United States District Court, E.D. California
ORDER AND FINDINGS AND RECOMMENDATIONS
GREGORY G. HOLLOWS UNITED STATES MAGISTRATE JUDGE
Plaintiff
is proceeding in this action pro se and has paid the filing
fee. Presently pending before the court are various motions,
including plaintiff’s “motion for summary
judgment, ” filed January 15, 2016, Anata Management
Solutions’ (“Anata”) motion to dismiss,
filed January 20, 2016, the United States’ motion to
dismiss, filed March 24, 2016, and plaintiff’s motion
to prevent the U.S. Attorney from representing the Internal
Revenue Service (“IRS”) and to require this
entity to secure its own counsel, filed April 8, 2016. Having
reviewed all filings in support and in opposition to these
motions, the undersigned now issues the following order and
findings and recommendations.[1]
BACKGROUND
Plaintiff
is a taxpayer whose work for her former employer, Anata,
based in Utah, was performed in Eureka California for the
years 2010 through 2012.[2] The complaint alleges that Anata
intentionally, recklessly and fraudulently issued W-2 tax
forms which calculated plaintiff’s daily per diem
allowance for 2010 and 2012 as gross wages which were
taxable. (For whatever reason, plaintiff does not claim any
refund is due for tax year 2011). Plaintiff asserts that her
per diem should not be taxable, and that she is owed a tax
refund from the IRS based on Anata’s misreporting.
Plaintiff has attached affidavits and amended tax forms. (ECF
No. 1 at 10-23.) She seeks damages from Anata for the
hardship and distress caused her by the IRS’ attempts
to collect taxes on her allegedly non-taxable daily per diem,
and she seeks a tax refund from the IRS for tax years
2010[3]
and 2012, as well as punitive damages.
DISCUSSION
I.
Legal Standards
A.
Rule 12(b)(1) - Subject Matter Jurisdiction
On a
Rule12(b)(1) motion to dismiss for lack of subject matter
jurisdiction, plaintiff bears the burden of proof that
jurisdiction exists. See, e.g., Sopcak
v. Northern Mountain Helicopter Serv., 52 F.3d 817, 818
(9th Cir.1995); Thornhill Pub. Co. v. General Tel. &
Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979).
Different standards apply to a 12(b)(1) motion, depending on
the manner in which it is made. See, e.g.,
Crisp v. U.S., 966 F.Supp. 970, 971-72 (E.D. Cal.
1997).
First,
if the motion attacks the complaint on its face, often
referred to as a “facial attack, ” the court
considers the complaint’s allegations to be true, and
plaintiff enjoys “safeguards akin to those applied when
a Rule 12(b)(6) motion is made.” Doe v.
Schachter, 804 F.Supp. 53, 56 (N.D. Cal. 1992).
Presuming its factual allegations to be true, the complaint
must demonstrate that the court has either diversity
jurisdiction or federal question jurisdiction. For diversity
jurisdiction pursuant to 28 U.S.C. § 1332, plaintiff and
defendant must be residents of different states. For federal
question jurisdiction pursuant to 28 U.S.C. § 1331, the
complaint must either (1) arise under a federal law or the
United States Constitution, (2) allege a “case or
controversy” within the meaning of Article III, §
2, or (3) be authorized by a jurisdiction statute. Baker
v. Carr, 369 U.S. 186, 198, 82 S.Ct. 691, 699-700
(1962).
Second,
if the motion makes a “factual attack” on subject
matter jurisdiction, often referred to as a “speaking
motion, ” the court does not presume the factual
allegations of the complaint to be true. Thornhill,
594 F.2d at 733. In a factual attack, defendant challenges
the truth of the jurisdictional facts underlying the
complaint. “Faced with a factual attack on subject
matter jurisdiction, the trial court may proceed as it never
could under Rule 12(b)(6). . . . No presumptive truthfulness
attaches to plaintiff’s allegations, and the existence
of disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional
claims.” Id. (quotations and citation
omitted). The court may hear evidence such as declarations or
testimony to resolve factual disputes. Id.;
McCarthy v. United States, 850 F.2d 558, 560 (9th
Cir. 1988).[4]
B.
