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Marranca v. United States Internal Revenue Service

March 31, 2009


The opinion of the court was delivered by: William M. Skretny United States District Judge



In this action, pro se Petitioner James A. Marranca seeks to quash a Notice of Levy served on his employer based on various "tax protester" theories challenging the Internal Revenue Service's ("IRS") authority to collect federal income taxes.*fn1 (Docket No. 6.) Presently before this Court is the government's Motion to Dismiss the Amended Petition, as well as Petitioner's various motions seeking default judgment against his employer. For the reasons that follow, the government's motion is granted and Petitioner's motions are denied.


A. Procedural History and Pending Motions

On December 28, 2007, Petitioner filed a Petition against the Commissioner of the IRS, Debra K. Hurst (an IRS employee), and his employer, Precision Process Equipment, Inc. ("Precision"), requesting that an IRS Notice of Levy served on Precision be quashed, and that a temporary restraining order be issued to restrain Precision from garnishing his wages in compliance with the Notice of Levy. (Docket No. 1).

This Court denied Petitioner's request for a temporary restraining order on January 4, 2008, finding that the Anti-Injunction Act, 26 U.S.C. § 7421, barred such relief. (Docket No. 2.) Petitioner moved for reconsideration on January 28, 2008 (Docket No. 4), which this Court denied on January 31, 2008 (Docket No. 5).

Thereafter, on February 15, 2008, Petitioner filed an Amended Petition, adding Henry M. Paulson, Secretary of the Treasury of the United States, and Linda E. Stiff, Acting Commissioner of Internal Revenue, as respondents.*fn2 (Docket No. 6.) This rendered the initial Petition moot.

The motions to date have centered around two issues: (1) the government's efforts to secure dismissal of the Amended Petition, and (2) Petitioner's efforts to secure default judgment against Precision. The motions have been sufficiently briefed and are ripe for consideration. Oral argument is unnecessary.

On March 7, 2008, the government filed a Motion to Dismiss the Amended Petition. (Docket Nos. 9, 10, 12, 20.) Petitioner filed two responses in opposition (Docket Nos. 17, 22), as well as a Motion to Dismiss the government's Motion to Dismiss (Docket No. 23). The government filed a response in opposition to Petitioner's Motion to Dismiss on June 5, 2008. (Docket No. 24.) Approximately one month later, Petitioner filed a Petition for Writ Quo Warrantor, seeking an Order compelling the government to, inter alia, demonstrate its constitutional authority to lay and collect taxes. (Docket No. 29.)

Meanwhile, on April 3, 2008, the Clerk of the Court entered default against Precision because it failed to appear and defend this action. (Docket No. 15.) Petitioner moved for default judgment on April 17, 2008. (Docket No. 16.) Though not appearing for Precision, the government filed a response in opposition to Petitioner's Motion for Default Judgment on April 22, 2008. (Docket No. 18.) Petitioner responded with a "Clerk's Praecipe Re: Default Judgment by Clerk and Order" (Docket No. 19) and later a "Judicial Notice of Trespass, and Motion for Sanctions" (Docket No. 27), which both request that the government's submission be stricken and that sanctions be imposed. The government opposed each of Petitioner's submissions. (Docket Nos. 21, 28.)

Finally, Petitioner filed two Motions for Writ of Mandamus (Docket Nos. 25, 30, 31) in June and October 2008, seeking an Order compelling the Clerk of the Court to grant his Motion for Default Judgment against Precision. The government opposed each motion. (Docket Nos. 26, 32.)

B. Facts

The facts of this case - which are alleged in the Petition but not re-alleged in the Amended Petition - are simple.*fn3 On December 3, 2007, the IRS sent Precision a Form 668-W(c) Notice of Levy on Wages, Salary, and Other Income, to begin garnishing Petitioner's wages to collect back taxes. (Petition, Docket No. 1, pp. 4-5, ¶¶ 8-10.) This form, which is attached to the Petition as Exhibit B, reflects that Petitioner's total unpaid assessment from tax years 1995, 2001, 2002, and 2003, was $22,303.23 as of December 26, 2007. (Petition, p. 5, ¶¶ 12-13 and Exhibit B.)

Petitioner alleges that the IRS never assessed him for tax years 1995, 2001, 2002, and 2003. (Petition, p. 9, ¶ 32; p. 11, ¶ 41.) In support of this allegation, Petitioner attaches a July 2004 letter response he received to a Freedom of Information Act request, wherein the IRS stated that "[w]e have no record of tax assessments for the tax years 1996, 2002 and 2003 at the present time, therefore, there is no responsive Record of Assessment for those years." (Petition, p. 9, ¶ 32 and Exhibit D.) Petitioner therefore maintains that no tax has been assessed. (Petition, p. 10, ¶ 36.) The government advises, however, that the assessments for 2002 and 2003 were made after the July 2004 letter was issued. (Murphy Decl., Docket No. 12, ¶ 5.)

