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Donald R. Huene v. U.S. Department of the Treasury

May 11, 2012


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


Presently before the court is defendant Internal Revenue Service's ("IRS") motion for judgment on the pleadings, which seeks the dismissal of plaintiff's claims on the grounds that plaintiff failed to state a claim on which relief can be granted (Dkt. No. 23).*fn1 Plaintiff opposes the IRS's motion (Dkt. No. 32).

Because oral argument would not materially aid the resolution of the pending motion, this matter is submitted on the briefs and record without a hearing. See Fed. R. Civ. P. 78(b); E. Dist. Local Rule 230(g). The undersigned has considered the briefs and appropriate portions of the record in this case and, for the reasons stated below, recommends that the IRS's motion be granted in part and denied in part.


Generally, plaintiff's complaint concerns the actions of the IRS and its agents in connection with a continuing tax audit of plaintiff. Plaintiff alleges that the IRS had "previously ordered Plaintiff for examinations of scheduled [sic] F filings on numerous occasions," and "decided to renew their examination." (Compl. ¶ 7.) Plaintiff alleges that on December 14, 2010, he "granted permission for Richard Holland and Necia Wollerman to represent [him] and they were given power of attorney to contact and complete the audit." (Id.) Plaintiff identifies Hollerman as a certified public accountant (see id. ¶ 10), but it is unclear who is Wollerman and what roles he or she played in the events alleged in the complaint.

Plaintiff alleges that two agents of the IRS, defendant Anthony Shelly and Siu Chan, requested voluminous records in connection with the audit. (See Compl. ¶¶ 6, 8.) Plaintiff alleges that because of the volume of documents at issue, he ultimately decided to represent himself before the IRS. (Id. ¶ 8.) Accordingly, plaintiff alleges that he advised the IRS, through a letter to Chan dated April 7, 2011, that Holland was no longer representing plaintiff, that the power of attorney previously granted to Holland had been rescinded, that plaintiff would be representing himself, and that plaintiff should be the only person contacted by the IRS in connection with the audit. (See id. ¶¶ 8-9.)

Plaintiff alleges that on or about June 6, 2011, he received an e-mail from Holland indicating that Holland had been contacted by Shelly, and further alleges that Shelly did not advise plaintiff of that contact. (Compl. ¶ 10.) Plaintiff alleges that in response to Shelly's contact with Holland, plaintiff again advised the IRS, in a letter dated June 7, 2011, that plaintiff had completely rescinded Holland's authority to represent plaintiff, that plaintiff was representing himself, that plaintiff had found out about Shelly's contact with Holland, and that plaintiff was being billed by Holland for Shelly's unauthorized contact with Holland. (See id. ¶ 11.) Plaintiff asserts that the letter characterized Shelly's contact with Holland as a violation of Internal Revenue Code § 6103(a), which designates tax returns and return information as confidential and restricts the disclosure of such information.*fn2 (Id.)

Plaintiff alleges that he subsequently sent a letter to Shelly in which plaintiff stated that if Shelly's contact or contacts with Holland were merely a mistake, plaintiff would accept an apology, sent within five days, explaining such inadvertent contact. (Compl. ¶ 14.) Plaintiff suggests that he advised Shelly that Shelly's failure to timely respond to plaintiff's letter would confirm for plaintiff that Shelly's contact or contacts with Holland, and any related disclosures of information, constituted "willful, wanton, and malicious" disclosures of tax information in violation of Internal Revenue Code § 6103(a). (Compl. ¶ 14.) Shelly allegedly never responded. (Id. ¶ 15.)

Plaintiff alleges that despite his previous letters, Shelly directly contacted Holland again on July 6, 2011. (Compl. ¶ 16.) Plaintiff alleges that in a letter dated July 11, 2011, he again informed Shelly of Shelly's willful and malicious conduct that constituted a "serious breach of the law." (Id. ¶ 17.) Plaintiff alleges that his letter advised Shelly, yet again, that plaintiff was being billed by Holland for Shelly's unauthorized contacts with Holland, all of which did nothing to resolve the underlying tax issues. (See id. ¶¶ 17-18.)

Plaintiff alleges that despite his myriad letters to the IRS, Shelly "nonetheless continued to contact" Holland knowing that such contact was not authorized and that plaintiff was being billed for Holland's time. (See Compl. ¶ 19.) Plaintiff alleges that Shelly's continued, unauthorized contacts with Holland constituted not only a violation of Internal Revenue Code § 6103(a), but also a violation of plaintiff's rights secured by the Fourth Amendment to the United States Constitution. (Id. ¶¶ 19, 31.) He further alleges that Shelly's unlawful contacts caused him "monetary and time damages" and "adverse and harmful effects" including mental distress, emotional distress, embarrassment, and humiliation. (Id. ¶¶ 23, 28.)

Plaintiff filed his complaint on August 5, 2011, naming the IRS and Shelly as defendants. Plaintiff identifies three claims for relief and seeks injunctive relief, declaratory relief, and damages. First, plaintiff alleges that defendants' denial of plaintiff's access to plaintiff's tax records violated the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, and the Privacy Act, 5 U.S.C. § 552a. (Compl. ¶ 26.) Second, plaintiff alleges that defendants' dissemination of plaintiff's private tax information to third parties without plaintiff's consent or authorization violated the Privacy Act. (Id. ¶¶ 27-28.) Finally, plaintiff alleges a claim pursuant to 42 U.S.C. § 1983, asserting that defendants violated his Fourth Amendment rights. (Id. ¶¶ 29-32.)

Meanwhile, on June 8, 2011, plaintiff filed a second lawsuit entitled Huene v. IRS, 2:11-cv-02109 JAM KJN PS (E.D. Cal.) ("Huene I"), in which plaintiff asserts a single claim for relief pursuant to FOIA. In Huene I, plaintiff seeks the release of records in the IRS's possession that are responsive to FOIA requests served by plaintiff.


Federal Rule of Civil Procedure 12(c) authorizes a party to move for judgment on the pleadings. "A judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law." Ventress v. Japan Airlines, 603 F.3d 676, 681 (9th Cir. 2010) (citation and quotation marks omitted). When a party uses a motion for judgment on the pleadings to raise the defense of failure to state a claim, the motion "faces the same test as a motion under Rule 12(b)(6)." McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988); accord Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) ...

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