Nidez v. IRS

Background

Moses Nidez, a California state prisoner proceeding without a lawyer, brought a civil action against the IRS and other defendants. He paid the filing fee. Nidez sought court intervention to obtain economic impact payments under the Coronavirus Aid, Relief, and Economic Security Act, commonly called the CARES Act.

Screening standard

Because Nidez was a prisoner suing a governmental entity, the court was required to conduct a preliminary review under 28 U.S.C. § 1915A. That statute requires dismissal of claims that are frivolous, malicious, fail to state a claim for relief, or seek money from a defendant who is immune from such relief. The court also noted that pleadings filed without a lawyer must be read liberally, but a complaint still must provide enough factual allegations to make the requested relief plausible rather than merely asserting labels or conclusions.

CARES Act payments

The court summarized the CARES Act provisions establishing tax credits and advance refunds for eligible individuals. The Act required the IRS to issue or allow the refunds or credits as rapidly as possible but stated that no refund or credit could be made or allowed under the relevant subsection after December 31, 2020.

The court also discussed an earlier related proceeding involving incarcerated people and economic impact payments. In that proceeding, the court held that the CARES Act did not authorize the defendants to withhold advance refunds or credits solely because people were or had been incarcerated, and it found the IRS policy making people ineligible based on incarceration arbitrary and contrary to law. But that court expressly took no position on whether any particular person was owed a payment or on the amount of any payment. Instead, the IRS was responsible for making individual eligibility determinations.

Ruling

The court held that Nidez was not entitled to the requested relief. The earlier ruling prevented denial based solely on incarceration, but it did not establish that Nidez personally was owed an economic impact payment. More importantly, the December 31, 2020 deadline had passed, and the court stated that no additional funds could be issued under the CARES Act. The court therefore concluded that Nidez failed to state a claim for relief.

The action was DISMISSED without leave to amend because the court found that no amendment could cure the identified deficiencies. The court also DENIED as moot the motion to proceed without paying filing fees and ordered the clerk to close the case.