JOHN C. HOM, JOHN C. HOM & ASSOCIATES, INC., Plaintiffs,
UNITED STATES OF AMERICA, Defendant.
ORDER GRANTING MOTION TO DISMISS
WILLIAM ALSUP, District Judge.
In this action against the United States for unauthorized disclosures of plaintiffs' tax information, defendant moves to dismiss the complaint or alternatively moves for a more definite statement. To the extent stated below, defendant's motion to dismiss is GRANTED.
Pro se plaintiffs John C. Hom and John C. Hom & Associates, Inc. filed this action for damages for violations of 26 U.S.C. 6103 in May 2013. Plaintiffs are seeking $40, 874, 000 in damages and "at least" $500, 000 in punitive damages (Dkt. No. 1 at 21-22). Defendant United States now moves to dismiss or alternatively moves for a more definite statement under FRCP 12(b)(6) (Dkt. No. 13).
Plaintiffs' complaint alleges that the IRS conducted an investigation of plaintiffs' tax returns. The IRS then opened a Foreign Bank Account Report ("FBAR") investigation under 31 U.S.C. 5314 because it discovered Hom's online gambling activity and use of foreign bank accounts (Dkt. No. 1 at 2). Plaintiffs allege that tax return information, discovered during the tax return investigation, was inappropriately disclosed for the purpose of the FBAR investigation.
Failure to state a claim is grounds for dismissal under FRCP 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). FRCP 8(a) requires "a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to give the defendant fair notice of what the... claim is and the grounds upon which it rests.'" Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). At a minimum, a plaintiff must provide "the grounds' of his entitle[ment] to relief' [which] requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Ibid. To ensure that pro se litigants do not lose their right to a hearing on the merits because of a technical procedural requirement, our court of appeals construes pro se pleadings liberally. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
1. UNAUTHORIZED DISCLOSURE UNDER SECTION 6103.
Plaintiffs are authorized to file this suit under 26 U.S.C. 7431. Plaintiffs argue that, under 26 U.S.C. 6103, the use of information discovered in the tax return investigation cannot be used for an FBAR investigation. Section 6103(a) states:
[r]eturns and return information shall be confidential, and except as authorized by this title -
(1) no officer or employee of the United States... shall disclose any return or return information obtained by him in any manner in connection with his services as such an employee or otherwise or under the provisions of this section....
Defendant's motion to dismiss argues that Section 6103(h)(1) provides an exception that allows such a disclosure:
[r]eturns and return information shall, without written request, be open to inspection by or disclosure to officers and employees of the Department of the Treasury whose official duties require such ...