Dockery v. U.S. Department of Treasury ( 2009 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
JASPER L. DOCKERY, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-0806 (PLF)
)
UNITED STATES DEPARTMENT )
OF TREASURY, Internal Revenue Service, )
)
Defendant. )
__________________________________________)
MEMORANDUM OPINION
This matter is before the Court on defendant’s motion to dismiss. The motion
will be granted.
I. BACKGROUND
Plaintiff brought this action against the United States Department of the Treasury,
Internal Revenue Service (“IRS”), pursuant to 26 U.S.C. § 7433 (“Section 7433”) alleging the
unlawful collection of taxes for tax years ending December 31, 1994 and December 31, 2001.
See Compl. at 1 & Ex. (Notices of Levy dated October 10, 2003 and December 2, 2006).1 Upon
receipt of the Notices of Levy, Chevy Chase Bank FSB issued cashier’s checks, dated October
16, 2003 and December 4, 2006, in the amounts of $4,670.26 and $1,952.06 respectively,
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The Court agrees with defendant that the Department of the Treasury and the IRS
are not proper party defendants, and will substitute the United States of America in their place.
deducting the funds from plaintiff’s account. See id., Ex. (Cashier’s Check Nos. 4166003 and
200041564).
Plaintiff sought “release [of the] levy and return of his money/property” on two
grounds. Compl., Ex. (May 19, 2007 letter). First, he argued that “he is tax-exempt from the
levy . . . because he is a prisoner held in prison from February 6, 1996 until the current date,
therefore, erroneous tax, [sic] on his property not subject to taxation.” Id., Ex. (Letter to B.W.
Dumars and Mr. Larkin captioned “Release of Levy and Notice of Release”) at 2. In other
words, he claimed to have had no earned income, wages, or other income subject to taxation,
such that “the tax [was] levied without statutory authority.” Id. Second, plaintiff explained that
the only funds in his bank account were the proceeds of the settlement of a claim against the
District of Columbia arising from an assault and resulting injuries to his eye and face sustained
while incarcerated at the D.C. Jail. See id. at 10 & Ex. (May 19, 2007 letter) at 3. As such,
plaintiff asserted that he received the funds through settlement of a personal injury action on
which he owed no taxes. See id. at 10-11; Plaintiff’s Motion Opposing Dismissal of Complaint
(“Pl.’s Opp’n”) at 6. Accordingly, plaintiff described himself as “a prisoner without funds
unowed [sic] to satisfy IRS[’s] wrongful demand full unowed payment of taxes only ti
circumvent its wrongful action.” Pl.’s Opp’n at 6.
Plaintiff alleges that the levies violate rights protected by the Fourth and Fifth
Amendments to the United States Constitution, see Compl. at 12-13 (Counts One and Two), 17
(Count Seven), and constitute acts of negligence, see id. at 15-16 (Counts Four and Five), and
other torts. See id. at 13-15 (Count Three), 16-18 (Counts Six and Eight). He demands
compensatory and punitive damages. Id. at 18.
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II. DISCUSSION
“It is axiomatic that the United States may not be sued without its consent and that
the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S.
206, 212 (1983). Such consent may not be implied; it must be “unequivocally expressed.”
United States v. Nordic Village, Inc., 503 U.S. 30, 33-34 (1992). The statute under which
plaintiff brings this action, 26 U.S.C. § 7433, is only a limited waiver of sovereign immunity.
See Buaiz v. United States, 471 F. Supp. 2d 129, 135 (D.D.C. 2007). In relevant part, Section
7433 provides that:
If, 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,
such taxpayer may bring a civil action for damages against the United
States in a district court of the United States. Except as provided in
section 7432 [pertaining to the IRS’ failure to release a lien], such
civil action shall be the exclusive remedy for recovering damages
resulting from such actions.
26 U.S.C. § 7433(a) (emphasis added).2 If the government is found liable, a plaintiff may
recover “an amount equal to the lesser of $1,000,000 ($100,000, in the case of negligence) or the
2
Because Section 7433 is the exclusive remedy for recovering damages arising
from the improper collection of taxes by the IRS, the Court dismisses plaintiff’s claims under the
Federal Tort Claims Act. See Johnson v. United States Army, No. No. 3:08-CV-1810-L, 2008
WL 5205881, at *4 (N.D. Tex. Oct. 24, 2008) (Magistrate Report and Recommendation to
dismiss FTCA claims against the IRS arising from the collection of taxes); Knuckles El-Bey v.
United States, No. 1:08CV151, 2008 WL 3500282,at *3 (M.D.N.C. Aug. 11, 2008) (concluding
that FTCA bars tort claim against the United States arising from “improper activities in
connection with the assessment and collection of taxes”); see also Ali v. Fed. Bureau of Prisons,
__U.S. __, __, 128 S.Ct. 831, 835 (2008) (recognizing that FTCA does not apply to a claim
arising from the assessment or collection of any tax); Ishler v. Comm’r of Internal Revenue, 442
F. Supp. 2d 1189, 1207 (N.D. Ala. 2006) (concluding that “waiver of immunity set forth in the
[FTCA] does not apply” to a claim arising from the assessment or collection of any tax).
