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Lyubov Rusu-Carp v. Internal Revenue Service

November 14, 2011


The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge


Presently before the court is defendant's motion to dismiss plaintiff's action for lack of subject matter jurisdiction, filed pursuant to Federal Rule of Civil Procedure 12(b)(1).*fn1

The court heard this matter on its law and motion calendar on October 27, 2011. (Minutes, Oct. 27, 2011, Dkt. No. 11.) Attorney William C. Hankla appeared on behalf of defendant. Plaintiff, who is proceeding without counsel, appeared on her own behalf.

The undersigned has considered the briefs, oral arguments, and appropriate portions of the record in this case and, for the reasons stated below, grants defendant's motion to dismiss without prejudice and, out of an abundance of caution, grants plaintiff leave to file a first amended complaint. Although plaintiff failed to plead facts sufficient to defeat certain jurisdictional bars to her tax-related lawsuit, plaintiff is granted leave to amend so that she may attempt to allege facts sufficient to overcome the jurisdictional defects.


Plaintiff filed her complaint on April 28, 2011, and her complaint appears to seek injunctive relief and declaratory relief relative to a tax assessment imposed on her by the Internal Revenue Service ("IRS"). Plaintiff alleges that defendant has wrongfully assessed a $14,000 tax liability against her individually for tax year 1994, "regardless of Statue [sic] of limitation." (See Compl. at 1, Dkt. No. 1.) Plaintiff asks the court to: (1) "dismiss alleged tax liability for the periods of 12/1994 against [her]"; (2) "bring [her] account to $00.00 balance as it is on her husband's account" with whom she filed a joint tax return for the 1994 tax year; and (3) "refund any payments made or withheld tax refunds." (See id. at 2.)

Plaintiff alleges that since 2008,*fn2 the IRS has improperly alleged that plaintiff owes $14,000 in back taxes. (Compl. at 1.) Plaintiff further alleges that the IRS issued a "liability letter" to her in her maiden name-Lyubon Litvinyuk-but that since 1991 she has always filed taxes jointly with her husband, Lazar Rusu-Carp. (Id.) Plaintiff contends that during 1994, she had no income other than that which her husband provided for the 1994 tax year. (Id.) Plaintiff alleges that she obtained an IRS transcript detailing tax amounts owed, which reflects no tax liability whatsoever for her husband but does not indicate how plaintiff's own liability of $14,000 was determined.*fn3 (Id.)

Plaintiff avers that she has visited her local IRS field office, made "several attempts to reason with the representatives of the North Highlands office," and met with an "IRS representative from the department of Assessment/Bankruptcy." (Compl. at 1.) Plaintiff alleges that at the suggestion of an IRS branch representative, she filed for "Innocent Spouse Relief." (Id.) She alleges that when she threatened to file a federal lawsuit, the IRS representative "assured" plaintiff that she would obtain faster resolution of the disputed tax issue by seeking "Innocent Spouse Relief" because "there is no liability on [her] husband and [she] did not have any income in 1994." (Id.) The IRS subsequently denied plaintiff's request for innocent spouse relief.*fn4 (Id. at 2.) Meanwhile, in August 2009, plaintiff's bank account was levied by the IRS. (Compl. at 1.) Plaintiff alleges that although the IRS offered to permit her to make $80 per month installment payments, plaintiff cannot afford those payments. (Id. at 2.) She alleges that the IRS's actions "have inflicted . . . tremendous trauma and pressure on [her] physical and mental health, [her] family and marriage. (Id.)


A motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) or 12(h)(3) challenges the court's subject matter jurisdiction. Federal district courts are courts of limited jurisdiction that "may not grant relief absent a constitutional or valid statutory grant of jurisdiction," and "[a] federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." A-Z Int'l v. Phillips, 323 F.3d 1141, 1145 (9th Cir. 2003) (citations and quotation marks omitted); see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject matter jurisdiction, the court must dismiss the action."). When ruling on a motion to dismiss for lack of subject matter jurisdiction, the court takes the allegations in the complaint as true. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). However, the court is not restricted to the face of the pleadings and "may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988), cert. denied, 489 U.S. 1052 (1989); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) ("A jurisdictional challenge under Rule 12(b)(1) may be made either on the face of the pleadings or by presenting extrinsic evidence."). "When subject matter jurisdiction is challenged under Federal Rule of Procedure 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion." Tosco Corp. v. Communities for a Better Env't., 236 F.3d 495, 499 (9th Cir. 2001) (per curiam), abrogated on other grounds by Hertz Corp v. Friend, 130 S. Ct. 1181 (2010); see also Colwell v. Dep't of Health & Human Servs., 558 F.3d 1112, 1121 (9th Cir. 2009) ("In support of a motion to dismiss under Rule 12(b)(1), the moving party may submit 'affidavits or any other evidence properly before the court . . . . It then becomes necessary for the party opposing the motion to present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction." (citation omitted, modification in original)).

To confer subject matter jurisdiction in an action against a sovereign, there must exist (1) "statutory authority vesting a district court with subject matter jurisdiction," and (2) "a waiver of sovereign immunity." Alvarado v. Table Mountain Rancheria, 509 F.3d 1008, 1016 (9th Cir. 2007). Because the United States is a sovereign, it is immune from suit unless it has expressly waived its immunity and consented to be sued. See Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1087-88 (9th Cir. 2007). The United States Supreme Court has "frequently held . . . that a waiver of sovereign immunity is to be strictly construed, in terms of scope, in favor of the sovereign." Dep't of the Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999). Moreover, the waiver cannot be implied, but must be "unequivocally expressed" in the statutory text. Id.; accord Harger v. Dep't of Labor, 569 F.3d 898, 903 (9th Cir. 2009). The party asserting a waiver of sovereign immunity bears "the burden of establishing that its action falls within an unequivocally expressed waiver of sovereign immunity by Congress. . . ." Dunn & Black, P.S., 492 F.3d at 1088.


A. Plaintiff's Claim for Declaratory Relief

Defendant moves to dismiss plaintiff's apparent claim for declaratory relief on the ground that the federal tax exception to the Declaratory Judgment Act bars this court from granting declaratory relief. (Def.'s Memo of P. & A. In Supp. of Mot. to Dismiss ("Def.'s Memo.") at 2-3, Dkt. No. 5, Doc. No. 5-1.) Defendant's correctly argues that the Declaratory Judgment Act, 28 U.S.C. ...

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