Court Opinion

ID: 4228033
Source: CourtListenerOpinion
Date Created: 2017-12-12 21:04:04.494599+00
Date Added: 2024-06-11T14:16:00.478662
License: Public Domain

'-, ! ,:n, !
                                                                                                        ,iti'rt              +
                                                                                                                                 {AL
                                                                                                       i,   -!        "rbt   C

                           lJn tW                        @nftr!                              $tttts [.owt of felrrsl                                  @lsims
                                                                                                        No. 17-7667
                                                                                                                                                         FILED
                                                                                            (Filed: December 12, 2017)                                       |   2
                                                                                                                                                       DEC           2017
                                                                                            NOT FOR PUBLICATION
                                                                                                                                                      U.S. COURT OF
*******               r!   ************                            {.   **   r.   ***       ** * ** * * * * *                                        FEDERALCLAIMS
KIRELL FRANCIS BETTIS.

                                                         Plaintiff                                               *
                                                                                                                 :f
                                                                                                                                 Pro Se Plaintiff; Motion to Dismiss; RCFC
                                                                                                                 :F
                                                                                                                                 l2(bXl); Tax Refund; Flora Full Payment
                                                                                                                 :F
                                                                                                                                 Rule
THE UNITED STATES,

                                                         Def-endant.                                             ;
* * * t'   {. 1. *(   * r' {.,i. *   *'   t'1.   *. 1. *! {.   *   {.   **   {.   *   {.   *********        r.   *

                                                                                              OPINION AND ORDER

        This case stems from an alleged wrongful denial by the Intemal Revenue Service ("lRS")
of a tar refund claim frled by plaintiffKirell Francis Bettis (a{551 U.S. 89, 94 (2007) (per
curiam) (intemal quotation marks omifted). However, the "leniency afforded to a pro se litigant
with respect to mere formalities does not relieve the bwden to meet jurisdictional requirements."
Minehan v. United States, 75 Fed. Cl.249,253 (2007); accord Henke v. United States, 60 F.3d
795, 799 (Fed. Cir. 1 995) ("The fact that [the plaintifl acted p1959 in the drafting of his
complaint may explain its ambiguities, but it does not excuse its failures, if such there be."). In
other words, a oro se plaintiff is not excused from its burden ofproving, by a preponderance of
evidence, that the court possesses jurisdiction. See McNutt v. Gen. Motors Acceptance Corp.,
298 U.S. 178, 179 (1936); Banks v. United Stares,741F.3d 1268, 1277 (Fed. Cir. 2014) (citing
Reynolds v. Armv & Air Force Exch. Serv. ,846 F.2d746,748 (Fed. Cir. 1988)).

                                                 -4-
                         B. Standard of Review Under RCFC 12(bxl)

        In determining whether subject matter jurisdiction exists, the court "must accept as true
all undisputed facts asserted in the plaintiffs complaint and draw all reasonable inferences in
favor ofthe plaintiff." Trusted Inte$ation. lnc. v. United States, 659 F.3d 1 159, 1163(Fed.Cir.
2011). With respect to a motion to dismiss for lack of subject matter jurisdiction pursuant to
RCFC 12(bX1), the plaintiffbears the burden ofproving, by a preponderance of evidence, that
the court possesses subject matter jurisdiction. Id. The court is not limited to the pleadings in
considering subject matter j urisdiction. Banks,741 F.3dat1277; Pucciariello v. United States,
 116 Fed. Cl.390,400 (2014). Ifthe court finds that it lacks subject matter jurisdiction over a
claim, RCFC 12(h)(3) requires the court to dismiss that claim.

                                 C. Subject Matter Jurisdiction
         Whether the court possesses jurisdiction to decide the merits of a case is a "threshold
matter." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83,94-95 (1998). Subject matter
jurisdiction carurot be waived or forfeited because it "involves a court's power to hear a case."
United States v. Cotton, 535 U.S. 625,630 (2002), ouoted in Arbaugh v. Y&H Corp., 546 U.S.
 500,514(2006). "Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction
is power to declare the law, and when it ceases to exist, the only function remaining to the court
is that of announcing the fact and dismissing the cause." Ex parte McCardle, 74 U.S. (7 WalD
 506, 514 (1868). Therefore, it is "an inflexible matter that must be considered before proceeding
to evaluate the merits of a case." Matthews v. United States,72Fed. CI.274,278 (2006); accord
K-Con Bldq. S),s.. Inc. v. United States,778F.3d 1000, 1004-05 (Fed. Cir.20l5). Either parry,
or the court sua sponte, may challenge the court's subject matter j urisdiction at any time.
Arbaueh, 546 U.S. at 506.

