ADVANCE RELEASE Documents, R.P. Fairlamb, U.S. Tax Court, (Feb. 5, 2010)
Dec. 58,126(M)
Code Sec. 6330, Code Sec. 7122

Collection: Proposed levy: Offer in compromise (OIC): Doubt as to collectibility: Calculation of future income: Abuse of discretion


T.C. Memo. 2010-22

REMINGTON P. FAIRLAMB, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
UNITED STATES TAX COURT. Docket No. 19122-07L. Filed February 4, 2010.
Tony Mankus , for petitioner.

Derek W. Kaczmarek , for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION
THORNTON, Judge: Pursuant to section 6330(d) , petitioner seeks judicial review of respondent's determination to proceed with a proposed levy to collect petitioner's unpaid Federal income tax liabilities for 2002, 2003, and 2004. 1 The issue for decision is whether respondent abused his discretion in rejecting petitioner's proposed offer-in-compromise.

FINDINGS OF FACT
The parties have stipulated some facts, which we so find. When he petitioned the Court, petitioner resided in Illinois.

Petitioner, born in 1942, has worked for many years as an independent sales representative in the paint industry. In March 2005 he incorporated his business activities, forming Phoenix Sales & Service, L.L.C. (the LLC), in which he and his wife each owned a 50-percent interest.

Petitioner did not timely file Federal income tax returns for taxable years 1998 through 2004. After making substitutes for returns, on September 13, 2004, respondent assessed petitioner's income taxes for 1998 through 2001. On April 9, 2005, respondent sent petitioner notices of intent to levy with respect to his tax years 1998, 1999, 2000, and 2001. Insofar as the record shows, petitioner submitted no request for a collection due process hearing with respect to these notices.

On or about April 29, 2005, petitioner filed amended Federal income tax returns for the years 1998 through 2002 and original Federal income tax returns for 2003 and 2004. He did not pay the taxes reported on these returns. On October 6, 2005, respondent sent petitioner a Letter 1058, Final Notice—Notice of Intent to Levy and Notice of Your Right to a Hearing, with regard to petitioner's 2002, 2003, and 2004 income taxes, showing an unpaid balance of $108,486 for these years. 2 On October 14, 2005, petitioner submitted a timely Form 12153, Request for a Collection Due Process Hearing, on which he indicated that enforcement action would create a hardship on him and that he intended to submit an offer-in-compromise.

Petitioner's First Offer-in-Compromise
On December 29, 2005, respondent received from petitioner Form 656, Offer in Compromise (the first offer), offering to pay $150,000 to compromise his Federal income tax liabilities for taxable years 1998 through 2004, which exceeded $400,000. Petitioner proposed to pay $1,389 per month for 108 months. This offer indicated that it was based on doubt as to collectibility; i.e., petitioner represented that he had insufficient assets to pay the full amount of his tax liability. As required, petitioner submitted with the first offer Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 433-B, Collection Information Statement for Businesses, with respect to the LLC.

Respondent accepted petitioner's offer-in-compromise for processing. By letter dated April 25, 2006, however, respondent's offer-in-compromise specialist (the first OIC specialist) rejected the proposed terms of the first offer, determining that any acceptable offer should be at least $372,949, calculated as the sum of $18,755 of total net equity in assets and $354,194 of total future income.

By letter dated May 5, 2006, petitioner's counsel took exception to the determinations made by the first OIC specialist. Petitioner's counsel asserted, among other things, that petitioner was elderly and in poor health and planned to retire by age 70 if his health permitted him to work that long. Petitioner's counsel contended that petitioner's future income should be measured by reference to the 59 months that he said remained until petitioner reached age 70.

By letter dated May 11, 2006, the first OIC specialist agreed that petitioner's future income should be measured by the months remaining until he reached age 70 but asserted that the correct number of these remaining months was 69 rather than 59, as petitioner asserted. Using 69 months of future income, the first OIC specialist lowered the minimum acceptable offer to $149,286, an amount that was slightly less than petitioner's original $150,000 offer. In a phone call with the first OIC specialist, petitioner's counsel indicated that he agreed with most of the recalculations, except he contended that petitioner's future income should be calculated using 67 months instead of 69 months, because it would take about 2 months to have the offer accepted, and that this adjustment would reduce the offer by about $4,000.

Petitioner's Second Offer-in-Compromise
This position was memorialized in petitioner's amended offer-in-compromise (the second offer), which respondent received on May 22, 2006. Petitioner offered to pay $145,433 to compromise his Federal income tax liabilities for taxable years 1998 through 2004. He proposed to pay $16,332 within 30 days of the second offer's acceptance and $1,927 per month for the next 67 months, until he reached age 70. In a report dated May 24, 2006, the first OIC specialist recommended to her group manager that petitioner's second offer be accepted because it represented “the most that can be expected to be paid by this taxpayer” taking into account “Special circumstance[s] due to the taxpayers [sic] age and health”. 3

On June 22, 2006, a different offer-in-compromise specialist (the second OIC specialist) reviewed the second offer and determined that it should be rejected. By letter dated June 28, 2006, the second OIC specialist informed petitioner that, notwithstanding the contrary recommendation of the first OIC specialist, he would recommend that the second offer not be accepted because “it is not in the best interests of the government”. As grounds for this conclusion, the second OIC specialist asserted that petitioner had a long history of not filing and not paying income taxes and had formed the LLC in 2005 to reduce his self-employment taxes. The letter stated that petitioner should make any response within 2 days because the second OIC specialist would be retiring then. By letter dated August 21, 2006, respondent's territory manager formally notified petitioner that the second offer had been rejected because it was determined not to be in the Government's best interests.

In a letter dated September 13, 2006, petitioner's counsel disputed the rejection of the second offer and requested that the case be transferred to respondent's Appeals Office.

Petitioner's Third Offer-in-Compromise
Petitioner's case was assigned to a settlement officer in respondent's Appeals Office. After discussions with petitioner's counsel, the settlement officer indicated by letter dated May 14, 2007, that she had determined petitioner's reasonable collection potential to be $241,356. She indicated that she had calculated petitioner's future income assuming that he would work for 60 more months and retire at age 70. The letter stated that “there are still no guarantees of acceptance since we need the approval of my Territory Manager and Counsel approval.”

Petitioner accepted most of the settlement officer's calculations. On June 12, 2007, respondent received a second amended offer-in-compromise (the third offer) from petitioner that was based on doubt as to collectibility and that proposed to pay $241,356 to compromise his income tax liabilities for taxable years 1998 through 2004. He proposed to pay $4,023 within 30 days of the third offer's acceptance and $4,023 per month for the next 59 months.

The third time was not a charm. By letter dated June 20, 2007, the settlement officer informed petitioner that his third offer had not been approved. Citing provisions of the Internal Revenue Manual (IRM), the letter indicated that petitioner's reasonable collection potential had been recalculated to be $523,958, by projecting his future income over the 107 months asserted to remain in the collection period. The letter proposed that petitioner's liabilities could be resolved in one of two ways: (1) By a long-term deferred offer-in-compromise to pay $4,897 for 107 months; or (2) by a part-payment installment agreement, which would require petitioner to liquidate certain assets and to make monthly payments of $4,053, apparently for 167 months (the 107 months alleged to remain in the collection period plus 5 years), with the possibility that the monthly amount “could be adjusted to a lesser amount when you retire if your income is reduced.”

By letter dated July 2, 2007, petitioner's counsel disagreed with the settlement officer's application of the IRM provisions and requested that the settlement officer and her manager reconsider the third offer.

Notice of Determination
On August 6, 2007, respondent issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330, with respect to petitioner's tax years 2002, 2003, and 2004, sustaining the proposed levies for those years (the notice). The notice states in part:

[T]he Appeals Team Manager confirmed that the offer could not be accepted because the offer was a deferred payment offer which is to be paid over the life of the collection statute. Your offer stipulated a payment term of 59 months (your remaining projected work life until retirement) rather than the 107 months remaining on the collection statute. Consequently, your offer is considered a deferred payment offer with special circumstances.

IRM 5.8.11.2(2) states taxpayers can have an offer accepted under Doubt as to Collectibility with special circumstances when their reasonable collection potential is less than their liability, but there are economic hardship factors that would justify accepting the offer for an amount less than the reasonable collection potential. Economic hardship is further defined in IRM 5.8.11.2.(2) as unable to pay reasonable basic living expenses. Since you are able to meet your basic living expenses, economic hardship does not apply to your situation. Therefore, your offer could not be accepted.

* * * * * * *

Offer Discussion and Analysis

Based on the financial data you provided, you are currently unable to pay the entire liability. Therefore an offer-in-compromise based on doubt as to collectibility would initially appear to be a more appropriate and less intrusive means of collection. However, your offer amount does not equal or exceed your Reasonable Collection Potential (RCP) of $523,988.00. Calculation of your RCP in the amount of $523,958.00 was based on Net Realizable Equity (NRE) in assets totaling $90,287.00 and Future Income Potential (FIP) of 433,671.00. For a long term deferred offer, future income is projected over the life of the collection statute.

OPINION
A. Collection Procedures
Section 6330 requires the Secretary to furnish a person notice and opportunity for a hearing before making a levy on the person's property. At the hearing, the person may raise any relevant issue relating to the unpaid tax or proposed levy, including spousal defenses, challenges to the appropriateness of the collection action, and offers of collection alternatives. The person may challenge the existence or amount of the underlying tax liability for any period only if the person did not receive a notice of deficiency or did not otherwise have an opportunity to dispute the liability. Sec. 6330(c)(2)(B) ; Sego v. Commissioner , 114 T.C. 604, 609 (2000). Once the Commissioner's Appeals Office issues a notice of determination, the person may seek judicial review in this Court. Sec. 6330(d)(1) .

Because petitioner has not challenged his underlying liability, our review is for abuse of discretion. Sego v. Commissioner , supra at 610. Under this standard of review, the question is whether respondent's rejection of petitioner's offers-in-compromise was arbitrary, capricious, or without sound basis in fact or law. See, e.g., Murphy v. Commissioner , 125 T.C. 301, 320 (2005), affd. 469 F.3d 27 (1st Cir. 2006). On brief the parties focus primarily on respondent's rejection of the third and final offer as the precipitating event for the notice. We shall do the same.

B. Offers-in-Compromise
Section 7122(a) authorizes the Secretary to compromise any civil or criminal case arising under the internal revenue laws. 4 The regulations set forth three grounds for compromising a liability: (1) Doubt as to liability; (2) doubt as to collectibility; and (3) promotion of effective tax administration. Sec. 301.7122-1(b) , Proced. & Admin. Regs. Petitioner based each of his three offers-in-compromise on doubt as to collectibility.

For purposes of evaluating an offer-in-compromise, doubt as to collectibility exists “where the taxpayer's assets and income are less than the full amount of the liability.” Sec. 301.7122-1(b)(2) , Proced. & Admin. Regs. An offer-in-compromise based on doubt as to collectibility “will be considered acceptable if it is unlikely that the tax can be collected in full and the offer reasonably reflects the amount the Service could collect through other means * * * This amount is the reasonable collection potential of a case.” Rev. Proc. 2003-71 , sec. 4.02(2) , 2003-2 C.B. 517, 517. In some cases, the Commissioner will accept an offer-in-compromise of less than the reasonable collection potential if there are “special circumstances.” Id.

