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Turner v. United States

April 24, 2006


The opinion of the court was delivered by: John D. Bates United States District Judge


Before the Court is defendant's motion to dismiss the amended complaint of pro se plaintiffs Daniel E. Turner and Donna R. Turner, who -- evidently in a coordinated effort with dozens of other individuals from around the country who have initiated cases in this Court based on nearly identical filings -- assert that they are entitled to damages pursuant to the Taxpayer Bill of Rights ("TBOR") for alleged misconduct by the Internal Revenue Service ("IRS") in the collection of taxes. See 26 U.S.C. § 7433. Defendant's motion to dismiss is based upon, among other things, plaintiffs' alleged failure to pursue administrative remedies as required by 26 U.S.C. § 7433(d)(1), which provides that "[a] judgment for damages shall not be awarded ... unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service." Defendant contends that this omission by plaintiffs deprives the Court of subject-matter jurisdiction over this matter. See Fed. R. Civ. P. 12(b)(1). For the reasons that follow, the Court will grant defendant's motion to dismiss in light of plaintiffs' admitted failure to pursue the IRS's administrative claims procedure prior to filing this damages action.

Consistent with section 7433(d)(1), the IRS has promulgated regulations that establish procedures to be followed by a taxpayer who believes that IRS officers or employees have disregarded provisions of the tax code in their collection activities. See 26 C.F.R. § 301.7433-1. Specifically, these regulations require that an aggrieved taxpayer first submit his or her claim "in writing to the Area Director, Attn: Compliance Technical Support Manager[,] of the area in which the taxpayer currently resides," and further requires that the claim include:

i. The name, current address, current home and work telephone numbers and any convenient times to be contacted, and taxpayer identification number of the taxpayer making the claim;

ii. The grounds, in reasonable detail, for the claim (include copies of any available substantiating documentation or correspondence with the Internal Revenue Service);

iii. A description of the injuries incurred by the taxpayer filing the claim (include copies of any available substantiating documentation or evidence);

iv. The dollar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable (include copies of any available substantiating documentation or evidence); and

v. The signature of the taxpayer or duly authorized representative.

26 C.F.R. § 301.7433-1(e) (hereinafter "the 301.7433-1(e) procedures"). If such a claim is filed and the IRS has either issued a decision on the claim or has allowed six months to pass from the date of filing without acting on it, the taxpayer may proceed to file suit in federal district court pursuant to 28 U.S.C. § 7433(a). See 26 C.F.R. § 301.7433-1(d)(1). The regulations also provide for immediate filing of suit following submission of the administrative claim if the claim is submitted during the last six months of the two-year statute-of-limitations period. 26 C.F.R. § 301.7433-1(d)(2).

In opposing the motion to dismiss, plaintiffs do not contest defendant's assertion that they have neglected to follow the 301.7433-1(e) procedures; instead, plaintiffs assert that they need not follow the IRS's administrative procedures because doing so would be a waste of their time. See Pls.' Opp'n to Mot. to Dismiss at 6 ("Plaintiff[s] contend that the administrative 'remedies' purportedly provided for -- as implemented by regulation -- are at best unavailable, and at worst, wholly inadequate.").*fn1

Plaintiffs' contention that there are no "administrative remedies available" to them, within the meaning of section 7433(d)(1), is belied by the regulations quoted above. Under these regulations, all that plaintiffs must do to avail themselves fully of the IRS's administrative-claims process is deliver (by U.S. mail or other means) a signed document containing the specified information to the "Compliance Technical Support Manager" for the IRS area in which they reside and then wait (at most) six months. Hence, administrative remedies are "available" unless the IRS refuses to take delivery of plaintiffs' claim, and nothing like that has been suggested here.

Plaintiffs likewise miss the mark with their arguments that the 301.7433-1(e) procedures are inadequate or that pursuit of administrative remedies would be futile. The TBOR admits of no such exceptions to its exhaustion requirement. Although plaintiffs are correct that courts sometimes relieve plaintiffs of exhaustion requirements, see, e.g., McCarthy v. Madigan, 503 U.S. 140, 146 (1992) ("[A]dministrative remedies need not be pursued if the litigant's interests in immediate judicial review outweigh the government's interests in the efficiency or administrative autonomy that the exhaustion doctrine is designed to further."), this is true only when the exhaustion requirement is itself a judicial creation.*fn2 By contrast, when exhaustion is mandated by statute, courts are not free to carve out exceptions that are not supported by the text. See id. at 144 ("Where Congress specifically mandates, exhaustion is required."); Avocados Plus, Inc. v. Veneman, 370 F.3d 1243, 1247-48 (D.C. Cir. 2004) ("If [a] statute does mandate exhaustion, a court cannot excuse it.") (citing Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 13 (2000)).*fn3

Plaintiffs' appeal to this Court to exercise its inherent equitable authority is unavailing. Whatever "extraordinary powers" this Court may possess to provide equitable relief in proper cases, see Pls.' Mem. in Opp'n to Mot. to Dismiss at 5, it most certainly does not include the power to rewrite statutes, as plaintiffs suggest, see id. at 23 ("Plaintiff[s] respectfully request[] the Court exercise its equitable powers; find that Congress should not have re-imposed the exhaustion requirement."). McNeil v. United States, 508 U.S. 106, 111 (1993) ("The command that an 'action shall not be instituted ... unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail' is unambiguous. We are not free to rewrite the statutory text.").

The concession by plaintiffs that they have failed to follow the 301.7433-1(e) procedures is therefore dispositive of the motion to dismiss because the language of the TBOR prohibits this Court from awarding plaintiffs their requested relief (i.e., damages) when, as here, failure to exhaust administrative remedies is uncontested. The only question left to be resolved is a purely procedural one: whether dismissal of plaintiffs' claim is based on a jurisdictional defect or instead based on a pleading deficiency that cannot be cured by amendment. In other words, is the motion to dismiss properly decided under Rule 12(b)(1) of the Federal Rules of Civil Procedure (dismissal for want of subject-matter jurisdiction) or under Rule 12(b)(6) (failure to state a claim upon which relief may be granted)? The outcome will be the same regardless of which rule is applied, as the standard for dismissal at this preliminary stage of litigation is the same under either rule -- a motion to dismiss will be granted if "it appears beyond ...

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