The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge
Our Constitution is in actual operation; everything appears to promise that it will last; but in this world nothing is certain but death and taxes.
- Benjamin Franklin, 1789 Letter to M. Le Roy Pro Se Plaintiffs Rick and Carol Erwin bring this action against Defendant the United States pursuant to the Taxpayer Bill of Rights, 26 U.S.C. § 7433 ("TBOR"), alleging that "principals, officers, agents, rogue agents and/or employees of the Internal Revenue Service" ("IRS") "recklessly, intentionally or by reason of negligence[,] disregarded and continue to disregard provisions of [the Internal Revenue Code ("IRC"),] Title 26 of the United States Code[,] and the regulations promulgated thereunder." Compl. ¶ 1. Accompanying Plaintiffs' Complaint is an "Emergency Application for Preliminary Injunction Notwithstanding Anti-Injunction Act," which contends that this Court should enjoin the IRS and its agents "from engaging in any further collection activity[,] whether civil or criminal[,] until all claims are fully resolved, and the return of all sums wrongfully collected." Id. ¶ 34; see also Pls.' Mot. for a Prelim. Inj. at 1-2.
Following an entry of default by the Clerk of the Court in this case on February 14, 2006, and the reassignment of Plaintiffs' actionto this Court, Defendant the United States finally made an appearance on July 27, 2006 via a Motion to Vacate Entry of Default and Cross-Motion to Dismiss. Defendant's Motion contends that the entry of default must be vacated and the case dismissed because (1) Plaintiffs "failed to properly serve the United States with a summons and complaint, and therefore, the Court lacks jurisdiction over the person of the United States"; and (2) "the Court lacks subject matter jurisdiction over the complaint, due to [P]laintiffs' failure to exhaust administrative remedies prior to filing their suit." Def.'s Mot. to Dismiss at 1. Following a July 31, 2006 Order by this Court informing Plaintiffs of their obligations pursuant to Fox v. Strickland, 837 F.2d 507, 509 (D.C. Cir. 1988), Plaintiffs submitted an Opposition to Defendant's Motion to Dismiss that was received by this Court on August 21, 2006, completing the relevant briefing in this matter.
Upon a searching examination of the relevant filings, the attached exhibits, the relevant case law, and the entire record herein, the Court shall grant Defendant's Motion to Vacate Entry of Default and Cross-Motion to Dismiss in full.
Plaintiffs brought this action via a Complaint dated August 25, 2005, whereupon the case was assigned to the Hon. Emmet G. Sullivan of the United States District Court for the District of Columbia. This case is one of at least a dozen virtually identical lawsuits brought in this jurisdiction by tax protestors -- allegedly proceeding pro se -- asserting a variety of forms of misconduct by the IRS.*fn1 The Complaint in this case contains a deficiency seen in most of these cases -- namely, it provides no particularized facts specifically pertaining to Plaintiffs Rick and Carol Erwin; instead, it consists almost entirely of argument and restatement of putatively pertinent legal standards. See Compl. ¶¶ 8-26. Moreover, even the few passages in the Complaint that purport to describe "facts" that support Plaintiffs' position merely offer boilerplate recitations of the factual showings required to satisfy the various statutory provisions relied upon by Plaintiffs. See id. ¶¶ 5, 7(a)-(r), 27-30.