The IRM describes procedures for analyzing a taxpayer's financial condition to determine reasonable collection potential. See IRM pt. 5.8.5 (Sept. 1, 2005). 5 The IRM defines reasonable collection potential as net equity plus future income. IRM pt. 5.8.11.2 (Sept. 1, 2005). “Future income” is defined as “an estimate of the taxpayers [sic] ability to pay based on an analysis of gross income, less necessary living expenses, for a specific number of months into the future.” IRM pt. 5.8.5.5(1). For a deferred payment offer, the general rule is that future income should be projected for “the number of months remaining on the statutory period for collection.” Id. The IRM also instructs the offer-in-compromise examiner to “Consider the taxpayers [sic] overall general situation including such facts as age, health, marital status, number and age of dependents, highest education or occupational training, and work experience.” IRM pt. 5.8.5.5(3). More specifically, the IRM states: “Some situations may warrant placing a different value on future income than current or past income indicates”. IRM pt. 5.8.5.5(5). By way of illustration, the IRM states that if “A taxpayer is elderly, in poor health, or both and the ability to continue working is questionable”, then the offer-in-compromise examiner should “Adjust the amount or number of payments to the expected earnings during the appropriate number of months. Consider special circumstance situations when making any adjustments”. Id.

The IRM also describes procedures for processing offers-in-compromise in the Commissioner's Appeals Office. See IRM pt. 8.23.3 (Oct. 16, 2007). It states: “IRM 5.8 is the primary authority for evaluating offers and should be followed when evaluating an appealed rejection. Appeals does not have the authority to disregard established guidance.” IRM pt. 8.23.3.3(1).

C. Analysis of Respondent's Determination
Respondent's settlement officer followed the just-cited IRM directives in initially recommending that petitioner's third offer be accepted. In determining petitioner's reasonable collection potential, she projected his future income for 60 months, which she noted was his “remaining working life until 70”. She noted in her case activity report:

Determination is made to recommend the offer for acceptance. Tp [taxpayer] owns no realty and only has minimal personal assets. His most important asset is his income as an independent paint sales manufacturing representative. This income is the source that will fund the offer of $241,356.00. Distraint action against this income could be a possibility but would not provide any more funds into the Treasury than is provided via monthly payments of $4,022.60 via the offer. Also continued levy could result in tp's dismissal. If the taxpayer maintains the offer, he will liquidate the back taxes and remain compliant with current taxes as well. Tp is now 65 years old. The older he becomes, the less likely the Service is to collect the liability or enforce collection.

Ultimately, the settlement officer was overruled by her superiors, and petitioner's third offer was rejected. The reasons articulated in the notice are somewhat cryptic. The notice cites IRM pt. 5.8.11.2(2) for the proposition that “[t]axpayers can have an offer accepted under Doubt as to Collectibility with special circumstances when their reasonable collection potential is less than their liability, but there are economic hardship factors that would justify accepting the offer for an amount less than the reasonable collection potential.” Applying this standard, the notice concludes that petitioner did not qualify for an offer-in-compromise based on doubt as to collectibility with special circumstances because “you are able to meet your basic living expenses”.

This rationale is deficient for at least two reasons. First, the notice misstates IRM pt. 5.8.11.2(2), which states that an offer-in-compromise based on doubt as to collectibility with special circumstances may be accepted where there are “economic hardship or public policy/equity factors that would justify accepting the offer”. (Emphasis added.) More fundamentally, according to the IRM an offer-in-compromise is to be evaluated as based on doubt as to collectibility with special circumstances (as opposed to plain-vanilla doubt as to collectibility) only if it is “for an amount less than the reasonable collection potential”. Id.

Petitioner's third offer was for the exact amount that the settlement officer had initially calculated to be his reasonable collection potential. Addressing this issue obliquely, the notice states (without citation of authority): “For a long term deferred offer, future income is projected over the life of the collection statute.” The notice fails to take into account, however, IRM pt. 5.8.5.5(5), which, as previously discussed, directs that in computing a taxpayer's future income, adjustments should be made for a taxpayer who is elderly or in poor health and whose ability to continue working is questionable. Following this directive, the settlement officer initially calculated petitioner's future income under the assumption that he would work until age 70. There is no indication in the record that any determination was ever made that petitioner would be able to work beyond age 70. Rather, the record strongly suggests that the determination in the notice was based on a misapplication of the IRM directives.

The Commissioner's internal procedures, as reflected in the IRM, do not have the force of law, and deviation from them does not necessarily render the Commissioner's action invalid. Vallone v. Commissioner , 88 T.C. 794, 807-808 (1987). Nevertheless, the determination in this case, which was based wholly on misapplication of internal procedures, cannot be said to have a sound basis in law or fact.

On brief respondent argues that the offer-in-compromise was properly rejected because of petitioner's alleged “long history of non-compliance and his affirmative tax avoidance actions”. 6 In making this argument, respondent cites section 301.7122-1(b)(3)(iii) , Proced. & Admin. Regs., which provides: “No compromise to promote effective tax administration may be entered into if compromise of the liability would undermine compliance by taxpayers with the tax laws.” (Emphasis added.) Because petitioner's various offers were all based on doubt as to collectibility rather than effective tax administration, this regulatory provision is not, by its terms, applicable. 7 In any event, we do not believe that respondent's ultimate determination, as explained in the notice, can fairly be construed as predicated on this rationale. In initially recommending petitioner's third offer, the settlement officer expressed no concern about this issue, and there is no indication in the record that this consideration played any role in the decision to overturn the settlement officer's initial recommendation.

In the light of the inadequacy of the reasons given in the notice for rejecting petitioner's third offer, which the settlement officer, with seemingly more soundly reasoned analysis, had initially recommended accepting, we are unable to conclude whether it was an abuse of discretion for respondent to determine to proceed with the proposed collection action for petitioner's 2002, 2003, and 2004 tax liabilities. We will remand the case to respondent's Appeals Office for further consideration and clarification and to allow petitioner, if he wishes, to propose a new collection alternative.

D. Evidentiary Issues
At trial the Court received into evidence a number of petitioner's exhibits over respondent's objection that they are outside the administrative record. On similar grounds respondent objected to petitioner's testimony and, in a motion in limine, to the testimony of petitioner's witness, a business associate. On brief respondent has renewed his objections.

Petitioner suggests that the disputed documents should be considered part of the administrative record because most of them are IRS documents and the others were sent to petitioner by the IRS. 8 Petitioner complains that respondent evinces a double standard in that, while insisting that judicial review should be limited to the administrative record, respondent seeks to raise in these proceedings for the first time issues and arguments that were never raised in the administrative hearings. 9 Petitioner states on brief: “The Petitioner cannot help but further wonder whether Respondent's strenuous efforts to limit the judicial review to the administrative file is not an effort to generally hamstring the tax courts and the taxpayers in order to avoid having its procedural missteps brought to light.”

The Tax Court does not follow the administrative record rule. See Robinette v. Commissioner , 123 T.C. 85 (2004), revd. 439 F.3d 455 (8th Cir. 2006). In any event, in reaching our decision we have not relied upon any of the disputed documents or their contents or any of the trial testimony. The portions of the record as to which respondent has raised no objection are sufficient to sustain our decision.

To reflect the foregoing,

An appropriate order will be issued .


Footnotes

1 Unless otherwise indicated, all section references are to the Internal Revenue Code, and all Rule references are to the Tax Court Rules of Practice and Procedure. All dollar amounts are rounded to the nearest dollar.

2 In addition to proposing the levy, on Oct. 24, 2005, respondent filed a notice of Federal tax lien with respect to petitioner's tax years 2002, 2003, and 2004. Petitioner did not file a Form 12153, Request for a Collection Due Process Hearing, in response to this notice of Federal tax lien, and it is not at issue in this proceeding.

3 The report indicates that petitioner had provided verification from two physicians regarding his health and states that petitioner “has coronary artery disease, hypertension, hyperlipidemia and problems with recurring sinusitis and pneumonia.”

4 Sec. 6331(k) generally prohibits the IRS from making a levy on a taxpayer's property while an offer-in-compromise is pending with the IRS. An offer-in-compromise becomes pending when it is accepted for processing. Rev. Proc. 2003-71 , sec. 5.01 , 2003-2 C.B. 517, 518.

5 The parties have stipulated the relevant provisions of the Internal Revenue Manual (IRM) referenced in this opinion.

6 Petitioner contests these assertions as unfounded in the record.

7 In Oman v. Commissioner , T.C. Memo. 2006-231, this Court found that IRS directives as contained in IRM pt. 5.8.7.6(5) (Nov. 15, 2004) and policy statement P-5-100 (Jan. 30, 1992) were inconsistent as to whether doubt as to future compliance is a sufficient reason to reject an offer-in compromise. The Court remanded for further consideration and clarification the Commissioner's determination rejecting on this ground the taxpayer's proposed offer-in-compromise based on doubt as to collectibility.

8 Evaluation of the parties' competing claims in this regard is complicated by the fact that respondent has not offered into evidence a certified copy of the entire administrative record. Although the parties have stipulated numerous documents that might properly appear in an administrative record, they have not filed with the Court the entire administrative record, stipulated as to its genuineness. Cf. Rule 217 (describing procedures for disposing of a declaratory judgment action on the administrative record). From the absence of certain documents cross-referenced in the stipulated exhibits, it is apparent that the entire administrative record is not in evidence.

9 For instance, on brief respondent disputes whether petitioner's health would necessitate his retirement by age 70. Insofar as the record shows, however, respondent's officers who examined petitioner's offers-in-compromise were satisfied with the documentary evidence petitioner submitted in this regard, and the notice of determination does not suggest that this issue played any role in the ultimate rejection of petitioner's offer-in-compromise.



