Court Dismisses Appraiser's Petition to Quash IRS Summons

Petitioner Jim Clower filed the instant petition to quash a summons issued to him by the Internal Revenue Service ("IRS") for certain documents including, among other things, appraisal work files, documents reflecting customers for whom he prepared appraisals, and correspondence related to appraisals completed for the purpose of valuating real property for conservation or historical easements. According to the petition. Clower is a certified general appraiser who has performed independent fee appraisals since 1969. In his petition, Clower avers that the IRS summons violates the requirements of 26 U.S.C. § 7609(b)(2) because (1) it is at least in part a John Doe Summons,¹ and the IRS did not follow the requirements for issuing such a summons; (2) it is a fishing expedition designed to produce evidence that could expose Clower to penalties and probable prosecution; (3) it fails to specify the projects being investigated or the targets of those investigations; (4) it requires disclosure of sensitive personal and/or privileged documents and information belonging to persons who are not a part of the investigation; and (5) it is unreasonable and irrelevant because it asks for information outside the statute of limitations. Clower avers that the Court has jurisdiction to hear his petition pursuant to 26 U.S.C. § 7609(h)(1).

The Government, as Respondent, moved to dismiss Clower's petition for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). The Government contends that Clower has failed to show a waiver of sovereign immunity permitting him to petition the Court, and in fact no waiver of sovereign immunity exists to permit a pre-emptive challenge to the summons, which was issued to Clower with respect to his own liability. In lieu of a response, Clower filed a motion to strike the Government's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(f). In his motion to strike, Clower reiterates the averments in his petition, asserting that the Government has failed to demonstrate that the summons meets the required criteria under 26 U.S.C. § 7609. He contends that he has properly alleged subject matter jurisdiction in his petition and that "sovereign immunity is appropriately raised at summary judgment rather than a motion to dismiss." [6] at 5.

Clower's motion to strike will be denied for two reasons. First, as the Government points out, its motion to dismiss is not the proper subject of a Rule 12(f) motion to strike. Rule 12(f) permits the Court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." A motion to dismiss is not a "pleading" as defined by Rule 7(a). See FED. R. CIV. P. 7(a) (narrowly defining "pleadings"); see also Circle Grp., L.L.C. v. Se. Carpenters Reg'l Council, 836 F. Supp. 2d 1327, 1349 (N.D. Ga. 2011) (noting that Rule 7(a) "applies to pleadings, not to motions or briefs filed in support of motions"). Additionally, as explained below, Clower has not offered a sufficient basis to challenge the Government's motion to dismiss.

"It is well settled that the United States, as a sovereign entity, is immune from suit unless it consents to be sued." Zelaya v. United States, 781 F.3d 1315, 1321 (11th Cir. 2015) (citing Christian Coal, of Fla., Inc. v. United States, 662 F.3d 1182, 1188 (11th Cir. 2011)), cert. denied, 136 S. Ct. 168 (2015). "If there is no specific waiver of sovereign immunity as to a particular claim filed against the Government, the court lacks subject matter jurisdiction over the suit." Id. at 1322. Further, exceptions to a waiver of sovereign immunity "'must be strictly construed in favor of the United States,' and when an exception applies to neutralize what would otherwise be a waiver of immunity, a court. . . lack[s] subject matter jurisdiction over the action." Id. at 1322 (quoting JBP Acquisitions, LP v. United States ex rel. FDIC, 224 F.3d 1260,1263-64 (11th Cir. 2000)).

