Meuli v. Internal Revenue Service, Commissioner of

Filing 22

MEMORANDUM AND ORDER: The court shall grant plaintiff twenty days from the date of this order to present any other material pertinent to defendants motion. The government will be granted ten days to respond to any material presented by defendant. Then the court will make a final decision upon the governments motion to dismiss.. Signed by District Judge Richard D. Rogers on 7/6/2011.Mailed to pro se party Gene E. Meuli by certified mail ; Certified Tracking Number: 70082810000136784595(meh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

GENE E. MEULI,
Plaintiff,
vs.

Case No. 11-1044-RDR

UNITED STATES OF AMERICA,
Defendant.
MEMORANDUM AND ORDER
Plaintiff, pro se, filed this action listing the Commissioner
of the Internal Revenue Service as defendant.

Since he filed this

case, plaintiff has been permitted to amend the complaint to list
the United States as the proper defendant. This case is before the
court upon the motion to dismiss of the United States.

The

government has filed its motion to dismiss pursuant to FED.R.CIV.P.
12(b)(1),(5) and (6).
I.

Allegations in the amended complaint
In his amended complaint, plaintiff alleges that:
“[C]ertain employees of the IRS did unlawfully levy
against my Social Security [b]enefits by falsely alleging
that my 2002 Form 1040 [f]ederal [i]ncome tax return was
frivolous.”
“The IRS violated my [c]onstitutional [r]ight under Art.
1, Section 9, Clause 4.”
“The IRS made a false assessment of my tax liability for
2002.”
“The IRS made no assessment in writing for a penalty
under sec. 6751.”

Doc. No. 20, pp. 3-4.

These are essentially the same allegations

as in the original complaint.

In response to the United States’

motion to dismiss, plaintiff clarifies that he is contesting a
March 10, 2010 letter in which the IRS assessed a $5,000.00 penalty
against plaintiff for allegedly filing a frivolous 2002 tax return.
Doc. No. 9 at p. 3.
In the original complaint, plaintiff asked that the court
“order the IRS to release the . . . levy on my Social Security
[b]enefits and return all property taken by the IRS . . .”

In his

amended complaint, plaintiff asks for relief as stated under 26
U.S.C. § 7433.
II.

Doc. No. 20 at p. 4.

Pro se standards
A pro se litigant’s pleadings “are to be construed liberally

and held to a less stringent standard than formal pleadings drafted
by lawyers.” Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).
If plaintiff’s pleadings can be reasonably read to state a valid
claim on which they could prevail, the court should do so despite
a failure to cite proper legal authority or follow normal pleading
requirements.

Id.

But, the court may not provide additional

factual allegations “to round out a plaintiff’s complaint or
construct a legal theory on a plaintiff’s behalf.”

Whitney v. New

Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997).
III.

Motion to dismiss standards
In

this

order

the

court

shall

2

address

the

government’s

arguments for dismissal pursuant to FED.R.CIV.P. 12(b)(1) and
FED.R.CIV.P. 12(b)(6).1
Regarding motions alleging a lack of jurisdiction under Rule
12(b)(1), it is well-settled that plaintiff bears the burden of
showing that jurisdiction is proper and must demonstrate that the
case should not be dismissed. U.S. ex rel. Stone v. Rockwell Int’l
Corp., 282 F.3d 787, 797 (10th Cir. 2002).

Plaintiff must sustain

the burden of alleging facts which show jurisdiction and supporting
those facts with competent proof. Id. at 797-98. “‘Mere conclusory
allegations of jurisdiction are not enough.’”

Id. at 798 (quoting

United States ex rel. Hafter v. Spectrum Emergency Care, Inc., 190
F.3d 1156, 1160 (10th Cir. 1999)).

To survive a motion to dismiss

for failure to state a claim under Rule 12(b)(6), a complaint must
present factual allegations, assumed to be true, that “raise a
right to relief above the speculative level” and must contain
“enough facts to state a claim to relief that is plausible on its
face.”