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sum of – (1) actual, direct economic damages sustained by the plaintiff as a proximate result of
the reckless or intentional or negligent actions of the officer or employee, and (2) the costs of the
action.” 26 U.S.C. § 7433(b).
Because the statute by its plain language provides a remedy only in connection
with the collection of a federal tax, “a taxpayer cannot seek damages under [Section] 7433 for an
improper assessment of taxes.” Shaw v. United States, 20 F.3d 182, 184 (5th Cir.) (emphasis
added), cert. denied, 513 U.S. 1041 (1994); Buaiz v. United States, 471 F. Supp. 2d at 135(“[O]nly actions in connection with the collection of taxes are actionable; conduct associated
with investigation or assessment of income tax is beyond the statute’s waiver of sovereign
immunity.”); see Miller v. United States, 763 F. Supp. 1534, 1543 (N.D. Cal. 1991)
(distinguishing assessment activity from collection activity by describing an assessment as “a
mere determination of tax liability which must precede any collection action by the IRS”). “[T]o
prove a claim for improper collection practices, the taxpayer must demonstrate that the IRS did
not follow the prescribed methods of acquiring assets.” Shaw v. United States, 20 F.3d at 184.
Absent allegations that the IRS engaged in improper collection procedures, even if those
procedures followed an improper assessment activity, plaintiff cannot collect damages under
Section 7433. See id.Defendant characterizes plaintiff’s claims as arising from the “improper
assessment, not the unauthorized collection[,]” of taxes for the tax years in question.
Memorandum in Support of Defendants’ Motion to Dismiss Complaint at 5 (emphasis in
original). The Court concurs. Plaintiff claims that he did not owe income taxes at all, rendering
the IRS’ collection activities improper. On this theory, he purports to challenge the IRS’ levy
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and collection of taxes from funds in his Chevy Chase Bank account in such a way that his
claims fall within the waiver of sovereign immunity afforded under Section 7433. While it is
true that the issuance of a Notice of Levy is a collection activity, see Bryant v. United States
Gov’t, 527 F. Supp. 2d 137, 141 (D.D.C. 2007); Brewer v. Comm’r of Soc. Sec., 430 F. Supp. 2d
1254, 1260 (S.D. Ala. 2006), the issuance of a Notice of Levy “does not transform the taxpayer’s
complaint into alleging improper collection procedures.” Brewer v. Comm’r of Soc. Sec., 430 F.
Supp. 2d at 1260.
The Court concludes that plaintiff’s claims arise from the IRS’ assessment of
taxes rather than from the collection of taxes by levy. These claims, therefore, fall beyond the
scope of Section 7433’s limited waiver of sovereign immunity, thus depriving this Court of
subject matter jurisdiction. See Elaison v. United States, 551 F. Supp. 2d 63, 65 (D.D.C. 2008)
(dismissing for lack of subject matter jurisdiction all claims which did not arise from the
collection of taxes); Gunnink v. United States Gov’t, No. 08-781, 2008 WL 3166308, at *5 (D.
Minn. Aug. 4, 2008) (dismissing claims “deal[ing] with the IRS’s alleged failures in assessing
taxes or issues regarding the proof of Plaintiffs’ tax liability rather than tax-collection efforts . . .
for lack of jurisdiction”); Springer v. United States, No. 08-CV-004-GKF-FHM, 2008 WL
4980892, at *1 (N.D. Okla. Nov. 24, 2008) (dismissing claims arising from IRS agents’ actions
in executing search warrant, including seizure of cash, for lack of subject matter jurisdiction
where complaint did not allege that the agents’ actions were “in connection with any collection
of a Federal tax”); Buaiz v. United States, 471 F. Supp. 2d at 136 (dismissing for lack of subject
matter jurisdiction all claims based on and related to the IRS’s alleged wrongful calculation of
tax assessments as falling beyond Section 7433’s sovereign immunity waiver); McCarty v.
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United States, No. 01-4942, 2002 WL 31934287, at *4 (D.N.J. Nov. 13, 2002) (dismissing claim
arising from IRS’s refusal to grant plaintiffs’ refund because involved the determination of taxes
and not the collection of taxes), aff’d, 147 Fed. Appx. 308 (3d Cir. 2005); see Zolman v. Internal
Revenue Serv., 87 F. Supp. 2d 763, 765 (W.D. Mich. 1999) (concluding that pro se plaintiff’s
“submissions are completely devoid of any allegation concerning improper collection procedures
by the individual defendants,” such that he failed to state a claim against the United States under
Section 7433).
Plaintiff “concede[s] that this court lacks subject-matter [jurisdiction]” over the
remaining constitutional claims, and his claims for infliction of emotional distress, and his claims
for punitive damages. Pl.’s Opp’n at 7. Defendant’s motion to dismiss will be granted, and this
civil action will be dismissed in its entirety. A separate Order accompanies this Memorandum
Opinion.
/s/______________________
PAUL L. FRIEDMAN
United States District Judge
DATE: January 23, 2009
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