Diamond v. United States , 115 Fed. Cl. 516 ( 2014 )

FILED
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U.S. COURT OF
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No. 13-292 T
Filed: April 4,2014
TO BE PUBLISHED
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Claim for Relief, RCFC 8(a)(2);
Motion to Dismiss, RCFC 12(bX1),
12(bX6);
NORMAN DOUGLAS DIAMOND AND Presenting Matters Outside Pleadings,
ZAIDA GOLEfrIA DEL RoSARIo, RCFC 12(d);
Motion for Summary Judgment, RCFC
Plaintiffs, pro se, 56;
When Facts Unavailable to
Nonmovant. RCFC 56(d);
Privacy Act of 1974,5 U.S.C. g 552a;
THE LJNITED STATES, 26 U.S.C. $ 6402 (offsetting
overpayments against liabilities);
Defendant. 26 U.S.C. $ 6702 (fees assessed for
frivolous tax retums);
*:f * t( *****
Pro Se.
**,! ***,t ** *** *! *** ** **:f *:t* *** *,t *
Norman Douglas Diamond & Zaida Golef,a Del Rosario, Ome City, Tokyo, Plaintiffs, pro se.
Michael J. Ronickher, United States Department of Justice, Tax Division, Washington, D.C.,
Counsel for the Government.
MEMORANDUM OPINION AND FINAL ORDER
BRADEN' -/adge.
This case represents onein a series of pro se Plaintiffs' efforts to obtain relief from
federal taxes levied against them.' In this case, Plaintiffs seek refunds for tax years 2006-20l l,
and abatement of a "frivolous" filing fee assessed by the Internal Revenue Service ("IRS"),
pursrunt to 26 U.S.C. $ 6702, for the 2008 tax year.'
'Based on the court's review, Plaintiffs have filed at least six different lawsuits
challenging their tax liability: (1) Diamond v. Ilnited States, 107 Fed. Cl. 702 (2012); (2)
Diamond v. C.LR., No. 003033-125 L (Apr. 17, 2012); (3) Diamond v. ClR., No. 13878-123
(T.C. Aug. 28,2Ol2); (4) Diamond v. C.I.R., No. 005518-t2S L (T.C. Sept. 28,2012); (S)
Diamond v. C.I.R., No. 014482-105 L (T.C. Sept. 30,2013); and (6) Diamond v. CLR., No.
005516-125 L (T.C. Dec. 19,2013).
2
Hereinafter, the Intemal Revenue Code will be cited as.LR.C..
RELEVANT FACTUAL BACKGROUND.s
Norman Douglas Diamond and Zaida Golefra Del Rosario (collectively "Plaintiffs") are
married United States taxpayers residing in Tokyo, Japan. Pl. Ex. A at 5. From 1992 through
1994, the IRS sent Plaintiffs' tax documents (and other correspondence) to their address in
Japan, and displayed Mr. Diamond's social security number on the outside of the envelope.
Compl. 'lf 8. Sometime in 1994, Mr. Diamond found an undelivered letter from the IRS in "a
public thoroughfare" that publicly displayed his name, address, and social security number.
Compl. fl 12. As a result of the IRS's actions, Mr. Diamond's social security number was
"abused." Compl. tl 31. Sometime in 1993 and 1994, Mr. Diamond wrote to the Govemment,
requesting a statement as to how the public display ofhis social security number complied with
the Privacy Act of 1974,5 U.S.C. $ 552a. Compl. fl 9. He never received a response. Compl. tf
10.
Around February 21, 1994, Ms. Del Rosario applied for a social security number by
submitting Form SS-5 . (Application for a Social Security Card) to the Social Security
Administration ('SSA').., Compl.'lf 6; Pl. Ex. A at 3. The Complaint alleges that, because of the
Govemment's public display of Mr. Diamond's social security number, he applied for a
replacement on March 24, 1994 by submiuing Form SS-5 to the SSA. Compl. tf 4. Mr.
Diamond's application was incomplete. Pl. Ex. A at 62 (A letter from Mr. Diamond explaining
that he submitted a "nearly completed Form SS-5," because he intentionally did not list his
current social security number and declined to answer other questions). Mr. Diamond's March
24, 1994 application also included an attached letter, stating that he would write ,,,[ajpplied for'
or other suitable response [in the future] on any U.S. [G]ovemment document that makes a legal
demand for [his] social security number." Pl. Ex. A at 62.
In 2007 and 2009, and on other times during this period, Plaintiffs applied for individual
taxpayer identification numbers ('ITIN') by submitting Form W-7 (Application for IRS
Individual Taxpayer Identification Numbers) to the IRS. Compl.flfl 5,7,25-29.
r The relevant facts discussed herein were derived
from: Plaintiffs' April 25, 2013
Complaint ("Compl.") and Exhibits attached thereto ("P1. Exs. A-C"); the Government,s August
23,2013 Motion To Dismiss and Exhibits attached thereto ("Gov't Mot. Exs. A-B,,) (certified
copies of Mr. Diamond's tax records for years 2005-2011); Plaintiffs' September 3, 2013
Objection To Motion To Dismiss ("P1. Resp.") and Exhibit attached thereto (,,P1. Resp. Ex. A");
Plaintiffs' October 8,2013 Sur-Reply To Motion To Dismiss ("P1. Sur-Reply,') and Exhibit
attached thereto ("P1. Sur-Reply Ex. A"); and Plaintiffs' october 29,2013 Supplement To Sur-
Reply ("P1. Supp.") and Exhibit attached thereto ("P1. Supp. Ex. A"). None of plaintiffs,
exhibits are numerically paginated. Therefore, the citations herein to particular pages reflect
their order within the exhibit.
a
The Complaint does not indicate whether the application was for an original social
security number or for a replacement.
On July 10, 2010, Mr. Diamond submitted a revised application for a replacement social
security number to the United States Embassy in Tokyo. Pl. Ex. A at 55. On September 7,2010,
the SSA denied Mr. Diamond's application. Compl. tf 4.
In January 2011, after rejecting both of Plaintiffs' ITIN applications, Plaintiffs received
ITINs. Compl. flfl 5, 7, 34. The Complaint alleges that, to date, the SSA has not acted on Ms.
Del Rosario's application for a social security number. Compl. tf 6.
The court now turns to the relevant facts for each of the tax years 2006-2011. and then to
the frivolous filing fee assessed for the 2008 tax year.