In his Amended Petition, Petitioner sets forth a litany of reasons for why he believes the Notice of Levy should be quashed, mainly centered around his belief that the IRS is without authority to collect income taxes. Based on these reasons, he asks that this Court (1) quash the Notice of Levy, declare it an "uttered instrument" of no legal force, and order Precision to disregard it, (2) issue an arrest warrant for Respondent Hurst for the "crime of uttering," (3) order the return of his allegedly illegally seized property (presumably his garnished wages) with interest, and (4) "order that all federal respondents be brought before a court, sitting in common law jurisdiction, and made to bring forth the contract and or lien which would show proof of the duty, obligation and liability of James A. Marranca." (Amended Petition, p. 17.)


A. The United States Is the Proper Federal Respondent

"The general rule is that a suit is against the sovereign if 'the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration' . . . or if the effect of the judgment would be 'to restrain the Government from acting, or to compel it to act.'" Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963) (quoting Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 1012, 91 L.Ed. 1209 (1947) and Larson v. Domestic & Foreign Corp., 337 U.S. 682, 704, 69 S.Ct. 1457, 1468, 93 L.Ed. 1628 (1949)).

"Suits against federal employees acting in their official capacity and suits against federal agencies must be analyzed as suits against the United States." See Petitio v. Hill, No. CV-04-4493, 2007 WL 1016890, at *10 (E.D.N.Y. Mar. 27, 2007) (citing Celauro v. United States, 411 F.Supp.2d 257, 267-68 (E.D.N.Y. 2006)); see also Higgins v. United States, No. 02 CV 499, 2003 WL 21693717, at *1 (E.D.N.Y. May 27, 2003) (dismissing IRS on ground that Congress has not authorized suit against the IRS in its own name).

Petitioner argues that his claims should be considered under Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, in which the United States Supreme Court held that federal officials may be held personally liable for damages for the violation of an individual's constitutional rights. 403 U.S. 388, 396-97, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). But a Bivens action is unavailable when adequate remedial mechanisms exist for the alleged constitutional violations, such as the process afforded by the Internal Revenue Code. See Schweiker v. Chilicky, 487 U.S. 412, 423, 108 S.Ct. 2460, 101 L.Ed.2d 370 (1988). Thus, a Bivens action is not available against IRS officials to challenge tax collection and assessment. See Hudson Valley Black Press v. I.R.S., 409 F.3d 106, 113 (2d Cir. 2005) (noting that "[b]ecause of the complex remedial scheme that Congress has created, and the plain indication that the failure of Congress to provide a remedy for injuries arising from tax assessment was not inadvertent, every circuit that has considered the appropriateness of a Bivens remedy in the taxation context has declined to permit one"); McMillen v. United States Dep't of Treasury, 960 F.2d 187, 190-91 (1st Cir. 1991) (per curiam); Celauro, 411 F.Supp.2d at 267. Petitioner has therefore failed to state a Bivens claim. See Celauro, 411 F.Supp.2d at 267; Jackman v. D'Agostino, 669 F.Supp. 43, 46-47 (D.Conn. 1987); Flank v. Sellers, 661 F.Supp. 952, 954-55 (S.D.N.Y. 1987)

Here, Petitioner's allegations involve actions taken by the individual respondents in their official capacities. This is therefore a suit against the United States. Accordingly, the IRS, Henry Paulson, Linda Stiff, and Debra Hurst, will be dismissed as respondents in favor of the United States.

The United States, as sovereign, however, may only be sued to the extent that it consents to be sued. United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941). Only Congress can waive this sovereign immunity defense, and it must do so expressly. United States v. Nordic Village, 503 U.S. 30, 33-34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992). In this context, the United States has not expressly consented to be sued, and in fact, Congress has expressly asserted its sovereign immunity through the Anti-Injunction Act. See Celauro, 411 F.Supp.2d at 269 ("the Anti-Injunction Act represents an express assertion of sovereign immunity by the United States in suits seeking to restrain the assessment or collection of any tax"). Accordingly, this Court lacks subject matter jurisdiction and Petitioner fails to state a claim against the United States. Id. at 270.

B. Dismissal of the Amended Petition Is Warranted

1. The Government's Motion to Dismiss the ...

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