EARL SHEROD, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE, Defendant., IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION, Case No. 2:98CV411K, April 4, 2001
EARL SHEROD, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE, Defendant.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION
Case No. 2:98CV411K
April 4, 2001
REPORT & RECOMMENDATION
This matter is before the court on Defendant's Motion to Dismiss Plaintiff s petition for review of a determination by the Internal Revenue Service. This case was assigned to United States District Court Judge Dale A. Kimball, who then referred it to United States Magistrate Judge Samuel Alba under 28 U.S.C. ╖ 636(b)(1)(B). On March 15, 2001, Judge Alba issued a Report and Recommendation, recommending that the United States' motion to dismiss for lack of subject matter jurisdiction be granted and that plaintiff be given notice that he has thirty days from entry of any order affirming the magistrate's recommendation to file an appeal with the Tax Court. No objection has been filed to the Report and Recommendation.
The court has reviewed the file de novo. The court approves and adopts the Magistrate Judge's Report and Recommendation in its entirety. Accordingly, this case is hereby DISMISSED for lack of subject matter jurisdiction and Plaintiff is notified that he has thirty days from the date of this order to file his appeal with the Tax Court.
BY THE COURT:
DALE A. KIMBALL
United States District Judge
REPORT AND RECOMMENDATION
ALBA, Magistrate Judge: A complaint was ini╜tially filed in this case on May 18, 2000, and the matter was assigned to United States District Judge Dale A. Kimball. (File Entry #1.) On May 19, 2000, an order of reference was signed by Judge Dale A. Kimball, pursuant to 18 U.S.C. ╖ 636(b)(1)(B), and the matter was re╜ferred to Magistrate Judge Samuel Alba. (File Entries #2 and #3.) On August 30, 2000, a motion was filed by defendant Commissioner of the Internal Revenue Service to dismiss the case for lack of subject matter jurisdiction, alleging that the case had been improperly filed in the United States District Court and should be filed in the Tax Court. (File Entry #4.) On September 26, 2000, the undersigned magistrate signed an order to show cause directed to the plaintiff to respond in writing on or before October 15, 2000, to show cause why defendant's motion to dismiss should not be granted. Plaintiff was put on notice that failure to respond would be taken as an indication that the plaintiff did not wish to continue to prosecute this matter and the motion to dismiss would be granted. (File Entry #5.)
On October 13, 2000, plaintiff filed with the court a request for transfer for want of jurisdiction and a request for an evidentiary hearing. Specifically, the plaintiff requested that the ac╜tion was "mistakenly filed into 'United States District Court,' and petitioner requests transfer to the 'United States district court.' " (File En╜try #6.) A notice of hearing was mailed to the parties scheduling the matter for oral argument on the defendant's motion to dismiss the case for lack of subject matter jurisdiction for November 16, 2000, at 9:00 am. (File Entry #8.) On that date, the plaintiff appeared pro se and Anita Machhar, counsel for the Department of Justice, appeared for the defendant. The court heard arguments from the parties and ordered a tran╜script of the proceedings. The transcript was prepared and is attached to this Report and Recommendation.
The thrust of the government's argument is that the petition has been filed in the wrong court. The government also argues that the plaintiff in this matter has improperly served the United States. The court would deal with these issues individually.
Rule 4 of the Federal Rules of Civil Procedure describes the method in which service of a com╜plaint is to be properly made. Specifically, Rule 4(i) outlines the procedures to be followed when serving the United States. This portion of the rule provides that a summons and a complaint must be delivered personally or sent by certified or registered mail to the United States Attorney for the District in which the action is brought, and by serving a copy of the summons and complaint by registered or certified mail to the Attorney General of the United States in Wash╜ington, D. C. A review of the certificate of service appended to the petition for judicial review filed by plaintiff in this matter, discloses that the petition for judicial review was served on the Clerk of the Court, Markus B. Zimmer, at 350 South Main Street, Salt Lake City, Utah 84101, and upon Wilcy Davis, Associate Chief Rocky Mountain Appeals, c/o Lavada J. Har╜mon, I.D. 84-00937, 1244 Spear Boulevard, Den╜ver, Colorado 80204-3581. (File Entry #1.)
Ms. Machhar, on behalf of the government at oral argument, represented to the court that she had contacted the United States Attorney's of╜fice and they had no record of being served with the petition for judicial review by the plaintiff in this matter. (Tr. at p. 5.) Based on the above, the petition filed by plaintiff in this matter should be dismissed for insufficiency of service of process, pursuant to Rule 12(b)(5) of the Federal Rules of Civil Procedure.
The government also argues that the petition filed in this case has been filed in the wrong court. The Internal Revenue Service Restructur╜ing and Reform Act of 1998 includes two new provisions, codified at 26 U.S.C. ╖ ╖ 6320 and 6330 to provide additional protections for tax╜payers. Section 6320 deals with liens, and ╖ 6330 with levies. At issue before this court is ╖ 6330, which provides that prior to the issuance of an administrative tax levy, the IRS must give the taxpayer notice of and the opportunity for an administrative review of the matter in the form of an appeals office due process hearing. Id. at ╖ 6330(a)(b). Subsections (c) and (d) of the stat╜ute outline the issues that can be raised in such a hearing and the means for obtaining judicial review if the taxpayer is dissatisfied with the determination made at that hearing. By letter dated April 20, 2000, the IRS informed Mr. Sherod after receiving such a hearing, pursuant to 26 U.S.C. ╖ 6330 of its determination. (Ex╜hibit A to File Entry #1, the Petition for Judi╜cial Review.)
Title 26 U.S.C. ╖ 6330(d)(1) provides that a taxpayer may seek judicial review of any deter╜mination by filing a petition with the tax court within thirty days of the determination being made. It is clear that plaintiff is challenging his income tax liability as determined by the IRS and therefore under 26 U.S.C. ╖ 6330(d)(1)(B) the Tax Court has exclusive jurisdiction. John╜son v. CIR [2000-2 USTC ╤ 50,591], 86 A.F.T.R.2d 2000-5225(1). Or, June 21, 2000). The petition for judicial review which has been filed with this court has been done so improp╜erly. This court lacks subject matter jurisdiction and under Rule 12(b)(1) of the Federal Rules of Civil Procedure, this matter should be dismissed.
It is important to note, however, that the taxpayer still has a remedy if this court finds that he has filed with the incorrect court. 26 U.S.C. ╖ 6330(d) provides "If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court deter╜mination to file such appeal with the correct court." This court hereby recommends to the United States District Court that upon adoption of this Report and Recommendation the tax╜payer should be given notice that he has thirty days from the date of dismissal of his action in this court to file an appeal with the Tax Court.
Based on the foregoing, it is hereby recom╜mended that the United States' motion to dis╜miss be granted and that the taxpayer, plaintiff, be notified that he has thirty days from the entry of such dismissal in this court in which to file his appeal with the Tax Court.
Copies of the foregoing Report and Recom╜mendation are being mailed to the parties who are hereby notified of their right to object to the same. The parties are further notified that they must file any objections to the Report and Rec╜ommendation with the clerk of the district court, pursuant to 28 U.S.C. ╖ 636(b), with ten (10) days after receiving it. Failure to file objec╜tions may constitute a waiver of those objections on subsequent appellate review.