United States of America v. Lund, No. 6:2011cv06237 - Document 34 (D. Or. 2012)
Court Description: OPINION and ORDER: Granting Motion 29 for Judicial Notice; Denying Motion to Dismiss Case for Lack of Jurisdiction 15 ; Denying Motion to Dismiss Case for Lack of Jurisdiction 25 ; Denying Motion for Reconsideration 21 ; Granting Motion 26 for Judicial Notice; Granting Motion 27 for Judicial Notice; Granting Motion 28 for Judicial Notice. Respondent is Order to appear on April 25, 2012 at 9:30 am in Courtroom 2 at the United States Courthouse in Eugene, Oregon. At that time, respondent is Ordered to Show Cause as to why he should not be compelled to obey the IRS Summons served on him April 26, 2011. Signed on 2/8/12 by Chief Judge Ann L. Aiken. (ljb)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON UNITED STATES OF AMERICA, Petitioner, v. ROBERT A. LUND, Respondent. S. Amanda Marshall United States Attorney Tim Simmons Assistant United States Attorney 405 E. 8th Avenue, Suite 2400 Eugene, Oregon 97401 Attorneys for petitioner Robert A. Lund P.O. Box 151 Albany, Oregon 97321 Pro se respondent Page 1 OPINION AND ORDER Civil No. 11-6237-AA OPINION AND ORDER AIKEN, Chief Judge: Pro se respondent Robert Lund filed two motions to dismiss for lack of jurisdiction. For the reasons set forth below, respondent's motions are denied. BACKGROUND This matter arises out of petitioner the United States of America's: civil investigation into respondent's income tax liability for 2001 through 2008, for which he has not filed federal income tax returns. Pursuant to this investigation, Revenue Agent Rae Cook ("Agent Cook") served respondent with an IRS administrative summons ("Summons") to produce certain designated records, and to appear in court on May 16, 2011, to provide testimony regarding such records. Respondent, however, failed to appear. a petition to As such, on July 27, 2011, petitioner led respondent. In response to this petition, Order to Show Cause on October 19, enforce 2011; the Summons against this Court issued an a hearing was held on November 8, 2011. Prior to the hearing, respondent filed a "Motion to Dismiss for Lack of Jurisdiction For Want of 'appropriate process'" ("first motion to dismiss") and a "Motion to Deny Summons Enforcement." the hearing, this Court denied respondent's motions. At See Transcript of Show Cause Hearing ("Transcript") at 32, Nov. 8, 2011 (doc. 20); see also Order on Motions to Dismiss ("Order") at 8, December 14, 2011 (doc. 22). I As acting though the Internal Revenue Service ("IRS"). Page 2 - OPINION AND ORDER After the hearing, respondent filed the following additional motions: 1) "Motion to Dismiss For Lack of Jurisdiction For Want of 'appropriate process' of the district court" ("second motion to dismiss"); 2) "Motion to Dismiss For Lack of Jurisdiction For Want of 'appropriate process' Because of the ex parte Conduct" ("third motion to dismiss"); 3) "Objection and Memorandum at Law,,2 i 4) "Motion to Take Judicial Notice of Law in the Decision of the Supreme Court of the United States in Flint v. Stone Tracy Co."; 5) "Motion to Take Judicial Notice of Law in the Decision of the Supreme Court of the United States in Stanton v. Baltic Mining Co."; 6) "Motion to Take Judicial Notice of Law in the Decision of the Supreme Court of Pacific R. Co."; and 7) the United States in Brushaber v. Union "Objection to Assumption of Facts Not in Evidence and Motion to Take Judicial Notice of Law in the Federal Statutes of Title 26 Establishing the Enforceab Payment of Tax." ability for Petitioner filed a response only in regard to respondent's third motion to dismiss. 2 Respondent filed an objection to this Court's use of the Powell ctors in assessing whether petitioner had engaged in the appropriate process. See U.S. v. Powell, 379 U.S. 48, 57-58 (1964) (outlining requirements for administrative summons enforcement). As such, the Court construes respondent's objection as a motion for reconsideration of his first motion to dismiss and "Motion to Deny Summons Enforcement." Page 3 - OPINION AND ORDER DISCUSSION Respondent contends that this Court committed a plethora of allegedly improper actions, each of which divests it of jurisdiction. I. Preliminary Matter To support his arguments in favor of dismissal, requests that this Court take judic Tracy Co., 220 U.S. 107 (1911); respondent 1 notice of: Flint v. Stone Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916); Stanton v. Baltic Mining Co., 240 U.S. 103 (1916) i and 26 U.S.C. §§ 1441, 1442, 1443, 1461, 770l. Judicial notice may be taken at any stage in the proceedings. Fed. R. Evid. 201(f). A judicially noticed fact "must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201 (b) . The Moreover, relevant all of facts the in this documents case that are largely respondent undisputed. seeks j udic 1 notice of are statutes or case law, which are already part of the public record, and are therefore capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. judicial notice. Accordingly, these documents are capable of The Court, however, is not bound by respondent's interpretation of the law. 1077, 1079 (9th Cir. 2010) Page 4 - OPINION AND ORDER See Rodriguez v. Holder Jr., 619 F.3d (per curiam). Further, the Court notes that the law cited to by respondent is mostly irrelevant to this dispute; to the extent that Brushaber and Stanton are relevant, position. See they are antithetical to respondent's Brushaber, 240 U.S. at 25 (upholding the constitutionality of the federal income tax under the Revenue Act 1913, which was enacted pursuant to Article I, section 8, clause 1 of, and the Sixteenth Amendment to, the United States Constitution); Stanton, 240 U.S. at 112-3 (same); see also Martin v. Comm'r, 756 F.2d 38, 40 (6th Cir. 1985) (discussing Brushaber and holding that the federal income tax applies to individual wage earners). Regardless, respondent's motions for judicial notice are granted. II. Second Motion to Dismiss for Lack of Jurisdiction Respondent asserts that this Court 1) petitioner cks jurisdiction because: iled to follow the proper procedure in issuing the Summons; 2) Magistrate Judges do not have the power to enforce an administrative summons; 3) a written report was never issued in regard to his first motion to dismiss and "Motion to Deny Summons Enforcement"; and 4) the Court "failed to demonstrate the required impartiality" by "preventing the Respondent from asking certain and specific revealing questions Second Mot. Dism. 2-4, 9. of the Revenue Agent." Resp' t' s As such, respondent's second motion to dismiss is, in part, a reiteration of his first motion to dismiss. As explained at the hearing and restated in the Order, this Court has jurisdiction to enforce administrative summonses. U.S.C. § 7402(b) i 26 U.S.C. § 7604(a). Page 5 - OPINION AND ORDER 26 To obtain such enforcement, the "IRS must show that: 1) the investigation will be conducted for a legitimate purpose; purpose; 3) the 2} the inquiry will be information sought is not relevant already to such wi thin the Commissioner's possession; and 4} the administrative steps required by the Internal Revenue Code Inc. v. U.S., 238 F.3d ("IRC") have been followed. 1076, 1081-82 (9th Cir. Lidas, 2001) (c ing Powell, 379 U.S. at 57-8). Here, petitioner filed a petition for enforcement accompanied by the declaration of Agent Cook, Powell elements had been met. who testified that all of the See Pet' r' s Summons Ex. A ("Cook Declo"), enen 2-3, 12-3. Pet. To Enforce IRS Therefore, pet ioner demonstrated that the appropriate process was followed in issuing the Summons. Crystal v. United States, 172 F.3d 1141, 1144 (9th Cir. 1999) (affidavit of the investigating revenue agent, asserting that the Powell requirements have been satisfied, is sufficient to establish a prima cie case). Respondent was then opportunity to rebut petitioner's prima facie case; however, was unable overcome this "heavy given an respondent, burden. " Id. Accordingly, respondent's first motion to dismiss was denied. Order at 5-6. Respondent has introduced petitioner's allegedly falla no new ous process. facts which relate to As such, to the extent that respondent is merely challenging again Agent Cook's issuance of the Summons, his second motion to dismiss fails. While unclear, the remainder of plaintiff's motion appears to be based on three premises: Page 6 OPINION AND ORDER that a written Order addressing his pre-hearing Magistrate invalid; motions Judge and was never renders the Court the is issued; the summons not involvement enforcement impartial because of a proceedings it limited respondent's direct examination of Agent Cook at the hearing. As a preliminary matter, it should