procedure, United States Mot. for
Summ. J., ECF No. 21, and the Court has construed “Plaintiff’s Motion Requesting the Court to
Hear Additional Facts,” ECF No. 23, as her opposition to the summary judgment motion. See
Min. Order (June 25, 2013). The defendant has opted not to reply. See Reply in Supp. of United
States’ Mot. for Summ. J., ECF No. 24. For the following reasons, the Court will grant the
defendant’s motion and enter judgment accordingly.
I. BACKGROUND
The plaintiff’s tax liability arose from her individual income tax returns for the years
2002 and 2003. See generally United States’ Statement of Material Facts Not at Issue, ECF No.
21-1. On June 13, 2005, the plaintiff was assessed additional taxes of $6,371 and interest and
penalties totaling $2,410.69 for tax year 2002. Def.’s Ex. 1, ECF No. 21-2 (Transcript of Ruthie
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Swanson regarding 1040) (hereafter “Tr. 1”). On March 2, 2009, the plaintiff was assessed
additional taxes of $2,972 and interest and penalties totaling $1,984.36 for tax year 2003. Def.’s
Ex. 2, ECF No. 21-3 (hereafter “Tr. 2”) at 1; see Compl. Attach., ECF pp. 10-11 (“Final Notice
of Intent to Levy and Notice of Your Right to a Hearing” dated May 16, 2011). The plaintiff’s
2003 tax bill was satisfied by offsetting her overpayment of federal income taxes for the year
2008, Tr. 2 at 2, and abating the remaining taxes, as well as the penalties and interest. Id. at 3-4.
The IRS issued the plaintiff a refund check of $2,883.73 on November 21, 2011; it did not levy
the plaintiff’s Social Security payments to satisfy the 2003 tax bill. See id. at 4.
On December 19, 2005, the IRS purportedly “issued” a notice to the plaintiff of its
“intent to levy collection” to satisfy her 2002 tax liability, and on February 27, 2006, it
purportedly “mailed” a “final notice before levy on social security benefits.” Tr. 1 at 2. 1 The
IRS deducted money from the plaintiff’s monthly Social Security payments from May 2006 to
October 26, 2009, to satisfy the plaintiff’s tax bill for tax year 2002. Id. at 2-8. The total
deductions exceeded $10,200.
Meanwhile, on June 2, 2006, the Department of the Treasury’s Financial Management
Service addressed a letter to the plaintiff at “General Delivery Ft. Lauderdale, FL 33310,”
informing her about the tax levy and the fact that the Social Security Administration had
deducted $238.20 of her benefit payment to apply “to a debt you owe” the IRS. Pl.’s Opp’n
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The defendant has not included the actual notices nor proffered any evidence confirming the
address where those notices were sent, and the plaintiff alleges that it was not until May 2011
that she “received a tax levy from the IRS stating that I owe taxes for 2003.” Compl. at 1. On
the other hand, the plaintiff admits that she was in Ft. Lauderdale, Florida, in 2004 “where [she]
filed [her] 2003 taxes,” Compl. at 2, and where, as will be discussed next, the Department of
Treasury’s Financial Management Service (“FMS”) sent a letter dated June 2, 2006, notifying
the plaintiff about the levy against her Social Security payments. Since it is the plaintiff who
placed FMS’s letter in the record, and she has not claimed that she did not receive this letter in a
timely manner, the Court will assume that the plaintiff did receive FMS’s letter in 2006.
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Attach., ECF No. 15-1 at 15. 2 The letter further stated that “[t]he Agency has previously sent
notice to you at the last [known] address. That notice explained the amount and type of debt you
owe, the rights available to you, and that the Agency intended to collect the debt by intercepting
any Federal payments made to you, including tax refunds.” Id. The plaintiff was informed to
contact the IRS if she believed her “payment was reduced in error . . . .” Id.
In August 2011, the plaintiff submitted a “Claim for Refund and Request for Abatement
(IRS Form 843)” in the amount of $18,148 for tax years 2002 and 2003. Id., ECF No. 15-1 at
11. On November 4, 2011, the plaintiff filed a lawsuit in the Superior Court of the District of
Columbia against the IRS and three individuals who participated in her tax proceedings,
demanding $28,000 in damages. ECF No. 15-1 at 19. On November 10, 2011, the plaintiff filed
the instant lawsuit solely against the IRS, claiming that the IRS owes her $18,148.04. Compl. at
3.
On December 19, 2011, the IRS abated the penalty and interest amounts for tax year
2002 and issued a refund check to the plaintiff for $2,230.25. Tr. 1 at 8-9; see ECF No. 15-1 at
20. In a letter to the IRS dated December 19, 2011, the plaintiff stated that she was “refusing
[the refund check] because you claim that I did not file my 2002 tax return and that is a complete
lie.” ECF No. 15-1 at 18. The plaintiff informed the IRS that she would “see you in court” and
added “don’t send any more hit men to my home.” Id. (emphases omitted). The IRS reissued
the refund check to the plaintiff on May 7, 2012, Tr. 1 at 9, which the plaintiff then accepted.
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Since the pro se plaintiff has not excluded or redacted her social security number from the
various places it appears in the documents attached to her opposition, and it is the Clerk’s sound
policy not to redact information from filings, the Court has instructed the Clerk to shield the
entire attachment, ECF No. 15-1, from public viewing. See LCvR 5.4(f) (Privacy
Requirements).
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See Mem. Op., ECF No. 17, at 2 (rejecting the defendant’s contested argument that the case is
moot because the plaintiff has now accepted the refund check).