2006 Tax Year
On June 9,2007, Plaintiffs submitted a joint tax return by filing Form 1040 with the IRS
("2006 tax retum"), requesting a refund of $10,762.35, which was received by the IRS on June
16,2007. Compl.'lffl 40, 49; Pl. Ex. A at 5-6. This retum reported $2,511.21 in adjusted gross
income, and included: Schedule A (ltemized Deductions); Schedule D (Capital Gains and
Losses); a Capital Loss Carryover Worksheet; Form 6781 (Gains and Losses From Section 1256
Contracts and Straddles); Form 1116 (Foreign Tax Credit); and an accompanying ..statement
conceming the tax retum." Pl. Ex. A at 8-20. The statement explained, among other things, that
"some estimates and errors are nearly certain." Pl. Ex. A at21-23,
The 2006 tax return also contained several anomalies. First, neither Mr. Diamond nor
Ms. Del Rosario included their social security numbers on the retum, instead referring the IRS to
the attached "statement conceming the tax return" through a notation that read "see statement."
Pl. Ex. A at 5. Second, Plaintiffs listed'$0.00" in income, writing',see statement" on line Z
(wages, salaries, tips, etc). Pl. Ex. A at 5. Third, Plaintiffs crossed out portions of the jurat
above the signature line on the 2006 tax return.s Pl. Ex. A at 6. specificaliy, plaintiffs crossed
out the text "to the best of my knowledge and belief, [the statements contained herein] are true,
correct, and complete," replacing that line with 'the accompanying statements explain our
knowledge and belief." Comp. Ex. A at 6. Plaintiffs also made several additions on the 2006 tax
retum, crossing out various lines of text and replacing them with handwritten notes. Pl. Ex. A at
6. Fourth, many of the forms accompanying Plaintiffs' Form 1040 contained handwritten
alterations and added explanatory text. ,See Pl. Ex. A at 8-20.
On January 15, 2008, the IRS informed Plaintiffs that the 2006 tax retum was deemed
frivolous under I.R.C. g 6702. Compl. !f 43. Accordingly, on June 2,2008, the IRS assessed a
$5,000 fee against Plaintiffs. Gov't Mot. Ex. B at B-9: see a/so Pl. Resp. Ex. A at I 1.
5
The jurat requires a taxpayer to sign the Form 1040 under penalty of perjury. In its
unadulterated form, it reads: "Under penalties of perjury, I declare that I have examined this
retum and accompanying schedules and statements, and to the best of my knowledge and belief,
they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all
information of which preparer has any knowledge." Pl. Ex. A at 6.
On May 19,2009, the IRS issued a Notice of Federal Tax Lien, because Plaintiffs failed
to pay the civil penalties assessed pursuant to LR.C. $ 6702 for tax year 2006. Pl. Resp. Ex. A at
9-14. On June 9, 2010, following a Collection Due Process hearing, the IRS issued a Notice of
Determination that sustained the Notice of Federal Tax Lien for tax vear 2006. Pl. Reso. Ex. A
at 9-14.
On February 6,2012, Mr. Diamond filed an individual 2006 Form 1040 tax return
("conected 2006 tax retum") that reported $1,048 in adjusted gross income and requested a
refund of withholding. Gov't Mot. Ex. Aat A-2. This retum did not have the same deficiencies
as the 2006 tax retum and the IRS assessed $0.00 in tax liability. Gov't Mot. Ex. A at A-2.
Since Mr. Diamond made payments of $116.95 though withholding, the IRS applied this
overpayment to Mr. Diamond's other outstanding tax liabilities. Gov't Mot. Ex. A at A-2. On
May 29,2013, payments made by Mr. Diamond of $500 and $ 150 also were applied towards his
outstanding tax liability for the 2005 tax year. Gov't Mot. Ex. A at A-2. The current balance for
Mr. Diamond's 2006 tax year account is $0.00. Gov't Mot. Ex. A at A-3.
2007 Tax Year:
It appears that, on August 7,2008, Plaintiffs filed a tax retum with the IRS, although that
return was not included in Plaintiffs' submissions to the court. Pl. Ex. A at 31. On August 3,
2010, Plaintiffs spoke with an IRS representative who pointed out certain defects in Plaintiffs'
August 7, 2008 retum. Compl. fl 73.
On August 27, 2010, the IRS sent a letter to Plaintiffs stating that Plaintiffs' August 7,
2008 retum also was deemed to be frivolous under LR.c. $ 6702, because there was "no basis in
the law for [Plaintiffs'] position." Pl. Ex. A at 30-31; see also Compl. fl 71. That letter wamed
that Plaintiffs would be fined $5,000, unless they filed a corrected tax retum within 30 days after
receipt of the letter. Pl. Ex. A at 31-32. The letter did not, however, explain what aspect of
Plaintiffs'tax return the IRS considered to be frivolous. Compl. !J 71.
On September 5,2010, Plaintiffs filed a joint tax retum reporting $2,505.76 in adjusted
gross income ("2007 tax retum"), together with: Form 4868 (Application for Automatic
Extension of Time To File U.S. Individual Tax Retum); Form W-7; a Foreign Eamed Income
Tax worksheet; a Qualified Dividends and capital Gain Tax worksheet; schedule B (Interest
and Ordinary Dividends); Schedule D; a Capital Loss Carryover Worksheet; Form 6781; and
Form 1116. Pl. Ex. A at 35-54."
Like the 2006 tax return, the 2007 tax retum contained several anomalies. First, rather
than providing their social security numbers, Plaintiffs wrote "[social security number]: applied
for. . . ITIN: rejected." Pl. Ex. A at 35. Second, Plaintiffs listed "$0.00" in income, writing.,see
statement" on line 7 (wages, salaries, tips, etc). Pl. Ex. A at 35. Third, although plaintiffs did
not alter the jurat on this tax retum, they included a notation that the jwat was "signed in
obedience of instructions from [the United States] Treasury." pl. Ex. A at 36. Fourth, many of
o
The Complaint alleges that this conected and accepted retum was sent within 30 days
of the receipt of the August 27 letter. Compl.fl76.
the forms accompanying Plaintiffs' Form 1040 contained handwritten alterations and starcments.
See generally Pl. Ex. A at 35-54. Nevertheless, the IRS accepted the retum and assessed $0.00
in taxes. Gov't Mot. Ex. A at A-5. Since Plaintiffs made $131.49 in payments through
withholding, that overpayment was applied to Plaintiffs' other outstanding tax liabilities. Gov't
Mot. Ex. A at A-5.'
On February 24,2011, the IRS issued a Letter 1058 to Plaintiffs, stating that the IRS
intended to issue a levy against Plaintiffs' bank accounts, wages, or other assets, because they
had an outstanding unpaid balance on their 2005, 2006, and 2007 t^x years. Pl. Ex. B at 32. On
March 10, 2011, the IRS received Form 12153 from Plaintiffs, requesting a Collection Due
Process Hearing. Pl. Ex. B at 32.