                                          D. Tucker Act
       The ability of the Court ofFederal Claims to entertain suits against the United States is
limited. "The United States, as sovereign, is immune from suit save as it consents to be sued."
United States v. Sherwood, 312 U.S. 584, 586 (1941). The waiver of immunity "may not be
inferred, but must be unequivocally expressed." United States v. White Mountain Apache Tribe,
537U.S.465,472 (2003). Further, "[w]hen waiver legislation contains a statute of limitations,
the limitations provision constitutes a condition on the waiver of sovereign immunity." Block v.
North Dakota ex rel. Bd. ofUniv. & Sch. Lands, 461 U.S. 273,287 (1983).

       The Tucker Act, the principal statute goveming the jurisdiction ofthis court, waives
sovereign immunity for claims against the United States, not sounding in tort, that are founded
upon the constitution, a federal statute or regulation, or an express or implied contract with the
United States. 28 U.S.C. $ 1491(a(1) (2012); White Mountain, 537 U.S. at 472. However, the
Tucker Act is merely ajurisdictional statute and "does not create any substantive right
enforceable against the United States for money damages." United States v. Testan, 424U.5.
392,398 (1976). Instead, the substantive right must appear in another source of law, such as a

                                                -5-
"money-mandating constitutional provision, statute or regulation that has been violated, or an
express or implied contract with the United States." Loveladies Harbor. Inc. v. United States, 27
F.3d 1545, 1554 (Fed. Cir. 1994) (en banc).

                                           E. Tax Refund Suits
        Congress has ganted the Court of Federal Claims the authority to entertain tax refund
suits. 28 U.S.C. $ 13a6(a)(1); United States v. Clintwood Elkhom Minins Co., 553 U.S. 1,4
(2008). To bring   a tax refund suit, a    plaintiffmust:

               .     make    full payment of its tax liabilities, Flora v. United   States,
                     3s7 U.S. 63, 7s (19s8);

               r     filea timely claim for refund with the IRS, I.R.C. g 7422(a)
                     (2012); anq

               o     file a timely complaint after the refund claim is denied or
                     deemed denied, I.R.C. g 6532(a).

Plaintiffs filing a tax refund suit in the Court of Federal Claims must include the following with
the complaint:

               (1)   a copy   ofthe claim for refund, and

               (2)   a statement   identifying:

                       (A)    the tax year(s) for which a refund is sought;

                       (B) the amount, date, and place ofeach payment to be
                              refirnded;

                       (C) the date and place the retum was filed, if    any;

                       (D) the name,     address, and identification number (under
                              seal) ofthe taxpayer(s) appearing on the retum;

                       (E) the date and place the claim for refund was frled; and

                       (F)    the identification number (under seal) of each plaintiff,       if
                              different from the identification number of the taxDaver.

RCFC 9(m).

                                                    -6-
                                         III.   DISCUSSION

         Plaintiffhas substantially complied with the pleading requirements of RCFC 9(m). In
 addition, the court assumes (without deciding) that plaintiffhas satisfied the second and third
jurisdictional prerequisites-filing a timely refund claim with the IRS and filing a timely
 complaint following denial of that claim-because (1) taxes were allegedly paid on December
 31,2016, (2) plaintifffrled a refund claim with the IRS on February 2,2017, (3) the refund claim
was denied on March 1,2017, and (4) plaintiff s complaint was filed in this court on June 6,
2017.o However, that does not end the court's jurisdictional inquiry. Rather, the court must still
determine whether the Trust has fully paid its tax liabilities prior to the filing of the complaint.

         Under the fuIl payment rule, a court's jurisdiction over tax refund claims is limited to
those claims where the taxpayer has fully paid all taxes assessed for the tax year at issue prior to
filing suit. Flora, 357 U.S. at 75. In other words, "payment of the assessed taxes in full is a
prerequisite to bringing a refund claim." Ledford v. United States,297 F.3d 1378, 1382 (Fed.
Cir. 2002); accord Artuso v. United States, 80 Fed. Cl. 336,338 (2008) ("A refi.rnd suit is exactly
what the descriptive term implies. Under the 'full payment rule' a plaintiff must have fully paid
the tax, pena.lties, and interest at issue.").

