Aran v. The Department of Treasury

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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RAYMOND ARAN,

Plaintiff,

MEMORANDUM & ORDER

-against- 21-CV-4748(EK)(LB)

DEPARTMENT OF TREASURY and INTERNAL

REVENUE SERVICE,

Defendants.

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ERIC KOMITEE, United States District Judge:

Pro se plaintiff Raymond Aran has filed a pleading

titled “Petitioner Request to Dismiss for Lack of Jurisdiction”

that I construe as a complaint. ECF No. 6. In essence,

Plaintiff argues that the defendant — the U.S. Treasury — lacks

“jurisdiction” to tax him. For the reasons set forth below, the

action is dismissed.

I. Background

Plaintiff appears to challenge his obligation to pay

income tax. The underlying facts of that challenge are not set

forth in the complaint itself, but some details emerge from

various exhibits attached to the complaint. The exhibits

indicate that plaintiff owes income tax to New York State and to

the Internal Revenue Service, and that he has been served with

notices that his property is subject to levy or seizure because

of his failure to pay. Compl. at 55-58, 74-82. The remedy he

seeks is also unclear, but it appears that Plaintiff wishes this

Court to declare that the state and federal government do not

have “jurisdiction” to tax him.

II. Legal Standard

In reviewing Plaintiff’s complaint, the Court is

mindful that the submissions of a pro se litigant must be

construed liberally and interpreted “to raise the strongest

arguments that they suggest.” Triestman v. Federal Bureau of

Prisons, 470 F.3d 471, 474 (2d Cir. 2006). Notwithstanding the

liberal pleading standard afforded to pro se litigants, however,

plaintiff must establish that the court has subject matter

jurisdiction over the action. Lyndonville Sav. Bank & Trust Co.

v. Lussier, 211 F.3d 697, 700–01 (2d Cir. 2000). “[S]ubject-

matter jurisdiction, because it involves the court’s power to

hear a case, can never be forfeited or waived.” United States

v. Cotton, 535 U.S. 625, 630 (2002). The subject-matter

jurisdiction of the federal courts is limited: Federal

jurisdiction exists only when a federal question is presented or

when there is diversity of citizenship and the amount in

controversy exceeds $75,000. See 28 U.S.C. §§ 1331-32. Federal

courts “have an independent obligation to determine whether

subject-matter jurisdiction exists, even in the absence of a

challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S.

500, 514 (2006) (internal citation omitted). When subject-

matter jurisdiction is lacking, the court must dismiss the

complaint. Id.; see also Fed. R. Civ. P. 12(h) (3).

Moreover, even when, as here, a plaintiff has paid the

filing fee, a district court may dismiss the case sua sponte if

it determines that the action is frivolous. Fitzgerald v. First

Fast Seventh Street Tenants Corp., 221 F.3d 362, 363-64 (2d Cir.

2000). An action is frivolous as a matter of law when it is

“based on an indisputably meritless legal theory” — that is,

when it “lacks an arguable basis in law .. . or a dispositive

defense clearly exists on the face of the complaint.”

Livingston v. Adirondack Beverage Co., 141 F.3d 434, 473 (2d

Cir. 1998). This standard authorizes dismissal when, among

other things, it is “clear” that the defendant is immune from

suit. Montero v. Travis, 171 F.3d 757, 760 (2d Cir. 1999).

III. Discussion

A. The United States is the Actual Party in Interest

As an initial matter, neither the IRS nor the

Department of the Treasury are subject to suit here. The IRS is

an agency of the United States. See 26 U.S.C. 7801 (a) (1)

(“[T]he administration and enforcement of [Title 26 of the

United States Code] shall be performed under the supervision of

the Secretary of the Treasury.”). No suit may proceed against

the IRS either for a refund of tax allegedly improperly

collected or for monetary or injunctive relief because Congress

has not authorized suit against the IRS in its own name. See

generally Blackmar v. Guerre, 342 U.S. 512, 515 (1952) (holding

that Congress must give express authorization for an agency to

be sued in its own name); Calixte v. IRS.gov, No. 21-CV-1419,

2021 WL 3847935, at *1 (E.D.N.Y. Aug. 26, 2021) (“Congress has

not authorized suit against the IRS.”) (citing Liffiton v.