Rule 12(b)(6) - Failure to State a Claim
A
motion to dismiss brought pursuant to Federal Rule of Civil
Procedure 12(b)(6) challenges the sufficiency of the
pleadings set forth in the complaint. Vega v. JPMorgan
Chase Bank, N.A., 654 F.Supp.2d 1104, 1109 (E.D. Cal.
2009). Under the “notice pleading” standard of
the Federal Rules of Civil Procedure, a plaintiff’s
complaint must provide, in part, a “short and plain
statement” of plaintiff’s claims showing
entitlement to relief. Fed.R.Civ.P. 8(a)(2); see also
Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir.
2009). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id.
In
considering a motion to dismiss for failure to state a claim,
the court accepts all of the facts alleged in the complaint
as true and construes them in the light most favorable to the
plaintiff. Corrie v. Caterpillar, Inc., 503 F.3d
974, 977 (9th Cir. 2007). The court is “not, however,
required to accept as true conclusory allegations that are
contradicted by documents referred to in the complaint, and
[the court does] not necessarily assume the truth of legal
conclusions merely because they are cast in the form of
factual allegations.” Paulsen, 559 F.3d at
1071. The court must construe a pro se pleading liberally to
determine if it states a claim and, prior to dismissal, tell
a plaintiff of deficiencies in his complaint and give
plaintiff an opportunity to cure them if it appears at all
possible that the plaintiff can correct the defect. See
Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000)
(en banc); accord Balistreri v. Pacifica Police
Dep’t, 901 F.2d 696, 699 (9th Cir. 1990) (stating
that “pro se pleadings are liberally construed,
particularly where civil rights claims are involved”);
see also Hebbe v. Pliler, 627 F.3d 338, 342 &
n.7 (9th Cir. 2010) (stating that courts continue to construe
pro se filings liberally even when evaluating them under the
standard announced in Iqbal).
In
ruling on a motion to dismiss filed pursuant to Rule
12(b)(6), the court “may generally consider only
allegations contained in the pleadings, exhibits attached to
the complaint, and matters properly subject to judicial
notice.” Outdoor Media Group, Inc. v. City of
Beaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation
and quotation marks omitted). Although the court may not
consider a memorandum in opposition to a defendant’s
motion to dismiss to determine the propriety of a Rule
12(b)(6) motion, see Schneider v. Cal. Dep’t of
Corrections, 151 F.3d 1194, 1197 n.1 (9th Cir. 1998), it
may consider allegations raised in opposition papers in
deciding whether to grant leave to amend, see,
e.g., Broam v. Bogan, 320 F.3d 1023, 1026
n.2 (9th Cir. 2003).
II.
United States’ Motion to Dismiss
The
United States brings this motion for lack of subject matter
jurisdiction and for failure to state a claim in regard to
plaintiff’s third, fourth and fifth claims for relief
wherein she seeks a tax refund for years 2010 and 2012, and
punitive damages against the United States and the IRS.
A.
Subject Matter Jurisdiction
As set
forth in the standard above, if the court has no subject
matter jurisdiction, it has no authority to hear the case.
Here, there is no subject matter jurisdiction in regard to
the United States and the IRS.
A suit
for refund of taxes may only be brought against the United
States, 26 U.S.C. § 7422(f); Wiltgen v. United
States, 813 F.Supp. 1387, 1395 (D.Iowa 1992);
Brennan v. C.I.R., 581 F.Supp. 28, aff'd. 752
F.2d 187 (6th Cir.1984), and then only if the taxpayer has
actually paid the disputed tax. Flora v. United
States, 362 U.S. 145, 80 S.Ct. 630 (1960); Francis
v. United States, 715 F.Supp. 973 (D .Nev.1988).
