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Davis v. States

September 19, 2006


The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge


The United States moves to dismiss the complaint of Carl Roger Davis and Jo Elaine Davis, who allege that they are entitled to monetary damages, a refund of unassessed taxes, and an injunction to restrain the Internal Revenue Service ("IRS") from continuing reckless, intentional, and negligent conduct that disregards provisions of the Internal Revenue Code ("Code") and its regulations. Compl., Prayer for Relief ¶ 1.2. The United States argues that the Plaintiffs did not properly serve the IRS, filed this suit in the improper venue, and failed to exhaust their administrative remedies. Although the Plaintiffs acknowledge that they did not follow the administrative procedures set forth in the Code regulations, they assert that the regulatory scheme is invalid and unavailable to them as a practical matter. After careful review of the Plaintiffs' Complaint and their opposition to the Government's motion to dismiss, and recognizing that Plaintiffs are proceeding pro se in this matter, the Court finds that the Complaint must be dismissed because the Plaintiffs did not exhaust administrative remedies with regard to their refund and damages claims and because the Anti-Injunction Act, 26 U.S.C. § 7421(a), bars their request for an injunction.


The Plaintiffs have had a running tax dispute with the IRS since at least 2000. See Compl. ¶ IV.A. They have filed various demand letters with the IRS District Director in Oklahoma City, Oklahoma; the IRS General Counsel; IRS Agent Timothy E. Noonan; and the Treasury Inspector General for Tax Administration ("TIGTA"), among others. Id. ¶¶ 1, 5, 7, 9, 11, 13, 15-18; see also id., Ex. 1 (Affidavit of Carl and Jo Elaine Davis). When the IRS continued its investigation into their tax returns -- by subpoenaing documents from banks, credit sources, trusts, mortgage companies, and employers, and by ordering Plaintiffs to appear before a Grand Jury -- they filed suit on December 23, 2005, pursuant to the Taxpayer Bill of Rights ("TBOR"), 28 U.S.C. § 7433, seeking damages for reckless, intentional, and negligent actions by the IRS. Id. ¶ IV; see also id., Prayer for Relief ¶ 1.2. Plaintiffs also seek a refund of "all un-assessed [sic] taxes, return of all seized property, [and] return of all levied funds," as well as an injunction to prevent "further collection activity." Id., Prayer for Relief ¶¶ 1.4, 1.5. Their suit is nearly identical to others filed recently in this Court, seeking money damages from the IRS. See, e.g., Gaines v. United States, 424 F. Supp. 2d 219, 221 (D.D.C. 2006) (collecting cases).

The parties agree that the Code and its regulations require a claimant to exhaust available administrative remedies prior to suit. See 26 U.S.C. § 7433(d)(1); see also Pls.' Opp. at 6. The Plaintiffs concede, by not contesting, that they never filed an administrative claim prior to filing suit. Nevertheless, the Plaintiffs argue that the Court should retain this suit on its docket in an exercise of the Court's equity jurisdiction. Pls.' Opp. at 5. Further, [b]ased upon a history of unsuccessfully seeking answers and agency records providing a basis for such answers Plaintiff(s) [sic] have asserted that they have either exhausted administrative remedies available, or that such administrative remedies are inadequate.

Id. The United States takes the position that the Court lacks subject-matter jurisdiction over the Plaintiffs' damages claim and that the Plaintiffs have failed to state a claim for damages upon which relief can be granted. Def's. Mot. at 3-4. It asserts that a pre-suit administrative claim is a necessary predicate for the Government's waiver of sovereign immunity, without which the Court has no jurisdiction. According to the United States, any lawsuit challenging the IRS is fatally deficient unless administrative remedies have been exhausted prior to litigation. Id. at 8.

