United States District Court, District of Columbia
REGINALD L. IVY, Plaintiff,
COMMISSIONER OF THE INTERNAL REVENUE SERVICE, Defendant.
RUDOLPH CONTRERAS United States District Judge
matter is before the Court on the defendant’s Motion to
Dismiss [ECF No. 7]. For the reasons discussed below, the
motion will be granted.
plaintiff alleges that his “2011 tax return was
fraudulently filed, ” Compl. at 1 (page numbers
designated by ECF), and that the Internal Revenue Service
(“IRS”) allowed the filer “to retain funds
which would have been sent to [him] by means of [a] tax
refund, ” id. at 2. He characterizes this civil
action as a challenge to “a wrongful offset” that
did not comply with 26 U.S.C. § 6402 and 31 C.F.R.
§ 285.2. Compl. at 2. In addition, he deems “[t]he
offset . . . in violation of Amendment 8; excessive fine; of
the U.S. Constitution[.]” Id. (emphasis
removed). The plaintiff demands a declaratory judgment and
“relief under [26 U.S.C. § 7433, ]”
specifically, “the return of the funds . . . wrongfully
taken, damages and/or expenses because of the offset, and
punitive relief.” Id.
offset to which the plaintiff refers pertains to
then-outstanding student loan debt (“pre-consolidated
debt”) owed the United States Department of Education
and the Missouri Department of Higher Education. See
Mem. in Support of United States’ Mot. to Dismiss [ECF
No. 7-1] (“Def.’s Mem.”) at 2. IRS records
show an overpayment to the plaintiff of $1, 822 for tax year
2011. Id. By letter dated September 26, 2012, the
Department of the Treasury, Financial Management Service
(“FMS”), notified the plaintiff that it had
“applied this overpayment toward [his] outstanding
student loan debt.” Id., Ex. B. At that time,
the plaintiff’s pre-consolidated debt was in default
status, see Compl. at 2, and the FMS advised the
plaintiff that it “[could not] resolve issues regarding
debts with other agencies, ” Def.’s Mem., Ex. B.
in August 2013, the plaintiff’s pre-consolidated
“student loan debt was marked as satisfied in full by
the Missouri Department of Higher Education and consolidated
into a new loan.” Def.’s Mem. at 2; see
Compl. at 2 (“The previous account was a student loan
which was in default (until August 2013) during the
fraudulent return.”). The plaintiff’s income tax
return for tax year 2011, which he filed in September 2013,
“reported an overpayment of $634.” Def.’s
Mem. at 2-3. “As a result, the Department of Treasury
partially reversed its . . . setoff against [the
plaintiff’s] original student loan so that only $
634.00 was credited toward that pre-consolidated debt,
” id. at 3, that is, in January 2014 it
“decreased the $1, 822.00 applied in September 2012
toward [the pre-consolidated] student loan by $1, 188.00,
” id. n.2; see id., Ex. C at 2
(noting “[r]eversal of refund applied to non-IRS
Dismissal Under Rule 12(b)(1)
courts are courts of limited jurisdiction[ and] possess only
that power authorized by Constitution and statute[.]”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994) (citations omitted). The presumption is
“that a cause lies outside this limited jurisdiction,
and the burden of establishing the contrary rests upon the
[plaintiff].” Id. (citation omitted). Relevant
to this case is the immunity of the United States from suit,
and any waiver “cannot be implied but must be
unequivocally expressed.” United States v.
Mitchell, 445 U.S. 535, 538 (1980) (quoting United
States v. King, 395 U.S. 1, 4 (1969)). The absence of a
clear waiver of sovereign immunity deprives the courts of
subject matter jurisdiction. See FDIC v. Meyer, 510
U.S. 471, 475 (1994).
moves to dismiss the complaint under Federal Rule of Civil
Procedure 12(b)(1) for lack of subject matter jurisdiction on
the ground that sovereign immunity bars the plaintiff’s
claims. See Def.’s Mem. at 4. Here, the IRS
argues, the plaintiff “fails to identify [a]
waiver” of immunity. Id.
expressly authorizes the Department of the Treasury to apply
an individual’s overpayment to outstanding debt
incurred with another federal government agency:
Upon receiving notice from any Federal agency that a named
person owes a past-due legally enforceable debt . .
. to such agency, the Secretary [of the Department of the
Treasury] shall -
(A) reduce the amount of any overpayment payable to such
person by the amount of such debt;
(B) pay the amount by which such overpayment is reduced under
subparagraph (A) ...