LAWRENCE P. ZATKOFF, District Judge.
This matter is before the Court on Defendant's Motion to Dismiss (Docket #6). The Motion is fully briefed. The Court finds that the facts and legal arguments pertinent to the Motion are adequately presented in the parties' papers, and the decision process will not be aided by oral arguments. Therefore, pursuant to E.D. Mich. Local R. 7.1(f)(2), it is hereby ORDERED that the Motion be resolved on the briefs submitted by the parties, without this Court entertaining oral arguments. For the reasons that follow, Defendant's Motion is GRANTED.
On October 29, 2009, the Internal Revenue Service ("IRS") sent Plaintiffs a letter of determination of taxes owed for taxable years 2001 and 2002. The IRS had previously placed two liens on Plaintiffs' assets on April 3, 2009, one for taxable year 2001 and one for taxable year 2002, and sent Plaintiffs notice of the liens on April 14, 2009. On November 29, 2009, Plaintiffs filed a petition against the IRS in the United States Tax Court ("Tax Court") to appeal the IRS's collection determination. On March 8, 2012, the IRS filed in the Tax Court a motion for entry of a decision, wherein the IRS stated, in part:
On March 14, 2012, the Tax Court issued an "Order and Decision" that stated:
Plaintiffs filed a motion to vacate the Tax Court's March 14, 2012, Order and Decision. Plaintiffs argued that the IRS's concession was not real and would leave the IRS free to collect for taxable years 2001 and 2002. On April 27, 2012, the Tax Court denied Plaintiffs' motion to vacate, finding that Plaintiffs wanted "more than a full concession from [the IRS] and [Plaintiffs] failed to sign a Stipulation of Settled Issues that resolved all issues in the case." The Tax Court further stated:
Despite the ruling in their favor, Plaintiffs appealed the Tax Court's decision and sought a writ of mandamus before the Court of Appeals for the District of Columbia Circuit. On December 2, 2013, the District of Columbia Circuit filed a per curiam judgment dismissing Plaintiffs' appeal and denying the writ of mandamus. Significantly, the District of Columbia Circuit found:
Citing Deposit Guar. Nat'l Bank, 445 U.S. at 333, the District of Columbia Circuit then held that Plaintiffs "have therefore received all relief to which they are entitled and we lack jurisdiction to hear their appeal." Plaintiffs subsequently filed a motion to publish the District of Columbia Circuit's opinion and a petition for rehearing en banc, both of which were denied (on January 23, 2014, and February 11, 2014, respectively).
In a letter dated July 1, 2013, the IRS notified Plaintiffs that the IRS had abated all of the alleged tax liability owed by Plaintiffs for taxable years 2002. In a separate letter dated July 1, 2013, the IRS stated that Plaintiffs still owed $122.78 for taxable year 2001. The account transcript for Plaintiffs for taxable year 2001 continued to show that Plaintiffs still owed $122.78 until that amount was completely abated on December 9, 2013. Defendant represented to the District of Columbia Circuit that the $122.78 amount was mistakenly overlooked, and Defendant abated that amount within a week of the District of Columbia Circuit's ruling. The liens for the 2002 taxable year and the 2001 taxable year were released on June 28, 2013, and November 22, 2013, respectively.
On February 11, 2014, Plaintiffs filed the instant action, wherein they seek: (1) Count I — an emergency injunction to use Plaintiffs' correct address and an order against assessment and collection under 26 U.S.C. § 6213; (2) Count II — judgment in Plaintiffs' favor over allegations of abusive tax collection under 26 U.S.C. § 7433 (and, perhaps, failure to release tax liens under 26 U.S.C. § 7432); and (3) judgment in Plaintiffs' favor for conduct in violation of the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. (the "FTCA").
A motion brought pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted tests the legal sufficiency of a plaintiff's claims. The Court must accept as true all factual allegations in the pleadings, and any ambiguities must be resolved in the plaintiff's favor. See Jackson v. Richards Med. Co., 961 F.2d 575, 577-78 (6th Cir. 1992). While this standard is decidedly liberal, it requires more than the bare assertion of legal conclusions. See Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n, 176 F.3d 315, 319 (6th Cir. 1999). A plaintiff must make "a showing, rather than a blanket assertion of entitlement to relief" and "[f]actual allegations must be enough to raise a right to relief above the speculative level" so that the claim is "plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference the defendant is liable for the alleged misconduct." See also Ashcroft v. Iqbal, 556 U.S. 662, 696-97 (2009).
In deciding a motion to dismiss pursuant to Rule 12(b)(6), this Court may only consider "the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the pleadings, and matters of which the [Court] may take judicial notice." 2 James Wm. Moore et al., Moore's Federal Practice ¶ 12.34[2] (3d ed. 2000). If, in deciding the motion, the Court considers matters outside the pleadings, the motion will be treated as one for summary judgment pursuant to Rule 56. See Fed. R. Civ. P. 12(d).
In Count II, Plaintiffs allege the IRS, through its employees and agents, violated 26 U.S.C. § 7433 from 1999 to October 2009. Among other allegations, Plaintiffs state that the IRS and its employees and agents sent Plaintiffs the notice of determination letter and engaged in wrongful conduct when pursuing the collection of taxes from Plaintiffs for taxable years 2001 and 2002.
