Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_08-cv-02432/USCOURTS-caed-2_08-cv-02432-4/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

---

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

 This action proceeds before the undersigned pursuant to Eastern District of California 1

Local Rule 302(c)(21) and 28 U.S.C. § 636(b)(1), and was reassigned by an order entered

February 9, 2010 (Dkt. No. 24). 

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

JAMES ROY MCNEIL,

Plaintiff, No. 2:08-cv-02432 MCE KJN PS

vs.

INTERNAL REVENUE SERVICE, FINDINGS AND RECOMMENDATIONS

Defendant.

_____________________________/

Presently before the court is defendant’s motion to dismiss plaintiff’s compliant

on the ground that the court lacks subject matter jurisdiction because plaintiff has failed to

establish that the United States has waived its sovereign immunity as to plaintiff’s claim for a tax

refund. (Dkt. No. 19.) Plaintiff, who is proceeding without counsel and in forma pauperis, did 1

not file an opposition to defendant’s motion to dismiss. This matter was submitted on the briefs

and record on December 3, 2009. (Dkt. No. 22.) For the reasons stated below, the undersigned

recommends that defendant’s motion be granted and that plaintiff’s complaint be dismissed.

I. BACKGROUND

On October 14, 2008, plaintiff James Roy McNeil filed his complaint in this

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 1 of 7
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

 Plaintiff’s complaint was filed on a form entitled “Complaint by a Prisoner Under the 2

Civil Rights Act, 42 U.S.C. § 1983.” (Dkt. No. 1 at 1.) Although plaintiff is currently

incarcerated in California State Prison and used this form to allege his claim, plaintiff’s

complaint alleges that his claim is entirely unrelated to his incarceration. (Pl.’s Compl. at 2.) 

His lawsuit seeks a refund of allegedly overpaid taxes and does not allege any violation of 42

U.S.C. § 1983. 

 In its motion to dismiss, defendant contends that although plaintiff named the IRS as a 3

defendant in his complaint, the United States is the proper defendant because plaintiff’s

requested relief, if granted, would result in a judgment that would expend itself on the public

treasury or restrain the federal government from action or interfere with public administration. 

(See Mem. of P. & A. in Supp. of Def.’s Mot. to Dismiss at 1 n.1 (citing Dugan v. Rank, 372

U.S. 609, 620 (1963)).) Defendant is correct that the United States is the proper defendant in an

action seeking the recovery of a civil tax refund. See, e.g., Grossman v. Comm’r of Internal

Revenue, 687 F. Supp. 1401, 1402 (N.D. Cal. 1987) (citing 26 U.S.C. 7422(f)(1)), aff’d, 85 F.2d

1289 (9th Cir. 1988). 

 Plaintiff’s January 27, 2009 letter to the IRS appears to be a cover letter accompanying 4

plaintiff’s 1999 tax return that demands an “income tax check” in an unspecified amount. 

2

action seeking a federal tax refund (Dkt. No. 1). Plaintiff alleges that from January 1999 2

through June 1999, he performed work for a contractor named Steve Relaford at a company

named OTTO Services. (Pl.’s Compl. at 3 (Dkt. No. 1).) He further alleges that the Internal

Revenue Service (“IRS”) failed to issue to him a refund of federal taxes that he alleges he

overpaid for the 1999 tax year. (Id.) Plaintiff also alleges that he complained to the IRS in

writing, but that the IRS did not respond to his correspondence. (Id. at 3.) Plaintiff demands a

monetary award of $3,000. (Id. at 4.)

Defendant filed the motion to dismiss at issue seeking to dismiss plaintiff’s

complaint on the ground that the court lacks subject matter jurisdiction because plaintiff has

failed to establish that the United States waived its sovereign immunity as to plaintiff’s claim.3

(Defs.’ Notice of Mot. & Mot. to Dismiss at 2 (Dkt. No. 19).) With its motion, defendant

submitted additional evidence: (1) a declaration from IRS Advisory Insolvency Quality Advisor

Michael Norris; (2) plaintiff’s federal tax return for the year 1999, dated January 27, 2009 (Norris

Decl., Ex. 1 at 1-2); and (3) a letter from plaintiff to the IRS, dated January 27, 2009 (Norris

Decl., Ex. 1 at 3). 

4

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 2 of 7
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

(Norris Decl., Ex. 1 at 3.) As with the complaint, the letter states that plaintiff worked for Steve

Relaford and Otto Services. (Id.)

