United States District Court, D. Columbia.
MICHAEL ELLIS, Plaintiff. Pro se, Rice, TX.
For COMMISSIONER OF INTERNAL REVENUE SERVICE, Office of Procedure & Administr., UNITED STATES ATTORNEY GENERAL, UNITED STATES DEPARTMENT OF JUSTICE, Defendants: Michael Joseph Martineau, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Tax Division, Washington, DC.
ROBERT A. MCNEIL, Movant, Pro se, Houston, TX.
LOUIS RONALD DEPOLO, Movant, Pro se, Garland, TX.
AMY BERMAN JACKSON, United States District Judge.
Plaintiff Michael Ellis, proceeding pro se, filed this case against the Commissioner of the Internal Revenue Service, the United States Attorney General, and the United States Department of Justice (collectively, " defendants" ), claiming that the Internal Revenue Service (" IRS" ) is committing criminal fraud by falsifying the tax records of United States citizens who do not file income tax returns. 2d Am. Compl. [Dkt. # 11]. Specifically, the second amended complaint alleges that the purported fraudulent scheme violates the Privacy Act of 1974, 5 U.S.C. § 552a (2012) (Count I); plaintiff's right against self-incrimination, as guaranteed by the Fifth Amendment to the United States Constitution (Count II); and plaintiff's right to due process of law, which is also set forth in the Fifth Amendment (Count III). Id. ¶ ¶ 90-97. Plaintiff seeks only injunctive relief. Id. ¶ ¶ 98-108.
Defendants moved to dismiss the second amended complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the complaint does not establish that the federal government has waived its sovereign immunity and that the Anti-Injunction Act (" AIA" ), 26 U.S.C. § 7421(a) (2012), also creates a jurisdictional bar. Defs.' Renewed Mot. to Dismiss for Lack of Jurisdiction (" Defs.' Renewed Mot. to Dismiss" ) [Dkt. # 13]; Defs.' Mem. in Supp. of Defs.' Mot. to Dismiss for Lack of Jurisdiction (" Defs.' Mem." ) at 4-6 [Dkt. # 6-1]. Moreover, defendants asserted that the second amended complaint should be dismissed pursuant to Rule 12(b)(6) because it failed to state a claim upon which relief may be granted, it is barred by the doctrine of res judicata, and it is frivolous on its face. Defs.' Mem. at 6-11. Plaintiff opposed that motion. Pl.'s Opp. to Mot. to Dismiss (" Pl.'s Opp." ) [Dkt. # 18].
Based on the points and authorities set forth in the motion to dismiss and plaintiff's opposition brief, the Court finds that the AIA bars plaintiff's claims, and it also
concludes that plaintiff does not have Article III standing to bring this case. The Court must therefore grant defendants' motion to dismiss the second amended complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1).
I. Factual Background
Plaintiff Michael Ellis is a concerned United States citizen. 2d Am. Compl. ¶ 10. He filed this case against defendants Commissioner of the IRS, the United States Attorney General (" USAG" ), and the United States Department of Justice (" DOJ" ) because he believes that he " has discovered that in cases involving those whom the [IRS] labels 'income tax non-filers', IRS," USAG, and DOJ are engaged in a criminally fraudulent scheme to circumvent the Fifth Amendment rights of Americans. Id. ¶ 1.
In the second amended complaint, plaintiff lists in great detail how the alleged scheme works, starting with the generation by the IRS of a Substitute For Return (" SFR" ) on behalf of an individual who does not file an income tax return. Id. ¶ ¶ 18-53. Plaintiff asserts that the creation of the SFR is unlawful because it is done without a request by or permission from the taxpayer, and in some cases, he alleges that IRS falsifies its records to show that an SFR was created when one was not. Id. ¶ 29. In either circumstance, plaintiff contends that the taxpayer's Individual Master File (" IMF" ), which contains records kept by the IRS about an individual, is falsified by the inclusion of an unlawful SFR or a notation to hide the fact that an SFR was never created. Id. ¶ 34. He believes this violates the taxpayer's Fifth Amendment right against self-incrimination (Count II), id. ¶ 95, as well as the Privacy Act's requirement that federal agencies maintain accurate records about individuals (Count I). Id. ¶ ¶ 91-93.