Under 26 U.S.C. § 7433, a plaintiff must file a lawsuit in district court within two years of the time a cause of action accrues against the IRS. See 26 U.S.C. § 7433(d)(3); 26 C.F.R. § 301.7433-1(g)(1); Tharp v. United States, 13 Fed.Appx. 326, 328 (6th Cir. 2001). A cause of action under 26 U.S.C. § 7433 accrues when a taxpayer "has had a reasonable opportunity to discover all essential elements of a possible cause of action." See 26 C.F.R. § 301.7433-1(g)(2); Dziura v. United States, 168 F.3d 581, 583 (1st Cir. 1999). "The two-year statute of limitations of section 7433 is not subject to equitable tolling, even where the taxpayer seeks to exhaust administrative remedies." Hynard v. Internal Revenue Service, 233 F.Supp.2d 502, 509 (S.D.N.Y. 2002) (citing United States v. Marsh, 89 F.Supp.2d 1171, 1176-77 (D.Hawaii 2000)("the statute of limitations applicable to section 7433 is not tolled pending exhaustion of administrative remedies, but runs from the time the cause of action accrued")), aff'd 87 Fed.App'x 220 (2d Cir. 2004) . A plaintiff's failure to timely file an action within that two-year period deprives the court of jurisdiction. United States v. Dalm, 494 U.S. 596, 608 (1990).
In the instant case, the Court finds that Plaintiffs' cause of action accrued, at the latest, in October/November 2009, when Plaintiffs received from the IRS the letter of determination of taxes owed for taxable years 2001 and 2002. As Plaintiffs did not file this cause of action until February 2014, more than four years after their cause of action accrued, the Court holds that Plaintiffs' claims under 26 U.S.C. § 7433 are time-barred. Moreover, based on established law, the Court must reject Plaintiffs' contention that the two-year statute of limitations under 26 U.S.C. § 7433 should be equitably tolled. See Hynard, supra.
The Court also notes that, in their response brief, Plaintiffs argue that they are entitled to relief under 26 U.S.C. § 7432 due to the IRS's alleged failure to timely release the tax liens for taxable years 2001 and 2002.
For the reasons set forth above, the Court grants Defendant's Motion to Dismiss Count II of Plaintiffs' Complaint.
The parties treat Plaintiffs' abuse of process claim as one brought under the FTCA. The FTCA, however, expressly prohibits claims related to the assessment or collection of taxes. See 28 U.S.C. § 2680(c). Plaintiffs attempt to circumvent that prohibition by arguing that the FTCA only prohibits claims related to the assessment or collection of "taxes," not "penalties." Specifically, Plaintiffs argue that because the statute refers only to the assessment or collection of taxes and not penalties (which are two separate and differently defined terms under the United States tax code), the FTCA's prohibition regarding the assessment or collection of taxes does not bar a claim for an alleged wrongful assessment or collection of
The United States Supreme Court recently held that penalties are included within the term "tax." See Nat'l Federation of Independence Business v. Sebelius, 132 S.Ct. 2566 (2012), citing United States v. Sotelo, 436 U.S. 268, 275 (1978) ("That the funds due are referred to as a `penalty' . . . does not alter their essential character as taxes"). The Supreme Court's ruling is consisent with a long line of case law. See e.g., Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 363 (1941); Gonsalves v. United States, 782 F.Supp. 164, 168-69 (D. Me. 1992), aff'd sub nom. Gonsalves v. I.R.S., 975 F.2d 13 (1st Cir. 1992); National Commodity and Barter Association, National Commodity Exchange v. Gibbs, 886 F.2d 1240, 1246 (10th Cir. 1989) (assessment of penalties for promotion of abusive tax shelter); Capozzoli v. Tracey, 663 F.2d 654, 657-58 (5th Cir. 1981) ("Congress intended to insulate the IRS from tort liability stemming from any of its revenue-raising activities," including the taking of photographs alleged to be tortious invasion of privacy); Morris v. United States, 521 F.2d 872, 874 (9th Cir. 1975) (unlawful seizure and levy of property fell within exempted group of tort claims arising out of tax collection efforts). Accordingly, the Court rejects Plaintiffs' position that the FTCA prohibition on claims for the assessment or collection of taxes does not apply to the assessment and collection of penalties imposed under Title 26.
For the reasons set forth above, the Court dismisses Count III of Plaintiffs' Complaint.
In Count I, Plaintiffs bring a claim for injunctive relief. Injunctive relief is not a freestanding claim, however, but is simply a form of relief. See, e.g., Terlecki v. Stewart, 278 Mich.App. 644, 663 (2008) ("It is well settled that an injunction is an equitable remedy, not an independent cause of action"). In this case, Plaintiffs have failed to state a claim upon which relief can be granted. Accordingly, the Court grants Defendant's Motion to Dismiss Count I of Plaintiffs' Complaint.
Accordingly, and for the reasons set forth above, IT IS HEREBY ORDERED that Defendant's Motion to Dismiss (Docket #6) is GRANTED. IT IS FURTHER ORDERED that Plaintiffs' cause of action shall be DISMISSED WITH PREJUDICE. Judgment shall be entered accordingly.
IT IS SO ORDERED.