In this case. Clower asserts that the Court has jurisdiction under subsections (h) and (b)(2) of 26 U.S.C. § 7609. Subsection (h) provides the district court "for the district within which the person to be summoned resides or is found . . . jurisdiction to hear and determine any proceeding brought under subsection (b)(2), (f), or (g)" of § 7609. Subsection (b)(2) permits a person entitled to notice of a summons under subsection (a) the right to bring a proceeding to quash the summons within a specified period. However, § 7609 governs procedures for third-party summonses, and as the Government points out, § 7609(c)(2)(A) explicitly provides that the section shall not apply to any summons that is "served on the person with respect to whose liability the summons is issued." See Zimmerman v. United States, No. CV-F-99-6562 AWI, 2000 WL 300496, at *3 (E.D. Cal. Feb. 4, 2000) ("Pursuant to 26 U.S.C. § 7609(b), a procedure is available for taxpayers to challenge a summons issued to a third party. However, 26 U.S.C. § 7609(c)(2)(A) expressly excludes summonses issued to a taxpayer under investigation. . . .").

The summons attached to the petition was issued to Jim R. Clower, "In the matter of Jim R. Clower under 26 USC Secs. 6694, 6695, 6700, 6701, 6707 and 6708." [1-1]. Although Clower contends in his petition and his motion to strike that the summons is a John Doe summons and that it fails to specify the targets of the investigation(s), he has not offered any arguments or evidence to support this or to contradict the plain language of the summons. The Court is generally required to accept the facts alleged in Clower's petition as true, but "when the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern." Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1206 (11th Cir. 2007).

The Court agrees with the Government that the summons, which Clower attached as an exhibit to his petition, unambiguously indicates that it was issued with respect to the liability of Clower.² Therefore, the Court does not have jurisdiction under § 7609, and this action must be dismissed for lack of subject matter jurisdiction. See Miccosukee Tribe of Indians of Fla. v. United States, No. 12-CV-22638-UU, 2013 WL 7728831, at *2 (S.D. Fla. Feb. 11, 2013) (concluding that petitions to quash summonses issued to three tribal officers must be dismissed for lack of subject matter jurisdiction under § 7609 where the tax investigation was of the tribe); cf. Stringer v. United States, 776 F.2d 274, 276 (11th Cir. 1985) (affirming dismissal of an untimely petition under § 7609 for lack of jurisdiction).³

For the foregoing reasons, Clower's motion to strike [6] is denied, and the Government's motion to dismiss [5] is granted. This action is hereby dismissed for lack of subject matter jurisdiction. The Clerk is directed to close this case.

IT IS SO ORDERED this 17th day of December, 2015.

² The fact that the summons may serve a "dual purpose" of determining a known taxpayer's liabilities and "discovering information that would aid in identifying unnamed taxpayers and investigating their liabilities" does not make it a John Doe summons subject to the procedures in § 7609(f). See United States v. Gottlieb, 712 F.2d 1363, 1367-68 (11th Cir. 1983) (quoting United States v. Barter Sys., Inc., 694 F.2d 163, 169 (8th Cir. 1982)).

³ Clower cites no authority for his assertion that sovereign immunity is a matter for summary judgment, and as demonstrated by the cases cited herein, courts routinely dismiss actions for lack of subject matter jurisdiction based on sovereign immunity. It is possible that Clower is arguing that the Court should apply the summary judgment standard to the Government's motion to dismiss. The Eleventh Circuit has instructed that "[w]hen the jurisdictional basis of a claim is intertwined with the merits, the district court should apply a Rule 56 summary judgment standard when ruling on a motion to dismiss which asserts a factual attack on subject matter jurisdiction." Lawrence v. Dunbar, 919 F.2d 1525, 1530 (11th Cir. 1990). However, this "does not mean that a district court can never dismiss a federal claim for lack of subject matter jurisdiction whenever a decision on subject matter jurisdiction also implicates the substantive merits of the claim. Where the plaintiffs claims are 'clearly immaterial, made solely for the purpose of obtaining jurisdiction or are wholly unsubstantiated and frivolous,' . . . the court should dismiss the claim." Id. at 1531 n.7 (quoting Eaton v. Dorchester Dev., Inc., 692 F.2d 727, 734 (11th Cir. 1982)). Here, the claim that the summons does not identify the person subject to liability is wholly unsubstantiated, and it is contradicted by the summons attached to the petition.