Court Opinion

ID: 165636
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:56:54+00
Date Added: 2024-06-11T17:24:48.031346
License: Public Domain

F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                    UNITED STATES COURT OF APPEALS
                                                                           MAR 18 2005
                                 TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                              Clerk

 THOMAS CARROLL ROSSON and
 TERRY ROXANNE ROSSON,
                                                        No. 04-1423
               Plaintiffs-Appellants,
          v.                                        District of Colorado
 UNITED STATES OF AMERICA,                      (D.C. No. 03-N-2294 (CBS))

               Defendant-Appellee.

                           ORDER AND JUDGMENT *

Before SEYMOUR, HARTZ, and McCONNELL, Circuit Judges.

      On November 17, 2003, Thomas C. Rosson and Terry R. Rosson filed a

complaint in the United States District Court for the District of Colorado seeking

(1) a refund of income taxes for their 1997, 1998, 1999, and 2000 tax years; (2) to

enjoin the United States from collecting any taxes from them in the future; and

      *
         After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination
of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). This case is
therefore submitted without oral argument.    This order and judgment is not
binding precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
(3) damages pursuant to I.R.C. § 7433 relating to collection of their taxes. The

district court dismissed their claims for lack of subject-matter jurisdiction, also

finding that they had failed to state a claim upon which relief could be granted.

Mr. and Mrs. Rosson appealed to this Court. We exercise jurisdiction pursuant to

28 U.S.C. § 1291 and AFFIRM.

                                I. Statement of Facts

      In April 2002, the Rossons filed a federal income tax form for the year

2000 in which they reported zeros on all lines of the form calling for reporting of

income and deductions, and requested a refund of $1,500 of tax that they claimed

to have paid. R. Doc. 7, Ex. E. Attached to the tax form was a statement by the

Rossons asserting their belief that “no section of the Internal Revenue Code . . .

[e]stablishes an income tax liability” or “provides that income taxes have to be

paid on the basis of a return” or includes “wages or salaries or compensation for

personal services” as income. Id. (internal quotations omitted). They stated that

their previous compliance with the Internal Revenue Code was based upon

“suspect information” and, after “stud[ying] the vast amount of information

available,” they had come to the conclusion that they did not have any “‘income’

tax liability.” Id. After coming to this conclusion, the Rossons fired their

accountant. Id.

      At the same time, the Rossons filed amended tax returns for their 1997,

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1998, and 1999 tax years in which they similarly reported zeros on all lines and

requested that the taxes paid for those years be refunded in the amount of

$43,977. R. Doc. 18 at 2.

      On November 17, 2003, the Rossons filed a complaint in the district court

in which they sought 1) refund of the $43,977; (2) an injunction against the

collection of taxes by the United States in future years; and (3) damages in the

amount of $400,000. In their complaint, they asserted, inter alia, that they had

recently learned that “the People occupy a status of Sovereign, superior to and

Creator of all artificial government entities.” R. Doc. 1 at 3. The Rossons

claimed that they were a “Sovereign Creator of government” and that the Internal

Revenue Code was “not law of the land.” Id. at 1-2. The government filed a

motion to dismiss for lack of jurisdiction and for failure to state a claim upon

which relief could be granted. R. Doc. 7.

      The matter was referred to a magistrate judge, who filed a report in which

he recommended that the court dismiss the complaint. R. Doc. 3, 18. The district

court adopted the magistrate judge’s report and dismissed the Rossons’ complaint

for lack of jurisdiction and for failing to state a claim, also noting that the

Rossons’ contentions “consist[ed] of undecipherable mish-mash concerning the

federal tax laws.” R. Doc. 35 at 1.

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                         II. Taxpayers’ Claim on Appeal

      The district court’s description of the appellants’ complaint also aptly

describes their claims on appeal. Among varied claims and demands, including a

request that this Court relieve from “duty” the author of Section 61 of the Internal

Revenue Code, the Rossons only tangentially address the issue of subject-matter

jurisdiction. However, “we liberally construe [the] brief[s]” of pro se litigants.

Cummings v. Evans, 161 F.3d 610, 613 (10th Cir. 1998). Based upon the

Rossons’ discussion of jurisdiction under heading five of the appeal, we construe

the appeal as a claim, albeit without benefit of supporting legal authority, that the

district court did have jurisdiction.

                                    III. Analysis

      The district court’s dismissal of a taxpayers’ claim for lack of subject-

matter jurisdiction is subject to de novo review. Colo. Envtl. Coalition v. Wenker,

353 F.3d 1221, 1227 (10th Cir. 2004).

      “It is well settled that the United States . . . [is] immune from suit, unless

sovereign immunity has been waived.” Atkinson v. O’Neill, 867 F.2d 589, 590

(10th Cir. 1989). Waivers of sovereign immunity must be unequivocal and are to

be strictly construed. United States v. Nordic Village, Inc., 503 U.S. 30, 33-34

(1992). When the United States is a defendant in an action by a taxpayer, the

taxpayer has the burden of showing an explicit waiver of sovereign immunity as a

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prerequisite to federal court jurisdiction. Lonsdale v. United States, 919 F.2d

1440, 1444 (10th Cir. 1990). The United States has conditionally waived

sovereign immunity for tax refund suits where the taxpayer first seeks

administrative remedies from the IRS. “No suit or proceeding shall be maintained

in any court for the recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed or collected . . . until a claim for refund or credit

has been duly filed with the Secretary.” 26 U.S.C. § 7422(a). The taxpayer may

initiate a suit six months after filing for administrative remedies or after the

Secretary renders a decision. See 26 U.S.C § 6532(a)(1). Here, the Rossons

have failed to allege that they sought administrative relief, which would be

necessary to establish a waiver of sovereign immunity. Since there was no waiver

of immunity, the Rossons’ claim for a refund was properly dismissed for lack of

subject-matter jurisdiction.

      The Rossons also seek injunctive relief to prevent the IRS from collecting

taxes from them in the future. The Anti-Injunction Act prohibits suits to restrain

the assessment or collection of taxes. “[N]o suit for the purpose of restraining the

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

. . . .” 26 U.S.C. § 7421(a). The Rossons do not allege that any statutory or

judicial exception to the rule applies. Therefore, this claim was also properly

dismissed.

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      Finally, the Rossons seek damages in the amount of $400,000 ($100,000 for

each year they paid taxes without, they allege, any obligation to do so). They

assert that these damages would serve to “get [the] attention” of the IRS and

“change the abusive and intimidating manner in which they conduct business for

this great nation.” Appellants’ Br. at 7. A civil action against the United States

under 26 U.S.C. § 7433 provides the exclusive remedy for recovery of damages.

26 U.S.C. § 7433(a). This statute states:

      If, in connection with any collection of Federal tax with respect to a
      taxpayer, any officer or employee of the Internal Revenue Service
      recklessly or intentionally, or by reason of negligence disregards any
      provision of this title, or any regulation promulgated under this title, such
      taxpayer may bring a civil action for damages against the United States . . .
      Except as provided in section 7432, such civil action shall be the exclusive
      remedy for recovering damages resulting from such actions.

The exception in § 7432 (relating to damages for failing to release a tax lien) does

not apply here. The Rossons have not alleged any violation of the Revenue Code

or Regulations. Neither have they alleged they have exhausted their

administrative remedies. Therefore, this claim was properly dismissed.

      For the foregoing reasons, the judgment of the United States District Court

for the District of Colorado is AFFIRMED.

                                               Entered for the Court,

                                               Michael W. McConnell
                                               Circuit Judge

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