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 & 570

(2007). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

“[A]llegations of

conclusions or opinions are not sufficient when no facts are
1

The government has withdrawn any argument for dismissal under
FED.R.CIV.P. 12(b)(5). Doc. No. 14 at p. 1 n.1.
3

alleged by way of the statement of the claim.” Bryan v. Stillwater
Board of Realtors, 578 F.2d 1319, 1321 (10th Cir. 1977).
The court has the authority to raise issues regarding the
failure to state a claim, whether or not those issues are asserted
in the motions to dismiss.
IV.

See Whitney, 113 F.3d at 1173.

Jurisdiction/Sovereign immunity
The United States contends in this case that it has not

consented to be sued under the statutes alleged by plaintiff and
that plaintiff cannot find or prove an explicit waiver of sovereign
immunity.

This case must be dismissed for lack of jurisdiction if

the government prevails in this argument.
“Absent a waiver, sovereign immunity shields the Federal
Government and its agencies from suit.”
471, 475 (1994).

FDIC v. Meyer, 510 U.S.

“Sovereign immunity is jurisdictional in nature.

Indeed, the ‘terms of [the United States’] consent to be sued in
any court define that court’s jurisdiction to entertain the suit.’”
Id., (quoting U.S. v. Sherwood, 312 U.S. 584, 586 (1941).

As the

Tenth Circuit explained in Fostvedt v. United States, 978 F.2d 1201
(10th Cir. 1992) cert. denied, 507 U.S. 988 (1993), plaintiff must
establish an explicit waiver of sovereign immunity in order to sue
the United States:
The United States may not be sued without its consent.
Such a waiver of sovereign immunity must be strictly
construed in favor of the sovereign and may not be
extended beyond the explicit language of the statute. It
long has been established that the United States, as
sovereign, is immune from suit save as it consents to be
4

sued and the terms of its consent to be sued in any court
define that court's jurisdiction to entertain suit. A
waiver of sovereign immunity cannot be implied, but must
be explicitly expressed. . . .
The burden is on the taxpayer to find and prove an
explicit waiver of sovereign immunity.
Id. at 1202-03 (internal quotations and citations omitted).
In his amended complaint, plaintiff has cited the following
statutes to support plaintiff’s claim of jurisdiction in this case:
28 U.S.C. §§ 1331 and 1343; and 26 U.S.C. §§ 408(d)(3), 3401, 6201,
6203, 6331(a), 6702, 6751(b)(1), 7433, 7491 and 7701(a).
makes reference to the Constitution.

He also

For its part, the United

States discusses but asks the court to reject 26 U.S.C. § 7422 as
an applicable waiver of sovereign immunity in this case.
Upon the current record on file, the court finds that there is
no

explicit

waiver

of

sovereign

immunity

which

applies

to

plaintiff’s action.
A.

Internal Revenue Code sections
1.

Section 7433

Section 7433 of the Internal Revenue Code has been considered
an explicit waiver of sovereign immunity.

However, the waiver is

conditioned upon the exhaustion of administrative procedures.
Section 7433 states in part:
(a) 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
5

against the United States in a district court of the
United States.
....
(d)(1) A judgment for damages shall not be awarded under
subsection (b) unless the court determines that the
plaintiff has exhausted the administrative remedies
available to such plaintiff within the Internal Revenue
Service.
This section of the IRS Code does not give this court jurisdiction
to consider plaintiff’s challenge against the assessed penalty for
two reasons.

First, plaintiff does not allege that he filed an

administrative claim for damages as required to state a claim under
§ 7433(d)(1). Exhaustion of administrative remedies is required to
bring a claim for damages under the statute.

Rae v. U.S., 530

F.Supp.2d 127, 130-31 (D.D.C. 2008); Brooks v. Snow, 313 F.Supp.2d
654, 661-62 (S.D.Tex. 2004).