be noted that none of these matters bear on this Court's jurisdiction. respondent's assertions are without merit. in fact, immaterial Article First, this Court did, issue a written Order addressing respondent's motions. See generally Order. is Regardless, III to of Second, the authority of a Magistrate Judge these the proceedings, Constitution as and, I was appointed accordingly, am under not a Magistrate. Third, the fact that respondent was prevented from asking certain questions of Agent Cook has no bearing on this Court's impartiali ty. respondent As explained at the hearing, sought to ask related to the questions that whether Agent Cook was delegated with the proper authority to issue the Summons, which is a legal determination and, as such, "has nothing to do with any factual basis information." on which her Transcript at 14. testimony would give additional Thus, it was unnecessary for the Court to hear testimony from Agent Cook in order to determine whether the Summons was enforceable, as she had already stipulated to the relevant facts under penalty of perjury in her declaration. See Cook Decl. ~~ 2 3, 12-3. to dismiss is denied. Page 7 - OPINION AND ORDER Therefore, respondent's second motion III. Third Motion to Dismiss for Lack of Jurisdiction Respondent's third motion to memorandum totaling 111 pages. prior approval to file an dismiss is supported a Because respondent did not seek extended brief, the Court was required to examine the first 35 pages of his memorandum. 7-2(b). by only See LR Regardless, because respondent is proceeding pro se, and because petitioner did not object to respondent's extended filing, the Court considered the entire brief. In his third motion to dismiss, respondent contends that this Court lacks jurisdiction because it failed appropriate process in enforcing the Summons. argues that this communication. Court lacks to follow the Further, respondent jurisdiction due to an ex parte In addition, respondent asserts numerous arguments as to why he is not required to pay federal income taxes. A. Appropriate Process To the extent that respondent is once again reprising those arguments already raised in his previous motions, his third motion to dismiss is denied. further motions or Furthermore, the Court will not consider any obj ections challenging matters that it has previously addressed and ruled upon. B. Ex Parte Communication Respondent argues that this Court does not have jurisdiction because improper ex parte communication occurred when he did not receive a copy of petitioner's opposition (the "Opposition") to his first motion to dismiss and "Motion to Deny Summons Enforcement." On November 2, 2011, a copy Page 8 - OPINION AND ORDER the Opposition was mailed to respondent's last 5 (b) (2) (C) . See Pet' r' s November 30, 2011, Id. known Accordingly, December 2, Resp. pursua~t to to Third Mot. Fed. R. Civ. Dism. P. Ex. 1. On the mailed copy was returned as "unclaimed. a 2011. address second copy was See Pet'r's Resp. mailed to respondent to Third Mot. Dism. u on Ex. 2. Petitioner has received no indication that the December 2 letter was not properly received. As such, petitioner effectuated service on November 2. Fed. R. Civ. Thus, the P. 5(b) (2) (C) fact Opposition that See ("service is complete upon mailing respondent did not receive a U ). copy of the prior to the November 8, 2011 hearing is irrelevant, especially since this failure was due to his choice to refuse acceptance. Further, respondent eventually received a copy of the Opposition. In addition, respondent was present at the November 8 hearing and was provided a full opportunity to address petitioner's arguments before the Court. assertions, the record Therefore, reveals that contrary to respondent's petitioner has not been communicating with the Court outside of respondent's presence and wi thout notice. As such, respondent's motion is denied to the extent that it is based on ex parte communication. C. Federal Income Tax The remainder of respondent's memorandum is an indictment of the federal income respondent seems to tax system. Whi difficul t to decipher, arguing that the IRC does not explicitly Page 9 - OPINION AND ORDER personal "wages," only income 3 ¢ provide for the taxation such, respondent citizens, as appears residents to be contending of states, constitutional federal jurisdiction, t