United States District Court, District of Columbia
TANYA S. CHUTKAN, District Judge.
This action arises from a tax dispute between Plaintiffs George Russell Reiff, Jr. and Amy Reiff and the IRS that was previously litigated in the United States Tax Court. Plaintiffs purport to not challenge the Tax Court decision directly, but instead challenge the actions of two IRS employees in connection with the Tax Court case and a related administrative proceeding. Plaintiffs bring numerous claims against the United States of America under the Federal Tort Claims Act ("FTCA") and against the IRS employees in their individual capacities under Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971). Defendants move to dismiss the Complaint on a variety of grounds, including that this court lacks subject matter jurisdiction and that Plaintiffs have failed to state a claim upon which relief may be granted. Because the FTCA does not waive the United States' sovereign immunity with respect to tax assessment or collection matters, and because the Internal Revenue Code provides a comprehensive remedial scheme which precludes Bivens actions against IRS employees under these circumstances, Defendants' motion to dismiss is granted.
The following facts taken from the Complaint are assumed to be true on a motion to dismiss. At some point, the Reiffs became parties to a Tax Court proceeding. In connection with that proceeding, plaintiff Amy Reiff filed a motion to approve an Innocent Spouse Relief Request ("ISRR"). (Compl. ¶ 24). An "innocent spouse" request seeks relief from joint tax liability pursuant to the spousal relief provisions of the Internal Revenue Code. 26 U.S.C. § 6015. After receiving the ISRR motion, counsel for the IRS filed a motion for continuance of trial to allow the IRS to process the ISRR administratively before the Tax Court ruled on the motion. (Compl. Ex. 1). Although the motion for continuance indicates that the IRS was not aware of Plaintiffs' position on their motion, Plaintiffs now claim they did not oppose the motion, that they signed the motion (even though no signature is present on the motion), and that it is a "negotiated written agreement" between the parties which created numerous duties that the IRS later breached. (Compl. ¶¶ 25, 35, Ex. 1).
As part of the administrative processing of the ISRR, Sharon Casey, an employee at the IRS's Centralized Innocent Spouse Operations ("CISO") office which handles ISRR determinations, sent Amy Reiff a letter requesting that she complete and submit Form 8857- Request for Innocent Spouse Relief. Casey also requested that George Reiff complete Form 12508 in connection with the ISRR. (Compl. ¶ 27). Plaintiffs responded via letter the next month and refused to submit the two required forms, arguing that the administrative record was already sufficient for CISO to make its ISRR determination. (Compl. Ex. 3). Plaintiffs also raised a number of questions and concerns it asked the CISO to address. According to Plaintiffs, they never received a response to their letter. Only after the Tax Court re-noticed the case for trial eight months later did Adam Sweet, the IRS's attorney in the Tax Court proceeding, notify Plaintiffs that "Mrs. Reiff was not responsive to the Appeals division when they asked her for information. Accordingly, her request for relief was denied." (Compl. Ex. 4). Plaintiffs sent another letter to the IRS asking why they were never notified of the decision and alleging various improprieties, which was similarly ignored.
Plaintiffs now challenge Casey and Sweet's actions during the ISRR administrative proceeding as tortious, unconstitutional, in violation of due process, and abusive of discretionary authority. Plaintiffs take pains to make clear that they challenge only the ISRR determination made by the CISO, and not any issues related to the Tax Court proceeding directly. This is likely because the Plaintiffs already raised similar issues in the Tax Court and lost. In that case, Plaintiffs brought a motion for sanctions against Defendant Sweet for his failure to properly consider the ISRR application, which the Tax Court denied as "groundless" because "[o]n the record presented, the Court is satisfied that CISO and respondent's counsel acted properly at all times in this case and made a good faith effort to fully develop and evaluate Mrs. Reiff's claim." (Mot. 4). Because the Tax Court reviewed the IRS's ISRR determination de novo, "petitioners had a full and fair opportunity to prosecute Mrs. Reiff's claim for spousal relief"-a claim that was denied by the Tax Court in part for the Reiffs' failure to provide the requisite financial information. ( Id. ).
II. LEGAL STANDARD
a. Motion to Dismiss Pursuant to Rule 12(b)(1)
In evaluating a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction, the Court must "assume the truth of all material factual allegations in the complaint and construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged[.]'" Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394 F.3d 970, 972 (D.C. Cir. 2005)). Nevertheless, "the court need not accept factual inferences drawn by plaintiffs if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions.'" Disner v. United States, 888 F.Supp.2d 83, 87 (D.D.C. 2012) (quoting Speelman v. United States, 461 F.Supp.2d 71, 73 (D.D.C. 2006)). The court "is not limited to the allegations of the complaint." Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). Rather, "a court may consider such materials outside the pleadings as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case." Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C. 2000) (citing Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992)). Courts may raise issues of subject matter jurisdiction sua sponte, regardless of whether the parties contest the court's jurisdiction. NetworkIP, LLC v. FCC, 548 F.3d 116, 120 (D.C. Cir. 2008).
b. Motion to Dismiss Pursuant to Rule 12(b)(6)
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citation omitted). Although a plaintiff may survive a Rule 12(b)(6) motion even where "recovery is very remote and unlikely[, ]" the facts alleged in the complaint "must be enough to raise a right to relief above the speculative level[.]" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (internal quotation marks and citation omitted). Moreover, a pleading must offer more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action[.]" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). It is well established that "[c]ourts must construe pro se filings liberally." Richardson v. United States, 193 F.3d 545, 548 (D.C. Cir. 1999); Haines v. Kerner, 404 U.S. 519, 520 (1972) ( pro se pleadings should be held "to less stringent standards than formal pleadings drafted by lawyers"). However, if the facts as alleged, which must be taken as true, nonetheless fail to establish that a pro se plaintiff has stated a claim upon which relief can be granted, the Rule 12(b)(6) motion must be granted. See, e.g., Am. Chemistry Council, Inc. v. U.S. Dep't of Health & Human Servs., 922 F.Supp.2d 56, 61 (D.D.C. 2013).
a. FTCA Claims
Plaintiffs bring four claims under the FTCA. Counts 1 and 2 allege that the IRS's failure to respond to the Reiffs' two letters during the ISRR administrative proceeding violated the "negotiated written agreement" ( i.e., the motion for continuance in the Tax Court proceeding) and constituted "negligent tortious conduct." Count 3 alleges that the IRS violated the "negotiated written agreement" by failing to timely notify Plaintiffs of the ISRR determination. Count 4 alleges that the IRS tortiously failed to ...