Second, § 7433 is “not a remedy for

taxpayers alleging impropriety or errors in the tax assessment
process.”
1999).

Addington v. U.S., 75 F.Supp.2d 520, 523 (S.D.W.Va.

“Taxpayers who wish to challenge the IRS’ calculation of

their tax liability must file either a petition for redetermination
in the Tax Court . . . or a refund action in the district court.”
Gonsalves v. I.R.S., 975 F.2d 13, 16 (lst Cir. 1992) (statutory
citations omitted).

Plaintiff appears to be challenging the

validity of the penalty assessed against him by the IRS, not the
manner of collecting the penalty. His arguments assert that he had
no tax liability and the penalty was unjustifiable.

Section 7433

does not provide jurisdiction in this court for such claims.
Dockery v. U.S. Dept. of Treasury, 593 F.Supp.2d 258, 260-61
6

(D.D.C. 2009).
2.

Section 7422

As noted earlier, the government acknowledges that 26 U.S.C.
§ 7422(a) is an explicit waiver of sovereign immunity.

Section

7422(a) provides:
No suit or proceeding shall be maintained in any court
for the recovery 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 the 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.
According to the government, the court cannot exercise jurisdiction
pursuant to this statute because, although plaintiff is making a
claim for a refund, he has not filed an administrative claim for a
refund with the IRS prior to filing his complaint in this court.
The government further cites Mires v. U.S., 466 F.3d 1208,
1211 (10th Cir. 2006) where the court concluded:
Two prerequisites must be met before a district court has
subject matter jurisdiction under § 1346(a)(1). First,
a plaintiff must have fully paid the challenged tax
assessment. . . . Second, a plaintiff must have filed a
valid refund claim with the IRS, and the IRS must have
denied the claim or six months must have passed since the
claim was filed with no IRS response.
26 U.S.C. §§
6532(a)(1), 7422(a).
The prior administrative claim requirement has been applied to
dismiss actions against the assessment of IRS penalties in Reiss v.
U.S., 983 F.2d 899, 901 (8th Cir. 1993) and Burton v. U.S., 585
F.Supp. 953, 955 (N.D.Tex. 1984).

7

The

government

has

supplied

an

affidavit

stating

that

plaintiff has not filed an administrative claim for refund.

Doc.

No. 7, Declaration of Melba A. Tyson at ¶ 7.

Although plaintiff

has stated that he has tried to resolve his dispute regarding his
tax liability with the Internal Revenue Service, he has not
specifically disputed the declaration of Ms. Tyson in his response
and surreplies to the motion to dismiss.2
3.

Other Internal Revenue Code sections

The court has examined the language in 26 U.S.C. §§ 408(d)(3),
3401, 6201, 6203, 6331(a), 6702, 6751(b)(1), 7491 and 7701(a)(26).
There is no explicit waiver of sovereign immunity communicated in
these statutory sections.
B.

General jurisdiction statutes

The Tenth Circuit has held that sovereign immunity is not
waived by a general jurisdictional statute such as 28 U.S.C. §

2

Plaintiff did send a letter to the IRS on April 17, 2010
which makes a variety of assertions, including: that plaintiff has
no tax liability; that plaintiff did not file a frivolous 2002 tax
return; that the IRS has not proven plaintiff is liable for a
penalty under the IRS Code; and that the IRS has committed criminal
extortion and criminal threats in violation of United States
criminal statutes. Doc. No. 7, Exhibit 7. The word “refund” is
never mentioned in the letter. The court does not consider this a
formal or informal refund claim. See Simon v. Doe, 463 F.Supp.2d
466, 470 (S.D.N.Y. 2006)(letter which requests an abatement of
penalties which had not been paid and which does not request a
refund, does not count as a formal or informal refund claim for the
purposes of § 7422(a)); see also, Martin v. U.S., 833 F.2d 655,
660-62 (7th Cir. 1987); Ambase Corp. v. U.S., 2010 WL 2500306 at *8
(D.Conn. 6/15/2010); Midwest Crane and Rigging, Inc. v. U.S., 2010
WL 4968274 at *3 (D.Kan. 8/6/2010).
8

Merida Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir.