 Congress has provided statutory authority vesting district courts with subject matter 5

jurisdiction over civil actions for internal-revenue tax refunds, 28 U.S.C. § 1346(a)(1), and

3

According to defendant’s evidence, on February 3, 2009, the IRS received

plaintiff’s Form 1040 Individual Tax Return for the 1999 tax year, which was dated January 27,

2009, after plaintiff filed the operative complaint in this action. (Norris Decl. ¶ 3 & Ex. 1 at 2.) 

The 1999 tax return reports “wages, salaries, tips, etc.” in the amount of “320.00 A week”;

taxable refunds, credits, or offsets of state and local income taxes in the amount of $124,500; and

an Individual Retirement Account distribution of $4,995. (Norris Decl. ¶ 3 & Ex. 1 at 1.) The

entry fields for both taxable income and the claimed refund amount are blank. (Id.) Mr. Norris

also declared that based on his review of information contained in the IRS’s Integrated Data

Retrieval System (“IDRS”): (1) plaintiff “had $633.00 in federal taxes withheld for the 1999 tax

year,” (2) the IRS did not receive a federal tax return or claim for refund for plaintiff for the 1999

tax year aside from plaintiff’s February 3, 2009 submission, and (3) there is no IDRS record of

federal income tax payments for the 1999 tax year made for plaintiff within three years of the

IRS’s receipt of plaintiff’s February 3, 2009 submission. (Norris Decl. ¶¶ 4-5.)

As stated above, plaintiff did not file an opposition to defendant’s motion to

dismiss and, thus, has not rebutted or supplemented defendant’s evidence.

II. LEGAL STANDARDS

Defendant’s motion seeks dismissal of plaintiff’s complaint for lack of subject

matter jurisdiction on the ground that plaintiff has not established that the United States waived

its sovereign immunity as to plaintiff’s claim for a tax refund. To confer subject matter

jurisdiction in an action against a sovereign, there must exist (1) “statutory authority vesting a

district court with subject matter jurisdiction,” and (2) “a waiver of sovereign immunity.” 

Alvarado v. Table Mountain Rancheria, 509 F.3d 1008, 1016 (9th Cir. 2007). Because the 5

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 3 of 7
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

defendant does not argue otherwise. Defendant only challenges whether the United States has

waived its sovereign immunity in this case.

4

United States is a sovereign, it is immune from suit unless it has expressly waived its immunity

and consented to be sued. See Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1087-88 (9th

Cir. 2007). The United States Supreme Court has “frequently held . . . that a waiver of sovereign

immunity is to be strictly construed, in terms of scope, in favor of the sovereign.” Dep’t of the

Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999). Moreover, the waiver cannot be implied, but

must be “unequivocally expressed” in the statutory text. Id.; accord Harger v. Dep’t of Labor,

569 F.3d 898, 903 (9th Cir. 2009). The party asserting a waiver of sovereign immunity bears

“the burden of establishing that its action falls within an unequivocally expressed waiver of

sovereign immunity by Congress. . . .” Dunn & Black, P.S., 492 F.3d at 1088.

When considering a motion to dismiss for lack of subject matter jurisdiction

pursuant to Federal Rule of Civil Procedure 12(b)(1), the district court is not restricted to the face

of the pleadings and “may review any evidence, such as affidavits and testimony, to resolve

factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 850 F.2d

558, 560 (9th Cir. 1988) (collecting cases), cert. denied, 489 U.S. 1052 (1989); see also Warren

v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (“A jurisdictional challenge

under Rule 12(b)(1) may be made either on the face of the pleadings or by presenting extrinsic

evidence.”). Accordingly, the court may consider the evidence submitted by defendant in support

of its motion to dismiss to the extent it aids resolution of this jurisdictional dispute. 

III. DISCUSSION

Defendant first argues that plaintiff’s complaint should be dismissed as

prematurely filed because plaintiff failed to meet the conditions and limitations that Congress

placed on the government’s waiver of sovereign immunity. (See Mem. of P. & A. in Supp. of

Def.’s Mot. to Dismiss at 4-6.) Specifically, defendant asserts that plaintiff’s action was

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 4 of 7
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

 In its entirety, 26 U.S.C. § 6532(a)(1) states: 6

 (a) Suits by taxpayers for refund.--

(1) General rule.--No suit or proceeding under section 7422(a) for

the recovery of any internal revenue tax, penalty, or other sum,

shall be begun before the expiration of 6 months from the date of

5

commenced prematurely because “[p]laintiff first filed his purported claim for refund (his 1999

tax return) on February 3, 2009, after commencing this action.” (Id. at 6.) 

