CHALLENGE TO IRS LEVIES DISMISSED.

Cory A. Johnson, United States Department of Justice, Tax Division, Washington, D.C., counsel for Defendant.

I. RELEVANT FACTS¹

On November 15, 2005, Plaintiff filed a Complaint in the United States Court of Federal Claims for the return of monies collected by the Internal Revenue Service ("IRS"). See Compl. at 1, 4. Plaintiff's official tax record indicates an outstanding tax liability of $14,835.00 for the taxable year 1995.²See Gov't Mot. Dis. Ex. 1-10. By October 23, 2000, assessed fines, penalties, and interest increased Plaintiff's outstanding liability for the taxable year 1995 to $27,930.73. Id.

In 2005, the IRS executed a series of levies to collect Plaintiff's outstanding 1995 tax liability. Id. On July 27, 2005, the IRS levied $192.45 per month for five months from Plaintiff's Social Security benefit. Id. On August 29, 2005, the IRS levied $2,915.23 from Plaintiff's Public Safety Personnel Retirement System of Arizona ("PSPRS") benefit. See Compl. ¶ 2.7. On September 8, 2005, the IRS levied $58.59 from Plaintiff's Bank One account. See Compl. Ex. D. On September 28, 2005, the IRS levied $48.53 from Plaintiff's Wells Fargo Bank account. See Compl. Ex. C.

On December 5, 2005, the Government stopped levying Plaintiff's Social Security benefit and refunded $384.90. See Gov't Mot. Dis. Ex. 1 (indicating that the refund was due to "10-07-2005 LEGAL/BANKRUPTCY SUIT PENDING").

To date, the IRS has collected the following amounts from the Plaintiff:

 Source of Funds                                        Amount

As of December 20, 2005, Plaintiff's outstanding tax balance was $24,526.15, because Plaintiff's official tax record was not updated to reflect either the $58.59 levy from the Bank One account or the $48.53 levy from the Wells Fargo Bank account. See Gov't Mot. Dis. Ex. 1.

II. PROCEDURAL BACKGROUND

On November 15, 2005, Plaintiff filed a pro se Complaint in the United States Court of Federal Claims, identifying as defendants: the United States of America, the PSPRS, the Social Security Administration, Wells Fargo Bank, and Bank One. See Compl. at 1-2. On February 22, 2006, the court issued an Order to clarify that the Government is the proper defendant. See Ct. Order, Fry v. United States, No. 05-1202T (Fed. Cl. Feb. 22, 2006).

The Complaint has seven causes of action alleging that the IRS levies: (1) constituted a "Bill of Attainder" in violation of the Article I, Section 9, Clause 3 of the United States Constitution; (2) deprived Plaintiff of personal property in violation of the Fourth and Fourteenth Amendments to the United States Constitution; (3) deprived Plaintiff of personal property in violation of the Ninth Amendment to the United States Constitution; (4) constituted an illegal exaction in violation of the Tenth Amendment to the United States Constitution; (5) deprived Plaintiff of personal property in violation of the Tenth Amendment to the United States Constitution; (6) deprived Plaintiff of "labor property" in violation of the Fifth Amendment to the United States Constitution; and (7) violated the Sixteenth Amendment to the United States Constitution. See Compl.

On March 3, 2005, the Government filed a Motion to Dismiss for a lack of subject matter jurisdiction. See Gov't Mot. Dis. On March 27, 2006, Plaintiff filed a Verified Response to the Government's Motion. See Pl. Resp. On April 5, 2006, the Government filed a Reply. See Gov't Reply. On April 27, 2006, Plaintiff filed a Second Verified Response to the Government's Motion. See Pl. Second Resp.

On July 18, 2006, Plaintiff filed a Motion to Compel Defendant to Answer the Complaint. See Pl. Mot. to Compel. On July 28, 2006, the Government filed a Response to Plaintiff's Motion to Compel. See Gov't Resp.

III. DISCUSSION

To determine whether a provision is money-mandating, "the court should entertain and decide the jurisdictional and merits test in a single step in which the trial court determines both the question of whether the provision provides the predicate for its jurisdiction, and lays to rest the question of whether the statute on its merits provides a money-mandating remedy." Wopsock v. Natchees, No. 05-1494,__ F.3d__ , 2006 WL 1889917, at 3 (Fed. Cir. July 11, 2006) (citing Fisher, 402 F.3d at 1172 (en banc)). "If the court's conclusion is that the source as alleged and pleaded is not money-mandating, the court shall so declare, and shall dismiss for lack of jurisdiction, a Rule 12(b)(1) dismissal -- the absence of a money-mandating source being fatal to the court's jurisdiction under the Tucker Act." Fisher, 402 F.3d at1173 (emphasis added).

