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CITE: Andrew M. House, et ux. v. Commissioner; 85 AFTR2d Par.
No. 2:99-2428-23AJ (January 10, 2000)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ANDREW M. HOUSE AND ANNA M. HOUSE,
COMMISSIONER OF INTERNAL REVENUE,
January 10, 2000
REPORT AND RECOMMENDATION
This civil action against the Commissioner of the Internal Revenue Service
(IRS) filed July 21, 1999, by two married tax payers proceeding pro se is before
the undersigned United States Magistrate Judge for a report and recommendation
on the parties' cross-motions to dismiss or for summary judgment. 28 U.S.C.
section 636(b). Both parties seek dismissal of the action.
The plaintiffs, Andrew M. House and Anna M. House, originally sought a
declaration from this court that certain IRS assessments against them are void,
that they are due monies from the IRS for taxes withheld wrongfully, an injunction
preventing the defendant from engaging in further collection activity against
the plaintiffs and the award of one million dollars ($1,000,000.00) in damages.
On September 27, 1999, the defendant filed his motion with exhibit asserting
among other things that this court lacks jurisdiction over the matter. The
plaintiffs were provided a copy of the motion and given an explanation of dismissal
and summary judgment procedures similar to that required by Roseboro v. Garrison,
528 F.2d 309(4th Cir. 1975) on September 30, 1999. On October 1, 1999, the
plaintiffs filed an objection to the motion to dismiss and their own motion
to dismiss with their own affidavit as well as copies of various income tax
returns and correspondence between the parties. Hence, it appears consideration
of the motions is appropriate.
A review of the pleadings before the court reveals the defendant's motion
should be granted for lack of jurisdiction and that the plaintiffs agree that
this court lacks jurisdiction.
This action arises out of the defendant's treatment of the plaintiffs'
1998 individual income tax return, a copy of which is attached to the plaintiffs'
It appears that on their 1998 Form 1040A tax return, the plaintiffs only
reported income in the amount of $4,954. As a result, the plaintiffs claimed
on the return that they owed no federal income tax liability and that they
were entitled to a refund of $2,075, representing the taxes withheld from Andrew
M. House's wages from Mt. Pleasant Radio Co. The plaintiffs did not include
on their 1040A the $29,455.93 in wages earned by Andrew M. House from Mt. Pleasant
Radio Co. and from which the $2,075 had been withheld. However, on an attachment
to their income tax return, the plaintiffs asserted that the wages earned by
the plaintiff from Mt. Pleasant Radio Co. were not "taxable" wages.
Nevertheless, based upon the Form W-2 attached to the plaintiffs' return
showing that Andrew M. House earned $29,455.93, the Internal Revenue Service
treated the plaintiffs' failure to include the $29,455.93 in income on the
plaintiffs' return as a clerical error, corrected the return, and made the
assessment of tax pursuant to Section 6213(b) of the Internal Revenue Code.
The IRS informed the plaintiffs of this change to their return and assessment
of tax in the amount of $3,356 by letter dated May 3, 1999. By letter dated
May 5, 1999, the plaintiffs challenged the assessment alleging that they are "NONIMAGRANT/NONRESIDENT
ALIEN NONTAXPAYERS" [sic] and therefore not "persons" subject
to federal income tax under the Internal Revenue Code.
In response on July 22, 1999, the defendant responded that the plaintiffs'
argument had consistently been rejected by the courts, and that further correspondence
on this subject would not receive a response. On July 23, 1999, apparently
before receiving the July 22 letter of the IRS, the plaintiffs commenced this
action seeking to recover the withheld income, an injunction against the defendant,
and other damages noted above.
As the defendant points out and as the plaintiffs apparently acknowledge
in their motion to dismiss, this action was brought in the wrong court. The
assessment complained of was denominated a clerical or mathematical error and
as a result no jurisdiction to review it lies in this court. Section 6213(b)(1)
of the Internal Revenue Code provides:
If the taxpayer is notified that, on account of a mathematical or clerical
error appearing on the return, an amount of tax in excess of that shown on
the return is due, and that an assessment of the tax has been or will be made
on the basis of what would have been the correct amount of tax but for the
mathematical or clerical error, such notice shall not be considered as a notice
of deficiency.., and the taxpayer shall have no right to file a petition with
Tax Court based on such notice, nor shall such assessment or collection be
prohibited by the provisions of subsection (a) of this section. Each notice
under this paragraph shall set forth the error alleged and an explanation thereof.
26 U.S.C. section 6213(b)(1).
A mathematical or clerical error includes "an entry on a return of
an item which is inconsistent with another entry of the same or another item
of such return." 26 U.S.C. section 6213(g)(2)(C).
Here the IRS treated the plaintiffs' omission of $29,455.93 in wages
earned by Mr. House on their Form 1040A as a mathematical or clerical error
because this omission was inconsistent with the Form W-2 prepared by Mt. Pleasant
Radio Co. that the plaintiffs had attached to their return. As a result, the
IRS changed the plaintiffs' return and assessed the plaintiffs $3,356 in income
tax, as provided for by Section 6213(b)(1). As required by Section 6312(b)(1),
this "change was detailed in writing" to the plaintiffs through the
IRS's May 3, 1999, letter.
In their complaint, the plaintiffs ask for judicial review under Section
7429(b) of the Internal Revenue Code with respect to what they believed was
a "jeopardy assessment" /1/ made against them.
Inasmuch as the assessment made against the plaintiffs was made pursuant
to Section 6213(b)(1), and was not a jeopardy assessment under Section 6861
of the Internal Revenue Code, this court lacks jurisdiction /2/ to consider
the plaintiffs' claim. Their complaint should be dismissed.
Additionally, the Anti-Injunction Act, 26 U.S.C. section 7421, bars plaintiffs'
request for injunctive relief against efforts by the defendant to collect taxes
from them. United States v. Regan, 465 U.S. 367, 376 (1984).
Accordingly, for the aforementioned reasons and upon the concurrence
of the parties, it is recommended that the complaint herein be dismissed for
want of subject matter jurisdiction.
Robert S. Carr
United States Magistrate Judge
Charleston, South Carolina
January 10, 2000
/1/ "If the Secretary believes that the assessment or collection of a
deficiency . . . will be jeopardized by delay, he shall, notwithstanding the
provisions of Section 6213(a), immediately assess such deficiency . . . and
notice and demand shall be made by the Secretary for payment thereof." 26
U.S.C. section 6861. If a jeopardy assessment is made the taxpayer may
be entitled to administrative review of the assessment pursuant to procedures
for in section 7429(b) and for judicial review under section 7429(b).
/2/ Likewise no substantial federal question is presented here because the
plaintiffs' claim that the are not "persons" within the meaning of
the IRS statutes as they are instead "citizens of the Sovereign State
of South Carolina" and cannot be taxed by the United States is frivolous
and has been universally rejected by the courts. See, e.g., United States
V. Hanson, 2 F.3d 942, 945 (9th Cir. 1993; United States v. Gerads, 999
1256 (8th Cir. 1993); United States v. Dawes, 874 F.2d 746, 750-751 (10th
Cir. 1989); In re Weatherlev, 169 B.R. E.D. Pa. 1994.
END OF FOOTNOTES
to Tax Protestor Exhibit