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METADATA
title R.P. Fairlamb
search-title Case: ADVANCE RELEASE Documents, R.P. Fairlamb, U.S. Tax Court, (Feb. 5, 2010)
primary-class case-law/case
wk-da number WKUS_TAL_1432
CCH PubVol adc01
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publisher http://wk-us.com/meta/publishers/#CCH
publishing-status new
publishing-dates available-date:
modified-date:
revised-date:
sort-date: 2010-02-05

key-phrase Collection
key-phrase Proposed levy
key-phrase Offer in compromise (OIC)
key-phrase Doubt as to collectibility
key-phrase Calculation of future income
key-phrase Abuse of discretion
document-transformation-history SOURCE-CRC: 931114030
G2I-VERSION: Group2Interchange-RELEASE-03-14-0012
G2I-TRANSFORMATION-DATE: 2010-02-26
I2A-VERSION: I2A-03-15-0006
I2A-TRANSFORMATION-DATE: 2010-02-26

wkcase-law:metadata parties in-re:R.P. Fairlamb

case-abbrev-name R.P. Fairlamb
court U.S. Tax Court [http://wk-us.com/meta/courts/#US-FJ-TAX]
document-date , precision: day
2010-02-05

BORITZ v. U.S., Cite as 105 AFTR 2d 2010-XXXX, 02/23/2010
________________________________________
PETER BORITZ, Plaintiff, v. UNITED STATES OF AMERICA and INTERNAL REVENUE SERVICE, Defendants.
Case Information:
Code Sec(s):
Court Name: UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA,
Docket No.: Civil Action No. 09-542 (CKK),
Date Decided: 02/23/2010.
Disposition:
HEADNOTE
.
Reference(s):
OPINION
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA,
MEMORANDUM OPINION
Judge: COLLEEN KOLLAR-KOTELLY United States District Judge
Pro se Plaintiff Peter Boritz brings this action against the United States and the Internal Revenue Service (“IRS,” collectively with the United States, “Defendants”) 1 regarding allegedly unlawful tax collection and assessment activity. Plaintiff complains that Defendants have wrongfully held him liable for certain unpaid tax liabilities for tax years 1994 and 1995 and have issued a procedurally improper Notice of Federal Tax Lien and Notice of Levy on his property. He primarily seeks relief pursuant to the Taxpayer Bill of Rights, 26 U.S.C. §§ 7432 and 7433, which permit a taxpayer to bring a suit for damages against the United States for failure to release a lien and for certain unauthorized collection actions, respectively. In addition, Plaintiff asserts a claim for declaratory and injunctive relief pursuant to the Administrative Procedures Act, (“APA”), 5 U.S.C. § 706, and seeks to quiet title to the property that is the subject of the Notice of Federal Tax Lien and the Notice of Levy pursuant to 28 U.S.C. § 2410.
Currently pending before the Court is Defendants' [7] Motion to Dismiss or in the Alternative Motion for Summary Judgment. Defendants argue that the United States is the only proper defendant in this action and that Plaintiff's claims should be dismissed under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6) or alternatively that Defendants should be granted summary judgment pursuant to Federal Rule of Civil Procedure 56. Upon consideration of Defendants' motion and the parties' responsive briefings as well as attachments thereto, as may be appropriate, the relevant case law and statutory authority, and the record of this case as a whole, the Court GRANTS Defendants' [7] Motion to Dismiss or in the Alternative Motion for Summary Judgment, for the reasons set forth below.
Specifically, the Court holds as follows. First, Defendants' Motion to Dismiss Plaintiff's claims against the IRS is GRANTED as conceded. Second, Defendants' Motion to Dismiss Count I (quiet title action pursuant to 28 U.S.C. § 2410) and Count IX (APA) for lack of jurisdiction pursuant to Rule 12(b)(1) is GRANTED. Third, Defendants' Motion to Dismiss Count II (failure to issue notice of deficiency in violation of §§ 6212 and 6213), Count III (failure to make assessment in violation of § 6203), Count IV (failure to make assessment in violation of § 6303), Count V (failure to release lien in violation of § 7342), Count VII (unauthorized disclosure in violation of § 6103(b)(6)), and Count VIII (failure to issue certificate of release in violation of § 6325), for failure to state a claim pursuant to Rule 12(b)(6) is GRANTED. Fourth and finally, Defendants' Motion for Summary Judgment as to Count VI (failure to issue notice of levy in violation of § 6331(d)) is GRANTED.
I. BACKGROUND
Plaintiff filed his Complaint on March 19, 2009. Plaintiff's Complaint represents one of dozens of lawsuits brought in this jurisdiction by tax protestors — allegedly proceedingpro se — asserting a variety of forms of misconduct by the IRS. See Pollinger v. United States, 539 F. Supp. 2d 242, 245 [101 AFTR 2d 2008-1383] & n. 3 (D.D.C. 2008) (citing cases). Unlike the majority of the complaints in those other actions, however, Plaintiff's Complaint includes at least some particularized facts specifically pertaining to Plaintiff Peter Boritz. See generally Compl.
Although the allegations contained in Plaintiff's Complaint are somewhat nebulous in nature, Plaintiff appears to primarily complain about a Notice of Levy and a Notice of Federal Tax Lien issued by the IRS for the tax years 2004 and 2005. The former was issued on November 9, 2007, by the IRS against Plaintiff's bank account in the amount of $12,558.73 for tax years 1994 and 1995.Id. ¶ 8 & Ex. D (IRS Notice of Levy). The latter was filed shortly thereafter on November 13, 2007, with the County Auditor in King County, Washington in the amount of $21,485.89 for the tax years 1994 and 1995. Id. ¶ 9 & Ex. C (IRS Notice of Federal Tax Lien).
Plaintiff now seeks to challenge the validity of both the Notice of Levy and Notice of Federal Tax Lien. At heart, Plaintiff disputes the underlying tax assessment issued against him for tax years 1994 and 1995, alleging that he “is the sole owner of his physical and mental labor” and that he “does NOT owe the UNITED STATES, or any employees working on its behalf, the fruit of his labor property.” Id. ¶¶ 2, 6 (emphasis in original). Plaintiff further claims that he has “filed all returns required to be filed for tax years 1994 and 1995 and fully satisfied and paid allincome taxes Plaintiff was made liable for and required to pay regarding the years in dispute.”Id. ¶ 7 (emphasis in original).
Despite Plaintiff's unequivocal denial of any substantive liability for tax years 1994 and 1995 and his clear attack on the validity of the underlying tax assessments, Plaintiff has — in an apparent effort to avoid many of the same pitfalls that have befallen previous tax protester lawsuits — attempted to frame his lawsuit as asserting only procedural, rather than substantive, challenges to the Notice of Levy and Notice of Federal Tax Lien. Specifically, Plaintiff asserts the following nine causes of action in his Complaint:
• Count I: seeks to quiet title to the property that is the subject of the Notice of Levy and Notice of Federal Tax Lien pursuant to 28 U.S.C. § 2410;
• Count II: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7433 based upon Defendants' alleged failure to send a notice of deficiency to Plaintiff's last known address prior to issuance of the Notice of Levy in violation of 26 U.S.C. §§ 6212(a) and 6213(a);
• Count III: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7433 based upon Defendants' alleged failure to make a timely assessment in violation of 26 U.S.C. § 6203;
• Count IV: alleges a claim for monetary damages pursuant to 26 § U.S.C. § 7433 based upon Defendants' alleged failure to provide a timely notice of assessment in violation of 26 U.S.C. § 6303;
• Count V: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7432 based upon Defendants' alleged failure to release the Notice of Federal Tax Lien in violation of 26 U.S.C. § 6325(a)(1);
• Count VI: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7433 based upon Defendants' alleged failure to serve him with a notice of levy in violation of 26 U.S.C. § 6331(d)(2);
• Count VII: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7433 based upon Defendants' allegedly unauthorized public disclosure of his social security number on the Notice of Federal Tax Lien in violation of 26 U.S.C. § 6103(b)(6);
• Count VIII: alleges a claim for monetary damages pursuant to 26 U.S.C. § 7433 based upon Defendants' alleged failure to issue a certificate of release with respect to the Notice of Federal Tax Lien in violation of 26 U.S.C. § 6325(a)(1); and
• Count IX: alleges that Defendants acted in excess of their statutory authority and seeks non-monetary declaratory and injunctive relief pursuant to the Administrative Procedures Act, 5 U.S.C. § 706(2).
See generally Compl.
As set forth in his Complaint, Plaintiff states that he previously submitted an administrative claim with the IRS and filed this lawsuit only after exhausting his administrative remedies. See id. ¶¶ 11–13 & Ex. A. Now before the Court is Defendants' Motion to Dismiss or in the Alternative Motion for Summary Judgment. See Defs.' Mot., Docket No. [7]. Plaintiff has filed his opposition to Defendants' Motion, see Pl.'s Opp'n, Docket No. [10], and Defendants have filed their reply,see Defs.' Reply, Docket No. [11]. Briefing on Defendants' Motion is therefore complete and the issues are ripe for the Court's resolution.
II. LEGAL STANDARDS
Defendants have moved for dismissal of Plaintiff's Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and/or 12(b)(6) and have also moved in the alternative for summary judgment pursuant to Federal Rule of Civil Procedure 56. Insofar as Defendants have moved for dismissal of certain claims under Rule 12(b)(1), the Court may consider a complaint “supplemented by undisputed facts evidenced in the record or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.”” Coalition for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (quoting Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992)). To the extent, however, that Defendants have moved to dismissed certain claims for failure to state a claim under Rule 12(b)(6), the Court is limited to considering the facts alleged in the complaint, any documents attached to or incorporated in the complaint, matters of which the court may take judicial notice, and matters of public record.See E.E.O.C. v. St. Francis Xavier Parochial Sch. , 117 F.3d 621, 624 (D.C. Cir. 1997).
In this case, Defendants have attached five exhibits to their motion — namely, the June 10, 1998 Order and Decision of the United States Tax Court in Boritz v. Commissioner of Internal Revenue and four Certificates of Official Record (Form 3430) relating to Plaintiff concerning tax years 1994 and 1995. See Defs.' Mot. at Exs. A–E. All of the attached exhibits may be appropriately considered by the Court for purposes of Defendants' Motion to Dismiss brought under Rule 12(b)(1). In addition, while the June 10, 1998 Order and Decision is a matter of public record and therefore may be considered by the Court in ruling on Defendants' Motion to Dismiss under Rule 12(b)(6), the Certificates of Official Record are not incorporated in or referenced by the Complaint and are therefore arguably outside the scope of the pleadings in this matter; as such, they may not be considered in evaluating Defendants' Motion to Dismiss brought under Rule 12(b)(6). Accordingly, to the extent the parties have relied upon those materials in moving for dismissal of Plaintiff's claims, the Court must construe Defendants' motion as a Motion for Summary Judgment pursuant to Rule 56. See Fed. R. Civ. P. 12(d) (“If, on a motion under Rule 12(b)(6) ..., matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.”). 2
Here, Defendants have moved to dismiss Plaintiff's claims against the IRS as well as Counts I (quiet title action pursuant to 28 U.S.C. § 2410) and IX (APA) of his Complaint for lack of jurisdiction under Rule 12(b)(1). As such, the Court may consider all attached exhibits in evaluating Defendants' Motion to Dismiss these claims pursuant to Rule 12(b)(1). With respect to the remaining claims, however, Defendants have moved to dismiss for failure to state a claim, or in the alternative, for summary judgment; accordingly, to the extent the parties rely upon and the Court does not exclude from consideration the Certificates of Official Record, the motion must be construed as a motion for summary judgment. In this case, the parties have relied upon and the Court does not exclude from consideration the Certificates in resolving Defendants' motion only with respect to Count VI (failure to issue notice of levy in violation of § 6331(d)). As such, the Court must construe Defendants' motion as to Count VI as a Motion for Summary Judgment pursuant to Rule 56. With respect to the remaining counts, however, the Court finds that the attached Certificates of Official Record are neither relied upon by the parties nor relevant to resolution of Defendants' motion. The Court therefore treats Defendants' motion on these counts — namely, Counts II (failure to issue notice of deficiency in violation of §§ 6212 and 6213), III (failure to make assessment in violation of § 6203), IV (failure to make assessment in violation of § 6303), V (failure to release lien in violation of § 7342), VII (unauthorized disclosure in violation of § 6103(b)(6)), and VIII (failure to issue certificate of release in violation of § 6325) — as a Motion to Dismiss for failure to state a claim pursuant to Rule 12(b)(6).
With this framework in place, the Court shall set forth the applicable legal standards relating to Defendants' Motion to Dismiss pursuant to Rule 12(b)(1) and Rule 12(b)(6), or in the alternative, Motion for Summary Judgment pursuant to Rule 56.
A. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(1)
A court must dismiss a case when it lacks subject matter jurisdiction pursuant to Rule 12(b)(1). As indicated above, the Court may “consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Coalition for Underground Expansion, 333 F.3d at 198 (citations omitted); see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) (“[T]he district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.”);Vanover v. Hantman , 77 F. Supp. 2d 91, 98 (D.D.C. 1999), aff'd, 38 F. App'x 4 (D.C. Cir. 2002) (“[W]here a document is referred to in the complaint and is central to plaintiff's claim, such a document attached to the motion papers may be considered without converting the motion to one for summary judgment.”) (citing Greenberg v. The Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999)). “At the motion to dismiss stage, counseled complaints, as well as pro se complaints, are to be construed with sufficient liberality to afford all possible inferences favorable to the pleader on allegations of fact.” Settles v. U.S. Parole Comm'n, 429 F.3d 1098, 1106 (D.C. Cir. 2005). In spite of the favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence.Am. Farm Bureau v. Envtl. Prot. Agency , 121 F. Supp. 2d 84, 90 (D.D.C. 2000).
B. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6)
The Federal Rules of Civil Procedure require that a complaint contain ““a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.”” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); accord Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam). Although “detailed factual allegations” are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the “grounds” of “entitle[ment] to relief,” a plaintiff must furnish “more than labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Id. at 1964–65; see also Papasan v. Allain, 478 U.S. 265, 286 (1986). Instead, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”Ashcroft v. Iqbal , __ U.S. __, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).
In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must construe the complaint in a light most favorable to the plaintiff and must accept as true all reasonable factual inferences drawn from well-pleaded factual allegations. In re United Mine Workers of Am. Employee Benefit Plans Litig., 854 F.Supp. 914, 915 (D.D.C. 1994);see also Schuler v. United States , 617 F.2d 605, 608 (D.C. Cir. 1979) (“The complaint must be “liberally construed in favor of the plaintiff,” who must be granted the benefit of all inferences that can be derived from the facts alleged.”). However, as the Supreme Court recently made clear, a plaintiff must provide more than just “a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1950. Where the well-pleaded facts set forth in the complaint do not permit a court, drawing on its judicial experience and common sense, to infer more than the “mere possibility of misconduct,” the complaint has not shown that the pleader is entitled to relief. Id. at 1950.
C. Motion for Summary Judgment Pursuant to Federal Rule of Civil Procedure 56
Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see also Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Under the summary judgment standard, the moving party bears the “initial responsibility of informing the district court of the basis for [its] motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact.”Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). In response, the non-moving party must “go beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and admissions on file, “designate” specific facts showing that there is a genuine issue for trial.” Id. at 324 (internal citations omitted).
Although a court should draw all inferences from the supporting records submitted by the nonmoving party, the mere existence of a factual dispute, by itself, is insufficient to bar summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, the factual assertion must be capable of affecting the substantive outcome of the litigation; to be genuine, the issue must be supported by sufficient admissible evidence that a reasonable trier-of-fact could find for the nonmoving party. Laningham v. U.S. Navy, 813 F.2d 1236, 1242–43 (D.C. Cir. 1987);Liberty Lobby , 477 U.S. at 251 (the court must determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law”). “If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted.” Liberty Lobby, 477 U.S. at 249–50 (internal citations omitted). “Mere allegations or denials in the adverse party's pleadings are insufficient to defeat an otherwise proper motion for summary judgment.” Williams v. Callaghan, 938 F. Supp. 46, 49 (D.D.C. 1996). The adverse party must do more than simply “show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, while the movant bears the initial responsibility of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact, the burden shifts to the non-movant to “come forward with “specific facts showing that there is agenuine issue for trial .”” Id. at 587 (citing Fed. R. Civ. P. 56(e)) (emphasis in original).
III. LEGAL DISCUSSION

