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Nix El v. Internal Revenue Service

United States District Court, District of Columbia

February 10, 2017

JEFFREY B. NIX EL, Plaintiff,
v.
INTERNAL REVENUE SERVICE, Defendant. Re Document No.: 6

          MEMORANDUM OPINION GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS, GRANTING PLAINTIFF'S REQUEST TO AMEND THE COMPLAINT, TRANSFERRING CASE

          RUDOLPH CONTRERAS United States District Judge

         I. INTRODUCTION

         Pro se plaintiff Jeffrey B. Nix El alleges that he has been improperly denied income tax refunds for 2011 and 2014 and seeks relief to the tune of more than $1.6 million in damages. Defendant, the Internal Revenue Service (“IRS”), moves to dismiss Mr. Nix El's complaint on the grounds that, among other issues, venue is improper. The Court agrees with Defendant that venue is improper and transfers the case to the United States District Court for the District of Maryland.

         II. BACKGROUND [1]

         In his complaint, Mr. Nix El alleges that the IRS impermissibly denied or rescinded his tax refunds for 2011 and 2014. See generally Compl., ECF No. 1. With regard to the 2011 refund, Mr. Nix El claims that he submitted his 2011 amended tax return on December 9, 2014, but never received the refund to which he was entitled. Compl. ¶ 5; see also Pl.'s Ex. A. According to Mr. Nix El, he sent a letter on August 18, 2015 to several employees at the IRS inquiring about the status of his refund and received a computer-generated acknowledgement, but no substantive response. Compl. ¶¶ 5-6; see also Pl.'s Ex. B.

         As to the 2014 refund, Mr. Nix El contends that the refund was electronically deposited into his bank account on June 19, 2015, but was “sent back” on July 1, 2015 by his credit union without his consent based on instructions from the IRS. Compl. ¶ 7. According to Mr. Nix El, he sent a letter asking for information on his refund to the IRS and several individuals, [2] but did not receive a reply. See Compl. ¶ 7; see also Pl.'s Ex. C. Mr. Nix El states that he separately received a letter from the U.S. Treasury Inspector General for Tax Administration discussing an open investigation of IRS employees for potential misconduct. Compl. ¶ 7. Mr. Nix El states that he has received no further information as to the progress or results of this investigation. Compl. ¶ 8.

         Mr. Nix El filed the instant complaint on March 7, 2016, seeking recovery under three causes of action: first, violations of international treaties and the United States Constitution; second, violations of IRS employee's oaths of office; and third, breach of fiduciary duty. Compl. at 4-6. In his complaint, Mr. Nix El requests “actual, compensatory, and punitive damages” as well as injunctive relief. See Compl. ¶ 1.

         Defendant filed the instant motion to dismiss arguing, inter alia, that venue is improper in this district and that Mr. Nix El's claims are so flawed that this Court should dismiss the case. See generally Mot. Dismiss, ECF No. 6. On August 1, 2016, Mr. Nix El filed his Opposition to Defendant's Motion to Dismiss, responding to Defendant's arguments and claiming that he has presented sufficiently stated claims in his complaint. See generally Pl.'s Opp'n, ECF No. 8.[3]

         III. ANALYSIS

         The IRS argues that the complaint is defective because the United States, rather than the IRS, is the proper defendant for such challenges to tax liability. The Court agrees. 26 U.S.C. § 7422 provides an avenue for filing civil suits for a tax refund, but requires that such a suit “be maintained only against the United States.” 26 U.S.C. § 7422(f)(1) (2012). This conclusion is supported by other courts in this jurisdiction, which have concluded that the United States is the proper defendant for civil actions based on the unauthorized collection of taxes (26 U.S.C. § 7433) or the wrongful failure to release a tax lien (26 U.S.C. § 7432). See Laukus v. United States, 691 F.Supp.2d 119, 132 (D.D.C. 2010) (holding that the United States, and not the IRS, is the proper defendant for tax claims because the IRS cannot be sued eo nomine [by that name]), aff'd, 442 F. App'x 570 (D.C. Cir. 2011). The Court thus concludes that the United States, and not the IRS, is the proper defendant of an action for a tax refund and for the unauthorized collection of taxes (to the extent that Plaintiff's claims about the removal of funds from his bank account are characterized as such).

         Although Mr. Nix El's original complaint names the IRS as the sole defendant, Compl., Mr. Nix El's reply suggests amending the complaint to add the United States as a defendant.[4]See Pl.'s Opp'n at 5 (“If it pleases the Court, the Complaint can be amended to include: The Commissioner of Internal Revenue, United States of America and the United States Attorney General's Office.”). As the Court construes a pro se plaintiff's filings leniently, Erickson v. Pardus, 551 U.S. 89, 94 (2007), the Court interprets this as a request to amend the complaint to name the United States as a defendant.[5] A party may amend its pleading with leave of the court, which the court “should freely give . . . when justice so requires.” Fed. R. Civ. Pro. 15(a)(2). Here, the Court grants leave to amend the complaint to name the United States as a defendant because such an amendment will serve the interests of justice by allowing Mr. Nix El's claims to be resolved more substantively and will not prejudice Defendant because the proceedings are still at an early stage.

         In addition to granting leave to amend, the Court will also dismiss the claims against the IRS. Unlike the United States, Congress has not waived the sovereign immunity of the IRS for this type of suit and it is not a proper defendant. See Laukus, 691 F.Supp.2d at 132; Spahr v. United States, 501 F.Supp.2d 92, 96 (D.D.C. 2007) (noting that the IRS's sovereign immunity has only been waived for a very limited set of claims related to the collection of income taxes, and not for any other purposes); see also Blackmar v. Guerre, 342 U.S. 512, 514-15 (1952) (stating that U.S. executive departments and agencies may only be sued in their own name if authorized by Congress).

         Having addressed the question of the proper defendant, the Court now turns to Defendant's claims regarding venue. As Defendant argues, the federal district courts are granted jurisdiction over suits-like this one-for tax refunds by 28 U.S.C. § 1346:

The district courts shall have original jurisdiction . . . of: (1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been ...

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