On June 17, 2022, the United States filed its “Brief for the Appellees” [41 pages] in the U.S. Court of Appeals for the District of Columbia Circuit. The government attorneys are David A. Hubbert – Deputy Assistant Attorney General, Jacob E. Christensen and Robert J. Branman – Attorneys – Tax Division, and Matthew M. Graves, United States Attorney (Of Counsel).
The rulings under review in this appeal are:
The District Court’s March 18, 2021 Order (Doc. 33) [1 page] issued by Judge Bates, dismissing my October 16, 2021 Amended Complaint (Doc. 19) [16 pages] for failure to state a claim,
His Memorandum Opinion (Doc. 34) [12 pages] which accompanied his March 18, 2021 Order, and
Judge Bates’ Order (Doc. 37) [3 pages] of May 6, 2021, denying my April 15, 2021 Rule 59 Motion (Doc. 35) [17 pages] to Alter or Amend the order of dismissal.
Background
On June 14, 2018, I mailed Form DS-82 “U.S. PASSPORT RENEWAL APPLICATION FOR ELIGIBLE INDIVIDUALS”, along with the required $110.00 passport renewal fee, to State’s National Passport Processing Center, P.O. Box 640155, Irving, TX 75064-0155.
On June 27, 2018, I received a letter from State denying his application, in accordance with 22 C.F.R. §51.60(a)(3), because of an alleged “seriously delinquent tax debt” certified by the Secretary of the Treasury as described in 26 U.S.C. §7345.
On July 7, 2018, I sent a letter to State notifying it that my alleged tax debt had been litigated in Federal District Court; that I entered evidence into the record proving the IRS falsified its internal records to make it appear I have an income tax liability when I don’t; that, for the periods in question, no court has ruled I owe the IRS one penny; and that I deny its allegation that I do. I also requested that, since State appeared intent on denying my passport renewal application, it should return my $110.00 application fee.
On July 13, 2018, State sent a letter acknowledging receipt of my July 7th letter and returned my expired passport, which I had submitted with my renewal application. The letter also stated that, “by law, the passport execution and application fees are non-refundable.”
After exchanging many letters with State over the next 547 days, and not receiving the information requested, I filed my Original Complaint on February 5, 2020, initiating a FOIA lawsuit in the U.S. District Court for the District of Columbia. The suit was given Case #20-cv-329 and was assigned to Judge John D. Bates for adjudication.
Over the next fifteen (15) months, I, the State Department, and the IRS filed many pleadings but, ultimately, Judge Bates dismissed this case on March 18, 2021.
On June 28, 2021, I filed my Notice of Appeal. The case is now being litigated in the U.S. Court of Appeals for the District of Columbia Circuit, having been assigned Case #21-6151.
Highlights of the Government’s Brief for the Appellees
Government’s Statement of the Issue (page 9)
Where the Commissioner of Internal Revenue has certified that a taxpayer has “seriously delinquent tax debt” pursuant to I.R.C. § 7345, whether a court may grant any relief (1) because the taxpayer did not receive the Commissioner’s notification of the certification, or (2) because of alleged errors in the underlying tax assessments comprising the “seriously delinquent tax debt.”
Government’s Characterization of Me (page 16)
McNeil is a frequent litigant in this Court. He focuses on tax collection issues. Judge Cooper had this to say of him: McNeil fashions himself a “21st Century American Revolutionary.” The target of his revolt is the federal income tax. And his tactics focus on litigation against the Internal Revenue Service, specifically its efforts to collect taxes from him and other individuals who, for whatever their reasons, feel relieved of their duties as citizens to file federal income tax returns. In the past three years, McNeil and a compatriot, Michael Ellis, have been responsible for the filing of at least 13 duplicative lawsuits in this district. They have filed six of these suits themselves. The other seven, including this one, were filed by individuals who McNeil acknowledges recruiting through his website. But while these separate suits were ostensibly brought by new plaintiffs, McNeil openly admits to preparing the complaints and various court filings in these cases themselves. All of these suits allege that the IRS is engaged in a criminal scheme to falsify records associated with non-filers or to misrepresent the process by which the IRS assesses their tax liability. Every case has either been dismissed under the Anti-Injunction Act, 26 U.S.C. § 7421(a), which bars suits that have the effect of interfering with the collection of taxes, or is still pending. The D.C. Circuit has affirmed every dismissal that has been appealed.
Government’s Summary of the Argument (page 23)
McNeil brought this suit after the IRS certified his tax debts as “seriously delinquent” pursuant to I.R.C. § 7345, causing the State Department to deny his application to renew his passport. After amending his complaint and narrowing his claims, he sought as relief an order reversing the certification on two grounds: (1) he did not receive the notice that the IRS mailed when it certified his debts as seriously delinquent, and (2) he alleged errors in the underlying assessments of tax. The District Court correctly dismissed the amended complaint for failure to state a claim for relief under I.R.C. § 7345. The IRS is required to mail the taxpayer contemporaneous notice of the certification. I.R.C. § 7345(d). The notice requirement is neither part of the certification requirement of subsection (a) nor part of the definition of “seriously delinquent tax debt” of subsection (b). Since the notice is to be contemporaneous, it logically cannot be a prerequisite to the certification. Therefore, the fact that McNeil did not receive the notice does not render the certification erroneous, nor does it compel the Commissioner to reverse the certification. In any event, McNeil learned of the certification promptly and was able to bring this suit timely. Moreover, the statute is clear that the court’s review is limited to whether the certification was erroneous at the time of certification and whether an event has occurred for which the Commissioner should reverse the certification. I.R.C. § 7345(e)(1).
Thus, the court may consider whether the total amount of the tax debt exceeds $50,000 and whether each element properly qualified and still qualifies to count toward the total. The court may not, however, adjudicate the correctness of the underlying tax debts. That conclusion is consistent with the fact that the only relief the court may grant is to order the IRS to notify the Secretary of State that the certification was erroneous. I.R.C. § 7345(e)(2).
Here, taxpayer alleged that the underlying assessments were flawed or fraudulent because the notices described the tax debts with the familiar form numbers “1040” and “1040A” rather than the descriptive phrase “individual income tax.” He maintained that the assessments were fraudulent because he never filed returns using those forms. The contention that the tax assessments were flawed or fraudulent amounted to a challenge to the underlying assessments and was beyond the scope of the issues the District Court could consider. Moreover, the notices are not, on their face, indicative of flaws or fraud in the underlying assessments. The IRS simply used familiar form numbers as a shorthand reference to the types of tax liabilities comprising the debts certified as seriously delinquent.
Government’s Argument (page 25)
I.R.C. § 7345 does not allow challenges to the Commissioner’s certification of seriously delinquent tax debt based on the adequacy of prior notice or error in the underlying tax assessments.
I.R.C. § 7345 does not create an avenue for taxpayers certified as “seriously delinquent” to challenge the accuracy of their underlying tax liabilities.
McNeil failed to state a claim allowable under I.R.C. § 7345(e).
My Reply Brief is due on or before July 8, 2022.