As noted above, the United States is immune from suit unless it consents to waive

its sovereign immunity, and “[t]he terms of the Unites States’ consent to be sued in any court

define that court’s jurisdiction to entertain the suit.” Hodge v. Dalton, 107 F.3d 705, 707 (9th

Cir. 1997) (citing Lehman v. Nakshian, 453 U.S. 156, 160 (1981)). The Supreme Court has held

that “[l]ike a waiver of immunity itself, . . . “limitations and conditions upon which the

Government consents to be sued must be strictly observed and exceptions thereto are not to be

implied.” Lehman, 453 U.S. at 160-61.

Although 28 U.S.C. § 1346(a)(1) waives the sovereign immunity of the United

States with respect to suits seeking recovery of a tax refund, Imperial Plan, Inc. v. United States,

35 F.3d 25, 26 (9th Cir. 1996), that waiver is subject to conditions. One such condition is that

“[n]o suit [for refund] . . . shall be maintained in any court . . . until a claim for refund or credit

has been duly filed with the Secretary [of the Treasury], according to the provisions of law in that

regard, and the regulations of the Secretary established in pursuance thereof.” 26 U.S.C.

§ 7422(a); see also United States v. Clintwood Elkhorn Mineral Co., 553 U.S. 1, 128 S. Ct. 1511,

1515 (2008) (citing 26 U.S.C. § 7422(a) and stating that “a claim for a refund must be filed with

the Internal Revenue Service (IRS) before suit can be brought”). In addition, no suit may

proceed under 26 U.S.C. § 7422(a) before the expiration of six months from the date of filing the

administrative claim required under Section 7422(a), unless the Secretary renders a decision

within that time. See 26 U.S.C. § 6532(a)(1).

6

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 5 of 7
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

filing the claim required under such section unless the Secretary

renders a decision thereon within that time, nor after the expiration

of 2 years from the date of mailing by certified mail or registered

mail by the Secretary to the taxpayer of a notice of the

disallowance of the part of the claim to which the suit or

proceeding relates.

6

Here, plaintiff filed his complaint on October 28, 2008. (Dkt. No. 1.) It was not

until February 3, 2009, however, that the IRS received plaintiff’s informal demand for a refund,

and plaintiff has submitted no other claim for a refund to the IRS. (See Norris Decl. ¶¶ 3-4 &

Ex. 1 at 1.) Plaintiff’s informal demand consisted of a cover letter and a partially completed tax

return for the 1999 tax year, neither of which demanded a specific refund amount. (Norris Decl.,

¶ 3 & Ex. 1 at 2-3.) The court makes no finding as to whether plaintiff’s February 3, 2009

submission to the IRS constituted a “ claim for refund . . . duly filed with the Secretary [of the

Treasury], according to the provisions of law in that regard, and the regulations of the Secretary

established in pursuance thereof.” 26 U.S.C. § 7422(a). This is because under the plain language

of 26 U.S.C. § 7422(a), Plaintiff was required to file an administrative claim with the IRS prior

to filing his lawsuit in federal court. He did not. Accordingly, plaintiff filed his complaint

prematurely and thus failed to meet one of the conditions of the waiver of sovereign immunity by

the United States. As a result, this court lacks subject jurisdiction over plaintiff’s complaint. 

Because the court concludes that the court lacks subject matter jurisdiction based

on plaintiff’s failure to meet the conditions of the government’s waiver of sovereign immunity, it

does not address defendant’s alternate argument regarding why the court lacks subject matter

jurisdiction over this action. (See Mem. of P. & A. in Supp. of Def.’s Mot. to Dismiss at 6-7.) 

IV. CONCLUSION

For the foregoing reasons IT IS HEREBY RECOMMENDED that defendant’s

motion to dismiss plaintiff’s complaint for lack of subject matter jurisdiction be granted and that

the complaint be dismissed. Although the court would lack subject matter jurisdiction over this

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 6 of 7
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

7

action if this recommendation of dismissal is adopted by the United States District Judge

assigned to the case, nothing in these findings and recommendations would preclude plaintiff

from filing a timely action for a tax refund that otherwise meets all of the conditions necessary to

effect a waiver of the government’s sovereign immunity. 

These findings and recommendations are submitted to the United States District

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

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.” Failure to file objections

within the specified time may waive the right to appeal the District Court’s order. Turner v.

Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153, 1156-57 (9th Cir.

1991).

DATED: February 24, 2010

_____________________________________

KENDALL J. NEWMAN

UNITED STATES MAGISTRATE JUDGE

Case 2:08-cv-02432-MCE -KJN Document 25 Filed 02/25/10 Page 7 of 7