accordingly, that are United "not As States within the torial or otherwise" and, "are not legitimate taxable subjects of the federal government." Resp't's Memo. Supp. of rd Mot. Dism. 19-20, 41-3, 62-6, 81. Respondent's contentions misconstrue the law. Amendment, as codified in the IRC, The Sixteenth authorizes a direct non-apportioned income tax on resident United States citizens. See Wilcox v. Comm'r, 848 F.2d 1007, 1008 n. 3 ( h Cir. 1988); 26 U.S.C. l{a)i United States v. Nelson (In re Becraft), 885 F.2d 547, 548 (9th Cir. 1989) ("the Supreme Court courts have both implic and the lower federal ly and explicitly recognized the Sixteenth Amendment's authorization of ... [an] income tax on United States citizens residing in the United States and thus the validity of the federal income tax laws as applied to such citizens"). Thus r every individual person who is a citizen of the United States must pay a federal on "all income from whatever source derived" and file an income tax return, where that income exceeds certain minimal levels. See 26 U.S.C. § 6012 (a) (1) i 26 U.S.C. § 3Respondent defines "income" as earnings "derived from the constitutional federal territorial and subject matter jurisdictions," which only includes "earnings of the corporations, the foreign persons in the United States, 'income' from th~· u. S. territories . '.''- and '[ehose-]act'ivi ties specifically made subject to indirect taxation under Article I, 8, cl. 1 of the U.S. Constitution." Resp't's Memo. in Supp. of Third Mot. Dism. 62-4. Page 10 - OPINION AND ORDER § 61; 26 U.S.C. 1. § Personal wages are encompassed by the IRC's broad definition of income. See 26 U.S.C. § 61; see also Wilcox, 848 F.2d at 1008 ("wages are income," citing Carter v. Comm'r, 784 F.2d 1006, 1009 (9th Cir. 1986)). Further, the federal income tax system Rather, is not voluntary. Id. each taxpayer who is required to file a return must pay the income tax owed on or before the date the return is due, without assessment, notice, or demand. 26 U.S.C. 6151. § As such, arguments that to federal income "frivolous." taxation sons" or "wages" are not subject have consistently been rejected as See United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981); United States v. Studley, 783 F.2d 934, 937 (9th Cir. 1986); United States v. Jensen, 690 F.Supp.2d 901, 914 (D.Alaska 2010); Gomez v. United States, 2003 WL 21148901, *1 (9th Cir. May IS, 2003). In ,this area of law is so well settled that pro se litigants have been sanctioned for on appeal. sing identical arguments Nelson, 885 F.2d at 548-9; see also at 937 n. 3 (9th Cir. 1986) 783 F.2d ("advancement of such utterly me arguments is now the basis for serious sanctions impo litigants who raise them"). similarly rejected; There accordingly, t ss on civil ,respondent's arguments are respondent's third motion to dismiss is denied. IV. Motion to Reconsider Respondent objects to the application of the Powell factors in determining whether the Summons was enforceable. Specifically, respondent asserts that the application of Powell was Page 11 - OPINION AND ORDER improper because "Powell was a case about the compelled production of the books and records of a corporation [rather individual citizen, as in the instant matter." 2. Re than] an 't's Objection I disagree and note that there is no dispute that the Powell factors govern even where, as here, the taxpayer is an individual. Crystal, 172 F.3d at 1144-5. As such, respondent's motion for reconsideration is denied. CONCLUSION Respondent's motions for judicial notice (docs. 26-29) are GRANTED. Respondent's "Motion to Dismiss For Lack of Jurisdiction For Want 'appropriate process' of the district court" (doc. 15) and "Motion to Dismiss 'appropriate process' are DENIED. For Lack of Jurisdiction For Because of the ex parte Conduct" Want of (doc. 25) Furthermore, respondent's motion for reconsideration (doc. 21) is DENIED. Accordingly, respondent is ordered to appear on April 25, 2012 at 9:30am in Courtroom 2 at the Un Oregon. At that time, respondent is ordered to show cause as to should not be compell why ed States Courthouse in Eugene, to obey the IRS Summons served on him April 26, 2011. IT IS SO ORDERED. Dated this ~ February 2012. Ann Aiken United States District Judge Page 12 OPINION AND ORDER
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