On June 13,2011, the IRS received a letter from Plaintiffs requesting that the civil
penalty assessed pursuant to I.R.C. $ 6702 for tax year 2007 be abated. pl. Ex. B at 7-8. On
September 20, 2011, the IRS disallowed that claim. Pl. Ex. B at 7-8.
On February 9, 2012, the IRS issued a Notice of Determination that sustained the
proposed levy. Pl. Ex. B at 3G-34.
Plaintiffs' cunent balance for the 2007 tax year is $0.00, Gov't Mot. Ex. A at A-6.
2008 Tax Year
At an unidentified time, Plaintiffs submitted "what they believed to be a United States
federal tax retum for year 2008." compl. fJ 81. The IRS responded that it also considered this
retum to be frivolous under LR.C. g 6702. Compl. fl 82.
On February 6,2012, Mr. Diamond filed an individual 2008 1040 tax rerum with the IRS
C'2008 tax retum"), reporting $6,490 in adjusted gross income and $0.00 due in taxes. Gov't
Mot. Ex. A at A-8. Because Mr. Diamond had made $192.31 in payments through withholding,
this overpayment remains as a credit. Gov't Mot. Ex. A at A-8. Unlike prior years, the IRS did
not apply that credit to Mr. Diamond's outstanding tax liability for other years, because his
account had "been frozen [by the IRS] as [Mr. Diamond] pursues . . . various other litigations
against the IRS." Gov't Mot. 7. Mr. Diamond's cunent balance for the 2008 tax year is a credit
of $192.31. Gov't Mot. Ex. A at A-9.
2009 Tax Year
On October 7, 2010, Plaintiffs filed a joint 2009 1040 rax retum reporring $36,443 in
adjusted gross income ("2009 tax retum"). Gov't Mot. Ex. A at A-11. The IRS assessed $0.00
in tax. Gov't Mot. Ex. A at A-1 l. Because Plaintiffs made $245.98 in payments through
withholding, this amount remains as a credit. Gov't Mot. Ex. A at A-11-12. Like the 200g
7
On November 26,2010, Plaintiffs filed an amended tax retum that also resulted in no
additional tax being assessed. Gov't Mot. Ex. A. at A-5.
account, Plaintiffs' 2009 account has been frozen, and the overpayment has not been applied,
because of litigation being pursued by Mr. Diamond. Gov't Mot. 7.
On February 7,2011, the IRS issued a Notice of Adjusted Refund to Plaintiffs, stating
that Plaintiffs were due a refund of $247.44, instead of than $245.98. Pl. Ex. B at 1-3. The
Notice stated, however, that Plaintiffs would "receive a refund . . . within 4-6 weeks as long as
[Plaintiffs] don't owe tax or debts [the IRS is] required to collect." Pl. Ex. B at 1. The current
balance of Plaintiffs' 2009 account is a $245.98 credit. Gov't Mot. Ex. A at A-12.
2010 Tax Year
On August 15, 2011, Plaintiffs filed a joint 2010 1040 tax retum reporting $34,079 in
adjusted gross income. Gov't Mot. Ex. A at A-14. The IRS assessed $0.00 in tax. Because
Plaintiffs made $157.50 in payments through withholding, this amount was applied towards
Plaintiffs' outstanding tax liability for the 2006 tax year. Gov't Mot. Ex. A at A-14.
On September 26,2011, the IRS issued a Notice to Plaintiffs, informing them that the
IRS had applied the $157.50 overpayment for the 2010 tax year towards Plaintiffs' outstanding
liability for the 2006 tu< year. Pl. Ex. B at 10-12. The current balance on Plaintiffs' account for
the 2010 tax year is $0.00. Gov't Mot. Ex. A at A-15.
2011 Tax Year
On June 14, 2012, Mr. Diamond filed an individual 2011 1040 tax retum reporting
$1,089 in adjusted gross income. Gov't Mot. Ex. A at A-17. The IRS assessed $0.00 in raxes.
Gov't Mot. Ex. A at A-17. Because Mr. Diamond made $36.24 in payments through
withholding, the IRS also applied this amount towards his outstanding liabilily for the 2006 tax
year. Gov't Mot. Ex. A at A-17.
On July 16, 2012, the IRS issued a letter to Mr. Diamond, explaining that the IRS applied
the $36.24 overpayment to the outstanding liability for the 2006 tax year. Compl. !J 101; see also
Pl. Ex. B at 55 (July 16,2012IRS Notice). The letter stated that, since the IRS applied the 201 1
overpayment to outstanding liability for the 2006 tax year, Plaintiff was ,due a refund of $0.00.',
Pl. Ex. B at 55. The current balance of Mr. Diamond's 2011 account is $0.00. Gov't Mot. Ex. A
at A-18.
Frivolous Fee
On July 7 , 2011, the IRS assessed a $5,000 fee against Mr. Diamond, pursuant to
I.R.C. $ 6702, for filing a frivolous income tax retum in 2008 ("the 2008 fee"). Gov't Mot. Ex.
B at B-20."
8
Mr. Diamond has a history of being assessed filing penalties under I.R.C. $ 6702. For
the 2005 tax year, he was assessed two $500 penalties and now has an outstanding balance of
$403.77. Gov't Mot. Ex. B at B-2, B-7. For tax year 2006, Mr. Diamond was assessed two
$5,000 penalties, and now has an outstanding balance of 99,806.26. Gov't Mot. Ex. B at B-9, B-
On August 5, 2011, the IRS received a letter from Mr. Diamond, requesting that the
agency abate the 2008 fee. Pl. Ex. B at 42. On May 17,2012, the IRS disallowed Mr.
Diamond's request, because he failed to respond to an IRS 3176 letter or CP72 notice in a timely
manner.' Pl. Ex. B at 4243; see also Compl. g 107. The August 5, 2011 letter advised Mr.
Diamond that he could challenge the 2008 fee either in a United States District Court or the
United States Court of Federal Claims. Pl. Ex. B at 42.
On May 31, 2012, Mr. Diamond filed a petition in the United States Tax Court,
challenging the IRS' failure to abate the 2008 fee. Compl. fl 109; see also Diamond v. C.I.R.,
No. 13878-125 (T.C. Aug.28,2012). Onluly27,2012,Mr. Diamondrequestedthatthe United
States Tax Court transfer his case to the United States Court of Federal Claims. See
Diamondv. CIR., No. 13878-125 (T.C. Aug. 28,2012). On August 28,2012, the United States
Tax Court dismissed the petition for lack of subject matter juisdiction. 1d.
il. PROCEDURALHISTORY.