In addition, before the United States Court of Federal Claims can exercise jurisdiction over a tax refund claim, the plaintiff must first file a tax refund request with the IRS:

In deciding a motion to dismiss, the court is "obligated to assume all factual allegations to be true and to draw all reasonable inferences in plaintiff's favor." Henke v.United States, 60 F.3d 795, 797 (Fed. Cir. 1995). Plaintiff, however, bears the burden of establishing jurisdiction by a preponderance of the evidence. See Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988) ("[O]nce the [trial] court's subject matter jurisdiction [is] put in question, it [is] incumbent upon [plaintiff] to come forward with evidence establishing the court's jurisdiction.").

Similarly, section 1346(a)(1) confers jurisdiction only on United States District Courts:

Although section 1346(a)(1) cross-references the jurisdiction of the United States Court of Federal Claims, it only confers jurisdiction on United States District Courts. See Hinck v. United States, 64 Fed. Cl. 71, 76 (2005), aff'd, 446 F.3d 1307 (Fed. Cir. 2006) (recognizing that the reference to the United States Court of Federal Claims in section 1346(a)(1) is merely a cross-reference to the Tucker Act); see also Doe v. United States, 372 F.3d 1308, 1312 (Fed. Cir. 2004) (distinguishing the Little Tucker Act, 28 U.S.C. § 1346, from the Tucker Act, 28 U.S.C. § 1491).

Therefore, the court does not have jurisdiction over Plaintiff's claims under 28 U.S.C. §§ 1331, 1340, 1346(a)(1) or 26 U.S.C. §§ 6330, 7429.

No language in either subsection fairly can be interpreted as money-mandating. Therefore, the court does not have jurisdiction over Plaintiff's section 6331 claims.

A bill of attainder, however, is "a legislative act that applies either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial."United States v.Lovett, 328 U.S. 303, 315 (1946) (emphasis added). Therefore, the Bill of Attainder Clause applies only to legislative action. See United States v. Brown, 381 U.S. 437, 444 (1965) ("The authors of the Federalist Papers took the position that although under some systems of government (most notably the one from which the United States had just broken), the Executive Department is the branch most likely to forget the bounds of its authority, 'in a representative republic * * * where the legislative power is exercised by an assembly * * * which is sufficiently numerous to feel all the passions which actuate a multitude; yet not so numerous as to be incapable of pursuing the objects of its passions * * *,' barriers had to be erected to ensure that the legislature would not overstep the bounds of its authority and perform the functions of the other departments. The Bill of Attainder Clause was regarded as such a barrier." (internal quotations omitted)); see also Korte v. Office of Pers. Mgmt, 797 F.2d 967, 972 (Fed. Cir. 1986) ("[T]he Bill of Attainder Clause was intended 'as an implementation of the separation of powers, a general safeguard against legislative exercise of the judicial function, or more simply-trial by legislature.' The clause is a limitation on the authority of the legislative branch." (quoting Brown, 381 U.S. at 442)).

No court has resolved whether the Bill of Attainder Clause is money-mandating. Arguably, this Clause is not money-mandating, because it contains no language directly related to a pecuniary interest. See U.S. Const. art. I, § 9, cl. 3. In that respect, it is distinguishable from the Export Clause¹⁰ and the Judges' Compensation Clause, ¹¹ that the United States Court of Appeals for the Federal Circuit has held to be money-mandating, in part, because these Constitutional provisions contain pecuniary language. See Cyprus Amax Coal Co., 205 F.3d at 1374-75 ("[B]oth clauses speak in absolute and unconditional terms and both protect pecuniary interests"). Moreover, the purpose of the Bill of Attainder Clause was to protect against the punitive confiscation of "property" by the sovereign. See Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 138 (1810) ("A bill of attainder may affect the life of an individual, or may confiscate his property, or may do both." (emphasis added)); see also Mark Strasser, Ex Post Fact Laws, Bills of Attainder, and the Definition of Punishment: On DOMA, the Hawaii Amendment, and Federal Constitutional Constraints, 48 SYRACUSE L.REV. 227, 238-39 (1998).