A. Defendants' Motion to Dismiss Pursuant to Rule 12(b)(1)
The Court turns first to consider Defendants' Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), which is directed towards Plaintiff's claims against the IRS as well as Count I (quiet title action pursuant to 28 U.S.C. § 2410) and Count IX (APA) of Plaintiff's Complaint.

1. Plaintiff's Claims Against Defendant IRS

As indicated above, Plaintiff has named as Defendants in this action both the United States and the IRS. Defendants contend that the United States is the only proper defendant in this action and have therefore moved to dismiss Plaintiff's claims against the IRS for lack of jurisdiction. Although Plaintiff filed an opposition to Defendants' motion, he failed to address Defendants' specific argument that the IRS must be dismissed as a defendant in this case. See generally Pl.'s Opp'n. “It is well understood in this Circuit that when a plaintiff files an opposition to a dispositive motion and addresses only certain arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to address as conceded.” Hopkins v. Women's Div., General Bd. of Global Ministries, 284 F. Supp. 2d 15, 25 (D.D.C. 2003),aff'd 98 Fed. Appx. 8 (D.C. Cir. 2004); see also Franklin v. Potter, 600 F. Supp. 2d 38, 60 (D.D.C. 2009) (treating defendant's argument in motion for summary judgment as conceded where plaintiff failed to address it in his response). The Court previously advised Plaintiff that his failure to respond to the Defendants' motion may result in the Court treating the motion as conceded. See 8/22/09 Order, Docket No. [8]. Accordingly, because Plaintiff had the opportunity to respond to the Defendants' argument but did not do so, the Court shall construe his failure as a concession with respect to Defendants' request to dismiss the IRS as a defendant in this action. See Hopkins, 284 F. Supp. 2d at 25. Defendants' Motion to Dismiss shall therefore be GRANTED as CONCEDED insofar as Defendants move to dismiss Plaintiff's claims against the IRS. 3

2. Count I of Plaintiff's Complaint

Count I of Plaintiff's Complaint purports to bring a quiet title action pursuant to 28 U.S.C. § 2410, which provides that the “United States may be named a party in any civil action or suit in any district court ... having jurisdiction of the subject matter ... to quiet title to ... real or personal property on which the United States has or claims a mortgage or other lien.” 28 U.S.C. § 2410(a)(1). Defendants argue that, although Plaintiff has attempted to frame his claim as challenging only the procedural deficiencies of the lien and levy at issue, it is apparent that Plaintiff is in fact attempting to use section 2410 as a means to challenge the validity of the underlying tax assessments and the Court therefore lacks jurisdiction to entertain his claim. Defs.' Mot. at 5; Defs.' Reply at 2–3. The Court agrees.

“It is elementary that the United States, as sovereign, is immune from suit save as it consents to be sued, and the terms of its consent to be sued in any court define that court's jurisdiction to entertain that suit.” United States v. Mitchell, 445 U.S. 535, 538 (1980) (citation omitted). Moreover, “a waiver of sovereign immunity “cannot be implied but must be unequivocally expressed.””Id. (citing United States v. King, 395 U.S. 1, 4 [23 AFTR 2d 69-1358] (1969)). Plaintiff argues that section 2410 acts as a waiver of sovereign immunity for his quiet title claim.See Pl.'s Opp'n at 5–8. 4 Plaintiff, however, is incorrect. Section 2410 “constitutes a waiver of sovereign immunity to a suit brought by a taxpayer against the United States which challenges the validity of a federal tax lien ... [but only] so long as the taxpayer refrains from contesting the merits of the underlying tax assessment itself.” Aqua Bar & Lounge v. U.S. Dep't of Treasury, 539 F.2d 935, 939–40 [38 AFTR 2d 76-5466] (3d Cir. 1976) (emphasis added); see also Pollinger, 539 F. Supp. 2d at 251. Indeed, “[t]he principle that a taxpayer cannot use section 2410(a) to challenge the extent of, or existence of, substantive tax liability is well-settled.” Robinson v. United States, 920 F.2d 1157, 1161 [67 AFTR 2d 91-393] (3d Cir. 1990). Despite Plaintiff's efforts to characterize his quiet title action as challenging only certain alleged procedural deficiencies, it is abundantly clear that his arguments regarding such alleged errors are premised upon his substantive challenge to the merits and validity of the tax assessment underlying the Notice of Federal Tax Lien and Notice of Levy issued. See Compl.¶ 7 (alleging that he “filed all returns required to be filed for tax years 1994 and 1995 and fully satisfied and paid all income taxes Plaintiff was made liable for and required to pay regarding the years in dispute”); see also id. ¶¶ 2–6. His principal concern is with the assessments — not with the actual tax liens. At heart, he alleges that the Notice of Federal Tax Lien and Notice of Levy are procedurally deficient only because he does not owe the claimed underlying taxes and/or no assessment ever took place, such that “Defendants have no estate, title, claim, lien, or superior claim in the Plaintiff's personal property or any portion thereof.” Id. ¶ 26. Accordingly, as Plaintiff has not “refrain[ed] from contesting the merits of the underlying tax assessment itself,” this Court lacks jurisdiction over his quiet title action. Defendants' Motion to Dismiss is therefore GRANTED insofar as Defendants seek dismissal of Count I of Plaintiff's Complaint for lack of jurisdiction pursuant to Rule 12(b)(1).

3. Count IX of Plaintiff's Complaint

In Count IX of the Complaint, Plaintiff alleges that Defendants acted in excess of their statutory authority and seeks non-monetary declaratory and injunctive relief pursuant to the section 706(2) of the APA. Compl. ¶¶ 58–64. As Defendants correctly point out, however, Plaintiff cannot pursue a claim for declaratory or injunctive relief under the APA based upon alleged wrongful tax assessment or collection actions. First, to the extent Plaintiff seeks injunctive relief, his claim is barred by the Anti-Injunction Act, 26 U.S.C. § 7421(a), which is part of the Tax Code and which “withdraw[s] jurisdiction from the state and federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes.” Enochs v. Williams Packing & Nav. Co., 370 U.S. 1, 5 [9 AFTR 2d 1594] (1962); see also Ross v. United States, 460 F. Supp. 2d 139, 149 [98 AFTR 2d 2006-7712] (D.D.C. 2006) (finding plaintiff's claim for injunctive relief under the APA barred by the Anti-Injunction Act where claim based on assessment or collection of taxes). Although the Supreme Court has recognized a limited exception to this rule, Plaintiff has not shown that the exception applies in this case. In Enochs, the Supreme Court held that the a suit for injunction may be maintained “[o]nly if it is [] apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim .... Otherwise, the District Court is without jurisdiction, and the complaint must be dismissed.” 370 U.S. at 7. As is selfevident from the Court's rulings herein granting Defendants' motion, it is clear that the limited exception recognized in Enochs is inapplicable to the case at hand.

