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EDWARDS v. INTERNAL REVENUE SERVICE

December 30, 2005.

SHARON DE EDWARDS, M.D., Plaintiff,
v.
INTERNAL REVENUE SERVICE, et al., Defendants.



The opinion of the court was delivered by: PHYLLIS HAMILTON, District Judge

ORDER GRANTING MOTION TO DISMISS

Before the court is the motion of defendants Internal Revenue Service and United States of America to dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby GRANTS the motion for the following reasons.

BACKGROUND

  Plaintiff Sharon De Edwards is a physician in private practice. She filed this action on November 29, 2004, against the Internal Revenue Service ("IRS"), seeking declaratory and injunctive relief, and also seeking damages. Plaintiff alleges that prior to 1997, she owed approximately $78,000 in federal taxes, penalties, and interest. She claims that starting in 1997 the IRS began levying on her bank accounts and on health plans that owed her money for professional services, without providing her with a deficiency notice prior to each assessment, in violation of 26 U.S.C. §§ 6212(a) and 6313(a).*fn1 She asserts that as of the time of the filing of the complaint, the IRS had executed levies in the amount of $196,029.80.

  She alleges that the IRS has refused to stop the levies, despite the fact that the amount collected now exceeds the amount of her tax liability, and despite the fact that she has requested on numerous occasions that the levies cease. She claims that the IRS has also refused to provide her with an accounting of how the money collected has been applied.

  Defendants seek an order dismissing the complaint for lack of subject matter jurisdiction.

  DISCUSSION

  A. Legal Standard

  The term "subject-matter jurisdiction" refers to the court's authority over the category of the claim in suit. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999). Subject matter jurisdiction is fundamental and cannot be waived. Billingsly v. C.I.R., 868 F.2d 1081, 1085 (9th Cir. 1989). It must be established as a threshold matter, inflexibly and without exception. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998). The burden of establishing federal jurisdiction rests on the party seeking to invoke it. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994).

  Federal district courts are courts of limited jurisdiction. In most cases, there must be both constitutional and statutory authority for a federal court to act. Id. When suit is brought against the United States, an additional threshold question arises — that is, whether the action is barred by sovereign immunity. See F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994). Without a waiver of that immunity, there can be no jurisdiction over the claim in any court. Id. Moreover, when the United States consents to be sued, the terms of its waiver of sovereign immunity precisely define the extent of the court's jurisdiction. United States v. Mottaz, 476 U.S. 834, 841 (1986).

  B. Defendants' Motion

  Defendants submit that plaintiff's intent, as reflected in the complaint, is to seek damages from the IRS and from the United States. They argue, however, that the IRS must be dismissed from the case because it lacks the capacity to be sued.

  Defendants also assert that the claims against the United States should be dismissed because plaintiff fails to allege any waiver of the United States' sovereign immunity, because plaintiff failed to file an administrative claim for a refund pursuant to the Internal Revenue Code, because the federal courts lack jurisdiction over any suit seeking a declaratory judgment with respect to federal taxes, and because plaintiff's suit does not fall within the exceptions to the Anti-Injunction Act.

  Plaintiff concedes that the court lacks subject matter jurisdiction, and requests, in lieu of dismissal, that the court transfer the action to the United ...


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