On April 25,2013, Plaintiffs filed a Complaint in the United States Court of Federal
Claims seeking a refund of withholding for their 2006-2011 tax years and an abatement of the
2008 fee assessed, pursuant to I.R.C. $ 6702, for the 2008 tax year. The Complaint alleges that
Plaintiffs are owed $88 1.93 in refunds for tax years 2006-2011. Compl. ,lf 157. 'u The
10, B-13. For the 2007 tax year, Mr. Diamond was assessed three $5,000 penalties, and now has
an outstanding balance of$15,076. Gov'tMot. Ex. B atB-15, B-16, B-18.
e
Letter 3176, also known as "Response to Frivolous Documents/Retums Received from
Taxpayers," informs the taxpayer that the IRS considers a tax retum to be frivolous and subject
to penalty under I.R.C. $ 6702, but "provides the taxpayer an opportr.rnity to withdraw a frivolous
retum filing." See Intemal Revenue Manual, Part 5: Collection Process,
http://www.irs.gov/irrn/part5/irm_05-020-010.html (last visited Apr. 3, 2014). A CP72 Notice
likewise informs the taxpayer that the IRS considers a tax retum to be frivolous, when it states a
position or provides information that "has no basis in the law." Understanding Your CP72
Notice, http://www.irs.gov/Individualsfunderstanding-Your-CP72-Notice (last visited Apr. 3,
2014). The CP72 Notice affords the taxpayer thirty days to file a corrected retum, but failure to
appropriately respond can result in a penalty of $5,000 being assessed. 1d
l0
The Complaint alleges the following amounts are owed for each year:
2006: $116.95 (Compl. !f 69);
2007: $131.49 (Compl. fl 80);
2008: $192.31 (Compl. tf 89);
2009: $247.44 (Compl.!f 95);
2010: $157.50 (Compl. !l 100,1r
2011: $36.24 (Compl. fl 105).
Complaint also alleges that the Govemment inconectly determined that Mr. Diamond's 2008 tax
retum was frivolous and requests the abatement of the $5,000 fee. Compl. 1fl2,106,157.
On August 23,2013, the Govemment filed a Motion To Dismiss, pursuant to RCFC
12(bxl) and 12(b)(6). On September 3,2013, Plaintiffs filed a Response. On September 20,
2013, the Govemment filed a Reply. On October 8,2013, Plaintiffs filed a Sur-Reply to the
Govemrnent's Motion To Dismiss.
On October 11,2013, the court issued an Order advising the Govemment that the August
23,2013 Motion To Dismiss would be considered as one for summary judgment under RCFC
56, since both parties had substantially relied on matters outside the pleadings. See Order,
Diqmond v. United States (No. 13-292), Dkt. No. 14; see also Martin v. United States,96 Fed.
Cl. 627,629 (2011) ("When matters outside the pleadings are presented and not excluded by the
[c]ourt, a motion to dismiss under Rule 12(b)(6) is to be converted to a motion for summary
judgment[.]"). Pursuant to RCFC 12(d)," the court's October 11, 2013 Order directed Plaintiffs
to file any new information relevant to the factual contentions in Govemment's August 23, 2013
Motion To Dismiss on or before November 8, 2013. On October 23,2013, Plaintiffs filed a
Response, together with a Motion To Compel the Govemment to produce forms and
communications conceming a related case filed by Plaintiffs in the United States Tax Court,
Docket No. 14482-10SL. On October 28,2013, Plaintiffs filed a Supplement to the October 23,
2013 Response. On November 6,2013, the Govemment frled a Notice Of Election Not To File
Supplemental Reply and an Opposition to Plaintiffs' October 23,2013 Motion To Compel. On
November 18, 2013, Plaintiffs filed a Reply.
On November 22,2013, the court issued an Order that defened ruling on Plaintiffs'
October 23, 2013 Motion To Compel, to allow Plaintiffs to file a single submission to
demonstrate why the discovery.
^requested
in the October 23, 2013 Motion To Compel was
warranted under RCFC 56(d). '' On December 2, 2013, Plaintiffs filed a Response. On
December 5,2013, the Govemment filed a Reply. On December 17,2013, the court issued a
Memorandum Opinion And Order denying Plaintiffs' October 23,2013 Motion To Compel.
On January 2,2014, the court issued an Order instructing the Clerk not to accept any
additional filinss in this case.
rrSee
RCFC 12(d) C'lf, on a motion under RCFC l2(bx6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the motion must be treated as one for
summary judgment under RCFC 56. All parties must be given a reasonable opportunity to
present all the material that is pertinent to the motion.").
'' RCFC 56(d) provides, in relevant part, that if the party opposing summary judgment
"shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to
justift its opposition," the court may defer ruling on or deny a motion for summary judgment, or
allow additional time to conduct discovery. RCFC 56(d).
III. DISCUSSION.
A, Jurisdiction.
The United States Cout of Federal Claims has jurisdiction wrder the Tucker Act, 28
U.S.C. $ 1491, "to render judgment upon any claim against the United States founded either
upon the Constitution, or any Act of Congress or any regulation of an executive department, or
upon any express or implied contract with the United States, or for liquidated or unliquidated
damages in cases not sounding in tort." 28 U.S.C. $ 1491(a)(1). The Tucker Act, however, is "a
jurisdictional statute; it does not create any substantive right enforceable against the United
States for money damages . . . . [T]he Act merely confers jurisdiction upon [the United States
Court of Federal Claims] whenever the substantive right exists." United States v. Testan, 424
U.S. 392, 398 (197 6). Therefore, to pusue a substantive right under the Tucker Act, a plaintiff
must identiff and plead an independent contractual relationship, Constitutional provision, federal
statute, and/or executive agency regulation that provides a substantive right to money damages.
Todd v. United States,386 F.3d 1091, 1094 (Fed. Cir. 2004) ("[J]urisdiction under the Tucker
Act requires the litigant to identifu a substantive right for money damages against the United
States separate from the Tucker Act[.]"); see also Fisher v. United States,402 F.3d 1167,ll72
(Fed. Cir.2005) (en banc) ("The Tucker Act . . . does not create a substantive cause ofaction; in
order to come within the jurisdictional reach and the waiver of the Tucker Act, a plaintiff must
identifu a separate source of substantive law that creates the right to money damages. In the
parlance ofTucker Act cases, that source must be 'money-mandating'"').
The Tucker Act authorizes the United States Court of Federal Claims to adjudicate tax
refund claims if a taxpayer has paid the full assessed federal tax liability and timely filed a
refund claim with the IRS stating the grounds for the claim. See 28 U.S.C' $ 1a91(a); I.R.C' $$
651 1(a), 7422(a); see also Shore v. United States, 9 F.3d 1524, 1526 (Fed. Cir. 1993) (holding
that a tax refund claim must be dismissed if the "principal tax deficiency has not been paid in
full"). If the claim is denied by the IRS and the taxpayer timely files suit, the United States
Court ofFederal Claims has jurisdiction to adjudicate the tax refund claim. See I.R.C. $ 6532(a);
see also 28 U.S.C. g 1346(a)(1). The issue of whether the court has jurisdiction over Plaintiffs'
claim for abatement ofthe 2008 fee is discussed more fully below.
