The proposed class action detailed on this page was dismissed with prejudice on March 7, 2018 by way of a judgment entered in favor of the U.S. Department of Treasury and the IRS.
United States District Judge Edward M. Chen signed off on the order granting the government’s motion to dismiss after ruling that the plaintiff failed to establish standing to sue the Treasury and the IRS, key constitutional elements that must be satisfied to show an actual injury has been suffered.
“Smith has failed to address any of the constitutional elements in his papers; as the United States has pointed out, Smith has no actual injury,” the judge wrote in an eight-page order. “He filed his late 2001 Form 1040 and is not facing any collection efforts by the IRS thereon. Nor is there any threat of criminal prosecution for failure to file a tax return with respect to his 2001 taxes.”
Moreover, Judge Chen stated that the plaintiff, in a lawsuit against the United States, was required to show there was “both a waiver of sovereign immunity” and a “statutory authority” vesting the court with subject matter jurisdiction. Given the United States did not consent to the suit, and the plaintiff failed to “point to any statutory authority” giving the court jurisdiction, the plaintiff’s claims were barred by sovereign immunity, the judge ruled.
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A California man has filed a proposed class action against the United States Department of Treasury and the Internal Revenue Service (IRS) over the parties' alleged failure to respond within six months to a Claim for Abatement the plaintiff says he submitted on March 15, 2017.
The complaint outlines a saga between the plaintiff and the IRS dating back to April 2002, when the plaintiff reportedly failed to timely file his 2001 tax return. The case says that on July 31, 2006, the IRS issued a “substitute return” assessment of $70,622 for the plaintiff’s 2001 tax year because the man had still not filed his tax return. In May 2009, the lawsuit continues, the plaintiff reportedly filed a 2001 1040 form with the IRS that “reported income the IRS was not aware of” and therefore did not include in its 2006 substitute return. Taking this additional income into account, the case says the IRS then issued an additional tax assessment of $40,095 against the plaintiff.
A 2016 Ninth Circuit court ruling reportedly agreed with a previous IRS declaration that “when a taxpayer filed a Form 1040 late, in fact years after the IRS prepared and assessed taxes against the taxpayer . . . and the taxpayer has no valid reason for failing to file a Form 1040 sooner . . . the taxpayer’s Form 1040 fails to qualify as a ‘return’ under ‘the tax code.’” It is here where the lawsuit sums up the plaintiff’s gripe against the defendants:
“Is it not in dispute that [the plaintiff’s] Form 1040 filed on May 26, 2009 fails to qualify as a ‘return’ under the tax code because [the plaintiff] is the taxpayer in the 2016 Ninth Circuit decision. On March 15, 2017, [the plaintiff] submitted Form 843, Claim for Abatement, to the IRS for tax year 2001. It has now been more than six months since the request was filed and no response has been provided by the IRS.”