Second, Plaintiff's claim for declaratory relief is barred by the Declaratory Judgment Act, 28 U.S.C. § 2201, which authorizes a court of the United States to “declare the rights and other legal relations of any interested party,” but expressly excludes cases “with respect to Federal taxes,” subject to one exception not applicable here. See Bob Jones Univ. v. Simon, 416 U.S. 725, 732–33 [33 AFTR 2d 74-1279] n. 7 (1974) (“The congressional antipathy for premature interference with the assessment or collection of any federal tax also extends to declaratory judgments.... [T]he federal tax exception to the Declaratory Judgment Act is at least as broad as the Anti-Injunction Act.”); see also McGuirl v. United States, 360 F. Supp. 2d 129, 132 [93 AFTR 2d 2004-1922] (D.D.C. 2004) (finding Plaintiff's claim under the APA for declaratory relief based upon the assessment or collection of taxes was barred by Declaratory Judgment Act), aff'd, 167 Fed. Appx. 808 (D.C. Cir. 2005). For these reasons, the D.C. Circuit has made clear that “Congress has preserved the immunity of the United States from declaratory and injunctive relief with respect to all tax controversies except those pertaining to the classification of organizations under § 501(c) of the IRC.” Murphy v. IRS , 493 F.3d 170, 174 [100 AFTR 2d 2007-5075] (D.C. Cir. 2007) (“Congress has preserved the immunity of the United States from declaratory and injunctive relief with respect to all tax controversies except those pertaining to the classification of organizations under § 501(c) of the [IRC].”). Accordingly, Defendants' Motion to Dismiss is GRANTED insofar as Defendants move to dismiss Count IX of Plaintiff's Complaint for lack of jurisdiction pursuant to Rule 12(b)(1).

B. Defendants' Motion to Dismiss Pursuant to Rule 12(b)(6)
The Court turns next to consider Defendants' Motion to Dismiss for failure to state a claim pursuant to Rule 12(b)(6), which as construed by the Court is directed towards Count II, which alleges a failure to issue a notice of deficiency; Counts III and IV, which allege a failure to assess taxes and provide assessment notices; Count V and VIII, which allege a failure to release a lien and to issue a certificate of release; and Count VII, which alleges unauthorized disclosure of Plaintiff's social security number.

1. Count II of Plaintiff's Complaint
Count II of Plaintiff's Complaint alleges that Defendants failed to send a notice of deficiency to Plaintiff's last known address before issuing the Notice of Levy thereby violating 26 U.S.C. §§ 6212(a) and 6213(a). Plaintiff seeks damages pursuant to section 7433 based upon this alleged violation. Compl. ¶¶ 28–31. Section 6212(a) “authorize[s]” the IRS, upon determining the existence of a tax deficiency, “to send notice of such deficiency to the taxpayer by certified mail or registered mail.” 26 U.S.C. § 6212(a). Such notice “shall be sufficient,” “if mailed to the taxpayer at his last known address ... even if such taxpayer is deceased or under a legal disability.” Id. § 6212(b). The taxpayer has 90 days after the notice is mailed in which to “file a petition with the Tax Court for a redetermination of the deficiency.” Id. § 6213(b). Pursuant to section 6213(a), the IRS is precluded from imposing any “assessment of a deficiency” or from making any “levy or proceeding in court for its collection” until the “notice [of deficiency] has been mailed to the taxpayer, []or until the expiration of [the] 90-day ... period, ... []or, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final.” Id.

“The purpose of a notice of deficiency is, first, to notify the taxpayer that a deficiency has been determined against him, and second, to afford him an opportunity to challenge the determination in tax court.” Kiley v. Kurtz, 533 F. Supp. 465, 467–68 [50 AFTR 2d 82-5501] (D. Colo. 1982) (citingBarnes v. Commissioner of Internal Revenue , 408 F.2d 65, 68 [23 AFTR 2d 69-895] (7th Cir. 1969)). As the Ninth Circuit has observed,

Reading the interrelated sections of the Code as an integrated whole, it is apparent that the legislative plan contemplates that actual notice of the deficiency should be given where such can reasonably be achieved and that the mailing authorized by § 6212(a) is a means to that end.

Clodfelter v. Commissioner of Internal Revenue, 527 F.2d 754, 756 [37 AFTR 2d 76-554] (9th Cir. 1975). The key, then, “is that the taxpayer have actual notice and not that he have it in any particular way.” Id. at 757; see also Borgman v. Commissioner of Internal Revenue, 888 F.2d 916, 917 [64 AFTR 2d 89-5795] (1st Cir. 1989) (“The purpose of section[] 6212(a) ... is to ensure that the taxpayer receives a timely actual notice so he can challenge the assessment within the 90-day period provided in section 6213.”). Accordingly, “[w]here the taxpayer receives actual notice of the contents of the deficiency notice, the purpose of the statute is satisfied.” Gibson v. United States, 761 F. Supp. 685, 690 [68 AFTR 2d 91-5102] (C.D. Cal 1991).

Plaintiff in this case alleges that he did not receive the required notice of deficiency prior to the issuance of the Notice of Levy and argues that Defendants are therefore in violation of sections 6212(a) and 6213(a). See Pl.'s Opp'n, Att. 1 (Affidavit of Peter Boritz) (hereinafter, “Boritz Aff.”), ¶ 7. Defendants respond that — even accepting Plaintiff's allegation as true — Plaintiff's claim must nonetheless be dismissed because public records demonstrate that he filed a timely petition with the Tax Court regarding the determination of tax deficiencies in the years at issue and therefore clearly received actual notice of the deficiencies.See Defs.' Mot. at 5–6 & Ex. A (Order and Decision dated June 10, 1998, in Boritz v. Commissioner of Internal Revenue, No. 17664-97) (hereinafter, “Tax Court Order”). 5 The Court agrees.

Plaintiff concedes that he filed a petition in Tax Court for tax years 1994 and 1995, but argues that he did so “without said notices, based on other letters and notices received from the IRS alleging the assessment of penalties.” Pl.'s Opp'n at 8. Even assuming, as Plaintiff apparently asserts, that none of the “letters and notices” he received from the IRS constituted the required notice of deficiency, this does not negate that Plaintiff had actual notice of the deficiencies and filed a timely petition in Tax Court for the tax years in question. As the IRS' mailings and notices “result[ed] in actual notice without prejudicial delay (as was clearly the case here),” the Court finds that the IRS has “[met] the conditions of § 6212(a).” Clodfelter, 527 F.2d at 757. Moreover, “[b]y timely invoking Tax Court jurisdiction, [Plaintiff] effectively waived any objection to the notice of deficiency.” Mulvania v. Commissioner of Internal Revenue, 769 F.2d 1376, 1380 [56 AFTR 2d 85-5744] (9th Cir. 1985);see also Roszkos v. Commissioner of Internal Revenue , 850 F.2d 514 [62 AFTR 2d 88-5084], (9th Cir. 1988) (where the “taxpayer acknowledges notice by timely petitioning the Tax Court for a redetermination of deficiency,” he “render[s] harmless the IRS' error”);cf. Kiley , 533 F. Supp at 468 (“In the present case, the plaintiff acknowledges that he actually received his notice of deficiency and he does not allege any detrimental delay. His challenge to the notice of deficiency is therefore without merit.”). Accordingly, Defendants' Motion to Dismiss is GRANTED insofar as Defendants assert that Count II of Plaintiff's Complaint should be dismissed for failure to state a claim pursuant to Rule 12(b)(6).

