Moreland v. Internal Revenue Service

Filing 10

MEMORANDUM AND ORDER granting 5 the government's Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge J. Thomas Marten on 9/17/2013. Mailed to pro se party Roy Melvin Moreland by regular mail. (mss)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ROY MELVIN MORELAND,
Plaintiff,
v.

Case No. 13-cv-1224-JTM-KMH

INTERNAL REVENUE SERVICE,
Defendant.
MEMORANDUM AND ORDER
The court has before it defendant United States of America’s Motion to Dismiss
(Dkt. 5).1 After reviewing the parties’ briefs and the evidence submitted with them, the
court grants the motion for the following reasons.
Plaintiff Roy Melvin Moreland is a resident of Augusta, Kansas. Moreland owns
numerous items of tangible and intangible property located within the State of Kansas.
Defendant United States of America has filed three tax liens on property owned by
Moreland, evidenced by three “Notice of Federal Tax Lien” forms that were filed by the
defendant with the Register of Deeds in Butler County, Kansas. Based on these three
liens, Moreland has $92,639.71 in federal income taxes assessed against him.
On June 10, 2013, Moreland filed this case against the United States of America
alleging the Internal Revenue Service’s instruments are procedurally and substantively
incorrect and are without merit. On August 9, 2013, the United States moved for
1Plaintiff Roy Melvin Moreland, appearing pro se, named the Internal Revenue Service as the defendant in
this case. the IRS is not proper party in this suit. The IRS, as an agency of the United States, cannot be
sued eo nomine (“by the name”), absent the express consent of Congress. See Blackmar v. Guerre, 342 U.S.
512, 514–15 (1952). The court construes his complaint liberally and substitutes the United States of
America as the defendant.

dismissal of the complaint on numerous grounds, including this court’s lack of subject
matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1).
Legal Standard
The plaintiff has the burden to establish that subject matter jurisdiction is proper.
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S. Ct. 1673 (1994). A plaintiff
suing in a federal court must show in his pleading, affirmatively and distinctly, the
existence of whatever is essential to federal jurisdiction, and, if he does not do so, the
court, on having the defect called to its attention or on discovering the same, must
dismiss the case unless the defect can be corrected by amendment. Smith v. McCullough,
270 U.S. 456, 459, 46 S. Ct. 338 (1926).
Analysis
The government argues Moreland has failed to allege a waiver of sovereign
immunity by the government and has therefore failed to set forth allegations sufficient
to establish federal subject matter jurisdiction. In Moreland’s complaint, he contends
that this court’s jurisdiction to hear his claim is based on the Administrative Procedure
Act (“APA”), 5 U.S.C. § 702 et seq.2
The United States is a sovereign and may not be sued without its consent, and
the terms of its consent define the court’s jurisdiction. United States v. Nordic Village, 503
U.S. 30, 34 (1992). A waiver of sovereign immunity may not be implied, but must be
2In his response, Moreland cites 28 U.S.C. § 1346(a) as a jurisdictional basis for his claim. That statute
operates in conjunction with 26 U.S.C. § 7422 to provide a limited waiver of sovereign immunity in tax
refund suits only when the plaintiff has paid the full amount of the tax and followed certain specific
procedures (such as filing an administrative refund claim). United States v. Dalm, 494 U.S. 596, 601 (1990);
see also United States v. Williams, 514 U.S. 527, 531–32 (1995). Moreland has not paid the tax at issue and is
not seeking a refund in this matter, so § 1346 is not applicable.

