Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04000/USCOURTS-cand-3_14-cv-04000-1/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

RAIMI SHOAGA,

Plaintiff,

 v.

WELLS FARGO BANK, ET AL., 

Defendants. /

No. 3:14-cv-04000-CRB

ORDER DISMISSING SECOND

AMENDED COMPLAINT WITH

PREJUDICE

Now before the Court is pro se Plaintiff Raimi Shoaga’s Second Amended Complaint

(“SAC”). See SAC (dkt. 13). On September 19, 2014, this Court granted Shoaga leave to

proceed in forma pauperis (“IFP”), 28 U.S.C. § 1915, as well as dismissed his initial

Complaint without prejudice for failure to state a claim upon which relief may be granted, 28

U.S.C. § 1915(e)(2)(B)(ii). See Order re Initial Complaint (dkt. 4). The Court gave Shoaga

thirty days to file an amended complaint, with a warning that failure to do so might result in

dismissal of Shoaga’s case with prejudice. Id. at 3. On October 24, 2014, Shoaga filed an

untimely First Amended Complaint (“FAC”). See FAC (dkt. 6). In addition to finding that

the the FAC was untimely, the Court determined that the FAC failed to state a cognizable

claim for relief and sua sponte dismissed his action under 28 U.S.C. § 1915(e)(2)(B). See

Order re FAC (dkt. 9). In that Order, the Court warned Shoaga that if he filed a future

complaint in this matter that likewise failed to state a claim, the Court might consider further

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United States District Court

For the Northern District of California

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amendments to be futile and dismiss the complaint with prejudice. See id. at 3. Any person

proceeding IFP under 28 U.S.C. § 1915(a) is subject to mandatory sua sponte review and

dismissal if the complaint is frivolous or malicious, fails to state a claim upon which relief

may be granted, or seeks monetary relief from a defendant immune from suit. 28 U.S.C.

§ 1915(e)(2)(B); Lopez v. Smith, 203 F.3d 1122, 1126–27 (9th Cir. 2000). Because

Shoaga’s SAC yet again fails to state a claim upon which relief can be granted and is

frivolous in a way that cannot be cured by the pleading of additional facts, the Court

declines to order that the Clerk issue summons and hereby DISMISSES the SAC WITH

PREJUDICE. 28 U.S.C. § 1915(d)–(e). 

I. LEGAL STANDARD

The legal sufficiency of a complaint is tested under Federal Rule of Civil Procedure

12(b)(6). Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Under Rule 12(b)(6),

dismissal is appropriate if the complaint fails to state a facially plausible claim for relief. 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556–57 (2007). That is, the complaint must state

enough facts to raise a reasonable expectation that discovery will reveal evidence of the

claim. Id. at 556. Dismissal is also appropriate when the complaint lacks a cognizable legal

theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

The district court must assume the truth of all factual allegations and construe them in

the light most favorable to the plaintiff. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir.

2002). However, pro se litigants are not “excused from knowing the most basic pleading

requirements.” Am. Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1107 (9th

Cir. 2000).

The standard for frivolity looks to whether any of the “legal points are arguable on

their merits.” Neitzke v. Williams, 490 U.S. 319, 325 (1989). “[A] complaint, containing as

it does both factual allegations and legal conclusions, is frivolous where it lacks an arguable

basis either in law or in fact.” Id. As used in the in forma pauperis statute, the “term

‘frivolous,’ when applied to a complaint, embraces not only the inarguable legal conclusion,

but also the fanciful factual allegation.” Id.

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II. DISCUSSION

The gravamen of Shoaga’s SAC is that “taxation in the United States is based on

voluntary compliance” and, as such, the IRS and other parties should not be acting to collect

taxes he has elected not to pay. See, e.g., SAC at 10. Specifically, Shoaga cites an IRS