Plaintiffs argue that they should not be limited by the Code or its regulations because they have repeatedly requested information from the IRS without success. Pls.' Opp. at 5. They base their argument on their October 25, 2000, request to the IRS District Director in Oklahoma City for the IRS "to produce competent evidence of [its] compliance . . . with section 6001, subsection (d) of the Internal Revenue Code . . . and, [sic] authority for operation of sections 6201, 6321, and 6331 . . . upon those denied the notice mandated in section 6001, subsection (d)." Compl. ¶ IV.A. Thereafter, when Agent Noonan attempted to interview Mr. Davis and sent a notice of his intent to contact other persons, the Plaintiffs objected to third-party contacts concerning their tax returns and notified Agent Noonan that unauthorized disclosure of tax information could lead to a possible action for damages. Id. ¶ IV.I. When Agent Noonan attempted a later appointment, Plaintiffs "called for Noonan to provide access to records of Noonan's authority, including his oath of office, commission, and bond, and requesting same." Id. ¶ IV.L. On or about August 14, 2002, Plaintiffs filed a TIGTA complaint, based upon Agent Noonan's failure to produce evidence of his enforcement authority, but received no response. Id. ¶ IV.N. Starting in December 2002, Agent Noonan issued various summonses "'In the matter [sic] of Roger C. Davis' . . . seeking testimony and records for a planned criminal investigation." See, e.g., id. ¶ IV.O; see also id. ¶ IV.S (seeking testimony and records related to Jo Elaine Davis). These summonses, Plaintiffs allege, were issued in retaliation for the TIGTA complaint concerning Agent Noonan's failure to produce evidence of his enforcement authority. Id. ¶ IV.O.2.

It appears that Special Agent James "Tony" Strother took over the investigation because he began issuing summonses in May 2004 regarding Plaintiffs and "seeking testimony and records for a planned criminal investigation." See, e.g., id. ¶ IV.EE. Plaintiffs presume that Special Agent Strother is a criminal investigator, id. ¶ IV.EE.1, and challenge his use of administrative summonses for purposes of criminal investigations and prosecutions as violative of the Code, id. ¶ IV.EE.2 (citing 26 U.S.C. § 2 7602(d)(1) [sic]). Agent Strother's investigations are asserted also to be in retaliation for the earlier TIGTA complaint. Id. ¶ IV.EE.5.

In sum, Plaintiffs' suit arises from the failure of the IRS and its officials to provide requested information on demand. Given their previous unanswered demands, Plaintiffs argue that they should not be forced into the administrative process prior to suit. The United States seeks to dismiss Plaintiffs' complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(3), 12(b)(5), and 12(b)(6).


Pursuant to Federal Rule of Civil Procedure 12(b)(1), the Plaintiffs bear the burden of proving by a preponderance of the evidence that the Court possesses jurisdiction over the subject matter of their claims. See Gustave-Schmidt v. Chao, 226 F. Supp. 2d 191, 195 (D.D.C. 2002). In reviewing a motion to dismiss under Rule 12(b)(1), the Court must accept the allegations in the complaint as true and draw all reasonable inferences in a plaintiff's favor. These allegations, however, "'will bear closer scrutiny in resolving a 12(b)(1) motion' than in resolving a 12(b)(6) motion for failure to state a claim." Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13-14 (D.D.C. 2001) (quoting 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE 2D, § 1350). The Court may consider information outside of the pleadings to determine its jurisdiction. Lipsman v. Sec'y of Army, 257 F. Supp. 2d 3, 6 (D.D.C. 2003).

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). The complaint need only set forth a short and plain statement of the claim, giving the defendant fair notice of the claim and the grounds upon which it rests. Kingman Park Civic Ass'n v. Williams, 348 F.3d 1033, 1040 (D.C. Cir. 2003) (citing Fed. R. Civ. P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41, 47 (1957)). "The accepted rule in every type of case" is that a court should not dismiss a complaint for failure to state a claim unless the defendant can show beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. Warren v. District of Columbia, 2004 U.S. App. LEXIS 2, *3 (D.C. Cir. Jan. 2, 2004); Kingman Park, 348 F.3d at 1040. A court's resolution of a Rule 12(b)(6) motion represents a ruling on the merits with res judicata effect. Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987).


A. Refund ...

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