District Court Lacked Jurisdiction Over Tax Collection Case

RICHARD ORVILLE TORP,
Plaintiff-Appellant,
v.
UNITED STATES OF AMERICA, et al.,
Defendants-Appellees.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

ORDER

Before: THAPAR and BUSH, Circuit Judges; HOOD, District Judge.*

Richard Orville Torp, a pro se litigant from Michigan, appeals the district court's amended judgment dismissing his civil suit against the federal government over tax matters. Torp has also filed three motions to strike the government's brief. This case has been referred to a panel of the court that, upon examination, unanimously agrees that oral argument is not needed. See Fed. R. App. P. 34(a).

According to his amended complaint, the government garnished Torp's wages at various times in the late 1990s through the early 2000s for unpaid taxes. Torp claims that these garnishments were illegal because the government lacked jurisdiction over him to impose the underlying taxes. He sought a declaratory judgment to “identify, resolve and settle”: “government corporation[] 'gain' and public salary 'wage' taxing scheme jurisdictions”; “how Richard Orville, Torp, is NOT subject[] to the jurisdictional elements of the corporation 'gain' and public salary 'wage' taxing jurisdictions/schemes”; and “how Richard Orville, Torp, is NOT subject to the jurisdictional elements of the social security taxing jurisdictions/schemes.” He named as defendants the United States and the Internal Revenue Service.

A magistrate judge recommended dismissing the complaint for lack of jurisdiction, citing the Tax Anti-Injunction Act and the Declaratory Judgment Act. Torp v. United States, No. 1:17-cv-161, 2018 WL 2773363, at **3–4 (W.D. Mich. May 18, 2018). The district court adopted that recommendation over Torp's objections. Torp v. United States, No. 1:17-cv-161, 2018 WL 2766791, at *2 (W.D. Mich. June 8, 2018). Torp moved for reconsideration, which the district court granted in part. Torp v. United States, No. 1:17-cv-161, 2018 WL 4510287, at *1 (W.D. Mich. July 30, 2018). The court determined that, contrary to its prior ruling, it did have subject matter jurisdiction over Torp's claims. Id. Yet, the court still dismissed his complaint, determining that Torp's complaint failed to state a claim upon which relief could be granted because of both the Declaratory Judgment Act and the Tax Anti-Injunction Act. Id. at *3.

Torp appeals the district court's dismissal. The government argues that the district court was right the first time and that Torp's case should have been dismissed for lack of jurisdiction.

“[F]ederal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction.” Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011). The Anti-Injunction Act provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” 26 U.S.C. § 7421(a). The Act “protects the Government's ability to collect a consistent stream of revenue, by barring litigation to enjoin or otherwise obstruct the collection of taxes. Because of the Anti-Injunction Act, taxes can ordinarily be challenged only after they are paid, by suing for a refund.” Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S. 519, 543 (2012). The government argues that, “even though [Torp] characterizes his suit as one seeking a declaratory judgment, the purpose of his suit is to restrain the assessment and collection of tax and is thus properly dismissed for lack of jurisdiction.” Appellee Br. at 13. Were the court to find for Torp and issue a declaratory judgment that the government lacks jurisdiction to collect taxes on his income, it would plainly “restrain[] the assessment or collection of [a] tax.” 26 U.S.C. § 7421(a). Thus, “the district court's exercise of jurisdiction was barred by the Anti-Injunction Act.” RYO Mach., LLC v. U.S. Dep't of Treasury, 696 F.3d 467, 470 (6th Cir. 2012).

Similarly, the Declaratory Judgment Act authorizes courts to issue declaratory judgments “except with respect to Federal taxes.” 28 U.S.C. § 2201(a). The statute operates “coterminously” with the Anti-Injunction Act, and “the analysis under the two provisions is identical.” Jenkins v. Rucker, No. 03-2063, 2005 WL 646715, at *2 (6th Cir. Jan. 11, 2005) (quoting Nat'l Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1435 (D.C. Cir. 1995)). Thus, the statute also deprives the federal courts of jurisdiction over Torp's claims seeking a declaratory judgment about his various tax matters. See Ecclesiastical Order of the ISM of AM, Inc. v. IRS, 725 F.2d 398, 402 (6th Cir. 1984) (treating the Declaratory Judgment Act as jurisdictional).

As for Torp's claims that the government had wrongly garnished his wages in the 1990s and 2000s, the Tax Court has exclusive jurisdiction over those claims. See 26 U.S.C. § 6330(d); Wagenknecht v. United States, 533 F.3d 412, 415-17 (6th Cir. 2008). In sum, the district court lacked jurisdiction to review Torp's complaint.

Accordingly, we VACATE the district court's judgment and REMAND the case with instructions to dismiss for lack of jurisdiction. Torp's motions to strike are DENIED as frivolous.

ENTERED BY ORDER OF THE COURT

Deborah S. Hunt, Clerk