The issue before the court, however, is not whether the Bill of Attainder Clause mandates the payment of money when Congress violates the Clause by enacting a bill of attainder. Instead, the issue is whether the Bill of Attainder Clause, as alleged and pled, is money-mandating. See Fisher, 402 F.3d at1173 ("If the court's conclusion is that the source as alleged and pleaded is not money-mandating, the court shall so declare, and shall dismiss the cause for lack of jurisdiction[.]" (emphasis added)). The Complaint, however, does not allege any requisite legislative act to invoke the Bill of Attainder Clause. Therefore, in this case, the court does not have jurisdiction over Plaintiff's Bill of Attainder Clause claim.

Likewise, the Ninth Amendment and Tenth Amendment are not money mandating. The Ninth Amendment provides that:

The Tenth Amendment provides that:

Therefore, the court does not have jurisdiction over Plaintiff's Fourth Amendment, Fifth Amendment Due Process Clause, Ninth Amendment, or Tenth Amendment claims.

Moreover, the lawful exercise of the Government's tax collection powers does not amount to a taking. See U.S. Shoe Corp. v. United States, 296 F.3d 1378, 1383 (Fed. Cir. 2002) (the ruling that imposition of the federal income tax does not constitute a taking under the Fifth Amendment); see also Branch ex rel. Me. Nat'l Bank v.United States, 69 F.3d 1571, 1576-77 (Fed. Cir.1995) ("enforcement action [of the constitutional tax assessment], including seizure of the property, could not be challenged as a taking"); see also First Atlas Corp. v. United States, 23 Cl. Ct. 137, 141 (1991), aff'd per curiam, 954 F.2d 733 (Fed. Cir. 1992) (concluding that the filing of a notice of a lien, standing alone, does not constitute a taking); Castillo Morales v. United States, 19 Cl. Ct. 342, 345 (1990) (holding that the court does not have jurisdiction over takings claims, because "where [. . .] a taxpayer disputes an IRS levy on its property, the appropriate course of action is a direct challenge of the levy, not the prosecution of a [F]ifth [A]mendment claim").

In this case, the Complaint alleges that the IRS's execution of levies to collect an outstanding tax liability was not authorized. See Compl. Therefore, the Complaint has failed to invoke the court's jurisdiction over the Just Compensation Clause claim. See Rith, 247 F.3d at1365. Assuming arguendo that Plaintiff conceded that the IRS's actions were authorized, nevertheless, as a matter of law, the United States Court of Appeals for the Federal Circuit has held that a tax is not a taking. See U.S. Shoe Corp., 296 F.3d at 1383. Therefore, the court does not have jurisdiction over the Plaintiff's Fifth Amendment claim.

A tax refund claim is a classic example of an illegal exaction claim and invokes Tucker Act jurisdiction by alleging that taxes have been improperly collected or withheld by the Government for which the remedy is a refund. See, e.g., City of Alexandria v. United States, 737 F.2d 1022, 1028 (Fed. Cir. 1984); see also 28 U.S.C. § 1491(a);New York Life Ins. Co. v.United States, 118 F.3d 1553, 1558 (Fed. Cir. 1997) (reaffirming the jurisdiction of the United States Court of Federal Claims over a suit concerning a federal tax refund). To invoke Tucker Act jurisdiction over a tax refund claim, however, a plaintiff must meet three jurisdictional prerequisites. First, a plaintiff must make full payment of the tax, penalties, and interest at issue under the so called "full payment rule." See Shore v. United States, 9 F.3d 1524, 1527 (Fed. Cir. 1993) (holding that the full payment rule is applicable to refund suits in the Court of Federal Claims); see also Flora v. United States, 362 U.S. 145, 163 (1960) ("[F]ull payment of an illegal assessment is a condition upon the jurisdiction of a District Court to entertain a suit for refund[.]"). Second, a plaintiff must file a claim for refund with the IRS for the amount of tax at issue. See 26 U.S.C. § 7422(a) (stating that "[n]o suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, . . ., until a claim for refund or credit has been duly filed with the Secretary . . ."). Third, a plaintiff is required to provide the amount, date, and place of each payment to be refunded, as well as a copy of the refund claim, when filing a refund suit in the United States Court of Federal Claims. See RCFC 9(h)(6). Failure to plead that a timely refund claim has been filed, even in pro se actions, deprives the United States Court of Federal Claims of jurisdiction.See Wozniak v. United States, 618 F.2d 119 (Ct. Cl. 1979) (holding that even in a pro se tax suit a timely claim for refund must be filed to invoke the court's jurisdiction).

