Filed: Aug. 11, 2008
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2008 Decisions States Court of Appeals for the Third Circuit 8-11-2008 Lichtman v. USA Precedential or Non-Precedential: Non-Precedential Docket No. 07-2902 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008 Recommended Citation "Lichtman v. USA" (2008). 2008 Decisions. Paper 683. http://digitalcommons.law.villanova.edu/thirdcircuit_2008/683 This decision is brought to you for free and open access by the Opinions of the United St
Summary: Opinions of the United 2008 Decisions States Court of Appeals for the Third Circuit 8-11-2008 Lichtman v. USA Precedential or Non-Precedential: Non-Precedential Docket No. 07-2902 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008 Recommended Citation "Lichtman v. USA" (2008). 2008 Decisions. Paper 683. http://digitalcommons.law.villanova.edu/thirdcircuit_2008/683 This decision is brought to you for free and open access by the Opinions of the United Sta..
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Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
8-11-2008
Lichtman v. USA
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-2902
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008
Recommended Citation
"Lichtman v. USA" (2008). 2008 Decisions. Paper 683.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/683
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2008 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 07-2902
___________
JOAN LICHTMAN, CPA,
Appellant
v.
UNITED STATES OF AMERICA
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 07-0010 )
District Judge: Honorable Paul S. Diamond
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
April 14, 2008
Before: MCKEE, SMITH and CHAGARES, Circuit Judges
(Opinion filed : August 11, 2008)
___________
OPINION
___________
PER CURIAM
Appellant, Joan Lichtman, appeals from the judgment of the United States District
Court for the Eastern District of Pennsylvania dismissing her complaint. For the reasons
that follow, we will affirm.
On January 3, 2007, Lichtman filed a suit against the United States. The factual
allegations in Lichtman’s complaint are summarized as follows: Lichtman’s father and
uncle (“the Lichtman brothers”), both of whom are now deceased, held fiduciary powers
over seven trusts. The trusts were established by Lichtman’s grandfather to benefit his
seven grandchildren. Each grandchild, including Lichtman, was the sole beneficiary of
the principal of his or her trust. The Lichtman brothers were the primary income
beneficiaries of the trusts, but, in the event that one of the grandchildren demonstrated a
monetary need due to health, welfare, education, maintenance or support, the trust’s
income was to be paid to him or her. While overseeing those trusts, the Lichtman
brothers engaged in self dealing and tax evasion. They were assisted in concealing their
tax evasion schemes by the law firm and the accounting firm who prepared the tax returns
for the trusts. The Lichtman brothers also denied Lichtman income distributions despite
her demonstration of a medical need. Lichtman filed multiple complaints with the
Internal Revenue Service (“IRS”) and the Federal Bureau of Investigation (“FBI”)
regarding the Lichtman brother’s tax evasion scheme; however, both agencies failed to
assess taxes against and prosecute the offenders.
Based on the foregoing facts, Lichtman seeks the following relief: (1) a writ of
mandamus directing the Secretary of the Treasury to collect taxes allegedly owed by the
Lichtman brothers; (2) a writ of mandamus directing the Government to prosecute certain
IRS agents and the tax and law firms that prepared the allegedly fraudulent tax forms; (3)
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an informer’s fee pursuant to 26 U.S.C. § 7214; (4) restitution pursuant to 26 U.S.C.
§ 7214; (5) damages pursuant to 26 U.S.C. § 7426(h); and (6) damages pursuant to the
Federal Tort Claims Act (“FTCA”); 28 U.S.C. § 2671. Appellee filed a motion to
dismiss, arguing that the claims were barred by res judicata, sovereign immunity, lack of
subject matter jurisdiction, lack of standing, and failure to state a claim upon which relief
may be granted. Although the District Court concluded Lichtman’s suit was not barred
by res judicata, the court granted the United States’s motion for the various other grounds
stated. Lichtman appeals.
We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. Our review of
the portion of the District Court’s order dismissing Lichtman’s mandamus petition is
plenary. Harmon Cove Condominium Ass’n v. Marsh, 815 F.2d 949, 951 (3d Cir. 1987).
We also exercise plenary review over the portion of the District Court’s order granting the
United States’s motion to dismiss. Fagin v. Gilmartin,
432 F.3d 276, 281 (3d Cir. 2005).
“In reviewing the motion to dismiss, we must accept as true the facts alleged in the
complaint and view them in the light most favorable to [Lichtman].”
Id.
Lichtman’s first and second claims seek mandamus relief pursuant to 28 U.S.C.
§ 1361, which states:
The district courts shall have original jurisdiction of any action in the nature
of mandamus to compel an officer or employee of the United States or any
agency thereof to perform a duty owed to the plaintiff.