B. Standard Of Review For Pro Se Litigants.
The pleadings of a pro se plaintiff are held to a less stringent standard than those of
litigants represented by counsel. See Haines v. Kerner,404 U.S. 519, 520 (1972) (holding that
pro se complaints, "however inartfully pleaded," are held to "less stringent standards than formal
pleadings drafted by lawyers"). It has been the tradition of this court to examine the record "to
seeif fapro sel plaintiff has a cause of action somewhere displayed." Ruderer v. United Stdtes,
4l2F.2d 1285,1292 (Ct. Cl. 1969). Nevertheless, while the court may excuse ambiguities in a
pro se ptaintiff s complaint, the court "does not excuse [a complaint's] failures."
Henke v. United States,60 F.3d 795,799 (Fed. Cir. 1995).
C. Standard Of Review For A Motion To Dismiss Pursuant To RCFC l2(bxl).
A challenge to the United States Court ofFederal Claims' "general power to adjudicate in
specific areas of substantive law . is properly raised by a [Rule] 12(bX1) motion."
Palmerv.United States, 168 F.3d 1310, 1313 (Fed. Cir. 1999); see aiso RCFC 12(bX1)
(allowing a party to assert, by motion, "lack of subject-matter jurisdiction"). When considering
whether to dismiss an action for lack of subject matter jurisdiction, the court is "obligated to
assume all factual allegations [of the complaint] to be true and to draw all reasonable inferences
in plaintiff s favor." Henke,60 F.3d al797 .
D. Standard For Decision On A Motion For Summary Judgment.
On a motion for summary judgment, the moving party must establish that there is no
genuine issue of material fact, and that the moving party is entitled to judgment as a matter of
law. See Duramed Pharms., Inc. v. Paddock Labs., [nc.,644 F.3d 1376, 1380 (Fed. Cir. 2011);
see a/so RCFC 56(c). Only genuine disputes of material fact that might affect the outcome of the
suit preclude entry of summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.5.242,
248 (1986) ("As to materiality, the substantive law will identify which facts are material. Only
disputes over facts that might affect the outcome of the suit under the goveming law will
properly preclude the entry of summary judgment. Factual disputes that are inelevant or
unnecessary will not be counted."). "[The] existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported motion for summary judgm ent.,' Id. at
24748. "Courts are required to view the facts and draw reasonable inferences 'in the light most
favorable to the party opposing the [summary judgment] motion."' Scott v. Harris, 550 U.S.
372,378 (2007) (quoting United States v. Diebold, lnc.,369 U.S. 654, 655 (1962) (per curiam)).
In a tax refund suit, "the ruling of the [IRS] Commissioner enjoys a presumption of
correctness and a taxpayer bears the burden of proving it to be wrong." Danville plnvood
Corp. v. United States, 899 F .2d 3, 7 (Fed. Cir. 1990) (citing Welch v. Helvering,290 U.S. I I 1,
115 (1933) ("[The IRS Commissioner's] ruling has the support of a presumption of correctness,
and the petitioner has the burden ofproving it to be wrong.")); see also Int'l Paper Co. v. United
States, 36 Fed. Cl. 313, 322 (1996) C'tAl tax refund suit in the Court of Federal Claims ,is a de
novo proceeding, in which the plaintiff bears the burden ofproof with respect to each and every
element of its claim." (quoting Sara Lee Corp. v. United States,29 Fed. Cl. 330,334 (1993)).
Even if the presumption of correctness is overcome, the taxpayer still will carry the burden of
proof at trial to show a finding contrary to that of the IRS. See Helvering v. Taylor, 293 tJ.S.
507, 515 (1935) ("Unquestionably the burden of proof is on the taxpayer to show that the
Commissioner's determination is invalid."); see also Danville Plyuood Corp., 899 F.2d at 7
(stating that to overcome the presumption of correctness, "the taxpayer must come forward with
enough evidence to support a finding contrary to the Commissioner's determination,').
l0
E, Issues Raised By The Government's August 23,2013 Motion to Dismiss.
1. Whether The United States Court Of Federal Claims Has Jurisdiction
To Adjudicate Plaintiffs' Claim For Abatement Of The 2008 Fee.
a. The Governmentts Argument.
The Govemment argues that the court does not have subject matter jurisdiction to
adjudicate Plaintiffs' claim for abatement of the 2008 fee under RCFC 12(bX1), because
Plaintiffs have not paid the fee. Gov't Mot. 5. It is well established that prior to commencing a
tax refund suit in the United States Court of Federal Claims, a taxpayer must fully pay all
outstanding tax liabilities for the years in question on or before the date the complaint is filed.
Gov't Mot. 5 (citing Flora v. United States,357 U.S. 63, 72-73 (1958) ("[R]efund suits [can]
only be maintained upon full payment of the tax alleged to be due."), aff'd on reh'g,362U.5.
145 (1960); Ledford v. United States,297 F.3d 1378, 1382 (Fed. Cir. 2002) (explaining that the
United States Court of Federal Claims has jurisdiction to adjudicate federal tax refund claims,
but "payment of the assessed taxes in full is a prerequisite to bringing a refund claim")); see also
id. 6 (citing Rocovich v. United States,933 F.2d 991,993-94 (Fed. Cir. 1991) (requiring full
payment of a tax assessment prior to commencing a refund action)). The full payment rule also
encompasses penalties separately assessed against the taxpayer, such as those instituted under
I.R.C. $ 6702. Gov't Mot. 6 (citing Nasharr v. United States,105 Fed. Cl. 114, 116, 119 (2012)
(applying the full payment rtle of Flora to "late filing and failure to pay penalties" assessed by
the IRS)).
In this case, Plaintiffs have not yet paid the 2008 fee of $5,000, which remains an
outstanding liability on Plaintiffs' account for the 2008 tax year. Gov't Mot. 6 (citing Gov't
Mot. Ex. B at B-21) (IRS Certificate of Assessment)); see also ld (citing Rocovich, 933 F.2d at
944 (stating that IRS transcripts of account are "presumptive proof of a valid assessment where
the defendant has produced no evidence to counter this presumption" (intemal citations and
quotations omitted))). Since Plaintiffs' 2008 fee has not been paid, the court does not have
jurisdiction to adjudicate Plaintiffs' abatement claim. Gov't Mot. 6.
b. Plaintiffs' Response.
In response, Plaintiffs reference a May 17,2012 IRS letter that denied Plaintiffs' claim
for abatement ofthe 2008 fee, but advised that Plaintiffs "may file suit to recover tax, penalties,
or other amounts . . . with the United States Court of Federal Claims." Pl. Resp. I 5; see also Pl.