The IRS
is not a proper party to this action which must be brought
against the United States. Furthermore, plaintiff has not
alleged that she has paid all of the taxes for tax year 2012
which is one of the years in dispute. In fact, in seeking
punitive damages, the complaint requests “the just
amount of what Plaintiff would have to pay to the Defendants,
and each of them, if Plaintiff refused to pay her
taxes….” The United States has submitted
evidence that in fact plaintiff has not paid her 2012 tax
bill in full. As of January 1, 2016, an Account Transcript by
the IRS indicates that she had a tax liability of $14, 112.57
plus interest and penalty for a total balance due of $17,
819.28. (ECF No. 20-2 at 1.) The United States’ Exhibit
1 may be considered with its motion to dismiss because the
government is mounting a factual attack on jurisdiction.
See McCarthy, 850 F.2d at 560. Plaintiff has failed
to submit evidence in opposition to satisfy her burden to
establish subject matter jurisdiction. See Savage v.
Glendale Union High School, 343 F.3d 1036, 1039 n. 2
(9th Cir. 2003). Therefore, any refund claim for the 2012 tax
year is dismissed for lack of jurisdiction.
Nor is
there jurisdiction over the United States for damages or
punitive damages pursuant to the doctrine of sovereign
immunity.[5][6] Plaintiff has failed to cite any statute
or provision of the Internal Revenue Code in support of her
claims against the United States; however, a limited
exception to sovereign immunity is contained in the Omnibus
Taxpayer's Bill of Rights, 26 U.S.C. § 7433, as
amended by the Internal Revenue Service Restructuring &
Reform Act of 1998, allowing taxpayers to recover civil
damages from the United States for unauthorized collection
activities, when IRS employees cause the damage through
reckless, intentional, or, as recently amended (effective
July 22, 1998), negligent disregard of the Internal Revenue
Code or regulations. The Taxpayer's Bill of Rights is the
exclusive remedy for alleged abuses involved in the
collection of taxes (even to the exclusion of FTCA and Bivens
claims). 26 U.S.C. § 7433(a). Section 7433 does not
permit a suit for damages by a taxpayer for improper
assessment of taxes. Shaw v. U.S., 20 F.3d 182, 184
(5th Cir.), cert. denied, 513 U.S. 1041 (1994). The Ninth
Circuit is in accord. See Miller v. U.S., 66 F.3d
220, 223 (9th Cir.1995) (“we align ourselves with the
Fifth Circuit”).
The legislative history of Section 7433 tells us that
“an action under this provision may not be based on
alleged ... disregard in connection with the determination of
tax.” Conf.Rep. No. 1104, 100th Cong., 2d Sess., at
229, reprinted in 1988-3 Internal Revenue Cum.Bull. 473, 719.
Taxpayers who wish to challenge the IRS' calculation of
their tax liability must file either a petition for
redetermination in the Tax Court, 26 U.S.C. §§
6213, 6214, or a refund action in the district court. 26
U.S.C. § 7422. Section 7433 was not intended to
supplement or supersede, or to allow taxpayers to circumvent,
these procedures.
Gonsalves v. I.R.S., 975 F.2d 13, 16 (1st Cir.
1992).
This
case does not present a claim of abuse or unauthorized
collection by an individual IRS employee. It presents only a
grievance requesting a tax refund based on plaintiff’s
misperception of the law concerning tax deductions for per
diem allowance. Since plaintiff is challenging only the
determination of the tax, the United States has not waived
its sovereign immunity and such a claim is not actionable.
B.
Failure to State a Claim Against the United States
Assuming
for the sake of argument that the court had subject matter
jurisdiction over any of plaintiff’s claims against the
United States, plaintiff has failed to state a claim on the
merits. This discussion is also warranted to address
plaintiff’s claims against Anata.
26
U.S.C. § 62(a)(2)(A) provides in part that adjusted
gross income consists of gross income minus deductions
consisting of expenses paid or incurred by the taxpayer for
work ...