Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_11-cv-00158/USCOURTS-azd-4_11-cv-00158-3/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7426 IRS: Wrongful Levy for Taxes

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UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

George O. Thurman and Elizabeth Thurman,

husband and wife,

Plaintiff,

v. 

Internal Revenue Service,

Defendant. ______________________________________

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CV 11-158 TUC DCB

ORDER

Plaintiffs filed their Complaint on March 16, 2011, which this Court dismissed on May

2, 2012, with leave to amend. The Plaintiffs filed an Amended Complaint on May 14, 2012,

which must be dismissed for the same reasons the original Complaint was dismissed.

On July 11, 2012, the Honorable D. Thomas Ferraro, United States Magistrate Judge,

filed a Report and Recommendation ("R&R"), which advises the Court to dismiss the Amended

Complaint for lack of subject matter jurisdiction and because it is barred by a two-year statute

of limitation. On August 2, 2012, the Plaintiffs filed their objections by “Reply to DTF’s R&R

Dated 11 July 2012.” 

As this Court previously explained, it is a Court of limited jurisdiction, Exxon Mobil

Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005), and “with very limited exceptions,

a legal suit to restrain the assessment or collection of a federal tax is expressly precluded by

statute, 26 U.S.C. § 7421(a).” (Doc. 29: Order at 3.) Plaintiffs’ Reply to the R&R makes it

clear that Plaintiffs challenge the IRS’ assertion they received over $3 million dollars in capital

gains during the 1998 and 1999 tax years. (Doc. 36: Reply to DTF’s R&R at3.) 

Case 4:11-cv-00158-DCB Document 38 Filed 08/22/12 Page 1 of 3
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As previously explained there is a two-year statute of limitation period, which precludes

claims from being raised two years after the cause of action accrues. (Doc. 29: Order at 4

(citing 26 U.S.C. § 7433(d)(3)). “A cause of action accrues when the taxpayer has had a

reasonable opportunity to discover all essential elements of a possible cause of action. Plaintiffs

amended complaint must allege facts showing that a cause of action accrued within two years

prior to when he filed this case: March 16, 2011.” In the Amended Complaint and the Reply,

Plaintiffs allege that in 2006 they complied with an IRS demand made in 2005 to file 1040s

from 1995 forward. It is from these filings that the IRS derived the $3 million tax liability owed

by Plaintiffs, but Plaintiffs again fail to establish the year the tax liability was assessed against

them.

Because there is no jurisdiction in this Court for Plaintiffs to challenge the amount of the

assessment against them, further amendment to clarify the date of the tax assessment would be

futile. 

The Court has reviewed de novo those portions of the R&R to which Plaintiffs objected.

28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149-50 (1985). As to those portions of

the R&R were no objection is raised, the court need only satisfy itself that there is no clear error

on the face of the record to accept the recommendation. Campbell v. United States Dist. Court,

501 F.2d 196, 206 (9th Cir. 1974). The district court may “accept, reject, or modify, in whole

or in part, the findings or recommendations made by the magistrate judge.” Fed.R.Civ.P. 72(b),

28 U.S.C. § 636(b)(1). 

CONCLUSION

After de novo review of the issues raised in Plaintiffs’ objections, this Court agrees with

the findings of fact and conclusions of law made by the Magistrate Judge in his R&R for

determining the pending Motion to Dismiss. There is no clear error on the face of the record.

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Case 4:11-cv-00158-DCB Document 38 Filed 08/22/12 Page 2 of 3
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The Court adopts the R&R, and for the reasons stated in the R&R, the Court grants the

Defendant’s Motion to Dismiss for lack of subject matter jurisdiction.

Accordingly,

IT IS ORDERED that after a full and independent review of the record, in respect to

the Plaintiffs’ objections, the Magistrate Judge's Report and Recommendation (Doc. 33) is

accepted and adopted as the findings of fact and conclusions of law of this Court.

IT IS FURTHER ORDERED that Defendant's Motion to Dismiss (Doc. 32) is

GRANTED.

IT IS FURTHER ORDERED that the Clerk of the Court shall enter Judgment

accordingly.

DATED this 21st day of August, 2012.

Case 4:11-cv-00158-DCB Document 38 Filed 08/22/12 Page 3 of 3