Unpublished Disposition, 844 F.2d 792 (9th Cir. 1988)

MEMORANDUM^** 

Edward and Rebecca Rutledge appeal pro se the district court's sua sponte dismissal of their action against various Internal Revenue Service agents. The district court dismissed the action prior to the issuance of a summons on grounds that it was frivolous and that the defendant IRS agents were immune from suit. We affirm.

The district court may sua sponte dismiss a complaint prior to the issuance of a summons if the court clearly lacks subject matter jurisdiction or lacks jurisdiction because the claim is wholly insubstantial and frivolous. Franklin v. State of Oregon, 662 F.2d 1337, 1342-43 (9th Cir. 1981). The district court properly found this suit to be frivolous.

The Rutledges challenge the conduct of various IRS employees exclusively in the performance of their official duties. A suit against an IRS employee in his or her official capacity constitutes a suit against the United States. Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985). Because the government has not expressly waived its immunity and consented to be sued under such circumstances, the district court's dismissal was proper. Id.

The district court's dismissal of this case did not deprive the Rutledge's of their right to a jury trial. Where suit is barred by the doctrine of sovereign immunity, dismissal is required. Id. Furthermore, the seventh amendment right to a jury trial does not extend to actions against the United States. See Hudson v. United States, 766 F.2d 1288, 1292 (9th Cir. 1985).

The Rutledges' argument that the district court's dismissal violated their due process rights because it deprived them of an opportunity to be heard is foreclosed by well-settled law. The Rutledges' "due process rights are adequately protected by the statutory scheme" which permits individuals 1) to contest tax liability in the tax court prior to paying the disputed amount or 2) to pay the disputed amount and sue for a refund in federal district court or the court of claims. Stonecipher v. Bray, 653 F.2d 398, 403 (9th Cir. 1981), cert. denied, 454 U.S. 1145 (1982).

The Rutledges also argue that they are not liable for federal income tax because Congress never enacted a law imposing a tax on the property and earnings of individuals. The Internal Revenue Code imposes taxes on the income of "every individual." See 26 U.S.C. § 1; see also United States v. Studley, 783 F.2d 934, 937 (9th Cir. 1986) (despite defendant's contention that she was an absolute, freeborn, and natural individual, she was still a "person" under the Internal Revenue Code). The fact that the Rutledges have not "consented" to such a tax is irrelevant. " [T]axes are enforced exactions, not voluntary contributions." Syufy v. United States, 818 F.2d 1457, 1465 (9th Cir. 1987).

The contention that prejudice is indicated by the district court's statement in the order of dismissal that the Rutledges' action was "no more than a disguised attempt ... to avoid payment of taxes" lacks merit. A federal judge may be disqualified "if a reasonable person with knowledge of all the facts would conclude that the judge's impartiality might be questioned." Sakellar v. Lockheed Missiles and Space Co., 765 F.2d 1453, 1457 (9th Cir. 1985), cert. denied, 474 U.S. 1084 (1986). The Rutledges have presented no evidence that the district judge was either personally biased against them or that he formed an opinion about the merits of the case from an extrajudicial source. Id.

Finally, because it is within the district court's discretion to assess attorney's fees under Fed. R. Civ. P. 11, it was not an abuse of discretion to warn the Rutledges about the possible imposition of such fees.

AFFIRMED.