Mission Statement and other similar documents that say that the mission of the IRS “is to

encourage and achieve the highest possible degree of voluntary compliance with the tax

laws.” See, e.g., id. at 13–14. He then deduces that ‘[t]he word ‘voluntary, . . . connotes an

agreement, implies willingness, volition, and intent,” and “refers to the doing of something

which a person is free to do or not to do, as he so decides.” Id. at 14. From this, he

concludes that “since the law clearly and unambiguously states that the payment of income

tax is voluntary, defendant cannot lawfully force or compel him to pay income tax”—in other

words, “he has the freedom of choice to pay or not to pay income tax without any legal

obligation towards defendant” and accordingly, the involuntary federal tax liens issued

against him were unlawful. Id. at 17–18. In Count One, Shoaga seeks to enjoin Defendants

from attempting to collect the “involuntary” taxes that the IRS has determined he owes. See

id. In a generous reading of Counts Two, Three, and Four, Shoaga appears to allege that

Defendants engaged in unfair, deceptive, and abusive practices, respectively, by seeking to

collect the outstanding balance on his taxes and on a federally guaranteed student loan that

Shoaga alleges he has no obligation to pay. 

Shoaga’s primary contention–that the federal income tax system is based on voluntary

compliance, meaning he may elect to pay or not pay income tax—has long been held to be

“completely lacking in legal merit and patently frivolous.” See Lonsdale v. United States,

919 F.2d 1440, 1448 (10th Cir.1990); Wilcox v. Commissioner of the Internal Revenue, 848

F.2d 1007, 1008–09 (9th Cir.1988) (awarding sanctions against a party for making this

frivolous argument on appeal). “[P]aying taxes is not voluntary.” Wilcox, 848 F.2d at 1008

(citing Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.1986)). That Shoaga

apparently wishes to join the chorus of “rejected tax protestor arguments” made by

“taxpayers who simply refuse to accept the judgments of the courts” does not require

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 For Shoaga’s benefit, the Court notes that the term “voluntary compliance,” as it relates to

taxes, refers to the fact that “the Government depends upon the good faith and integrity of each potential

taxpayer to disclose honestly all information relevant to tax liability”—not that the payment of taxes

is voluntary or that the government lacks the authority “to investigate and audit” tax evaders who

“attempt to outwit the system.” See, e.g., United States v. Bisceglia, 420 U.S. 141, 145–46 (1975);

Williams v. Untied States, No. 86-114-MMS, 1987 WL 12075, at *3 (D. Del. Feb. 11, 1987). 

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“opposing parties . . . to bear the burden of meritless litigation.”1 See Lonsdale, 919 F.2d at

1448 (imposing sanctions against party for pressing the same argument Shoaga raises here). 

Moreover, the Anti–Injunction Act states that “no suit for the purpose of restraining the

assessment or collection of any tax shall be maintained in any court by any person, whether

or not such person is the person against whom such tax was assessed.” 26 U.S.C. § 7421(a). 

Although the Supreme Court has carved out an exception, which applies if it is clear that the

government could not prevail under any circumstances, that clearly is not the case here. See

Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962).

Finally, a generous reading of Shoaga’s Complaint might suggest some vague

allegation that Shoaga’s federally guaranteed student loan is unenforceable because the

interest rate is too high and/or because Shoaga should have qualified for a loan write-off as a

medical technician. Despite pressing some version of this claim in each iteration of his

complaint thus far, Shoaga fails to allege the interest rate of his loan, which if any law he

believes it violates, whether he applied for any loan forgiveness program, or any other facts

or law that could entitle him to relief. The Court can discern no basis to believe that the

federal government’s student loan program is categorically usurious, and deems Shoaga’s

claims in this regard to be frivolous. Moreover, the federal and state defendants against

whom Shoaga appears to levy these claims are immune from suit. See, e.g., Dep’t of the

Army v. Blue Fox, Inc., 525 U.S. 255, 260 (1999); Yakama Indian Nation v. State of Wash.

Dep’t of Revenue, 176 F.3d 1241, 1245 (9th Cir.1999), cert. denied, 528 U.S. 1116 (2000). 

IV. CONCLUSION 

Accordingly, the Court sua sponte DISMISSES this action because it is both frivolous

and because it fails to state a claim upon which relief can be granted. 28 U.S.C.

§ 1915(e)(2)(B). Repeated failed amendments, as well as the legal frivolity of Shoaga’s

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claims, make it clear that further amendment would be futile. Accordingly, Shoaga’s action

is dismissed WITH PREJUDICE.

IT IS SO ORDERED.

Dated: April 16, 2015 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

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