Ex. B at 42 (May l7, 2012 IRS Letter). Plaintiffs argue that, if the court may not adjudicate the
validity of the 2008 fee, that the Due Process Clause of the Fifth Amendment to the United
States Constitution has been violated. Pl. Resp. fl 6. Plaintiffs further assert that the IRS has not
adequately explained why Plaintiffs' 2008 tax retum was deemed frivolous. Pl. Resp. [n20,24,
40. Finally, Plaintiffs assert they already paid some money to challenge the validity of the 2008
penalty assessment. Pl. 10/23113 Resp. rl{ 4 (explaining that Plaintiffs paid $60 when they
petitioned for review ofthe assessment in the United States Tax Court).
l1
c. The Court's Resolution,
Plaintiffs have failed to meet their burden to establish subject matter jurisdiction
regarding their claim for abatement of the 2008 fee.ll
The April 25,2013 Complaint seeks an abatement of the 2008 fee assessed by the IRS.
The Govemment produced a signed and sealed Certificate of Official Record and certified
transcripts for Mr. Diamond that show he was assessed a $5,000 penalty "For Filing Frivolous
Income Tax Retum" for the 2008 tax year and that this assessment was urnpaid as of August 21,
2013. Gov't Mot. Ex. B at B-19-B-21. Plaintiffs have offered no contradictory evidence.ra
These IRS certificates are presumptively correct where, as here, Plaintiffs offered no evidence to
the confiary. see Rocovich,933 F.2d ar 994 ("A certificate of Assessments and Payments is
routinely used to prove that a tax assessment has in fact been made.").
As a matter of law, the "full payment rule requires that taxpayers prepay the tax principal
before the Court of Federal Claims will have subject matter jurisdiction over their tax refund
action under $ 1491." Shore, 9 F.3d at 1527; see also McNeil v. (Jnited States,293 Fed. App,x
758,760 (Fed. Cir. 2008) ("Under the 'full payment rule,' a raxpayer must fully pay disputed
taxes and seek a refund from the IRS before filing suit."). Thil requirement also applies, with
exceptions inapplicable here, to penalties imposed by the IRS.I) See Nasharr, 105 Fed. cl. at
'' Because the facts discussed above concem the court's subject matter jurisdiction, they
may be considered when ruling on the Govemment's August 23,2013 Motion To Dismiss. ,See
Rewolds v. Army & Air Force Exch. Serv., 846 F.2d,746, 747 (Fed. Cir. 19S8) (,,If a motion to
dismiss for lack of subject matter jurisdiction . . . challenges the truth of the jurisdictional facts
alleged in the complaint, the [trial] court may consider relevant evidence in order to resolve the
factual dispute."); see also Gonzalez v. united states,2B4 F.3d zg1,2gg (1st cir. 2002) (,,The
attachment of exlibits to a Rule 12(bxl) motion does not convert it to a Rule 56 motion. While
the court generally may not consider materials outside the pleadings on a Rule l2(b)(6) motion,
it may consider such materials on a Rule 12(b)(1) motion[.]"). The court considers these
materials only insofar as they pertain to the Govemment's arguments for dismissal based on lack
of subject matter jurisdicti on. see Twp. of saddle Brookv. [Jnited states,l04 Fed. cl. 101, 106
(2012) (explaining that the court should consider relevant factual evidence to determine if it has
subject matter jurisdiction).
ra
Plaintiffs' contention that they paid $60 to challenge the 2008 fee in the United States
Tax court is irrelevant. Pl. 10/23113 Resp. fl 4. First, full payment of any federal tax due is
required to be paid prior to commencing suit. see Flora,357 u.s. at 72-73 (.,[R]efund suits
[can] only be maintained .opon full payment of the tax alleged to be due." (emphasis added)). A
single $60 payment is not full satisfaction ofa $5,000 obligation. Second, the $60 Plaintiffs-paid
appearc to be the filing fee for commencing a petition in the Tax Court. See United States Tax
Court, Fees and Charges (listing the petition Filing Fee as $6o.oo),
http://www.ustaxcourt. gov/fees.htm (last visited Apr. 3, 20 I 4).
15
In 1982, congress relaxed the fu payment requirement when it enacted
I'R'c' g 6703(c)(1), which permits a tixpayer to contest a penaliy imposed under g 6702 by
bringing a refund suit after paying only 15 percent of the assessed penaiW. See
11
I 19-20 (dismissing case for lack of subject matter jurisdiction where taxpayer had not fully paid
a "failure to pay penalty"). Because Plaintiffs did not pay the $5,000 fee prior to commencing
this lawsuit, the court does not have jurisdiction to adjudicate that claim.
Plaintiffs' remaining arguments against dismissal lack merit. Although the IRS's May
17,2012letter may have misled Plaintiffs, the "lRS's letter cannot confer jurisdiction upon this
[c]ourt. Jurisdiction of federal courts is'limited to those subjects encompassed within a statutory
grant ofjurisdiclion."' Colman v. United States,96 Fed. Cl. 633,639 (2011) (quoting 1ns. Corp.
of Ir. v. Compagnie des Bawites de Guinee,456 U.S. 694,'101 (1982)). To the extent Plaintiffs
assert a Due Process claim, the court does not have jurisdiction to adjudicate that claim. ,See
LeBlanc v. United States,50 F.3d 1025, 1028 (Fed. Cir. 1995) ("[C]ounts alleging violation[s]
of. . . rights under the Due Process Clauses of the Fifth and Fourteenth Amendments . . . . [are
not] a sufficient basis for jurisdiction because they do not mandate payment of money by the
[G]ovemment."). For these reasons, Plaintiffs' claim for abatement of the 2008 fee must be
dismissed.
2. Whether The Complaint States A Claim For Refunds For Plaintiffs'
2006-2011Tax Years.
a. The Government's Argument.
The Govemment also argues that Plaintiffs have failed to state a viable refund claim for
the tax years 2006-2011, because "[P]laintiffs have already received the requested refunds, in
the form of a credit, and there is no money to recover." Gov't Mot. 6. It is true that Plaintiffs
made overpayments in the tax years 2006-2011; however, the IRS has exercised the statutory
right under LR.C. $ 6402 to apply those overpayments against Plaintiffs' outstanding tax
liabilities in other years. Gov't Mot. 6. Under I.R.C. $ 6401(c), when a taxpayer pays an
amount in excess of that owed, those amounts are considered overpayments. Gov't Mot. 6.