On November 27, 2012, this Court denied the defendant’s motion to dismiss after
determining that the record contained no evidence to determine whether, as the defendant
contends, the plaintiff has failed to exhaust her administrative remedies under the Taxpayer Bill
of Rights. See Mem. Op. at 2-4. The defendant has responded with the instant summary
judgment motion.
II. LEGAL STANDARD
Pursuant to Rule 56, summary judgment shall be granted “if the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986);
Estate of Parsons v. Palestinian Auth., 651 F.3d 118, 123 (D.C. Cir. 2011); Tao v. Freeh, 27
F.3d 635, 638 (D.C. Cir. 1994). To determine which facts are material, the Court looks to the
substantive law on which each claim rests. Anderson, 477 U.S. at 248. The mere existence of a
factual dispute does not bar summary judgment. See id. A genuine dispute is one whose
resolution could establish an element of a claim or defense and, therefore, affect the outcome of
the action. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson, 477 U.S. at 248.
Summary judgment is properly granted against a party who “fails to make a showing sufficient
to establish the existence of an element essential to that party's case, and on which that party will
bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322. The burden remains on the
moving party to demonstrate that there is an “absence of a genuine issue of material fact” by, for
example, pointing to the absence of evidence proffered by the nonmoving party. Id. at 322-23.
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In ruling on a motion for summary judgment, the Court must draw all justifiable
inferences in favor of the nonmoving party, and shall accept the nonmoving party's evidence as
true. Anderson, 477 U.S. at 255; Estate of Parsons, 651 F.3d at 123; Tao, 27 F.3d at 638. The
Court is only required to consider the materials explicitly cited by the parties, but may on its own
accord consider “other materials in the record.” Fed. R. Civ. P. 56(c)(3). For a factual dispute to
be “genuine,” Estate of Parsons, 651 F.3d at 123, the nonmoving party must establish more than
“[t]he mere existence of a scintilla of evidence” in support of her position, Anderson, 477 U.S. at
252, and she cannot simply rely on allegations or conclusory statements, Greene v. Dalton, 164
F.3d 671, 675 (D.C. Cir. 1999). Rather, the nonmoving party must present specific facts that
would enable a reasonable jury to find in her favor. See Anderson, 477 U.S. at 250. “If the
evidence is merely colorable, or is not significantly probative, summary judgment may be
granted.” Id. at 249-50 (citations omitted).
III. DISCUSSION
The Court has construed the plaintiff’s claim as brought under the Internal Revenue
Service Restructuring and Reform Act of 1998 (hereafter “the Act”), commonly known as the
Taxpayer Bill of Rights, codified in relevant part at 26 U.S.C. § 7433. Mem. Op. at 2-3 (citing
cases). Section 7433 permits a civil action for damages against the United States “[i]f, in
connection with any collection of Federal tax with respect to a taxpayer, any officer or employee
of the Internal Revenue Service recklessly or intentionally, or by reason of negligence,
disregards any provision of this title, or any regulation promulgated under this title . . . .” 26
U.S.C. § 7433(a). But a court may not award a judgment for damages without “determin[ing]
that the plaintiff has exhausted the administrative remedies available to such plaintiff within the
Internal Revenue Service.” Id. at § 7433(d)(1); see 26 C.F.R. § 301.7433-1(a) (“An action for
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damages [under the Act] filed in federal district court may not be maintained unless the taxpayer
has filed an administrative claim pursuant to paragraph (e) of this section, and has waited for the
period required under paragraph (d) of this section.”); Glass v. U.S., 424 F. Supp. 2d 224, 227
(D.D.C. 2006) (taxpayer’s “[f]ailure to comply with [exhaustion requirement] deprives the
federal district court of jurisdiction”) (citing Venen v. United States, 38 F.3d 100, 103 (3d Cir.
1994); McGuirl v. United States, 360 F. Supp. 2d 125, 128 (D.D.C. 2004)).
The applicable regulation states that “[a]n administrative claim . . . shall be sent in
writing to the Area Director, Attn: Compliance Technical Support Manager of the area in which
the taxpayer currently resides[,]” and the claim must include “(i) the name, [contact information],
and taxpayer identification number of the [claimant]; (ii) [t]he grounds, in reasonable detail, for
the claim; (iii) [a] description of the [taxpayer's] injuries; (iv) [t]he dollar amount of the claim,”
including any reasonably foreseeable damages; and “(v) the signature of the taxpayer.” 26
C.F.R. § 301.7433-1(e)(1) and (2)). The defendant’s declarant Jeffrey R. Krogh states under
penalty of perjury that he searched the IRS’s Integrated Collection System to determine if the
plaintiff has filed an administrative claim for wrongful collection and “found no record of her
having done so.” Krogh Decl., ECF No. 21-4, ¶¶ 5, 6. The plaintiff has not proffered any
evidence indicating that she has exhausted her administrative remedies under section 7433(d).
Even if she had, it is likely that this action filed in November 2011 would be barred by the Act’s
two-year statute of limitations since the plaintiff knew or should have known about her claim in
June 2006, at the latest. See n.2 supra; 26 C.F.R. § 301.7433-1(g)(2) (“A cause of action under
[the Act] accrues when the taxpayer has had a reasonable opportunity to discover all essential
elements of a possible cause of action.”).
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CONCLUSION
For the foregoing reasons, the Court finds that no genuinely disputed fact exists with
regard to the plaintiff’s failure to exhaust her administrative remedies under the Taxpayer Bill of
Rights; therefore, the defendant is entitled to judgment as a matter of law. A separate, final order
accompanies this Memorandum Opinion.
/s/ Beryl A. Howell
UNITED STATES DISTRICT JUDGE
DATE: July 30, 2013
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