Plaintiff has not satisfied the prerequisites necessary to invoke the court's jurisdiction over tax refund claims. Plaintiff's partial payment of a tax liability through levies totaling $3,599.70 on a deficiency of $27,930.73 does not meet the full payment prerequisite. See Flora v. United States, 357 U.S. 63, 75-76 (1958) (holding that the full payment rule literally requires full, not partial, payment and rejecting the argument that a part-payment remedy is necessary when a taxpayer is too poor to pay the full amount of the tax). Moreover, Plaintiff has failed to plead that, before instituting the present action, a timely administrative refund claim was filed with the IRS. Therefore, the prerequisites of section 7422(a) and RCFC 9(h)(6) have not been met.

Assuming arguendo, as Plaintiff argues, that the "illegal seizure of property" claim is not a tax refund claim, but an illegal exaction, the court, nevertheless, does not have jurisdiction.

In Norman v. United States, 429 F.3d 1081 (Fed. Cir. 2005), the United States Court of Appeals for Federal Circuit explained that:

Plaintiff bears the burden of demonstrating "that the statute or provision causing the exaction itself provides, either expressly or by 'necessary implication,' that 'the remedy for its violation entails a return of money unlawfully exacted.'" Id. at 1095. Plaintiff's bare allegation that the Government exceeded an unspecified "Limited Statutory Authority" does not satisfy this burden.

Finally, if Plaintiff's unspecified illegal exaction claim is intended to allege that the IRS's tax collection was a criminal act, the court does not have jurisdiction. See 28 U.S.C. § 1491(a).

Therefore, the court does not have jurisdiction over Plaintiff's "illegal seizure of property claim."

IT IS SO ORDERED.

² For the taxable years 1996, 1997, 1998, 1999, 2000, and 2002, Plaintiff also had outstanding tax liabilities ranging from $21,944 to $40,066 per year. See Gov't Mot. Dis. Ex. 2-6, 8. Plaintiff did not file a tax return for the taxable years 2001, 2003, and 2004. Id. at 7, 9-10. Plaintiff denies having an outstanding tax liability for taxable years 1995 through 2004. See Pl. Second Resp. at 3-4. The Government, however, has notified Plaintiff of outstanding tax liabilities totaling $214,830.21. See Compl. ¶ 3.3. Because the court does not have jurisdiction over Plaintiff's claims, the merits of Plaintiff's tax liability has not been considered.

³ Although Plaintiff's official tax record indicates that the IRS seized Plaintiff's Social Security benefit for three months for a total of $577.35, the Complaint alleges only two months of plaintiff's Social Security benefit were collected for a total of $384.90. Compare Gov't Mot. Dis. Ex. 1, with Compl. ¶ 2.6.

⁴ In considering the money-mandating requirement of the Tucker Act, the United States Supreme Court has held that: "This 'fair interpretation' rule demands a showing demonstrably lower than the standard for the initial waiver of sovereign immunity . . . . It is enough, then, that a statute creating a Tucker Act right be reasonably amendable to the reading that it mandates a right of recovery in damages. While the premise to a Tucker Act claim will not be 'lightly inferred' . . . a fair inference will do." United States v. White Mountain Apache Tribe, 537 U.S. 465, 472-73 (2003). The United States Court of Appeals for the Federal Circuit has recognized, but not resolved, that the United States Supreme Court, in restating the money-mandating test, may have made it less stringent. See Fisher, 402 F.3d at 1173-74 (quoting White Mountain, 537 U.S. 465). For the purposes of this case, however, under either interpretation, the court does not have jurisdiction over the claims alleged in this Complaint. Id. at 1174.

⁵ Section 1331 provides, in relevant part, that:

⁶ Similarly, section 1340 provides, in relevant part, that:

⁷ Section 6330 provides, in relevant part, that:

⁸ Section 7429 provides, in relevant part, that:

⁹Fisher, however, expressly overruled Gollenhon's "non-frivolous allegation" test for invoking jurisdiction. See Fisher, 402 F.3d at 1172 (holding that making a "non-frivolous" allegation is insufficient to survive a motion to dismiss for lack of jurisdiction).

¹⁰ The Export Clause to the United States Constitution provides: "no Tax or Duty shall be laid on Articles exported from any state." U.S. CONST. art I, § 9, cl. 5.

¹¹ The Judges' Compensation Clause to the United States Constitution provides: "The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behavior, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office." U.S. CONST. art. III, § 1.