And, pursuant to I.R.C. $ 6402(a), the IRS has the authority to credit tax overpayments from one
year against tax deficiencies in prior years. Gov't Mot. 7 (citing Donahue v. United States, J3
Fed. Cl. 600, 605 (1995) ('[T]he IRS has the authority under LR.C. $ 6402(a) . . . to credit tax
overpayments against tax deficiencies for prior years[.]")); see also I.R.C. $ 6402(a) ("In the case
of any overpayment, the Secretary . . . may credit the amount of such overpayment . . . against
any liability in respect of an intemal revenue tax on the part of the person who made the
overpayment[.]").
For the tax years at issue in this case, the IRS credited Plaintiffs' overpayments (made
through withholding) towards federal taxes due. Gov't Mot. 7. For tax years 2006,2007,2010
and 2011, the IRS also applied those credits towards Plaintiffs' unpaid tax liabilities in prior
years. Gov't Mot. 7. The credits in tax years 2008 and 2009 remain in Plaintiffs' account,
because they have been frozen, while Plaintiffs litigate against the IRS. Gov't Mot. 7. Thus,
"there is no relief that the [c]ourt could offer [Plaintiffs] on these claims-the reliefhas already
been granted by the IRS." Gov't Reply 3.
I.R.C. $ 6703(c)(1). In addition, a taxpayer is not required to prepay "interest and penalties
when the ta,rpayer only disputes the tax assessment." Shore,9 F.3d at 1524.
13
b. Plaintiffs' Response,
Plaintiffs respond that the IRS's decision to credit Plaintiffs' overpayments against tax
deficiencies for prior years was unlaudrl, because a February 9,2012 IRS Notice stated that
"collection action[s were] suspended." Pl. Resp. lT 11-12. Plaintiffs also argue that they were
unaware, at the time of frling the Complaint, that the IRS had credited their accounts with
overpayments from other years. Pl. Resp. flfl 7-10; but see Pl. Sur-Reply fl 1l ("Defendant has
not refunded overpayments."). Plaintiffs fi.rther assert that they were unaware for many years
why the IRS deemed their tax retums to be frivolous. Pl. Resp. $ 20 (explaining tlat the IRS has
"from time to time stated no reason or changed its reason for alleging that [P]laintiffs' originally
submitted retums were frivolous").
Plaintiffs further contend the Govemment failed to abide by stipulated decisions entered
by the United States Tax Court on May 22,2013 in Docket numbers 5516-l2SL and 14482-
l0SL, because a statement for Plaintiffs' tax accounts from a "Payoff Calculator" lists tax
penalties that are inconsistent with the stipulated decisions. Pl. Resp. ll a7a8; see also Pl.
Resp. Ex. A aI 17-21.
Finally, Plaintiffs argue that the records presented by Govemment in the Motion To
Dismiss are inconsistent with other tax records Plaintiffs received from the IRS over time, which
Plaintiffs presented to the court as exhibits. Pl. 10/23/13 Resp. fl 6; see also id. (explaining that
certain IRS records of Plaintiffs' accounts are inconsistent). Plaintiffs, however, do not identify
which exhibits are inconsistent with the Govemment's records, but appear to reference exhibits
attached to Plaintiffs' October 8,2013 Sur-Reply. Pl. Sur-Reply Ex. Aat5-16.16
c. The Court's Resolution.
None of the material facts are genuinely in dispute in this case. Both parties agree that
Plaintiffs overpaid their taxes during the relevant tax years. Compl. flfl 69, 80, 89, 95, 100, 105;
see also Gov't Mot. 2-4 (citing Gov't Mot. Ex A (IRS Certificates Of Assessment re: 2006-
201 l). The parties also agree that the IRS levied civil penalties against Plaintiffs for a variety of
different tax years. Pl. Sur-Reply Ex A at 5*16 (lRS statements of account detailing Plaintiffs'
frivolous filing fees for tax years 2005 and 2006); Pl. Ex. B at 7 (lRS letter rejecting Plaintiffs'
claim for abatement of civil penalties for tax year 2007); Pl. Ex. B at 30 (February 9, 2012
Notice Of Determination regarding Plaintiffs' request for a Collection Due Process Hearing on
civil penalties for tax years 2005-2007); Gov't Mot. 4 (citing Gov't Mot. Ex. B (IRS Certificates
Of Assessment re: civil penalties)). In addition, Plaintiffs also do not dispute that overpayments
have been credited to satisfy outstarding liabilities for other tax years, although they disagree
with the IRS's decision to do so. See Pl. Resp. lfu 7-10 (stating only that Plaintiffs did not know
at the time of filing the Complaint that the IRS had "already credited [P]laintiffs' account," but
'o Plaintiffs also invoke the right against self-incrimination founded in the Fifth
Amendment to the United States Constitution. Pl. 10123/13 Resp. fl 4 (citing llnited
States v. Sullivan,274 U.S. 259,263 (1927) (holding that the privilege against self-incrimination
does notjustify an outright refusal to file any income tax retum at all)).
14
are now aware); see also id. \
1l (Plaintiffs knew "ofthe disposition of refunds owing for years
2010 and 2011;'); Pl. Sur-Reply fl 8 (same); Pl. Resp. Ex. A at 19 (Stipulated Decision of United
States Tax Court stating that "credits in the amounts of $157.50 and $36.24 were transferred
from [Plaintiffs'] income tax accounts for the taxable years 2010 and 2011 . . . to [Plaintiffl
Norman Diamond's civil penalty account for the taxable yeu 2006.").
Therefore, Plaintiffs' generalized statement that the IRS's records of account are
temporally inconsistent has no bearing on the accuacy of the records on which the Govemment
relies to support the August 23,2013 Motion To Dismiss. Plaintiffs do not dispute the accuracy
of the IRS's records of their accounts per .re, but contend that the balance and payments listed
evolved over time. This fact, however, reflects only that those accounts had accrued interest, had
been updated to reflect stipulated judgments by the United States Tax Court, and had accrued
penalties assessed by the IRS over a long period of time. See generally Gov't Mot. Ex. B at B-
l-B-21 (detailing interest assessed, additional penalties, and fees and costs imposed on
Plaintiffs' civil penalty accounts). Plaintiffs also readily admit that they "do not know how to
compute what the amounts should be." Pl. 10/23113 Resp. tf 6. Construing the facts in the light
most favorable to the Plaintiffs, at best, this reflects the "existence of some alleged factual
dispute . [insufficient] to defeat an otherwise properly supported motion for summary
judgment." Anderson, 4'77 U.S. at 24748 (emphasis added); see also id. at 248 ("Factual
disputes that are irrelevant or unnecessary will not be counted."); Crown Operations Intern., Ltd.
v. Solutia Inc., 289 F,3d 1367, 1377 (Fed. Cir. 2002) ("[T]he non-moving party must
affrrmatively demonstrate by specific factual allegations that a genuine issue of material fact
exists for trial."). The evolution of these records over time simply reflects the self-evident
proposition that tax records are continually updated and demonstrates the costs Plaintiffs have
imposed on the IRS to manage, litigate, and attempt to collect on Plaintiffs' accounts.