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unequivocally expressed. United States v. King, 395 U.S. 1, 4 (1969). Federal statute may
waive sovereign immunity. Bruno v. United States, 547 F.2d 71, 73 (8th Cir. 1976).
However, no suit may be maintained against the sovereign unless the suit is brought in
exact compliance with the terms of a statute under which the sovereign has consented
to be sued. United States v. Sherwood, 313 U.S. 584, 586 (1941). The party bringing the
suit has the burden of showing a waiver of sovereign immunity. Fostvedt v. United
States, 978 F.2d 1201, 1203 (10th Cir. 1992). Moreland has not met his burden.
The Tenth Circuit has already foreclosed on using 5 U.S.C. § 702 as a basis for
jurisdiction in this type of case:
The Administrative Procedure Act itself is not a grant of jurisdiction for
the review of agency actions. Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct.
980, 984, 51 L.Ed.2d 192 (1977). The language of this section and the
amendments thereto merely suggest that sovereign immunity will not be a
defense in an action in which jurisdiction already exists. Watson v.
Blumenthal, 586 F.2d 925, 932 (2d Cir. 1978); Lee v. Blumenthal, 588 F.2d
1281, 1283 (9th Cir. 1979). Section 702 by its very terms disclaims any
“authority to grant relief if any other statute that grants consent to suit
expressly or impliedly forbids the relief which is sought.” 5 U.S.C. §
702(2). . . . Congress has provided express methods by which proposed
deficiencies, assessments, or collections of taxes may be challenged, and
express prohibition in the Anti–Injunction Act, 26 U.S.C. § 7421(a) against
suits brought for the purpose of restraining the assessment or collection of
any tax except in the prescribed manner.
Lonsdale v. United States, 919 F.2d 1440, 1444 (10th Cir. 1990).
As was mentioned in Lonsdale, Moreland’s requests for releasing tax liens filed or
levies made against him are prohibited by the Anti-Injunction Act, which provides that
“no suit for the purpose of restraining the assessment or collection of any tax shall be
maintained in any court by any person.” 26 U.S.C. § 7421(a). The purpose of the Anti3

Injunction Act is to protect the “Government’s need to assess and collect taxes as
expeditiously as possible with a minimum of pre-enforcement judicial interference, ‘to
require that the legal right to disputed sums to be determined in a suit for refund,’
[citations omitted],” and to protect “the collector from litigation pending in a suit for
refund.” Bob Jones Univ. v. Simon, 416 U.S. 725, 736–37 (1974); Enochs v. Williams
Packing & Navigation Co., 370 U.S. 1, 8 (1962) (the goal of the statute is to avoid
suspending the collection of taxes). The Act appears to have been enacted with a case
such as this in mind.
Although statutory and judicial exceptions to the Anti-Injunction Act exist,
Moreland’s complaint does not qualify for either. Section 7421(a) provides that its rule
barring tax injunctions applies “[e]xcept as provided in sections 6015(e), 6212(a) and (c),
6213(a), 6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), 7426(a) and (b)(1), 7429(b),
and 7436.” Moreland does not allege that any of these statutory exceptions apply to this
case.
The judicial exception is applicable only where the government has no chance of
success on the merits and the taxpayer has no other remedy available to avoid
irreparable harm. Bob Jones Univ., 416 U.S. at 746–748. Regardless of the government’s
chances on the merits, Moreland fails to qualify for the judicial exception because he has
other legal remedies available. Once he has filed the proper claims and otherwise
complied with the requirements of 26 U.S.C. §§ 7432 or 7433, Moreland may sue for
damages or refund. Additionally, the Internal Revenue Code provides an
administrative remedy for a taxpayer who wishes to contest the validity or amount of
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any tax assessment by the IRS. Before the IRS can engage in any action to collect an
assessment or enforce a tax lien or levy against a taxpayer’s property, the IRS must
provide notice of its intention to the taxpayer and allow the taxpayer an opportunity to
request a CDP (collection due process) hearing. See 26 U.S.C. § 6330(b). When a
taxpayer requests a CDP hearing, the IRS must immediately halt all collection and
enforcement activities until the IRS Office of Appeals rules on the taxpayer’s claim. 26
U.S.C. § 6330(e). If the taxpayer is displeased with the IRS’s decision after these
procedures are completed, the taxpayer may appeal the ruling to the U.S. Tax Court or,
in some cases, to the U.S. District Court. This is the only mechanism for a taxpayer to
challenge a tax assessment unless the taxpayer fully pays the taxes and files a claim for
refund. 26 U.S.C. § 7422(a); 28 U.S.C. § 1346(a)(1); United States v. Dalm, 494 U.S. 596
(1990).
Moreland has not alleged that any of these actions took place. The AntiInjunction Act bars this suit, as Moreland has other legal remedies available. Similarly,
the declaratory relief Moreland seeks—e.g., a determination that the assessments were
erroneous and that his property is not subject to levy—is barred by the Declaratory
Judgment Act, 28 U.S.C. § 2201, which prohibits declaratory judgments “with respect to
federal taxes.” See Ambort v. United States, 392 F.3d 1128, 1140 (10th Cir. 2004).
For all of the reasons above, the court has no subject matter jurisdiction over
Moreland’s claims. The case is dismissed.

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IT IS THEREFORE ORDERED this 17th day of September, 2013, that the
government’s motion to dismiss (Dkt. 5) is granted.

s/J. Thomas Marten
J. THOMAS MARTEN, JUDGE

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