Keuker, 850 F.2d 73, 77 (2d Cir. 1988)); In re Hall, 629 B.R.

124, 141 (Bankr. E.D.N.Y. 2021) (“[W]here a plaintiff –

including a taxpayer – seeks to assert a claim concerning its

tax liability, it is the United States, rather than its agency

the IRS that may be sued.”).

Therefore, neither the IRS nor the Treasury Department

is a proper defendant here; the Court treats this lawsuit as one

against the United States. See e.g., Dubay v. IRS, No. 3:96-CV-

1399, 1997 WL 76577, at *2 (D. Conn. Feb. 7, 1997).

B. Subject Matter Jurisdiction

1. Sovereign Immunity

With the United States identified as the appropriate

defendant, the case must be dismissed on the basis of its

sovereign immunity. “The United States, as sovereign, is immune

from suit save as it consents to be sued.” United States v.

Sherwood, 312 U.S. 584, 586 (1941); see also Dotson v. Griesa,

398 F.3d 156, 177 (2d Cir. 2005) (“[The] shield of sovereign

immunity protects not only the United States but also its

agencies and officers when the latter act in their official

capacities.”). Absent such a waiver, courts have no subject

matter jurisdiction over cases against the United States

government. Adeleke v. United States, 355 F.3d 144, 150 (2d

Cir. 2004).

A waiver of sovereign immunity “must be unequivocally

expressed in statutory text, and cannot simply be implied.” Id.

at 150 (internal citations omitted). Aran’s complaint invokes

no Internal Revenue Code provision or other statute on point.

And while the IRC does permit an action against the Service for

“wrongful” collection of taxes under certain circumstances,

26 U.S.C. § 7433, the relevant statute also requires a plaintiff

to exhaust administrative remedies as a prerequisite to suit in

federal district court. See Roberts v. I.R.S., 468 F. Supp. 2d

644, 649 (S.D.N.Y. 2006). Aran has not pleaded that he pursued,

let alone exhausted, any administrative remedies. Nor has he

alleged the other elements of a Section 7433 claim. Aran has

therefore failed to establish that this action is within the

scope of the Government’s consent to be sued. His suit is

barred by the doctrine of sovereign immunity.

2. The Anti-Injunction Act

In addition, the Anti–Injunction Act (“AIA”) permits

the United States to assess and collect taxes without judicial

intervention. Bob Jones Univ. v. Simon, 416 U.S. 725, 736–37

(1974); Black v. United States, 534 F.2d 524, 526–27 (2d Cir.

1976). Specifically, it states that, excluding certain

exceptions not implicated here, “no suit for the purpose of

restraining the assessment or collection of any tax shall be

maintained in any court by any person, whether or not such

person is the person against whom such tax was assessed.” 26

U.S.C. § 7421(a). The Supreme Court has held that this

statutory provision bars suit against the United States for an

injunction against the collection of taxes. Enochs v. Williams

Packing & Nav Co., 370 U.S. at 6. Therefore, to the extent that

Plaintiff requests injunctive relief preventing the IRS from

collecting on his tax liabilities, his request is barred by the

Anti–Injunction Act.

3. The Declaratory Judgment Act

Plaintiff essentially asks the Court to declare that

he is not subject to the provisions of the Internal Revenue

Code. Because the Plaintiff requests that the Court make

declarations regarding the payment of his taxes, his declaratory

judgment claims are barred by the Declaratory Judgment Act and

dismissed for lack of jurisdiction. While the Declaratory

Judgment Act empowers courts to “declare the rights and other

legal relations of any interested party seeking such

declaration,” it expressly excepts cases “with respect to

Federal taxes.” 28 U.S.C. § 2201(a); S.E.C. v. Credit Bancorp,

Ltd., 297 F.3d 127, 137 (2d Cir. 2002) (“Thus, whether or not

that Act waives the sovereign immunity of the United States with

respect to other types of actions, it explicitly excludes from

any such waiver the power to declare rights or obligations with

respect to federal taxes.”).

