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Ulloa v. United States

June 22, 2006


The opinion of the court was delivered by: Norman A. Mordue, Chief United States District Judge


I. Introduction

Presently before the Court is a complaint filed pro se by plaintiff Richard Ulloa. The complaint challenges a levy issued by the Internal Revenue Service ("IRS") to recover unpaid taxes. Dkt. No. 1. Plaintiff has also filed a motion encaptioned "Motion to Stay," which appears to seek injunctive relief. Dkt. No. 2. The statutory filing fee for this action has been paid.

I. Complaint

According to the complaint, the notice of levy is "unlawful and invalid" because, inter alia, the notice of levy was issued "without the 'due process' of a Collection Due Process hearing," the notice of levy was issued without "issuance of a 'Notice and Demand,'" and plaintiff never received the original Notice of Levy from the IRS.*fn1 Dkt. No. 1 at 1-2.

II. Motion to Stay

Plaintiff's "Motion to stay" is construed as seeking a preliminary injunction to stay further collection under the notice of levy until a Collection Due Process Hearing can be held. Dkt. No. 2. A preliminary injunction is an extraordinary remedy that should not be granted as a routine matter. Patton v. Dole, 806 F.2d 24, 28 (2d Cir. 1986). In most cases, the party seeking the injunction must show (a) a threat of irreparable injury if the injunction is not granted and (b) either (1) a probability of success on the merits or (2) sufficiently serious questions going to the merits of the claims to make them a fair ground of litigation, and a balance of hardships tipping decidedly in favor of the moving party. Burgess v. Friedmann, No. 9:05-CV-0379, 2005 WL 3531459, at *2 (N.D.N.Y. Dec. 22, 2005) (citing Jolly v. Coughlin, 76 F.3d 468, 473 (2d Cir. 1996)).

However, where, as in this case, a plaintiff seeks an injunction to "prevent government action taken pursuant to statutory authority, which is presumed to be in the public interest," the second "serious questions" prong is inapplicable and the plaintiff is required to demonstrate a likelihood of success on the merits. See Molloy v. Metropolitan Trans. Auth., 94 F.3d 808, 811 (2d Cir.1996) (citing Able v. United States, 44 F.3d 128, 130 (2d Cir.1995)). In addition, the courts are barred from entertaining suits that seek to restrain the assessment or collection of any tax. 26 U.S.C. § 7421. The Anti-Injunction Act withdraws jurisdiction from the state and federal courts in any suit seeking an injunction prohibiting the collection of federal taxes and requires that the legal right to a disputed sum be determined in a suit for refund. Id.; see Mullings v. Commissioner, 78 A.F.T.R.2d (RIA) 6109, 96-2 U.S. Tax Cas. (CCH) P50531, 1996 WL 576999 (E.D.N.Y.1996), aff'd,112 F.3d 504 (2d Cir.1997).

Celauro v. U.S., 371 F. Supp.2d 219, 222-23 (E.D.N.Y. 2005).*fn2

In support of his request for injunctive relief, plaintiff merely submits a one page document setting forth plaintiff's conclusory statements that the Notice of Levy was issued without due process, and that if collection continues under the levy, plaintiff will be left with "basically no monies to live on." Dkt. No. 3. Plaintiff has not met the stringent standard to warrant the injunctive relief that he requests. Plaintiff has not established, with credible evidence, that he is likely to succeed on the merits of his underlying action.

While the Supreme Court recognizes one judicial exception to the Anti-Injunction Act,*fn3 plaintiff has not established that he fits into the judicial exception. The judicial "exception exists only when the plaintiff can show both: (1) that the government could 'under no circumstances' ultimately prevail and (2) that equity jurisdiction otherwise exists."*fn4 Tucker v. United States, No. 96-CV-6093, 1998 WL 708923, at *2 (E.D.N.Y. Jul. 6, 1998) (emphasis added) (citing Bob Jones University v. Simon, 416 U.S. 725, 736 (1974); Enochs v. Williams Packing and Navigation Co., 370 U.S. 1 (1962)). To take advantage of the judicial exception, plaintiff must prove "that the government has no possible chance of succeeding on the merits....'" Tien v. Goldenberg, No. 94-CV-3868, 1996 WL 271591, at *2 (E.D.N.Y. Jan. 30, 1996, as amended May 29, 1996) (citations omitted). In deciding whether the judicial exception is applicable, the court must "take the view of the facts that is most liberal to the Commissioner, not to the taxpayer seeking injunctive relief." Tucker, 1998 WL 708923, at *2 (citations omitted). The Court has reviewed the allegations set forth in plaintiff's complaint in conjunction with the relevant law and finds that plaintiff has failed to meet this burden.

Based on the foregoing, plaintiff's "Motion to Stay" is denied. WHEREFORE, it is hereby

ORDERED, that it is the responsibility of plaintiff to immediately serve the defendants with a copy of the summons and complaint in accordance with the Federal Rules of Civil Procedure, and it is further

ORDERED, that the parties shall comply with General Order 25, which sets forth the Civil Case Management Plan used by the Northern ...

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