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McNeil v. Commissioner of Internal Revenue

April 21, 2010


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


Plaintiff, Jerry P. McNeil, has two cases pending before this Court, both arising out of the Internal Revenue Service's attempts to collect unpaid taxes and penalties by imposing tax levies against plaintiff's federal retirement annuity. Before the Court is the United States'*fn1 motion to dismiss the complaint in the above-captioned matter for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and plaintiff's motion to strike or quash defendant's motion. For the reasons stated herein, defendant's motion will be granted and plaintiff's motion will be denied.*fn2


Plaintiff retired under the Civil Service Retirement System ("CSRS") on February 2, 1987, and since then he has received retirement benefits in the form of payments from his Civil Service Annuity. (Compl. ¶ 7); see also McNeil v. United States, 78 Fed. Cl. 211, 213 (Fed. Claims Ct. 2007), aff'd, 293 Fed. Appx. 758 (C.A. Fed. 2008).*fn3 The Office of Personnel Management ("OPM") is responsible for making these payments to the plaintiff. Id.

On November 27, 2009, the IRS sent a letter to plaintiff. (Compl., Ex. 1.) According to that letter, the IRS mailed plaintiff a "final notice of intent to levy" on November 19, 2009, based on taxes, penalties and interest plaintiff owed for tax years 2004-2006. (Id., Ex. 1.) The letter also informed plaintiff that he had "thirty days from the date on the notice to appeal it" through the IRS's administrative appeal procedure. (Id., Ex. 1.)

On December 15, 2009, plaintiff, proceeding pro se, filed suit against the Commissioner of Internal Revenue challenging this levy. The complaint alleges that the "Commissioner of Internal Revenue, acting through his agents, employed by the Federal Reserve Bank of Philadelphia, has provided [plaintiff] with good and sufficient notice of the Commissioner's intent to seize private property" -- his federal retirement annuity -- and "to do so without due process of law" (Id. ¶¶ 2-3) because he "is not in receipt of the notice . . . required under express terms of 26 U.S.C. § 7429 requiring signature of the Chief Counsel or his delegate." (Id. ¶ 5.) Plaintiff, therefore, asks the Court to "enjoin[] the Internal Revenue Service, and its Fiscal Agents in the Federal Reserve Bank" from imposing or executing any tax levies against his federal retirement annuity due to the IRS's alleged failure to provide notice as required by 26 U.S.C. § 7429. (Id. ¶¶ 7-10.) He alleges that this Court has jurisdiction over his complaint "under the [s]tatutory authority of 26 U.S.C. § 7429(b)(2)(A) granting the District Courts of the United States exclusive jurisdiction to determine the Commissioner's authority to levy property under § 6331." (Id. ¶ 6.)*fn4

Defendant has moved to dismiss for lack of subject matter jurisdiction. (United States' Mot. to Dismiss, Mar. 2, 2010 [dkt. #5]). Plaintiff's only response to defendant's motion was a motion to quash or strike [dkt. #7], which the Court will treat as plaintiff's opposition to defendant's motion. (Mot. to Strike or Quash Def.'s Mot. to Dismiss, Mar. 17, 2010.)


I. Statutory Framework

Section 6331(a) of the Internal Revenue Code provides, in relevant part:

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property . . . belonging to such person . . . . Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.

26 U.S.C. § 6331(a). Section 6331(d) provides:

(d) Requirement of notice before levy.-

(1) In general.--Levy may be made under subsection (a) upon the salary or wages or other property of any person with respect to any unpaid tax only after the Secretary has notified such ...

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