Zurek v. United States Internal Revenue Service et al

Filing 8

ORDER granting Defendants' 6 Motion to Dismiss; directing the Clerk to terminate this action. Signed by Judge G Murray Snow on 4/4/13.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Richard R. Zurek,

No. MC-12-00110-PHX-GMS
Petitioner,

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v.

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ORDER

United States Internal Revenue Service;
Samuel Martin Ely,

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Respondents.

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Pending before the Court is the Motion to Dismiss of the United States Internal

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Revenue Service (“IRS”). (Doc. 6.) For the reasons discussed below, the IRS’s Motion to

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Dismiss is granted.

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On or about October 16, 2012, IRS Revenue Agent and Defendant Samuel Martin

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Ely issued administrative summonses to Bank of America, Farmers Insurance Federal

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Credit Union (“Farmers”), and Desert Schools Federal Credit Union (“Desert Schools”).

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(See Docs. 1, 2, 3.) The summonses were issued in connection with the IRS’s

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investigation of Petitioner Richard Zurek’s federal income tax liability for the years 2008

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through 2011. (Doc. 6 at 1.) Zurek subsequently filed Petitions to Quash the summonses

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within the twenty-day period set forth in 26 U.S.C. § 7609(b)(2). (Docs. 1, 2, 3.) Zurek

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claimed that Agent Ely was improperly “using the summons power to expand the tax

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years being reviewed.” (Id.) However, Zurek failed to mail registered or certified copies

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of the petitions to the entities summoned within twenty days of filing his petition, as

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required by 26 U.S.C. § 7609(b)(2)(B). Defendants thus moved to dismiss Zurek’s

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Petitions as lacking in subject matter jurisdiction. (Doc. 6 at 7–8.) Zurek did not file a

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Response to the Defendants’ Motion to Dismiss.

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The IRS, as a unit of the federal government, enjoys sovereign immunity from suit

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unless Congress has expressly consented to such suits. Lane v. Pena, 518 U.S. 187, 192

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(1996). Similarly, “a suit against IRS employees in their official capacity is essentially a

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suit against the United States” and thus requires “express statutory consent to sue.”

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Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985).

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Here, Congress has given express consent to sue in 28 U.S.C. 7609(b)(2), which

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waives sovereign immunity for actions to quash summonses by the IRS. Mollison v.

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United States, 568 F.3d 1073, 1075 (9th Cir. 2009). However, “limitations and conditions

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upon which the Government consents to be sued must be strictly observed and exceptions

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thereto are not to be implied.” Id. (quoting Soriano v. United States, 352 U.S. 270, 276

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(1957)). Federal courts lack subject matter jurisdiction over “any action that does not fit

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within the scope of the Congressional waiver. Taylor v. United States, 292 F. App'x 383,

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385 (5th Cir. 2008). The Ninth Circuit has observed that “when Congress attaches

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conditions to waiving sovereign immunity . . . those conditions must be ‘strictly

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observed.’” Marley v. United States, 567 F.3d 1030, 1034 (9th Cir. 2009).

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Here, the statutory waiver contains a requirement that the petitioner mail by

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regular or certified mail a copy of the petition to the parties summoned within twenty

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days of filing the petition. 26 U.S.C. § 7609(b)(2)(B). However, the Supreme Court has

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recognized that statutes of limitation and other statutory deadlines can be equitably tolled

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in some circumstances. John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 133

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(2008). Conversely, when the limitations period is absolute and equitable tolling cannot

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be applied, the timing requirement is “referred to, in ‘shorthand,’ as ‘jurisdictional. ’”

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Marley, 567 F.3d at 1035 (quoting John R. Sand, 552 U.S. at 133). The difference turns

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on whether the statutory limitation functions “to protect a defendant’s case-specific

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interest in timeliness” or to “achieve a broader system-related goal, such as facilitating

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the administration of claims, limiting the scope of a governmental waiver of sovereign

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immunity, or promoting judicial efficiency.” Id.

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Under Ninth Circuit precedent, the petitioner’s failure to comply with the twenty-

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day limit in 26 U.S.C. § 7609(b)(2)(B) strips the district court of jurisdiction. See

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Ponsford v. United States, 771 F.2d 1305, 1309 (9th Cir. 1985); Bharose v. United States,

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210 F. App'x 713, 714 (9th Cir. 2006). The purpose of § 7609(b)(2)(B) supports a finding

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that the twenty-day limit is jurisdictional in nature. The requirement that petitioner mail

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the petition to the summoned party within a delineated period of time serves to ensure

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that the summoned party is notified of a potential problem with the summons, preventing

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them from complying with a faulty subpoena. It also limits the scope of Congress’s

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waiver of sovereign immunity. Thus, the statutory limitation functions to achieve a

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broader system-related goal and should be considered jurisdictional.

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Zurek failed to comply with the twenty-day deadline for mailing copies of the

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petition to the summoned parties set out in § 7609(b)(2)(B). Thus, this Court has no

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subject matter jurisdiction over his Motions to Quash.

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IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss is
GRANTED. The Clerk of Court is directed to terminate this action.
Dated this 4th day of April, 2013.

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