2. Count III and Count IV of Plaintiff's Complaint
Counts III and IV of Plaintiff's Complaint seek damages pursuant to 26 U.S.C. § 7433 for the IRS' alleged failure to assess taxes and provide assessment notices. Specifically, Plaintiff alleges in Count III of the Complaint that Defendants violated 26 U.S.C. § 6203 by issuing the Notice of Federal Tax Lien and the Notice of Levy without first making an assessment regarding Plaintiff's tax liabilities for years 1994 and 1995. Compl. ¶¶ 32–35. In Count IV of the Complaint, Plaintiff alleges that Defendants failed to give him notice within 60 days after any alleged assessment as is required by 26 U.S.C. § 6303(a). Id. ¶¶ 36–39.
Both claims therefore relate to the IRS' assessment of tax liability. As such, the claims are not actionable under section 7433 and must be dismissed for failure to state a claim. As noted above, Section 7433(a) authorizes taxpayers to bring actions for civil damages against the United States when any IRS officer or employee recklessly, intentionally, or negligently acts in disregard of the Code or its implementing regulations “in connection with any collection of Federal tax.” 26 U.S.C. § 7433(a) (emphasis added). As this Court has previously held, section 7433 is limited to alleged violations of law by the IRS in connection with tax collection and ““does not provide a cause of action for wrongful tax assessment or other actions that are not specifically related to the collection of income tax.”” Pollinger, 539 F. Supp. 2d 242 [101 AFTR 2d 2008-1383] at 255–56 (quoting Buaiz v. United States, 471 F. Supp. 2d 129, 135–36 [99 AFTR 2d 2007-699] (D.D.C. 2007));see also Jaeger v. United States , 524 F. Supp. 2d 60, 63–64 [100 AFTR 2d 2007-7117] (D.D.C. 2007) (holding that “ section 7433 does not provide a cause of action for wrongful tax assessment, the absence of a tax assessment, or other actions not related to collection of income tax”); Spahr v. United States, 501 F. Supp. 2d 92, 95 [100 AFTR 2d 2007-5601] (D.D.C. 2007) (same). 6 The Court's holding in Pollinger applies equally here and mandates the dismissal of Plaintiff's claims in Count III and Count IV arising from the IRS' alleged failure to make an assessment in compliance with 26 U.S.C. §§ 6203, 6303. While Defendants themselves have not specifically challenged the viability of Plaintiff's claims on this point, instead addressing the merits of Plaintiff's claims, it is well settled in this Circuit that “[c]omplaints may [] be dismissed,sua sponte if need be, under Rule 12(b)(6) whenever “the plaintiff cannot possibly win relief.””Best v. Kelly , 39 F.3d 328, 331 (D.C. Cir. 1994) (quoting Baker v. Director, United States Parole Comm'n, 916 F.2d 725, 726 (D.C. Cir. 1990) (per curiam)). Accordingly, because it is patently obvious that Plaintiff's claims relating to the alleged errors in the assessment of taxes “cannot possibly win relief,” the Court concludes that Count III and Count IV must be dismissed sua sponte for failure to state a claim under Rule 12(b)(6). Defendants' Motion to Dismiss is therefore GRANTED insofar as Defendants have moved to dismiss Counts III and IV, albeit on the alternative reasoning that Plaintiff has failed to state a claim under section 7433. 7
3. Count V and Count VIII of Plaintiff's Complaint
In Count V and Count VIII of the Complaint, Plaintiff alleges that Defendants have failed to release the Notice of Federal Tax Lien and issue a certificate of release as required by 26 U.S.C. § 6325(a)(1). Plaintiff seeks monetary damages for this failure under 26 U.S.C. §§ 7432 and 7433, respectively. Compl. ¶¶ 40–43, 53–57. Section 6325 provides that “the Secretary shall issue a certificate of release of any lien imposed with respect to any internal revenue tax not later than 30 days after the day on which ... [t]he Secretary finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable.” 26 U.S.C. § 6325(a)(1).
In this case, the parties agree that the Notice of Federal Tax Lien is now unenforceable because the ten-year limitation periods for collection of the underlying tax assessment have expired.See Compl. ¶ 56; Defs.' Mot. at 9 (“the liens have not been refiled and are considered released”). This is confirmed by reference to the Notice of Federal Tax Lien, which is attached as an exhibit to Plaintiff's Complaint and which states as follows:
IMPORTANT RELEASE INFORMATION: For each assessment listed below, unless notice of the lien is refiled by the date given in column (e), this notice shall, on the day following such date, operate as a certificate of release as defined in IRC 6325(a).
Id., Ex. C. There is no allegation by Plaintiff that the liens have been refiled; indeed, Plaintiff alleges that the liens are now unenforceable (i.e., that no enforceable lien was refiled). See id. ¶¶ 54–56. Accordingly, the Notice of Federal Tax Lien itself operated as the certificate of release required under section 6325(a) and automatically released the tax liens at issue when no notice of lien was refiled by the dates listed in column (e).See Rotte v. United States , 615 F. Supp. 2d 1347, 1351 [103 AFTR 2d 2009-1734] (S.D. Fla. 2009) (finding that IRS “complied with section 7432 because the notice of federal tax lien was self-releasing);cf. Enax v. United States , Civ. Act. No. 06-14774, 2007 WL 708976 [99 AFTR 2d 2007-1356], 450 (11th Cir. Mar. 8, 2007) (observing that “[a]t the end of the limitations period, the liens self-release unless the IRS had revoked the self-release and re-filed the liens before the limitations period expired”);Eastman v. United States , Civ. Act. No. 06cv1069, 2008 WL 899252 [101 AFTR 2d 2008-1566], 2 (W.D. Ark. Mar. 31, 2008) (“[T]he 10 year collection statute of limitations on these assessments expired and the lien documents self released. The IRS did not refile its notice of lien ... [t]herefore, ... the Notice of Federal Tax Lien became the § 6325(a) certificate of release of these liens.”). As such, Plaintiff cannot succeed on his claims that Defendants violated section 6325 by failing to release the Notice of Federal Tax Lien and/or by failing to issue a certificate of release. Defendants' Motion to Dismiss is therefore GRANTED insofar as Defendants move to dismiss Counts V and VIII of Plaintiff's Complaint for failure to state a claim pursuant to Rule 12(b)(6).
4. Count VII of Plaintiff's Complaint
In Count VII of the Complaint, Plaintiff seeks damages under 26 U.S.C. § 7433 based upon Defendants' allegedly unauthorized public disclosure of his social security number on the Notice of Federal Tax Lien in violation of 26 U.S.C. § 6103(b)(6). Compl. ¶¶ 48–52. Section 6103 states the general rule that return information shall be kept confidential and, except as authorized, shall not be disclosed. 26 U.S.C. § 6103; Church of Scientology of Calif. v. IRS, 484 U.S. 9, 10–12 [60 AFTR 2d 87-5832] (1987). One of the exceptions to section 6103, however, permits disclosure of return information “in connection with ... collection activity ... to the extent that such disclosure is necessary in obtaining information ... with respect to the enforcement of any other provision of [the Code].” 26 U.S.C. § 6103(k)(6). The implementing regulations for section 6103 further provide that disclosure may be made in order “to locate assets in which the taxpayer has an interest ... or otherwise to apply the provisions of the Internal Revenue Code relating to establishment of liens against such assets, or levy, seizure, or sale on or of the assets to satisfy any such liability.” 26 C.F.R. § 301.6103(k)(6)-1(vi); see also Glass v. United States, 480 F. Supp. 2d 162, 165–66 [99 AFTR 2d 2007-1853] (D.D.C. 2007).
Based on section 6103(k)(6) and the related regulations, several courts, including the undersigned Judge, have concluded that a notice of lien does not give rise to an unauthorized disclosure action. See, e.g., Pollinger, 539 F. Supp. 2d at 253 (“Plaintiff cannot state an unauthorized disclosure claim based upon the various notices of liens and levies.”); see also Glass, 480 F. Supp. 2d at 165–66 (finding that “a notice of lien does not give rise to a cause of action”); Mann v. United States, 204 F.3d 1012, 1018 [85 AFTR 2d 2000-963] (10th Cir. 2000) (dismissing plaintiff's claim for unauthorized disclosure of social security number in notice of lien because “ § 6103(k)(6) and the relevant regulations do permit disclosure of tax return information when made in notices of lien and levy, to the extent necessary to collect on taxes assessed.”); McGraw v. United States, Civ. Act. No. 08-0092, 2008 WL 4000570 [102 AFTR 2d 2008-5875], 3 (W.D. Wash. Aug. 25, 2008) (dismissing plaintiff's claim that IRS violated section 6103(k) by disclosing plaintiff's social security number in the notices of federal tax liens and levies because disclosure was permitted under implementing regulations). Accordingly, the Court finds that Plaintiff cannot state an unauthorized disclosure claim based upon the Notice of Federal Tax Lien. Defendants' Motion to Dismiss is therefore GRANTED insofar as Defendants move to dismiss Count VII of Plaintiff's Complaint for failure to state a claim.
C. Defendants' Motion for Summary Judgment
The Court finally turns to consider Defendants' motion for summary judgment, which as construed by the Court is directed towards Plaintiff's final claim — Count VI, in which Plaintiff alleges that Defendants failed to serve him with a notice of levy, as required by 26 U.S.C. § 6331(d)(2). Plaintiff seeks civil damages for this alleged failure pursuant to 26 U.S.C. § 7433. Compl. ¶¶ 44–47. Given the somewhat obscure nature of Plaintiff's Complaint, it is not entirely clear whether he means to allege that Defendants violated section 6331(d)(2) by failing to serve him with an actual copy of the Notice of Levy issued against his bank account or rather by failing to serve him with a notice of its intent to issue the Notice of Levy before doing so. As Defendants correctly point out, section 6331(d) requires only that the IRS notify a taxpayer “in writing of his intention to make [the] levy” at least 30 days before the day of the levy. 26 U.S.C. § 6331(d)(1). It does not require that a copy of the Notice of Levy itself be provided to the taxpayer. See id. Accordingly, to the extent Plaintiff contends that the IRS violated section 6331(d) by failing to provide him with a copy of the actual Notice of Levy, such a claim cannot succeed.
Nonetheless, cognizant of Plaintiff's pro se status, the Court shall give Plaintiff the benefit of the doubt and instead construe Count VI as alleging that Defendants violated section 6331(d) by failing to provide a notice of intent to levy. Even construing Plaintiff's Complaint in his favor, however, it is clear that Plaintiff's claim is without merit. The undisputed facts on the present record demonstrate that the IRS issued the required notices of intent. Specifically, Defendants direct the Court to the Certificates of Official Record (Form 4340) regarding Plaintiff's tax liability in the tax years 1994 and 1995. Defs.' Mot. at 8 n. 2. These Certificates of Official Record, which are attached to Defendants' motion as Exhibits B, C, D and E, indicate that the required notices of intent to levy were provided to Plaintiff. See id., Ex. B, C, D, and E. As noted above, see supra n. 7, these Certificates of Official Record are “self-authenticating” and “provide a sufficient basis for summary judgment.”Buaiz , 521 F. Supp. 2d at 96; see also Hines v. United States, 658 F. Supp. 2d 139 [104 AFTR 2d 2009-6652] (D.D.C. 2009) (awarding presumption of regularity to IRS records demonstrating that notices of intent to levy were sent to plaintiff). Plaintiff has offered no facts or documentary evidence to refute the accuracy of the certified forms or to otherwise indicate that the notices of intent to levy were not provided. As such, he has failed to defeat the Defendants' motion for summary judgment. Accordingly, Defendants' Motion for Summary Judgment is GRANTED insofar as Defendants contend that there are no material disputes of fact and they are entitled to judgment as a matter of law with respect to Count VI of Plaintiff's Complaint.
IV. CONCLUSION
For the reasons set forth above, Defendants' [7] Motion to Dismiss or in the Alternative Motion for Summary Judgment is GRANTED. Specifically, the Court holds as follows. First, Defendants' Motion to Dismiss Plaintiff's claims against the IRS is GRANTED as conceded. Second, Defendants' Motion to Dismiss Count I (quiet title action pursuant to 28 U.S.C. § 2410) and Count IX (APA) for lack of jurisdiction pursuant to Rule 12(b)(1) is GRANTED. Third, Defendants' Motion to Dismiss Count II (failure to issue notice of deficiency in violation of §§ 6212 and 6213), Count III (failure to make assessment in violation of § 6203), Count IV (failure to make assessment in violation of § 6303), Count V (failure to release lien in violation of § 7342), Count VII (unauthorized disclosure in violation of § 6103(b)(6)), and Count VIII (failure to issue certificate of release in violation of § 6325), for failure to state a claim pursuant to Rule 12(b)(6) is GRANTED. Fourth and finally, Defendants' Motion for Summary Judgment as to Count VI (failure to issue notice of levy in violation of § 6331(d)) is GRANTED. An appropriate Order accompanies this Memorandum Opinion.
Date: February 23, 2010
COLLEEN KOLLAR-KOTELLY
United States District Judge
________________________________________
1
As discussed below, the Court grants Defendants' motion to dismiss the IRS as a defendant in this action. The Court nevertheless refers to the United States and the IRS collectively as “Defendants” in this opinion, so as to be consistent with the parties' filings.
________________________________________
2
The Court notes that Plaintiff was given notice that Defendants' motion may be treated as a motion for summary judgment under Rule 56 and that in opposing such a motion, he “may not rely merely on allegations or denials in its own pleading; rather, its response must—by affidavits or as otherwise provided in this rule—set out specific facts showing a genuine issue for trial. If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party.” See Aug. 22, 2009 Order, Docket No. [8].
________________________________________
3
Alternatively, the Court notes that Plaintiff's claims for monetary damages under sections 7432(a) and 7433(a) against the IRS would nonetheless fail because suits for civil damages for wrongful tax collection activity and for failure to release a lien may be brought, if at all, against the “United States.” See 26 U.S.C. § 7432(a);id. § 7433(a). Similarly, Plaintiff's claims for declaratory and injunctive relief against the IRS would fail as “Congress has preserved the immunity of the United States from declaratory and injunctive relief with respect to all tax controversies except those pertaining to the classification of organizations under § 501(c) of the IRC. As an agency of the Government, of course, the IRS shares that immunity.”Murphy v. IRS , 493 F.3d 170, 174 [100 AFTR 2d 2007-5075] (D.C. Cir. 2007) (internal citations omitted).
________________________________________
4
Although Plaintiff argues in his briefing that section 2410 acts as the relevant waiver of sovereign immunity in this case, Plaintiff's Complaint actually cites 28 U.S.C. § 1367 as jurisdictional grounds for his quiet title claim. See Compl. ¶ 16. Section 1367, however, does not save Plaintiff's claim. That section provides only that “in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Section 1367 does not constitute a waiver of sovereign immunity by the United States. See 28 U.S.C. § 1367; see also San Juan Co., Utah v. United States, 503 F.3d 1163, 1181 (10th Cir. 2007) (“ Section 1367(a) is expressed in general terms, applying to all litigants. There is no mention of sovereign immunity or of the special status of the government as a litigant. Under settled law, ... this statute does not waive federal sovereign immunity.”); Dunn & Black v. United States, 492 F.3d 1084, 1088 [100 AFTR 2d 2007-5170] n. 3 (9th Cir. 2007) (same); United States v. Certain Land Situated in City of Detroit, 361 F.3d 305, 307 (6th Cir. 2004) (same).
________________________________________
5
As shown by the Tax Court Order, Plaintiff was held to have outstanding tax deficiencies for the years in question. See Tax Court Order.
________________________________________
6
While some courts have held that the limitations on the right of action under section 7433 are jurisdictional because they pertain to the scope of the United States' waiver of sovereign immunity, see, e.g., Buaiz, 471 F. Supp. 2d at 135–36; Spahr, 501 F. Supp. 2d at 96, this Court finds persuasive the reasoning set forth by Judge John D. Bates in Jaegar concluding that “the limitations on the right of action are nonjurisdictional because the language of section 7433 is not jurisdictional, and, furthermore, this Circuit treats the lack of a right of action as an issue of failure to state a claim upon which relief can be granted, id. 524 F. Supp. 2d at 64 n.1 (internal citations omitted). See also Pollinger, 539 F. Supp. 2d at 256 (dismissing claims relating to tax assessment under Rule 12(b)(6) for failure to state a claim).
________________________________________
7
Alternatively, the Court notes that Defendants would be entitled to summary judgment as the undisputed facts demonstrate that assessments were timely made and that notice was sent to Plaintiff as required. Defendants submit the Certificates of Official Record (Form 4340), regarding Plaintiff's tax liability in the tax years 1994 and 1995, which demonstrate that assessments were made, and that notice and demand in accordance with section 6303 was given, on November 16, 1998, December 18, 1998, and December 21, 1998, thus satisfying sections 6203 and 6303. See Defs.' Mot. at Exs. B, C, D, and E. While Plaintiff contends that the Certificates of Official Record are insufficient to support an award of summary judgment without providing the underlying supporting documentation, the case law makes clear that the certified Form 4340s “are self-authenticating and need no extrinsic evidentiary support as a predicate to admissibility.”Buaiz , 521 F. Supp. 2d at 96. As such, they are “presumptive proof of the taxpayer's liability” and “may provide a sufficient basis for summary judgment.”Id. Plaintiff has offered no facts or documentary evidence to refute the accuracy of the certified forms, and he has therefore failed to defeat the Defendants' motion for summary judgment.