        Plaintiffalleges that defendant is in possession of"money had and received from
plaintiff," Pl.'s Resp. 1, as a result of the purported performance bonds that plaintiff has posted.
Plaintiffis correct that remittance ofa bond can be used to satisfy tax liabilities (although the
term "bond" is no longer used). Pursuant to I.R.C. $ 6603(a), taxpayers "may make a cash
deposit_. . . to pay any tax . . . which has not been assessed at the time of the deposit" (emphasis
added).' Deposits not used for the payment of tax may be refunded upon request. I.R.C.
$ 6603(c). Taxpayers may make such a deposit by "remitting to the [IRS] . . . a check or a
money order accompanied by a written statement desigrrating the remittance as a deposit. The
wdtten statement also must include: (a) [t]he Ope(s) oftax; (b) [t]he tax year(s); and (c) [a]
statement . . . identifuing the amount of and basis for tle disputable tax." Rev. Proc. 2005- 1 8,
$ 4.01(1), 2005-l C.B. 798. Remittances not designated as a deposit are treated as payments and
applied against outstanding tax liabilities, including penalties and interest. Id. $ a.01(2). The
term "cash bond" was previously used, in now-superseded Revenue Procedure 84-52, l9g4-1
C.B. 551, to describe deposits made to suspend interest accrual. Id. $ 2.06.

        Plaintiff is also correct that "[u]sing an eligible obligation instead of a surety bond for
security is the same as using[, among other options,] cash." 31U.S.C. $9303(c)(2012).

        0 Plaintiffdoes not appear to have filed valid
                                                a      refund claim pursuant to Treas. Reg.
g 301.6402-2(b)(1). However, because defendant did not contest the validity of plaintiffs refund
claim, the court assumes (without deciding) that plaintiffs refund claim was valid.
       7 I.R.C. 7103 describes several situations in which
                 $                                            the IRS may accept a bond. None
ofthese situations is applicable to the instant case. For example, pursuant to I.R.C. $ 7485(a),
taxpayers may file a bond to stay assessment and collection oftax deficiencies during the
pendency of an appeal of a United States Tax Court decision.

                                                  -7-
Plaintiff asserts that the purported performance bonds he submitted with Forms l04l-ES are
eligible obligations, and thus constituted payment ofhis tax liabilities. Pl.'sResp.5. However,
plaintiffs reasoning is offpoint for two reasons. First, LR.C. $ 6603 provides that deposits must
be made in cash, and Revenue Procedure 2005-18 makes no allowance for posting a surety bond
(or any other tlpe of bond) in iieu of a check or money order. Second, even if a surety bond was
permissible, an "eligible obligation" equiva.lent must, among other requirements, "have a market
value that is equal to or greater than the amount of the required surety bond," with the market
value of the obligation being "determined by the Secretary of the Treaswy." 31 U.S.C.
$ 9303(aX2). The IRS, which is under the direction ofthe Secretary ofthe Treasury, has
effectively determined that the "bonds" submitted by plaintiffhave no market value.

         Plaintiffs tax refund case thus boils down to the value of plaintiff s purported bonds,
which depend on the value of the Instrument. The court finds that the Instrument-and, by
extension, plaintiffs *bonds"-are entirely frivolous in nature. Frivolous claims include those
that describe "fantastic or delusional scenarios." Neitzke v. Williams, 490 U.S. 319, 328 (1989);
accord Taylor v. United States, 568 F. App'x 890, 891 (Fed. Cir. 2014) (unpublished decision)
("Frivolous complaints include those in which the factual allegations asserted are so unbelievable
that there is no need for an evidentiary hearing to determine their veracity."). plaintiffs
allegations conceming the Instrument-that a person can generate $850 billion simply by
"finding" a writing and affrxing the signature of a govemor who has been dead for over a
centrfy-amount to a quintessential frivolous claim.

        In other words, the Instrument has no value and thus cannot be used as a vehicle to oav
tax liabilities. Plaintiff s claims are wholly meritless.

                                        IV. CONCLUSION
        The court has considered all of the parties' arguments. To the extent not discussed
herein, they are unpersuasive, without merit, or immaterial.

        Plaintiffhas failed to demonstrate that he paid the tax liabilities at issue prior to initiating
the instant refund action. PlaintifF s claims before this court are so implausible and devoid of
merit as to not give rise to a federal contoversy. Therefore, the court GRANTS defendant's
motion to dismiss for lack of subject matter jurisdiction. The court also DENIES AS Moor all
other pending motions.

        PlaintifFs complaint is DISMISSED       wITHour       PREJUDICE. No costs. The clerk is
directed to enter judgment accordingly.

       IT IS SO ORDERED.

                                                  -8-