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Scott v. United States

April 17, 2009

ROBERT SCOTT, ET AL., PLAINTIFFS,
v.
UNITED STATES, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

Plaintiffs Robert Scott and Linda Casoria-Scott have filed an amended pro se complaint alleging in twenty-seven "counts" that the Internal Revenue Service ("IRS") has unlawfully required plaintiffs to file tax returns and has disregarded provisions of the Internal Revenue Code and its regulations in the course of pursuing collection activities against plaintiffs, all in violation of the United States Constitution and 26 U.S.C. § 7433. Plaintiffs seek monetary damages as their only remedy. Plaintiffs' tax protests also formed the basis for an earlier case brought by plaintiffs, which was dismissed by this Court. See Scott v. United States ("Scott I"), 416 F. Supp. 2d 116, 118-19 (D.D.C.) (Huvelle, J.), reconsid. denied, No. 05-CV-2043, 2006 WL 1274763 (D.D.C. May 8, 2006), motion for relief from judgment denied, No. 05-CV-2043, 2007 WL 1792293 (D.D.C. Apr. 13, 2007). The instant complaint consists of boilerplate recitations similar to those employed in Scott I and the myriad of other tax protest suits filed in this Court, and is essentially identical to the complaint dismissed by Judge Bates in Marsoun v. United States, 591 F. Supp. 2d 41 (D.D.C. 2008). The government has filed a motion to dismiss the complaint for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted. For the reasons set forth below, the government's motion will be granted.

BACKGROUND

Plaintiffs are residents of Alabama. (See Am. Compl. at 1, 3.*fn1 ) In 2005, they filed a boilerplate complaint in Scott I, wherein they alleged that the government had disregarded various provisions of the Internal Revenue Code ("Code") relating to the assessment, recording, collection and levy of taxes owed by plaintiffs from 2001 onward. See Compl. ¶ 7, Scott I, No. 05-CV-2043 (D.D.C. filed Oct. 14, 2006). The Court dismissed that action because plaintiffs had failed to administratively exhaust their claims in accordance with the procedures established by 26 C.F.R. § 301.7433-1, as required by 26 U.S.C. § 7433(d)(1). See Scott I, 416 F. Supp. at 118-19; see also Marsoun, 591 F. Supp. at 42-43 (discussing exhaustion requirements). The Court reasoned that plaintiffs' failure to exhaust deprived the Court of subject matter jurisdiction over their claims. Scott I,416 F. Supp. at 119. Subsequently, this Court concluded in Wesselman v. United States ("Wesselman I") that "it is now clear that, although exhaustion is not a jurisdictional requirement, failure to exhaust is nevertheless fatal under Federal Rule of Civil Procedure 12(b)(6)." 498 F. Supp. 2d 326, 328 (D.D.C. 2007) (Huvelle, J.) (citing Ross v. United States, 460 F. Supp. 2d 139, 145-47 (D.D.C. 2006) (Bates, J.); Lindsey v. United States, 448 F. Supp. 2d 37, 61 (D.D.C. 2006) (Walton, J.)) (emphasis in original).*fn2

Shortly after Wesselman I, plaintiffs initiated this second action on August 27, 2007. Their initial complaint named the United States as defendant and stated that this was "an action for damages" pursuant to 26 U.S.C. § 7433, based on the IRS's alleged disregard of "certain sections of the IRS Code while engaged in collection activity regarding [p]laintiffs." (Original Compl. [Dkt. # 1] at 1 & n.1.) Plaintiffs supported the initial complaint with exhibits showing that the collection activity at issue overlapped, at least in time, with the activity at issue in Scott I. (See id., Exs. 1-2 (addressing tax year 2002).) Consistent with Wesselman I,the Court dismissed plaintiffs' complaint sua sponte on August 31, 2007, because plaintiffs had again "failed to allege that they exhausted their administrative remedies," thus making it "clear from the face of their complaint that they have failed to state a claim on which relief can be granted." Scott v. United States ("Scott II"), No. 07-CV-1529, 2007 WL 2506446, at *1 (D.D.C. Aug. 31, 2007).

Plaintiffs appealed that dismissal [Dkt. # 4], but because defendant had not yet been served, the D.C. Circuit considered the appeal without any appearance by the government. (Mem. in Supp. of United States' Mot. to Dismiss Am. Compl. ["Mot."] at 1.) On April 25, 2008, in an unpublished disposition [see Dkt. # 5], the D.C. Circuit remanded for reconsideration in light of the Supreme Court's decision in Jones v. Bock, 529 U.S. 199 (2007). See Scott v. United States, 275 F. App'x 21, 2008 WL 1885481, at *1 (D.C. Cir. 2008) (per curiam). The Court of Appeals noted reasoned that Jones v. Bock "consider[ed] a provision similar to the one at issue here" and concluded that "'failure to exhaust is an affirmative defense,'" such that "litigants 'are not required to specially plead or demonstrate exhaustion in their complaints.'" Id. (quoting 529 U.S. at 921). The government then entered an appearance before the Court of Appeals and sought rehearing on the grounds that Jones was inapplicable because exhaustion was a jurisdictional prerequisite to an action under § 7433. (Mot. at 1.) On July 30, the D.C. Circuit denied rehearing in a one-page order but clarified that its earlier order "merely remanded for reconsideration in light of Jones v. Bock, without addressing whether exhaustion under 26 U.S.C. § 7433(d)(1) is jurisdictional or not," and that "the United States may enter an appearance and present its arguments on that issue to the district court on remand." Order at 1, Scott v. United States,No. 07-5310 (D.C. Cir. July 30, 2008) (per curiam) (citation omitted).

After plaintiffs served the government [see Dkt. # 8], the government filed a motion to dismiss for lack of jurisdiction or, in the alternative, for failure to state a claim. [Dkt. # 10.] Plaintiffs then filed a 27-count amended complaint on January 12, 2009. [Dkt. # 13.] Counts 1 through 18 are based on a cause of action for alleged violations of plaintiffs' constitutional right to due process pursuant to Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971).*fn3 (See id. at 9-22.) Counts 19 through 27 are based on a cause of action for alleged violations or unlawful disregard of the Internal Revenue Code, pursuant to 26 U.S.C. § 7433.*fn4 (See id. at 22-26.) Specifically, the counts appear to allege that the IRS violated or disregarded:

fl 26 U.S.C. § 6001 and 26 C.F.R. § 1.6001-1, by failing to notify plaintiffs of their obligation to file tax returns (Counts 1 and 2);

fl 26 U.S.C. § 6020 and 26 C.F.R. § 301.6020-1, by failing to prepare or "subscribe" any substitute tax returns in plaintiffs' names (Counts 3 through 6);

fl 26 U.S.C. § 6103 and 26 C.F.R. § 301.6103(c)-1, by failing to disclose to plaintiffs, upon their request, any tax returns or substitute tax returns bearing plaintiffs' names (Counts 7 and 8);

fl 26 U.S.C. § 6109 and 26 C.F.R. § 301.6109-1, by improperly requiring that plaintiffs obtain and provide Social Security numbers (Counts 9 and 10);

fl 26 U.S.C. §§ 6201-6202 and 27 C.F.R. § 70.1 et seq., by failing to correctly or permissibly assess the taxes owed by plaintiffs (Counts 11 through 13);

fl 26 U.S.C. §§ 6202-6203 and 26 C.F.R. § 301.6203-1, by failing to properly record those tax assessments and to provide plaintiffs with copies upon request (Counts 14 through 17);

fl 26 U.S.C. ยง 6211, by failing to promulgate regulations regarding the determination of ...


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