CREEL SR. v. COMM., Cite as 96 AFTR 2d 2005-5487 (419 F.3d 1135), 08/02/2005 , Code Sec(s) 6330; 7122

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Billy S. CREEL, SR., PETITIONER-APPELLEE v. COMMISSIONER of Internal Revenue, RESPONDENT-APPELLANT.


Case Information:
Code Sec(s): 6330; 7122

Court Name: U.S. Court of Appeals, Eleventh Circuit,
Docket No.: No. 04-11817,
Date Decided: 08/02/2005.
Prior History: Tax Court affirmed.
Tax Year(s): Years 1987, 1988, 1989, 1990, 1991.
Disposition: Decision for Taxpayer.
Cites: 419 F.3d 1135, 2005-2 USTC P 50504.

HEADNOTE
1. Collection due process—review of administrative determination—satisfaction of liabilities—settlements—criminal restitution and civil tax liabilities. Tax Court properly determined that IRS erred in its administrative determination to collect taxpayer's liabilities for years subject of already-completed restitution order imposed in prior criminal tax case. Restitution order by its plain terms intertwined all taxpayer's criminal and civil tax liabilities for subject years, thus fully covering subject civil liabilities, including any applicable penalties and interest; so, those liabilities were completely extinguished and IRS had no right to pursue further collection once taxpayer completed his payments and U.S. Attorney issued lien release and satisfaction of judgment explicitly stating that obligations were fully paid or settled. Also, govt.'s attempt to circumvent such settlement on grounds U.S. Attorney lacked authority to enter same was meritless; and argument about missing witness inference was rejected.

Reference(s): ¶ 63,305.01(5) ; ¶ 71,225.01(15) ; ¶ 71,225.04(40) Code Sec. 6330 ; Code Sec. 7122

OPINION
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT,

Appeal from a Decision of the United States Tax Court

Before EDMONDSON, Chief Judge, and TJOFLAT and KRAVITCH, Circuit Judges.

Judge: KRAVITCH, Circuit Judge:

[PUBLISH]

Tax Court No. 3037-01L

Respondent-Appellant, the Commissioner of Internal Revenue (“the Commissioner”), appeals the Tax Court's decision denying a proposed levy to collect federal income taxes for the years 1987–1991 allegedly owed by Petitioner-Appellee, Billy Creel, Sr. (“Creel”). 1

I. Background
1. Prior Criminal Tax Case
Creel failed to file timely federal income tax returns for the years 1985–1991. The Internal Revenue Service (“IRS”) referred the matter to the Department of Justice [pg. 2005-5488] (“DOJ”) for prosecution, and the DOJ assigned the matter to the United States Attorney's Office for the Middle District of Alabama. On April 8, 1993, Creel pleaded guilty to both counts of a two-count criminal information charging him with willfully failing to file federal income tax returns for 1987 and 1988, in violation of 26 U.S.C. § 7203. As part of the plea agreement, Creel agreed to file returns for the years 1985–1991 and make full restitution of the amount of loss resulting from his failure to file returns for the years 1986–1991. 2

Creel's returns for the years 1986–1991 showed unpaid income taxes totaling $83,830. 3 The IRS assessed the taxes shown on the returns, plus interest. The IRS assessed penalties for failure to file timely returns for each year under 26 U.S.C. § 6651(a), and penalties for underpayment of estimated tax under 26 U.S.C. § 6654 for the years 1985–1989. 4

On June 14, 1993, the district court sentenced Creel in the criminal case and he was placed on probation for five years. As a condition of probation, Creel was ordered to make restitution to the IRS for the years 1986–1991 in the amount of “$83,830 plus any applicable penalties and interest.” 5 (emphasis added). The district court ordered the restitution pursuant to 18 U.S.C. § 3663(a)(3), which provides that a “court may...order restitution in any criminal case to the extent agreed to by the parties in a plea agreement.” To secure the restitution obligation, the U.S. Attorney recorded a judgment lien against Creel's property. [pg. 2005-5489]

Beginning in May 1994, and continuing through June 1998, Creel made monthly restitution payments totaling $83,830. On June 9, 1998, after Creel made his last monthly restitution payment, the USAO informed the district court that Creel's restitution obligation had been paid or was otherwise settled. The U.S. Attorney filed a Satisfaction of Judgment that stated: “The assessment, fine, and/or restitution imposed by the Court...having been paid or otherwise settled, the Clerk...is hereby authorized and empowered to satisfy the Judgment as to the monetary imposition only.” The U.S. Attorney also recorded a Cancellation and Release that stated that the previously-recorded judgment lien was “fully released, satisfied, discharged, and cancelled” because the debt was “paid in full.”

2. Administrative Proceeding
[1] The IRS applied the restitution payments totaling $83,830 to fully satisfy Creel's tax liability for 1986 and part of his tax liability for 1987. Claiming that Creel owed additional taxes, penalties, and interest for 1985 and 1987–1991, in June 1998, the IRS assigned the account to the Collection Division. The revenue officer and Creel's representative discussed whether Creel could enter into an offer in compromise or a deferred payment schedule. These discussions ended when the parties disagreed as to the amount Creel could afford to pay.

On February 2, 2000, the Commissioner sent Creel a notice of intent to levy showing unpaid amounts totaling $284,758.28 and a notice of a right to a collection-due-process (“CDP”) hearing with respect to these unpaid amounts 6 :

(For additional columns, see below.)

Assessed Late
Assessed Filing Penalties and
Unpaid Tax Statutory Interest
Year Per Return as of July 24, 2000
---- ---------- -------------------
1985 $18,772.16 $34,818.37
1987 $9, 514.96 $10,326.78
1988 $15,974.75 $16,720.50
1989 $15,148.34 $9,592.03
1990 $10,425.95 $4,834.60
1991 $9,479.16 $3,114.52

Total Unassessed Late
Assessed Payment Penalties
Amounts as of and Statutory Total
Year July 24, 2000 Interest Due
---- ------------- -------- ----
1985 $53,601.53 n7 $31,803.67 $85,405.20
1987 $18,063.01 n8 $19,189.06 $37,252.07
1988 $32,695.25 $28,729.02 $61,424.27
1989 $24,751.37 n9 $22,270.20 $47,021.57
1990 $15,271.55 n10 $14,026.54 $29,298.09
1991 $12,593.68 $11,763.40 $24,357.08
----------
Total $284,758.28

---------------------------------------------------------------------------
n7 Includes fees and collection costs totaling $11.
n8 Includes fees and collection costs totaling $11 and reflects
the application of a $1,500 payment and a $278.73 payment.
n9 Includes fee and collection costs totaling $11.
n10 Includes fee and collection costs totaling $11.
Creel requested a CDP hearing. Creel's counsel met with Judy Kelly, the Appeals Officer assigned to the case, to discuss the proposed levy. Creel's counsel argued that Creel's alleged civil tax liabilities for the years 1986–1991 had been satisfied by virtue of his payment of $83,830. Kelly disagreed, determining that the restitution order required that Creel pay “83,830 plus any applicable penalties and interest.” (emphasis added). Accordingly, Kelly sustained the Commissioner's proposal to collect the unpaid “applicable penalties and interest.”

3. Tax Court Proceeding
Creel petitioned the United States Tax Court under 26 U.S.C. § 6330(d) for review. At the trial, Creel testified that it was his understanding that his payment of $83,830 satisfied all of his tax liabilities for the subject years. Besides Creel, the only other witness to testify was Kelly. The Commissioner reserved in its trial memorandum the right to call as a witness [pg. 2005-5490] a representative of the DOJ and/or the USAO, but never did so.

Following the trial, the Tax Court entered an order, in which it did not sustain the proposed levy with respect to the 1987–1991 liabilities. 11 The Tax Court found that Creel's payment of $83,830 and the U.S. Attorney's issuance of a satisfaction of judgment and release of lien settled the alleged civil tax liabilities. The Tax Court found, inter alia, that Creel testified “credibly and without contradiction that he understood that his payment of the $83,830 would satisfy his civil tax obligation for $83,830 plus related penalties and interest.” The court also relied on the “missing witness inference,” inferring that the Commissioner's failure to call to the stand a representative of the U.S. Attorney's Office suggested that “any relevant testimony from such a witness would have been unfavorable” to the Commissioner. Finally, the Tax Court concluded that the U.S. Attorney had the authority to settle Creel's civil tax liabilities. The Commissioner now appeals the Tax Court's decision.

II. Discussion
1. Standard of Review
We review the Tax Court's factual findings for clear error and its legal conclusions de novo. Atlanta Athletic Club v. Commissioner, 980 F.2d 1409, 1411–12 [71 AFTR 2d 93-588] (11th Cir. 1993). “A finding of fact is clearly erroneous if the record lacks substantial evidence to support it, so that our review of the entire evidence leaves us with the definite and firm conviction that a mistake has been committed.” Atlanta Athletic Club, 980 F.2d at 1411–12 (citations and quotation marks omitted).

2. Analysis
The Commissioner concedes that Creel's criminal restitution obligation was satisfied, and thus, his criminal tax liabilities were discharged. The Commissioner contends, however, that the satisfaction of Creel's criminal restitution obligation has no bearing on the Commissioner's ability to pursue Creel for additional civil tax liabilities.