In her first claim, Lichtman seeks a writ of mandamus directing the Secretary of
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the Treasury to collect taxes allegedly owed by the Lichtman brothers. Lichtman lacks
standing to present this claim because she has failed to demonstrate a judicially
cognizable injury in fact. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Lichtman’s claim is not particularized; it is a generalized grievance of behalf of all
taxpayers. See Warth v. Seldin,
422 U.S. 490, 500 (1975). Furthermore, the IRS’s
decision to investigate or not investigate a particular taxpayer’s case is within its
discretion; thus, the IRS cannot be compelled under 28 U.S.C. § 1361 to investigate or
assess taxes against the Lichtman brothers. Cf. United States v. McKee,
192 F.3d 535
(6th Cir. 1999) (stating “courts must defer to the discretion of revenue agents as to
whether an initiation of a criminal investigation is warranted.”).
Lichtman’s second claim seeks a writ of mandamus directing the Government to
prosecute certain IRS agents and the tax and law firms that prepared the allegedly
fraudulent tax forms. The District Court correctly concluded that the Department of
Justice (“DOJ”) does not owe a duty to Lichtman to prosecute the offenders involved in
the alleged tax evasion scheme. Furthermore, the DOJ’s decision to prosecute or not
prosecute an individual is within its discretion; thus, the DOJ cannot be compelled under
28 U.S.C. § 1361 to prosecute the alleged offenders. See Inmates of Attica Corr. Facility
v. Rockefeller, 477 F.2d 375, 379 (2d Cir. 1973) (stating, “federal courts have
traditionally, and, to our knowledge, uniformly refrained from overturning, at the instance
of a private person, discretionary decisions of federal prosecuting authorities not to
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prosecute persons regarding whom a complaint of criminal conduct is made.”).
Lichtman’s next two claims seek an informer’s fee and restitution pursuant to 26
U.S.C. § 7214. In order for Lichtman to be awarded an informer’s fee or restitution,
however, a revenue officer or agent must first be convicted pursuant to 26 U.S.C. § 7214.
Lichtman fails to identify any individual who has been convicted pursuant to 26 U.S.C.
§ 7214. Accordingly, the District Court properly dismissed both claims.
Lichtman’s fifth claim seeks damages under 26 U.S.C. § 7426(h), which permits
damages in an action brought pursuant to 26 U.S.C. § 7426(a). Section 7426(a)(1)
permits an action against the United States if the IRS has placed a wrongful levy against a
third party’s property. Lichtman asserts that the IRS’s failure to assess taxes against the
trust property held by the Lichtman brothers constitutes a wrongful levy. Lichtman,
however, fails to allege that the IRS placed any levy against the trust property nor is there
any indication that such a levy ever existed. The IRS’s failure to assess taxes against the
property, without more, is insufficient to constitute a levy, wrongful or otherwise. See
Interfirst Bank Dallas, N.A. v. United States, 769 F.2d 299, 304 (5th Cir. 1985) (holding
that “[i]n order for Section 7426 to apply, the IRS must have made an actual ‘levy’ upon
the property in question.”); see also Nickerson v. United States,
513 F.2d 31, 33 (1st Cir.
1975).
In her final claim, Lichtman asserts that she is entitled to damages pursuant to the
FTCA, 28 U.S.C. § 2671, because she suffered financial losses and threats to her well-
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being as a result of the IRS’s failure to assess taxes against the Lichtman brothers and as a
result of the DOJ’s failure to prosecute the offenders involved in the tax evasion scheme.
The FTCA is the exclusive remedy against the United States for tort claims arising out of
the wrongful acts of Government employees acting within the scope of their employment.
28 U.S.C. § 2679. The FTCA’s waiver of sovereign immunity, however, is subject to
several exceptions. See 28 U.S.C. § 2680. Upon review of Lichtman’s claim, we
conclude that it is barred by the exceptions to the FTCA.
The first portion of Lichtman’s FTCA claim is based on the IRS’s failure to assess
taxes against the Lichtman brothers. The FTCA does not apply to any “claim arising in
respect of the assessment or collection of any tax.” 28 U.S.C. § 2680(c). Accordingly,
the IRS’s failure to assess taxes against the Lichtman brothers is barred by section
2680(c)’s exclusion. See Interfirst Bank Dallas, N.A., 769 F.2d at 307 (concluding that
section 2680(c)'s exception “specifically applies to all tax-related claims) (emphasis in
original). The second portion of Lichtman’s FTCA claim is based on the DOJ’s failure to
prosecute the offenders involved in the tax evasion scheme. Section 2680(a) precludes
any claim “based upon the exercise or performance or the failure to exercise or perform a
discretionary function or duty on the part of a federal agency or an employee of the
Government, whether or not the discretion involved be abused.” “Prosecutorial decisions
as to whether, when and against whom to initiate prosecution are quintessential examples
of governmental discretion in enforcing the criminal law, and, accordingly, courts have
6
uniformly found them to be immune under the discretionary function exception.” Pooler
v. United States, 787 F.2d 868, 871 (3d Cir. 1986). Accordingly, this portion of
Lichtman’s FTCA claim is also barred.
For the foregoing reasons, we will affirm the judgment of the District Court.
Lichtman’s motion, requesting an injunction to prevent the Government from filing any
response to the appeal and to remand the appeal to the District Court, is denied.
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