In short, the dispute before the court is whether the Govemment has shown Plaintiffs are
not entitled to refunds for the 2006-201 I tax years. The IRS has the authority to withhold a tax
refund and apply overpayments to a taxpayer's other outstanding liabilities. SeeI.R.C. $ 6402(a)
(authorizing the IRS to withhold tax refunds in order to apply them to debts owed to the IRS);
see also Donahue,33 Fed. Cl. at 605 (holding that the IRS was authorized to withhold a
taxpayer's refund in order to satisfr other debts); Becker v. United States,878 F.2d 1444, 1989
WL 43289 * I (Fed. Cir. May 3, 1989) (l.R.C. 6402(a) "affords the Commissioner, and
concomitantly denies [to taxpayers], authority unilaterally [to] direct the application of
overpayments to particular tax periods."). That is exactly what occurred here. Plaintiffs'
overpayments, in the form of withholding, for the 2006-2011 tax years were. as credits
-treated
for those tax years and applied to mitigate other substantial tax liabilities. " Plaintiffs have
received the benefit of the refund they seek, albeit in a form they seemingly do not desire. As
" As the Govemment points out, in two cases with Plaintiffs the United States Tax Court
"recently reduced the amount of certain frivolous filing penalties assessed against them for
2005-2007." Gov't Reply 4 (citing Pl. Resp. Ex. A at 17-21). Those decisions reduce those
particular penalties to $1,000. Gov't Reply 4. That reduction, however, does not entitle
Plaintiffs to a refund, since the overpayments at issue here "are still insuffrcient to cover even the
reduced 2005 and 2006 penalty amounts, let alone the $5,000 frivolous filing penalty for 2008."
Gov't Reolv 4.
l5
such, the court can afford them no further relief. See, e.g., In re Luongo,259 F.3d 323, 335 (5th
Cir. 2001) ("[T]he [taxpayer] is generally only entitled to a &u refund to the extent that her
overpayment exceeds her unpaid tax liability.").
Plaintiffs' remaining arguments also are unavailing. For example, Plaintiffs contend that
the IRS's "collection of refirnds" was unlawful because a February 9, 2012 IRS Notice of
Determination explained that "collection action was suspended." An Attachment to that Notice
explained that the "collection statute has been suspended; the collection period allowed by
statute to collect these taxes has been suspended by the appropriate computer codes for the tax
periods at issue." Pl. Ex. B at 33. As the title of the Notice of Determination suggests, the
collection statute suspension concems LR.C. $ 6330 and $ 6331. I.R.C. 6330(e)(1) provides that
when a collection due process hearing is requested, "the levy actions which are the subject of the
requested hearing . . . shall be suspended for the period during which such hearing, and appeals
therein, are pending." LR.C. $ 6330(e)(1) (emphasis added). LR.C. 6331(a), however, provides
that, "if any person liable to pay any tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, the Secretary is authorized to collect such tax by levy upon
property belonging to the taxpayer." Moore v. C.LR.,114 T.C. 171,174 (2000). I.R.C. 6331(d)
requires "the Secretary to provide the taxpayer with notice, including notice of the
administrative appeals available to the taxpayer, before proceeding with collection by levy on the
taxpayer's property." 1d. Therefore, I.R.C. 633 1, in combination with I.R.C. 6330, prohibits
"the collection of taxes by way of a levy on a taxpayer's property" unless certain procedural
safeguards have been followed. Sego v. C.I.R.,l l4 T.C. 604, 608 (2000).
By its own terms, the February 9, 2012 IRS Notice Of Determination and, by extension
LR.C. $ 6330 protect the taxpayer against "levy actions," not the IRS's decision to apply
overpayments to a taxpayer's outstanding liabilities in prior years. In this proceeding, Plaintiffs
do not challenge the IRS's decision to lery against their property, but instead seek refunds for
the tax years 2006-2011. Nor could Plaintiffs mount such a challenge in the United States Court
ofFederal Claims, since I.R.C. $ 6330(d) provides only forjudicial review of the IRS's decision
to levy upon a taxpayer property in the United States Tax Court after filing a timely appeal. See
I.R.C. $ 6330(d) ("The person may, within 30 days ofa determination under this section, appeal
such determination to the Tax Court (and the Tax Court, shall have jurisdiction with respect to
such matter)."). The February 9, 2012 IRS Notice is therefore irrelevant to the legal issue of
whether Plaintiffs are entitled to refunds.
To the extent that Plaintiffs assert the Govemment did not abide by stipulated decisions
of the United States Tax Court, any such claim is insufficiently pled. See RCFC 8(a)(2)
(requiring a "short and plain statement of the claim showing that the pleader is entitled to
relief'); see also Bell Atl. Corp. v. Twombly,550 U.S. 544, 555 (2007) ('[T]he pleading must
contain something more... than ... a statement of facts that merely creates a suspicion [ofl a
legally cognizable right of action." (intemal citations omitted)). The Tax Court decisions entered
on May 22,2013 reduce the amounts of penalties assessed against Plaintiffs for the tax years
2005-2007, and concem the February 9,2012 IRS Notice of Determination. Pl. Resp. Ex. A at
17-21. Those decisions explicitly state, however, that the reductions do not impact any interest
on outstanding liabilities, and that "interest will be assessed as provided by law," together with
"fees and collection costs . . . due and owing." Pl. Resp. Ex. A at 18; see also jd at 21 (same).
16
To substantiate an alleged violation ofthose Tax Court decisions, Plaintiffs provide a snapshot of
a "Payoff Calculator" table dated May 29,2013, seven days after issuance of the Tax Court
decisions. This table is provided without context or any explanation as to its meaning, and does
not disaggegate taxes or penalties, but instead lumps them together into a single amount for each
tax year. There is no way to tell what penalties and taxes are, or are not, included in a given
year. Such vagueness and ambiguity makes it impossible for the court to determine whether a
claim within the jurisdiction of the United States Court of Federal Claims exists, and certainly
does not provide sufficient "factual content that allows the court to draw the reasonable inference
that the [Govemment] is liable for the misconduct alleged." Ashiloft v. Iqbal,556U.S. 662,679
(2009). Accordingly, this claim also must be dismissed. See Twombly, 550 U.S. at 555.
[I. CONCLUSION.
For these rea.slons, the Govemment's August 23,2013 Motion To Dismiss is granted.
Accordingly, the Clerk of Court is directed to dismiss the April 25,2013 Complaint.
IT IS SO ORDERED.
17