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Laukus v. United States

March 8, 2010

KYLE W. LAUKUS, PLAINTIFF,
v.
UNITED STATES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiff Kyle W. Laukus filed this action against the United States and the Internal Revenue Service ("IRS") (collectively, "Defendants") claiming that the government has engaged in unlawful tax collection activities. Defendant United States has moved to dismiss the complaint for improper venue, lack of subject matter jurisdiction, and failure to state a claim upon which relief can be granted.*fn1 As explained below, Laukus has failed to rebut, and thereby conceded, Defendant's argument that venue is improper in this district, and the Court finds that a transfer in lieu of dismissal is not in the interest of justice. Alternatively, even if venue were proper, the Court would dismiss Laukus's claims for either lack of subject matter jurisdiction or failure to state a claim upon which relief can be granted. Accordingly, the Court shall GRANT Defendant's [6] Motion to Dismiss the Complaint.

I. FACTUAL BACKGROUND

The following facts are drawn from the allegations of the Complaint.

Plaintiff Kyle W. Laukus maintains an address at 4209 Red Arrow Highway in Benton Harbor, Michigan. Compl. at 1. From 1998 to 2003, Laukus received compensation for his labor in the form of wages. Id. ¶ 3. Laukus contends that he did not earn or receive compensation as "income, gross income or taxable income" in the amount of $334,204.96 during these years and does not have an existing tax liability to the United States. Id. ¶ 6. Laukus further contends that he has fully satisfied and paid all income taxes for tax years 1998 through 2003. Id. ¶ 7. Laukus asserts that he "did not receive any profit or gain for compensation received for tax years 1998 through 2003 and does NOT owe the UNITED STATES, or any employees working on its behalf, the fruit of his labor property." Id. ¶ 8.

From August 12, 2004 through May 16, 2006, Laukus received copies of four IRS Forms 668(Y)(c) - "Notice of Federal Tax Lien" ("NFTL"). Compl. ¶ 9. Laukus attached these forms as Exhibit B to his Complaint and contends that they were "procedurally improper" and "legally unenforceable." Id. The first NFTL was issued against taxpayer American Pride Trust for $82,231.31 and was signed by the IRS on August 12, 2004. Id., Ex. B (8/12/2004 NFTL). The second NFTL was issued against taxpayers Renee L. and Kyle W. Laukus for $99,419.93 and was signed by the IRS on May 9, 2006. Id., Ex. B (5/9/2006 NFTL). The third and fourth NFTLs were issued against taxpayer Kyle W. Laukus for $301,215.59 and were signed by the IRS on May 11 and 16, 2006, respectively. Id., Ex. B (5/11/2009 NFTL, 5/16/2009 NFTL). On August 7, 2006, Laukus received copies of two IRS Forms 668-A(ICS) - "Notice of Levy" issued to Chemical Bank Shoreline in Benton Harbor, Michigan: one against taxpayer American Pride Trust for tax years 1999-2001 in the amount of $181,936.34 and the other against taxpayer Kyle W. Laukus for tax years 1999-2001 in the amount of $334,204.96. Id. ¶ 10 & Ex. C (Notices of Levy). Laukus contends that the Notice of Levy against him disclosed his "return information" to an unauthorized third party. Id. ¶ 10. Around three days later, Laukus received two letters from Chemical Bank informing him that they had received the Notices of Levy against his American Pride Trust account and his personal account and that $3164.99 and $13,816.47 had been seized from those accounts, respectively. Id. ¶ 11. On or about August 28, 2006, the IRS issued a Form 668-B (ICS) - "Levy" against American Pride Trust in the amount of $111,077.81. See Compl. ¶ 12 & Ex. D (Levy). On or about August 30, 2006, a Notice of Seizure was issued to American Pride Trust pertaining to certain property situated in the Township of Benton, County of Berrien, Michigan. Id. ¶ 13 & Ex. D (Notice of Seizure).

