Court Dismisses Challenge to IRS's Annual Filing Season Program

GERARDO RIVERA, et. al.
Plaintiffs,
and
THE NATIONAL TAXPAYERS ADVOCATE,
Involuntary Plaintiffs,
v.
THE INTERNAL REVENUE SERVICE, et. al.
Defendants.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO

ORDER

This matter comes before the Court sua sponte on its “independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party” at any stage in the litigation. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006). Before the Court is Plaintiffs’ complaint against the Internal Revenue Service. (Doc. 3.) Because the United States has not waived its sovereign immunity, the Court will dismiss this case for lack of subject matter jurisdiction.

The United States may only be sued where Congress has expressly consented by statute. Lehman v. Nakshian, 453 U.S. 156, 160 (1981); United States v. Mitchell, 445 U.S. 535. 538 (1980). Otherwise, the courts lack jurisdiction to grant relief against the United States. Plaintiffs fail to identify any waiver of the United States’ sovereign immunity. Plaintiffs’ Amended Complaint cites the following statutes as grounds for a waiver of sovereign immunity: 28 U.S.C. §§ 1331 and 1343; the U.S. Constitution; civil rights statutes found in 42 U.S.C. §§ 2121, 1981, and 1983; and declaratory judgment statutes found in 28 U.S.C. §§ 2201 and 2202, and 5 U.S.C. §§ 702-706. (Doc. 3 at 9-10.) None of these statutes waive the United States’ sovereign immunity.

28 U.S.C. §§ 1331 and 1343 are jurisdictional statutes that do not waive the United States’ sovereign immunity. 28 U.S.C. § 1331 grants district courts original jurisdiction over all civil actions arising under the Constitution, laws, or treaties of the United States, but “does not waive the government’s sovereign immunity.” Eagle-Picher Indus., Inc. v. United States, 901 F.2d 1530, 1532 (10th Cir. 1990). 28 U.S.C. § 1343 also does not waive sovereign immunity. See Salazar v. Heckler, 787 F.2d 527, 528-29 (10th Cir. 1986). Plaintiffs fail to explain how the U.S. Constitution waives the United States’ sovereign immunity. In fact, the U.S. Constitution leaves that discretion to Congress. Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971) (holding that a direct cause of action for a violation of the Constitution may lie against federal employees in a narrow set of circumstances).

Plaintiffs fail to explain how 42 U.S.C §§ 1981 and 1983 waive the United States’ sovereign immunity. These civil rights statutes target state action, but not federal law. Davis-Warren Auctioneers, J.V. v. F.D.I.C., 215 F.3d 1159, 1161 (10th Cir. 2000). Further, the United States and its agencies are not persons within the meaning of 42 U.S.C. § 1983, and therefore cannot be sued under that statute. Egan v. City of Aurora, Ill., 365 U.S. 514 (1961).

Plaintiffs also seek relief under the Declaratory Judgment Act. 28 U.S.C. §§ 2201-02. These statutes do not waive sovereign immunity or confer jurisdiction on a federal court in a tax case where none otherwise exists. See Wyoming v. United States, 279 F.3d 1214, 1225 (10th Cir. 2002); New Mexico v. Regan, 745 F.2d 1318, 1322-23 (10th Cir. 1984). The Declaratory Judgment Act excludes disputes “with respect to Federal taxes” and it is “at least as broad as the Anti-Injunction Act.” Bob Jones Univ. v. Simon, 416 U.S. 725, 732 (1974).

The Administrative Procedures Act (APA) waives the United States’ sovereign immunity in some cases, but that waiver is defeated when another statute prohibits the relief sought. Gassei v. Dep’t of Justice, 968 F.2d 19, at *1 (10th Cir. 1992) (holding that the Anti-Injunction Act is the express statutory prohibition of the declaratory relief sought in the Complaint). 5 U.S.C. § 702 does not override the limitations of the Anti-Injunction Act or the Declaratory Judgment Act. Fostvedt v. United States, 978 F.2d 1201, 1203-04 (10th Cir. 1992) (citing McCarty v. United States, 929 F.2d 1085, 1088 (5th Cir. 1991)). Actions “committed to agency discretion by law” are not reviewable under the APA. 5 U.S.C. § 701(a)(2). The Supreme Court has identified the issuance of an agency opinion or declaratory ruling as examples of agency action See Bennet v. Spear, 520 U.S. 154, 157 (1997); Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 977-78 (2005). The Supreme Court has also held that where agencies are conducting investigations, judicial review is disfavored because it can unduly interfere with agency activities, and because investigations are not sufficiently final. See FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 242-43 (1980). The Complaint revolves around an ongoing investigation being conducted by the Internal Revenue Service. The steps taken so far have been informal and do not constitute final agency action. Thus, they are not reviewable by this Court. The APA does not waive sovereign immunity or give courts the jurisdiction to enjoin ongoing investigations.

The Court finds that it lacks subject matter jurisdiction over this case. Plaintiffs request relief that the Court does not have the power to grant.

IT IS THEREFORE ORDERED that the complaint (Doc. 3.) is hereby dismissed with prejudice.

ROBERT C. BRACK
UNITED STATES DISTRICT JUDGE