The opinion of the court was delivered by: John D. Bates United States District Judge
Plaintiff seeks damages against the United States pursuant to 26 U.S.C. § 7431(a)(1) based on alleged unlawful disclosures of confidential tax return information by the Internal Revenue Service ("IRS") when it recorded a notice of federal tax lien against plaintiff in the public record. See Compl. ¶¶ 1-13. Defendant has filed a motion to dismiss for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted.
Plaintiff alleges that he is "the subject of ongoing purported collection action being conducted by . . . agent(s) of the Internal Revenue Service, in the absence of record evidence of existing assessment(s)." Compl. ¶ 4. He further alleges that two IRS agents recorded a notice of federal tax lien against plaintiff with the County Recorder/Register of Deeds in Grant County, Washington on or about December 27, 2005. Compl. ¶ 5. The notice states, allegedly without any tax assessment having been done, that "taxes . . . have been assessed against" plaintiff, that the tax "remains unpaid," and declares a lien in favor of the United States against the property. See Compl., Ex. 1 (Notice of Federal Tax Lien dated December 27, 2005). Plaintiff alleges that, as a result of the notice, his tax return information has been wrongfully disclosed, and he has suffered substantial personal embarrassment, loss of good will, and loss in credit. Id. ¶¶ 6, 7, 19.
Pursuant to 26 U.S.C. § 7431(a), plaintiff seeks damages in the amount of $1,000 for each unauthorized disclosure and punitive damages in an amount yet to be determined. Id. ¶¶ 19-20. This provision of the Internal Revenue Code creates a damages action for unlawful disclosures of confidential tax return information, stating, in relevant part:
(1) Inspection or disclosure by employee of United States. -- If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.
Section 6103, in turn, provides that tax returns and return information shall be kept confidential subject to several enumerated exceptions. 26 U.S.C. § 6103.
A separate provision of the Internal Revenue Code, 26 U.S.C. § 7433, authorizes a damages action for unlawful collection actions by the IRS. That provision states:
If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States. Except as provided in section 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.
26 U.S.C. § 7433(a). Thus, a violation of section 6103 (unauthorized disclosure of confidential information) "in connection with any collection of Federal tax" is actionable under section 7433.
Indeed, plaintiff previously brought an action for damages under section 7433 based on alleged misconduct by the IRS in connection with the collection of taxes dating from 1998 to early 2006. See Evans v. United States, 433 F. Supp. 2d 17, reconsideration denied, 2006 WL 2527976 (D.D.C. 2006); see also Am. Compl., Evans v. United States, Civ. No. 06-0032 (D.D.C. filed Jan. 9, 2006). That action was dismissed because plaintiff failed to exhaust his administrative remedies, as required by 26 U.S.C. § 7433(d)(1) and the relevant IRS regulations. 433 F. Supp. 2d at 19-21. The Court now considers whether plaintiff's more specific allegation of the IRS's public recording of a notice of federal tax lien gives rise to a damages action for unlawful disclosure under 26 U.S.C. § 7431.
"[I]n passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see Leatherman v. Tarrant Cty. Narcotics and Coordination Unit, 507 U.S. 163, 164 (1993); Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979). Therefore, the factual allegations must be presumed true, and plaintiff must be given every favorable inference that may be drawn from the allegations of fact. Scheuer, 416 U.S. at 236; Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). However, the Court need not accept as true "a legal conclusion couched as a factual allegation," nor inferences that are unsupported by the facts set out in the complaint. Trudeau v. Federal Trade Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
Here, the Court will treat defendant's motion to dismiss as one for failure to state a claim upon which relief can be granted because the deficiency alleged pertains to the boundaries of the right of action under 26 U.S.C. § 7431 in light of section 7433, in contrast to a statutory provision speaking to the jurisdiction of the district courts. See Arbaugh v. Y&H Corp., 126 S.Ct. 1235, 1245 (2006) ("when Congress does not rank a statutory limitation as . . . jurisdictional, courts should treat the restriction as non-jurisdictional in nature"); see also Trudeau, 456 F.3d at 188, 191 (observing that whether ...