In the abstract, the Commissioner is correct. As a general rule, the government can recover criminal penalties from an individual in a criminal prosecution and can recover additional civil penalties in a civil proceeding. See generally United States v. Barnette, 10 F.3d 1553, 1558 (11th Cir. 1994); Hickman v. Commissioner of Internal Revenue, 183 F.3d 535, 537–38 [84 AFTR 2d 99-5346] (6th Cir. 1999). Moreover, an order to pay restitution under 18 U.S.C. § 3663 is a criminal penalty rather than a civil penalty. United States v. Johnson, 983 F.2d 216, 220 (11th Cir. 1993). Indeed, the restitution statute used in the instant case expressly contemplates that a civil claim may be brought subsequent to a criminal conviction by providing for an offset for the amount of restitution paid in the criminal case against any damages recovered in the civil proceeding. 18 U.S.C. § 3663(e)(2).

The key problem with the Commissioner's position is that it fails to take into account the unique facts and the nuances of the instant case, most notably the language of the restitution judgment and the actions of the U.S. Attorney.

As a condition of probation, the district court ordered Creel to pay restitution to the IRS. As stated in the PSI, the plea agreement mandated: “[a]s a condition of probation, the Court shall impose a condition requiring restitution in the amount of $83,830 to the Internal Revenue Service, in addition to any interest and penalties which may be imposed by the Internal Revenue Service.” (emphasis added). In turn, the judgment in the criminal case set the amount of restitution at “$83,830 plus any applicable penalties and interest.” (emphasis added). Thus, as the Tax Court found, the restitution amount specifically included the civil [pg. 2005-5491] penalties that the Commissioner now seeks to recover. 12

Creel made his monthly restitution payments totaling $83,830. As a condition of probation, Creel still owed the “applicable penalties and interest.” Rather than pursue these additional civil penalties, the U.S. Attorney undertook two key actions. First, the U.S. Attorney issued a satisfaction of judgment which stated that “[t]he assessment, fine, and/or restitution imposed by the Court in the above styled case having been paid or otherwise settled...” (emphasis added). Second, the U.S. Attorney signed a cancellation and release of lien which stated that “[t]he debt secured...having been paid in full, said lien is hereby fully released, satisfied, discharged, and cancelled.” (emphasis added).

Creel argues that because the government elected to include his civil tax liabilities as part of the restitution order, when the U.S. Attorney discharged the restitution obligation, Creel's civil tax liabilities were also extinguished. We agree. Creel testified in the Tax Court proceeding that he understood his payment of $83,830 constituted a full payment of his tax liabilities. He also testified to the effect that he understood the release issued by the U.S. Attorney discharged all that he owed. The Commissioner did not refute Creel's testimony or show that the release of lien and satisfaction of judgment should be viewed as anything other than a release of all liabilities contained in the restitution order. As the Tax Court noted:

Although the record does not establish why the USAO treated the restitution order satisfied for the lesser amount, the record does establish that the sentencing court considered petitioner to be a man of limited wealth. A reasonable inference is that the USAO believed that the receipt of petitioner's civil taxes (exclusive of penalties and interest) in the amount of $83,830 was the most that it could recover from petitioner and agreed with him following his sentencing that his timely payment of that amount would serve to settle his civil tax liability of $83,830 plus related penalties and interest.
Upon review of the record, we conclude that the Tax Court did not err in finding that Creel's civil tax liabilities were settled by virtue of the $83,830 payment and the actions of the U.S. Attorney. Thus, although not compelled to do so, the government discharged Creel's civil tax liabilities as part of the criminal case.

The Commissioner also argues that the Tax Court erred in applying certain legal principles. The Commissioner first contends that the Tax Court erred in concluding that the U.S. Attorney had the authority to compromise Creel's civil tax liabilities. Without such authority, the U.S. Attorney's actions would not bind the government, even if he intended to compromise Creel's civil tax liabilities. United States v. Beebe, 180 U.S. 343, 351 (1901); Klein v. Commissioner, 899 F.2d 1149, 1152 [65 AFTR 2d 90-1039] (11th Cir. 1990). “It is well settled that persons dealing with a governmental agent must take notice of the agent's authority and that any unauthorized acts taken by the agent do not bind the government. United States v. Killough, 848 F.2d 1523, 1526 (11th Cir. 1988).

Under 26 U.S.C. § 7122(a), “the Attorney General or his delegate may compromise” any “civil or criminal case arising under the internal revenue laws” after “reference to the Department of Justice for prosecution or defense.” In turn, the Attorney General's authority to compromise any “civil or criminal case arising under the internal revenue laws” has been delegated to the Assistant Attorney General, Tax Division. 28 C.F.R. §§ .70, 0.160. Moreover, some civil claim settlement authority has been re-delegated to U.S. Attorneys. Tax Div. Directive No. 105, § 7, 60 Fed. Reg. 31244 (1995), 28 C.F.R., Appendix to [pg. 2005-5492] Subpart Y of Part O. 13 Although the Commissioner acknowledges that some civil settlement authority has been re-delegated to U.S. Attorneys, he argues that Creel fails to show that the formal requirements of a re-delegation were satisfied.

Under the unique facts of this case, we are not persuaded by the Commissioner's position. Importantly, the Commissioner concedes that the U.S. Attorney had authority to settle Creel's criminal restitution obligation. And here the restitution obligation was drafted such that Creel's civil tax liabilities were inextricably intertwined with his criminal tax liabilities, which together formed a condition of his probation. Because the U.S. Attorney had the authority to settle the criminal side of the case, and the civil penalties were consolidated within the criminal case, the U.S. Attorney acted within the scope of his authority. Cf. In re Knopf v. United States, 190 B.R. 647, 651–52 (Bankr. D. Mont. 1995) (noting that “it does not bode well for an IRS attorney to...challenge the authority of the Assistant U.S. Attorney to settle a tax prosecution case by a court accepted Plea Agreement.”).

Finally, the Commissioner argues that the Tax Court erred in applying the missing witness inference. The Tax Court inferred from the Commissioner's failure to present a witness from the DOJ or U.S. Attorney's Office that any relevant testimony from such a witness would have been unfavorable to the Commissioner. The Tax Court noted that the failure to call such a witness was peculiar given that the Commissioner listed a representative from the U.S. Attorney's Office or DOJ on its pre-trial witness list.

“It is well settled that the production of weak evidence when strong is available can lead only to the conclusion that the strong would have been adverse.” Raley, Inc. v. Kleppe, 867 F.2d 1326, 1329 (11th Cir. 1989); see also Mammoth Oil Co. v. U.S., 275 U.S. 13, 52 (1927). The Commissioner argues that the use of the inference was improper because Creel had the burden to show that his civil tax liabilities were compromised, and the Commissioner's failure to call a witness cannot by itself satisfy Creel's burden. 14 That argument assumes that the Tax Court relied solely on the missing witness inference. A review of the record reveals that such an assumption is incorrect. The Tax Court simply relied on the missing witness inference along with the other evidence presented in the case. See Steiner v. Commissioner, 350 F.2d 217, 223 [16 AFTR 2d 5174] (7th Cir. 1965). Creel proffered other evidence to support the existence of a compromise: (1) Creel's uncontradicted testimony that he believed his payment of $83,830 fully satisfied all of the amounts he owed to the government; and (2) evidence showing that the U.S. Attorney issued a release of lien and satisfaction of judgment. Under these circumstances, we hold that there was nothing improper about the use of the missing witness inference.

For the foregoing reasons, we AFFIRM.

AFFIRMED.


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1

The Tax Court sustained the Commissioner's proposed collection with respect to Creel's tax liabilities for 1985. Thus, the 1985 tax liabilities are not at issue in this appeal.
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2

The plea agreement itself is not in the record. The Presentence Investigation Report (PSI) issued by the U.S. Probation Office states the terms of the plea agreement.
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3

The tax returns showed the following unpaid taxes:

Year Tax Unpaid
---- ----------
1986 $23,287.00
1987 $9,514.96
1988 $15,974.75
1989 $15,148.34
1990 $10,425.95
1991 $9,479.16


Creel also filed a return for 1985 showing unpaid taxes of $18,772.16.
--------------------------------------------------------------------------------
4

The assessed penalties and interest were as follows:
Year Sec. 6651(a) Sec. 6654 Interest Total
---- ------------ --------- -------- -----
1985 $4,223.74 $1,396.73 $29,197.90 $34,818.37
1986 $5,239.65 $1,267.57 $23,477.31 $29,984.53
1987 $2,140.87 $578.13 $7,607.78 $10,326.78
1988 $3,594.32 $3,594.31 $9,531.87 $16,720.50
1989 $3,408.37 ----- $6,183.66 $9,592.03
1990 $2,345.83 ----- $2,488.77 $4,834.60
1991 $2,132.81 ----- $981.71 $3,114.52

--------------------------------------------------------------------------------
5

The amount of restitution was computed as follows:

Year Tax Amount
---- ----------
1986 $23,287
1987 $9,514.96
1988 $15,974.75
1989 $15,148.34
1990 $10,425.95
1991 $9,479.16

Total $83,830.00


The judgment stated that the restitution should be paid to the DOJ in monthly installments according to a schedule determined by the U.S. Probation Office.
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6

Prior to a levy, the IRS must give the taxpayer notice of an opportunity for a CDP hearing before the IRS Appeals Office. 26 U.S.C. § 6330(a).
--------------------------------------------------------------------------------
7

Includes fees and collection costs totaling $11.
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8

Includes fees and collection costs totaling $11 and reflects the application of a $1,500 payment and a $278.73 payment.
--------------------------------------------------------------------------------
9

Includes fee and collection costs totaling $11.
--------------------------------------------------------------------------------
10

Includes fee and collection costs totaling $11.
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11

The Tax Court sustained the proposed levy for the 1985 tax year because that year was not included in the restitution order. Thus, as noted earlier, the 1985 tax liabilities are not at issue in this appeal. The court also held that the Appeals Office did not abuse its discretion in rejecting Creel's proposal to make minimal monthly payments of $250.
--------------------------------------------------------------------------------
12

The Commissioner also argues that the “any applicable penalties and interest” portion of the restitution judgment was too vague to be legally enforceable. The fact that penalties and interest might be undetermined at sentencing does not make them legally ineffective, so long as the amount is eventually agreed upon by the parties or adjudicated. See United States v. Stoehr, 196 F.2d 276, 284 [41 AFTR 1190] (2d Cir. 1952). Here, there was no such need for agreement or adjudication because the penalties and interest were waived.
--------------------------------------------------------------------------------
13

The full text of the regulation states:
Section 7. Subject to the conditions and limitations set forth in Section 8 hereof, United States Attorneys are authorized to:
((A)) Reject offers in compromise of judgments in favor of the United States, regardless of amount;
((B)) Accept offers in compromise of judgments in favor of the United States where the amount of the judgment does not exceed $300,000; and
((C)) Terminate collection activity by his or her office as to judgments in favor of the United States which do not exceed $300,000 if the United States Attorney concludes that the judgment is uncollectible:
provided that such action has the concurrence in writing of the agency or agencies involved, and provided further that this authorization extends only to judgments which have been formally referred to the United States Attorney for collection.


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The Commissioner also argues that a witness was not called because he did not have adequate notice prior to the trial of Creel's theory of the case. Creel's pre-trial memorandum, however, specifically stated the relevant issue as whether “[he had] paid his tax liability in full” and argued that he paid as restitution the total amount of taxes owed in the amount of $83,830 and had received a satisfaction of judgment. Thus, there is no merit to this argument.