Accordingly, to the extent Plaintiff seeks declaratory

relief, the Court lacks jurisdiction under the Declaratory

Judgment Act. Calen v. United States, No. 18-CV-182183, 2020 WL

3129063, at *8 (E.D.N.Y. Mar. 13, 2020), report and

recommendation adopted, No. 18-CV-2183, 2020 WL 2537262

(E.D.N.Y. May 19, 2020).

C. Frivolous Claim

Plaintiff's complaint sounds in the familiar refrain

of the so-called sovereign citizen, with its references to

Plaintiff as a “secured party,” “sui juris,” “non-participant in

any government programs,” its attachments of the “discharge” of

his birth certificate and social security card and UCC financing

statements, and arguments that are consistent with a sovereign

citizen ideology. As the Second Circuit has explained, “[t]he

sovereign citizens are a loosely affiliated group who believe

that the state and federal governments lack constitutional

legitimacy and therefore have no authority to regulate their

behavior.” United States v. Ulloa, 511 F. App'x 105, n. 1 (2d

Cir. 2013). They seek to “delay proceedings” by “raising

numerous — often frivolous — arguments, many alleging that the

Courts or the Constitution lack any authority whatsoever.”

United States v. McLaughlin, 949 F.3d 780, 781 (2d Cir. 2019).

Courts have resoundingly rejected the particular

sovereign-citizen type of claim Plaintiff appears to advance

here, namely, that his status as a sovereign citizen relieves

him of his obligation to pay taxes. See, e.g., Bey v. State of

Indiana, 847 F.3d 559, 559-61 (7th Cir. 2017) (referring to

attempts to evade taxation under sovereign citizen theories as

“frivolous”); United States v. Mundt, 29 F.3d 233, 237 (6th Cir.

1994) (dismissing “free sovereign” type of arguments in a

federal tax case as “completely without merit” and “patently

frivolous”); see also Cheek v. United States, 498 U.S. 192, 199

(1991) (rejecting sovereign-citizens’ argument that the income

tax is unconstitutional). As the case law makes clear,

Plaintiff’s claim lacks an arguable legal basis and must be

dismissed as frivolous.

D. Leave to Amend Denied as Futile

Any amendment in this case would be futile. See

Russell v. Aid to Developmentally Disabled, Inc., 753 F. App'x

9, 15 (2d Cir. 2018) (“Leave to amend may properly be denied if

the amendment would be futile.”) (citing Anderson News, L.L.C.

v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012)). First,

the sovereign immunity, the Anti-Injunction Act, and the

Declaratory Judgment Act bars Aran’s suit against the United

States, and he could not possibly overcome the jurisdictional

bar by pleading additional facts. Second, his entire complaint

is derived from various sovereign citizen theories, which have

already been held to be “patently frivolous.” United States v.

Studley, 783 F.2d 934, 937 n. 3 (9th Cir. 1986) (noting that

theories of immunity to taxation based on sovereign citizenship

had been “thoroughly rejected by every branch of the government

for decades” and “such utterly meritless arguments” were “the

basis for serious sanctions [to be] imposed on civil litigants

who raise them”).

IV. Conclusion

For the reasons set out above, the complaint is

dismissed for lack of subject matter jurisdiction, see Fed. R.

Civ. P. 12 (h)(3), and as frivolous. See Fitzgerald, 221 F.3d at

363-64; Livingston, 141 F.3d at 473; Montero, 171 F.3d at 760.

Although Plaintiff paid the filing fee to commence

this action, the Court certifies pursuant to 28 U.S.C. §

1915(a)(3) that any appeal would not be taken in good faith and

therefore in forma pauperis status is denied for the purpose of

any appeal. Coppedge v. United States, 369 U.S. 438, 444–45

(1962). The Clerk of Court is respectfully directed to correct

the caption to reflect the fact that Plaintiff is suing both the

IRS and the Department of Treasury, enter judgment, and close

this case. The Clerk of Court is also respectfully directed to

send a copy of this order to Plaintiff by mail and to note the

mailing on the docket.

SO ORDERED.

__/s/ Eric Komitee__________

ERIC KOMITEE

United States District Judge

Dated: February 8, 2022

Brooklyn, New York