Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02038/USCOURTS-caed-2_05-cv-02038-1/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7401 IRS: Tax Liability

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

MIKE SPIRO,

Plaintiff, No. CIV S-05-2038 MCE JFM PS

vs.

MARIAN R. OTA, in his capacity 

as Appeals Team Manager, 

Internal Revenue Service, 

Defendant. FINDINGS AND RECOMMENDATIONS

 /

Defendant’s motion to dismiss this action on the grounds of sovereign immunity

came on regularly for hearing February 23, 2006. Plaintiff appeared telephonically in propria

persona. Justin S. Kim, Trial Attorney, Tax Division, U.S. Department of Justice, appeared

telephonically for defendant. Upon review of the motion and the documents in support and

opposition, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

On October 11, 2005, plaintiff filed a document entitled “Petition for Review of

Determination of Internal Revenue Service Office of Appeals.” Plaintiff seeks review of the

Internal Revenue Service Notice of Determination that plaintiff is responsible for filing an

income tax return and to pay income taxes for 2001. That Notice of Determination was dated

Case 2:05-cv-02038-MCE -JFM Document 16 Filed 02/24/06 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2

September 8, 2005, and is attached to plaintiff’s complaint at pages 18-19. Plaintiff argues that

this matter concerns an employment tax, not federal income tax. Defendant disagrees.

Defendant asserts the proper party to this action is the United States. The

remedies sought in the complaint (i.e., the abatement of collection actions, release of federal tax

liens) indicate that this action is against the United States, regardless of how it is styled. See

Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 101 n.11 (1984). Plaintiff has not

alleged personal actions by the manager that fall outside the scope of his employment. A lawsuit

brought against a federal employee, acting within his official capacity, is essentially a suit against

the United States. Hawaii v. Gordon, 373 U.S. 57 (1963); Gilbert v. DaGrossa, 756 F.2d 1455,

1458 (9th Cir. 1985). Good cause appearing, the United States will be substituted as the proper

party defendant. 

The United States further contends this action should be dismissed on the grounds

of sovereign immunity. It is well settled that the United States, as a sovereign, may not be sued

without its consent, and that the terms of its consent define the court's jurisdiction. United States

v. Testan, 424 U.S. 392, 399 (1976) (citing United States v. Sherwood, 312 U.S. 584, 586

(1941)). Where the United States has not consented to suit, the court lacks jurisdiction over the

subject matter of the action and dismissal is required. Hutchinson v. United States, 677 F.2d

1322, 1327 (9th Cir.1982) (citations omitted). The burden is on the taxpayer to find and prove an

"explicit waiver of sovereign immunity." Lonsdale v. United States, 919 F.2d 1440, 1444 (10th

Cir.1990). Waivers of sovereign immunity "must be explicitly expressed," and "must be strictly

construed in the favor of the sovereign and may not be extended beyond the explicit language of

the statute." Fostvedt v. United States, 978 F.2d 1201, 1202-03 (10th Cir.1992) (citing

Ruckelshaus v. Sierra Club, 463 U.S. 680, 685 (1983); See Gilbert v. DaGrossa, 756 F.2d 1455,

1458 (9th Cir.1985).

Plaintiff argues that the government has waived sovereign immunity pursuant to

26 U.S.C. § 6330 (the district court has jurisdiction to hear and decide appeals from Collection

Case 2:05-cv-02038-MCE -JFM Document 16 Filed 02/24/06 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

3

Due Process hearings “if the Tax Court does not have jurisdiction of the underlying tax

liability.”) However, plaintiff’s assertion that this matter concerns an employment tax rather than

federal income tax is contradicted by the attachment to plaintiff’s complaint. The “Notice of

Determination” appended to plaintiff’s complaint discusses the IRS’ proposed collection actions

for a federal income tax obligation for the year 2001. Although plaintiff cites various statutes, he

has provided no evidence in support of his position that this matter concerns an employment tax

rather than a federal income tax. Generally a plaintiff’s allegations are accepted as true in

deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(1). However, where those allegations

are contradicted by facts established by exhibits attached to the complaint, they may be

disregarded. See Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). Federal

income tax liability falls exclusively within the jurisdiction of the United States Tax Court. See

26 U.S.C. § 7442. 

The Notice of Determination put plaintiff on notice that if he wanted to dispute

the Notice of Determination, he was required to file a petition with the United States Tax Court

for a redetermination within thirty days from the date of the Notice of Determination. 

(Complaint, at 18.) It appears plaintiff failed to do so. Thus, this court lacks subject matter

jurisdiction as to matters related to the plaintiff’s underlying federal income tax liability. 

Because the Tax Court has exclusive jurisdiction over this matter, the court may not exercise

jurisdiction under 26 U.S.C. § 6330. 

Based on plaintiff’s complaint, this court concludes there is no waiver of

sovereign immunity in this action. Therefore, this court lacks subject matter jurisdiction and the

complaint against the United States should be dismissed.

IT IS HEREBY ORDERED that:

1. The United States is substituted as the named defendant in this case; the Clerk

of the Court is directed to amend the caption of this case to reflect the United States as the sole

named defendant in this action; and 

Case 2:05-cv-02038-MCE -JFM Document 16 Filed 02/24/06 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

4

2. The status conference set for February 23, 2006 is vacated. This date will be

reset, if appropriate, following the district court’s consideration of these findings and

recommendations.

IT IS HEREBY RECOMMENDED that the United States' December 28, 2005

motion to dismiss be granted, and this action be dismissed.

These findings and recommendations are submitted to the United States District

Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within ten days

after being served with these findings and recommendations, any party may file written objections

with the court and serve a copy on all parties. Such a document should be captioned "Objections to

Magistrate Judge's Findings and Recommendations." Anyreplyto the objections shall be served and

filed within ten days after service of the objections. The parties are advised that failure to file

objections within the specified time may waive the right to appeal the District Court's order.

Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

DATED: February 23, 2006.

001;spirotax.mtd

Case 2:05-cv-02038-MCE -JFM Document 16 Filed 02/24/06 Page 4 of 4