Thurman et al v. United States Internal Revenue Service

Filing 38

IT IS ORDERED that after a full and independent review of the record, in respect to the Plaintiffs objections, the Magistrate Judge's Report and Recommendation Doc. 33 is accepted and adopted as the findings of fact and conclusions of law of this Court. Defendant's Motion to Dismiss Doc. 32 is GRANTED and the Clerk of the Court shall enter Judgment accordingly. Signed by Judge David C Bury on 8/21/12.(KAD)

1
2
3
4
5
6

UNITED STATES DISTRICT COURT

7
8
9
10
11
12
13

DISTRICT OF ARIZONA
)
)
)
)
Plaintiff,
)
v.
)
)
Internal Revenue Service,
)
)
Defendant.
______________________________________ )
George O. Thurman and Elizabeth Thurman,
husband and wife,

CV 11-158 TUC DCB
ORDER

14

Plaintiffs filed their Complaint on March 16, 2011, which this Court dismissed on May

15

2, 2012, with leave to amend. The Plaintiffs filed an Amended Complaint on May 14, 2012,

16

which must be dismissed for the same reasons the original Complaint was dismissed.

17

On July 11, 2012, the Honorable D. Thomas Ferraro, United States Magistrate Judge,

18

filed a Report and Recommendation ("R&R"), which advises the Court to dismiss the Amended

19

Complaint for lack of subject matter jurisdiction and because it is barred by a two-year statute

20

of limitation. On August 2, 2012, the Plaintiffs filed their objections by “Reply to DTF’s R&R

21
22
23
24
25
26
27
28

Dated 11 July 2012.”
As this Court previously explained, it is a Court of limited jurisdiction, Exxon Mobil
Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005), and “with very limited exceptions,
a legal suit to restrain the assessment or collection of a federal tax is expressly precluded by
statute, 26 U.S.C. § 7421(a).” (Doc. 29: Order at 3.) Plaintiffs’ Reply to the R&R makes it
clear that Plaintiffs challenge the IRS’ assertion they received over $3 million dollars in capital
gains during the 1998 and 1999 tax years. (Doc. 36: Reply to DTF’s R&R at3.)

1

As previously explained there is a two-year statute of limitation period, which precludes

2

claims from being raised two years after the cause of action accrues. (Doc. 29: Order at 4

3

(citing 26 U.S.C. § 7433(d)(3)). “A cause of action accrues when the taxpayer has had a

4

reasonable opportunity to discover all essential elements of a possible cause of action. Plaintiffs

5

amended complaint must allege facts showing that a cause of action accrued within two years

6

prior to when he filed this case: March 16, 2011.” In the Amended Complaint and the Reply,

7

Plaintiffs allege that in 2006 they complied with an IRS demand made in 2005 to file 1040s

8

from 1995 forward. It is from these filings that the IRS derived the $3 million tax liability owed

9

by Plaintiffs, but Plaintiffs again fail to establish the year the tax liability was assessed against

10

them.

11

Because there is no jurisdiction in this Court for Plaintiffs to challenge the amount of the

12

assessment against them, further amendment to clarify the date of the tax assessment would be

13

futile.

14

The Court has reviewed de novo those portions of the R&R to which Plaintiffs objected.

15

28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149-50 (1985). As to those portions of

16

the R&R were no objection is raised, the court need only satisfy itself that there is no clear error

17

on the face of the record to accept the recommendation. Campbell v. United States Dist. Court,

18

501 F.2d 196, 206 (9th Cir. 1974). The district court may “accept, reject, or modify, in whole

19

or in part, the findings or recommendations made by the magistrate judge.” Fed.R.Civ.P. 72(b),

20

28 U.S.C. § 636(b)(1).
CONCLUSION

21

After de novo review of the issues raised in Plaintiffs’ objections, this Court agrees with

22
23
24
25
26

the findings of fact and conclusions of law made by the Magistrate Judge in his R&R for
determining the pending Motion to Dismiss. There is no clear error on the face of the record.
/////
/////

27
28

-2-

1

The Court adopts the R&R, and for the reasons stated in the R&R, the Court grants the

2

Defendant’s Motion to Dismiss for lack of subject matter jurisdiction.

3

Accordingly,

4

IT IS ORDERED that after a full and independent review of the record, in respect to

5

the Plaintiffs’ objections, the Magistrate Judge's Report and Recommendation (Doc. 33) is

6

accepted and adopted as the findings of fact and conclusions of law of this Court.

7
8
9
10
11

IT IS FURTHER ORDERED that Defendant's Motion to Dismiss (Doc. 32) is
GRANTED.
IT IS FURTHER ORDERED that the Clerk of the Court shall enter Judgment
accordingly.
DATED this 21st day of August, 2012.

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-3-