1331.

2005); Lonsdale v. U.S., 919 F.2d 1440, 1444 (10th Cir. 1990). This
holding applies as well to 28 U.S.C. § 1343 which generally covers
actions taken under state law or conspiracies by private persons
which violate civil rights, not to actions taken by IRS officials
pursuant to federal law.

See Salazar v. Heckler, 787 F.2d 527,

528-29 (10th Cir. 1986) (§ 1343(a)(4) is not a waiver of sovereign
immunity);

Beale

v.

Blount,

461

F.2d

1133,

1138

(5th

Cir.

1972)(same); Smith v. Krieger, 643 F.Supp.2d 1274, 1291 (D.Colo.
2009)(same);

Garcia

v.

United

States,

538

F.Supp.

814,

816

(S.D.Tex. 1982) (a damages claim under § 1343(a)(3) may not be
brought against federal officials in their official capacity);
Black v. U.S., 388 F.Supp. 805, 808 (E.D.N.Y. 1975)(§ 1343 does not
waive immunity from suit upon a claim that IRS agents used illegal
tactics to drive a tax preparer out of business).
C.

The Constitution

As

mentioned,

Constitution

in

his

plaintiff

also

recitation

of

makes

reference

jurisdiction

to

the

authorities.

However, “[t]he Constitution itself does not contain a waiver of
sovereign immunity.”

Merida Delgado, 428 F.3d at 919; Garcia v.

United States, 666 F.2d 960, 966 (5th Cir.) cert. denied, 459 U.S.
832 (1982); Smith, 643 F.Supp.2d at 1291; Rzayeva v. U.S., 492
F.Supp.2d 60, 72 (D.Conn. 2007); Manstream v. U.S. Dept. Of
Agriculture, 649 F.Supp. 874, 883 (M.D.Ala. 1986); Sellers v. U.S.,

9

569 F.Supp. 1149, 1154 (N.D.Ga. 1983).
D.

Governmental action

Plaintiff argues that he should be excused from administrative
exhaustion requirements because the government has failed to follow
procedures

set

forth

in

the

Internal

compliance with 26 U.S.C. § 6751.3

Revenue

Code,

such

as

Plaintiff does not cite any

authority which holds that alleged noncompliance with governmental
laws or regulations is sufficient to satisfy the requirement of an
explicit waiver of sovereign immunity.

The requirement of an

explicit waiver is itself so clear that the court should not imply
an exception to the rule.
V.

Conclusion
For the above-stated reasons, it appears to the court that

plaintiff’s

complaint

should

be

dismissed

sovereign immunity/lack of jurisdiction.

on

the

grounds

of

Since this conclusion

rests to some extent upon material outside the pleadings which
substantiates that plaintiff has not filed a claim for refund or
other administrative claim necessary to eventually bring a judicial
challenge against the United States, this matter is arguably more
aptly framed as a motion for summary judgment.
3

See Ramer v. U.S.,

Section 6751 requires that a notice of a penalty include
certain information including the section of the title under which
the penalty is imposed and a computation of the penalty. Section
6751 also requires that no penalty be assessed unless the initial
determination of the assessment is personally approved by the
immediate supervisor of the individual making such determination or
some other designated higher level official.
10

620 F.Supp.2d 90, 99-100 (D.D.C. 2009). Consequently, the court
shall grant plaintiff twenty days from the date of this order to
present any other material pertinent to defendant’s motion.

The

government will be granted ten days to respond to any material
presented by defendant.

Then the court will make a final decision

upon the government’s motion to dismiss.
IT IS SO ORDERED.
Dated this 7th day of July, 2011 at Topeka, Kansas.
s/Richard D. Rogers
United States District Judge

11