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Maxwell v. O'Neill

September 12, 2002


The opinion of the court was delivered by: Henry H. Kennedy, Jr., United States District Judge


Plaintiff Lawrence Stephen Maxwell ("Maxwell") and approximately 561 other similarly situated individuals and entities bring this action against defendant Secretary of the Treasury, Paul O'Neill. *fn1 Plaintiffs seek declaratory and injunctive relief under various statutory and constitutional provisions for defendant's alleged unlawful withholding and/or maintenance of certain tax records and defendant's alleged unlawful taxation of plaintiffs. Before the court is defendant's motion to dismiss or for summary judgment. Upon consideration of the motion, the opposition thereto, and the summary judgment record, the court concludes that defendant's motion must be granted in part and denied in part.


On June 9, 2000, plaintiff Maxwell sent a ten-page letter to the Internal Revenue Service ("IRS") National Office of Disclosure seeking disclosure of tax-related information for the tax years 1987 to 2000. Maxwell sought disclosure of at least nineteen different types of information pertaining to him, including, but not limited to: (1) "return information;" (2) records "that determined that [Maxwell] was subject to the enforcement authority of the United States Department of the Treasury pursuant to some specific statute;" (3) records showing that Maxwell "ever received any income from . . . any federal source;" (4) records showing that Maxwell is "a citizen of the United States;" and (5) records showing that Maxwell "resided or worked within one of the specified areas of federal jurisdiction of the United States government." Def.'s Mot. Ex. A. The letter was framed as a request under Section 6103 of the Internal Revenue Code, 26 U.S.C. § 6103 ("Section 6103" or "§ 6103"), which provides that "tax return information" "shall, upon written request, be open to inspection by or disclosure to" the individual who filed the return. 26 U.S.C. § 6103(e)(1)(A)(i).

The other plaintiffs to this action also sent letters to the IRS which were identical to Maxwell's in all relevant respects. See Wayne A. Paul, et al. v. Paul O'Neill, Second Am. Original Compl. ("Paul, Second Compl.") at 106. With regards to their request for "return information," plaintiffs cited the definition of "return information" provided in Section 6103 verbatim, see id. at (b)(1), (2), and also cited the D.C. Circuit's decision, Lake v. Rubin, 162 F. 3d 113 (D.C. Cir. 1998). Plaintiffs relied on Lake for the proposition that "individuals seeking 'return information' . . . must do so pursuant to § 6103 . . . rather than the Privacy Act." 162 F.3d at 116. In Lake, the plaintiffs alleged that the IRS violated the Privacy Act by failing to disclose certain tax information about the plaintiff class. Maxwell was a member of the class in Lake and actively participated in the litigation.

After sending their identical requests to the IRS, Maxwell and the other plaintiffs received identical responses from the agency. See Paul, Pls.' Resp. to Def.'s Mot. to Dismiss at 28 n. 2. In a letter to each plaintiff, the IRS stated that it was responding to "your Freedom of Information/Privacy Act" request and stated that "[c]onsidering the breadth of your request and the burden searches of this magnitude place on restricted IRS sources, you are required to follow our published procedures for making a request under the Privacy Act of 1974." Def.'s Mot. Ex. B at 1. The letter then directed each recipient to the provisions of the Code of Federal Regulations setting forth these procedures. In addition, the IRS noted that if the request sought documents concerning one's personal liability to pay federal income taxes, it would not constitute a request for existing documents but instead a "request for the creation of personalized statements regarding your tax liability." Id. Finally, the letter noted that the Sixteenth Amendment to the United States Constitution authorizes the collection of federal income taxes, and that the Freedom of Information Act is "not a vehicle that can be used to challenge these legal requirements." Id. at 2.

Symeria R. Roscoe, Program Analyst for the IRS Freedom of Information division, also responded to Maxwell's request in a letter sent July 21, 2000. Roscoe's letter stated that it was in response to Maxwell's "Freedom of Information Act request." The letter informed Maxwell that IRS headquarters did not maintain centralized files concerning taxpayers and that any records regarding IRS action taken in reference to Maxwell could be found at the IRS "Service Center or District Office in which such action took place or where you filed your income tax returns." Def.'s Ex. C. The letter then advised Maxwell that if he wished to obtain IRS documents relating to him, he should forward his request to the appropriate Service Center or District Office together with evidence of his identity and a statement of his willingness to pay any fees. See id.

After receiving these responses from the IRS, plaintiffs filed suit in this court, seeking various forms of declarative and injunctive relief. Plaintiffs request that the court: (1) enjoin the IRS from withholding the tax records they seek and declare that such withholding violates Section 6103; (2) enjoin the IRS from maintaining other tax records and declare that the maintenance of such records violates the Privacy Act; (3) declare that plaintiffs are not citizens of the United States and do not reside or work therein; (4) declare that Texas is not a part of the United States; and (5) declare that the United States "is not a Republican form of government as required by the Constitution . . . and must therefore be abolished." Pl.'s Compl. at 20; Paul, Second Compl. at 112-116.

Defendant now moves to dismiss or in the alternative for summary judgment. Defendant argues that the court lacks subject matter jurisdiction under Section 6103 to compel the disclosure of the information plaintiffs request, and that the information cannot be disclosed under the Freedom of Information Act, 5 U.S.C. § 552 ("FOIA") because plaintiffs failed to make a proper FOIA request and failed to exhaust their administrative remedies.


A. Standard of Review

Under Federal Rule of Civil Procedure 56, summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue of material fact in dispute and that the movant is entitled to judgment as a matter of law. Facts "that might affect the outcome of the suit under the governing law" are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The non-movant's opposition must consist of more than mere unsupported allegations or denials and must be supported by affidavits or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56 (e); Celotex Corp. v. Catrett, 477 U.S. 317 (1986). The non-movant's evidence must be of a nature "that would permit a reasonable jury to find" in its favor. Laningham v. Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987). Evidence that is "merely colorable" or "not significantly probative" is not sufficient to sustain a grant of summary judgment. Anderson, 477 U.S. at 249-50.

B. Subject Matter Jurisdiction

Defendant argues that § 6103 does not supersede the FOIA and therefore does not serve as an independent means of establishing this court's subject matter jurisdiction. Plaintiffs argue that § 6103 does provide jurisdiction as it is the sole vehicle for obtaining the kind of information they seek. Plaintiffs base this argument upon the D.C. Circuit's statement in Lake that § 6103 "represents the exclusive statutory route for taxpayers to gain access to their return information," 162 F.3d at 115-16, citing Cheek v. IRS, 70 ...

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