Laukus subsequently filed numerous forms with various IRS personnel which he claims have resulted in no response from the IRS. See Compl. ¶¶ 14-18. From about November 17, 2006 through July 31, 2007, Laukus served completed Forms 12661 - "Disputed Issue Verification" and 843 - "Request for Abatement" contesting alleged penalty assessments in response to multiple "Notices CP504" received referencing the amount due for tax years 2001-2003. Id. ¶ 14.*fn2 On or about February 12, 2007, Laukus served a completed Form 12203 -"Request for Appeals Review" attached to an affidavit of "Notice of Intent to Remain in Compliance with the Internal Revenue Laws" in reponse to "Letter 3176C." Id. ¶ 15. Around April 18, 2007, Laukus served another completed Form 12203 - "Request for Appeals Review" attached to a notice that contested and disputed alleged tax liabilities in response to three "Notices CP15" dated April 2, 2007, that referenced $1500 as penalty assessments for tax years 2001-2003. Id. ¶ 16. Laukus also served Forms 12203 - "Request for Appeals Review" on or about May 31, 2007 and July 13, 2007. Id. ¶¶ 17-18.

On or about July 11, 2007, the seized property in Benton Township was sold at auction for $27,000. Compl. ¶ 19 & Ex. D (Certificate of Sale of Seized Property). On October 15, 2007, the IRS sent a letter to American Pride Trust indicating that the proceeds from the sale had been applied to its tax liability and that its outstanding balance, including accrued interest and penalties, was $90,735.62. See Compl., Ex. D (Letter 3047).

On January 25, 2008, Laukus sent a letter to the IRS captioned "Verified Notice of Administrative Claim, Demand to Release or Withdraw the Legally Unenforceable Notices of Federal Tax Lien and Notices of Levy, and Return Seized Property." See Compl. ¶ 20 & Ex. A (Administrative Claim Letter). Laukus asserts that this letter satisfied the requirements of 26 C.F.R. § 301.7433-1(e)(1), which provides procedures for filing an administrative claim for damages for certain unauthorized collection actions. Id. ¶ 20. In his Administrative Claim Letter, Laukus claimed, inter alia, that "The [Internal Revenue] Code And IRS Employees Failed To Impose A Tax Liability Creating The Basis For An Assessment," arguing that the federal laws do not define what constitutes "taxable income" and therefore IRS employees failed to establish that Laukus had any tax liabilities. Id., Ex. A (Administrative Claim Letter) at 7-8. On February 1, 2008, Laukus filed an Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien, alleging that the four NFTLs were filed prematurely or not in accordance with IRS procedures. See id., Ex. A (Application for Withdrawal).

Laukus asserts that Defendants have "engaged in unlawful collection activity because they did not establish when, where or how [Laukus's] personal compensation received from his labor property was involved, used, or intended to be used, in violation of the internal revenue laws. Id. ¶ 23. Laukus contends that he "was not then and is not now seeking to restrain the lawful assessment or collection of any internal revenue tax, but is disputing the unlawful collection activity and taking of personal property" by Defendants. Id. ¶ 24.

II. STANDARD OF REVIEW

A. Motion to Dismiss for Improper Venue Under Rule 12(b)(3)

Defendant argues that the District of Columbia is an improper venue for this case and that it should be dismissed pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(3). "In considering a Rule 12(b)(3) motion, the court accepts the plaintiff's well-pled factual allegations regarding venue as true, draws all reasonable inferences from those allegations in the plaintiff's favor, and resolves any factual conflicts in the plaintiff's favor." Darby v. U.S. Dep't of Energy, 231 F. Supp. 2d 274, 276 (D.D.C. 2002). Nevertheless, a plaintiff "bears the burden of establishing that venue is proper." Varma v. Gutierrez, 421 F. Supp. 2d 110, 113 (D.D.C. 2006) (internal quotations omitted); see also Freeman v. Fallin, 254 F. Supp. 2d 52, 56 (D.D.C. 2003) ("[b]ecause it is the plaintiff's obligation to institute the action in a permissible forum, the plaintiff usually bears the burden of establishing that venue is proper").

B. Motion to Dismiss for Lack of Subject Matter JurisdictionUnder Rule 12(b)(1)

A court must dismiss a case pursuant to Rule 12(b)(1) when it lacks subject matter jurisdiction. In determining whether there is jurisdiction, the Court may "consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Coalition for Underground Expansion, 333 F.3d at 198 (citations omitted); see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) ("[T]he ...


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