According to plaintiff, USAG and DOJ are complicit in the IRS's fraudulent scheme. He claims that after the IRS has falsified its records, USAG and DOJ engage in the practice of creating " self-authenticating certifications" that allow DOJ to introduce fraudulent tax documents during a tax prosecution without a live witness or custodian of the records to verify their authenticity. Id. ¶ ¶ 53, 74. This practice violates the Due Process Clause of the Fifth Amendment, plaintiff contends, because the self-authenticating certification " prevent[s] cross-examination of IRS experts regarding the underlying IMF fraud and imaginary SFR's [sic]" (Count III). Id. ¶ ¶ 53, 75, 97; see also 2d Am. Compl. at 1 n.1.
The second amended complaint also describes how plaintiff was personally a victim of this fraudulent scheme and the injuries that he and other taxpayers have suffered as a result of it. 2d Am. Compl. ¶ ¶ 37-69. Specifically, he asserts that both the IRS's SFR scheme and DOJ's practice of self-authenticating tax records in prosecutions have harmed him and other citizens because they result in the government obtaining tax liens and levies against taxpayers. See, e.g., id. ¶ ¶ 77, 86.
But despite that harm, plaintiff does not challenge the collection and assessment of taxes in general; he " seeks only to terminate the commission of criminal acts of which complaint is made and for which no authorization can ever exist." Id. ¶ 17. Put differently, plaintiff explains that " correct resolution of this suit in Plaintiff's favor would not prevent IRS from performing all substitutes for return, assessment and collection activities authorized by law." Id. ¶ 89. He claims that he simply seeks to stop the government from engaging in what he believes to be criminally fraudulent conduct. Id. ¶ 17; see also Pl.'s Surreply at 4-5 [Dkt. # 24-1].
II. Procedural History
This is the second time that plaintiff has sought to expose what he believes are the criminal acts of the IRS. He filed the first lawsuit on April 24, 2012, providing the Court with a similar overview of the IRS's allegedly fraudulent SFR scheme. See Compl., No. 12-cv-655 [Dkt. # 2]. Soon after the first case was filed, the Court noted that plaintiff's claims were " nearly identical [to] claims in Florance v. Commissioner Internal Revenue Service, 1:12-cv-933-RMC, which another Court in this district [had] recently dismissed for lack of subject matter jurisdiction," and it ordered plaintiff to show cause why his " case should not be dismissed for lack of subject matter jurisdiction in light of the court's order in Florance." July 17, 2012 Minute Order, No. 12-cv-655. After considering plaintiff's response to the order, the Court dismissed plaintiff's first lawsuit sua sponte on the grounds that plaintiff did not have Article III standing. Nov. 7, 2012 Order, No. 12-cv-655 [Dkt. # 11]. Plaintiff moved for reconsideration, Mot. to Amend/Correct, No. 12-cv-655 [Dkt. # 12], but the Court denied his motion. April 15, 2013 Mem. Op. & Order, No. 12-cv-655 [Dkt. # 13], Plaintiff then filed an appeal with the D.C. Circuit, Notice of Appeal, No. 12-cv-655 [Dkt. # 15], which he later voluntarily withdrew.
On March 19, 2014, plaintiff filed the original complaint in this case against the Commissioner of the IRS, raising almost the exact same issues that he alleged in his first lawsuit. Compl. [Dkt. # 1]. Shortly thereafter, he filed the first amended complaint, 1st Am. Compl. [Dkt. # 3], which the Commissioner moved to dismiss for lack of jurisdiction, [Dkt. # 6]. The Court subsequently denied that motion as moot after it granted plaintiff's motion for leave to file the second amended complaint. See June 5, 2014 Order [Dkt. # 10]. The second amended complaint added the USAG and DOJ as named defendants. See 2d Am. Compl.
On June 17, 2014, defendants renewed their motion to dismiss, arguing that the Court does not have subject matter jurisdiction over the case and that the second amended complaint fails to state a claim upon which relief may be granted. See Defs.' Renewed Mot. to Dismiss; Defs.' Mem. Plaintiff responded by filing a motion for leave to file a third amended complaint. See Mot. for Leave to File 3d Am. Compl. [Dkt. # 16]. The Court stayed consideration of plaintiff's motion pending resolution of the motion to dismiss the second amended complaint on jurisdictional grounds, July 9, 2014 Minute Order,
and plaintiff filed an opposition to the motion to dismiss on July 10, ...