In short, Plaintiffs' Complaint attempts to catalogue seventeen (17) distinct provisions of the IRC which they claim have been contravened by the IRS. See id. ¶ 7(a)-(r).*fn2 Plaintiffs contend that Defendant, through agents of the IRS, violated the following provisions of the IRC during its levy of taxes against them:*fn3
1. 26 U.S.C. § 6201, by failing to make an assessment of the taxes owed by Plaintiffs;
2. 26 U.S.C. § 6202, by failing to make an assessment of the taxes owed by Plaintiffs within the time and mode set forth by the Secretary of the Treasury;
3. 26 U.S.C. § 6203, by failing to record an assessment of the taxes owed by Plaintiffs and by failing to furnish Plaintiffs copies of the assessment upon their request;
4. 26 U.S.C. § 7214(a), by attempting and continuing to attempt to collect sums greater than appear on records of assessment;
5. 26 U.S.C. § 6159, by abrogating Plaintiffs' "guaranteed" availability of an installment agreement;
6. 26 U.S.C. § 6321, by filing an invalid and unlawful Notice of Tax Lien against Plaintiffs;
7. 26 U.S.C. § 6325, by failing to release to liens "when it became obvious" that such liens were invalid and/or unlawful;
8. 26 U.S.C. § 6330(a), by failing to provide Plaintiffs with notice of a right to an impartial hearing;
9. 26 U.S.C. § 6402, by failing to refund all unassessed taxes taken from Plaintiffs following their written request;
10. 26 U.S.C. § 6404(g), by failing to suspend interest and penalties "for reason that defendant has not specifically stated the amount of, and the basis for the liability" Plaintiffs are alleged to owe;
11. 26 U.S.C. § 6501(a), by neglecting to assess taxes owed within three years;
12. 26 U.S.C. § 6751(a), by failing to include in a notice imposing the penalty (1) the name of the penalty; (2) the Code section authorizing the penalty; and (3) an actual computation of the penalty;
13. 26 U.S.C. § 6751(b)(1), by failing to verify that a supervisor had personally approved, in writing, the initial penalty determination;
14. 26 U.S.C. § 7123(b)(1), by failing to provide Plaintiffs with non-binding mediation;
15. 26 U.S.C. § 7491(b), by refusing to prove items of income which were reconstructed solely through the use of statistical information on unrelated taxpayers;
16. 26 U.S.C. § 7491(c), by refusing to produce any evidence with respect to the imposition of penalties and additions; and
17. 26 U.S.C. § 7602(a), by conducting a presumed financial status audit.
The Complaint seeks several forms of redress, including a declaratory judgment that Defendant has violated one or more of the demarcated IRC provisions, id. ¶ 31; an injunction barring any further collection of taxes from Plaintiffs, id. ¶ 34; a refund of all unassessed taxes and the return of property unlawfully seized, id. ¶ 33; and an award of damages under 26 U.S.C. § 7433 "to amend the reprehensible, egregious, and vexatious behavior of the defendant," id. ¶ 32. Plaintiffs attempted to effectuate service upon Defendant by mailing a copy of the summons and Complaint via certified mail to the Attorney General and the United States Attorney for the District of Columbia on October 24 and October 26, 2005. See Pls.' 1/7/06 Return of Service/Aff. of Summons & Compl.
Following Plaintiffs' apparent service, Plaintiffs filed a Request for Entry of Default on February 14, 2006, contending that Defendant's non-appearance and failure to answer their Complaint constituted a default. See Pls.' 2/14/06 Mot. for Entry of Default at 1, ¶¶ 4-6. The Clerk of the Court entered the requested default that same day, February 14, 2006. See 2/14/06 Entry of Default. On March 6, 2006, Judge Sullivan entered a sua sponte "show cause" order directing that Plaintiffs, by March 20, 2006, were to explain why the court had subject matter jurisdiction over their case -- specifically, how they have "exhausted all administrative remedies," as required by 26 U.S.C. § 7433(d)(1) and 26 C.F.R. § 301.7433-1(a), (e). See 3/6/06 Show Cause Order at 1. Judge Sullivan also directed that Plaintiffs were to "attach all documentation reflecting the filing of a claim as described in 26 C.F.R. § 301.7433-1(e)(2)." Id.
In response to Judge Sullivan's "Show Cause" Order, Plaintiffs supplemented their filings with a March 17, 2006 "Response to Order to Show Cause and/or Motion to Dismiss," a March 17, 2006 "Brief on Defendant's Use of Computer 'Evidence'" (an odd filing given the fact that Defendant had not yet made an appearance in this matter, nor attempted to rely upon computer evidence), an April 19, 2006 "Addendum to Order to Show Cause," a May 1, 2006 "Addendum to Complaint No. 1," and a May 22, 2006 "Addendum to Complaint No. 2." Following the July 18, 2006 reassignment of Plaintiffs' action to this Court, Defendant finally made an appearance in this case via a "Motion to Vacate Entry of Default and Cross-Motion to Dismiss" on July 27, 2006. Plaintiffs entered an Opposition to Defendant's Motion on August 21, 2006, completing the relevant briefing with respect to Defendant's motion.
A. Motion to Dismiss Pursuant to ...