Carr v. Internal Revenue Service
- William Orrick
- 3:20-cv-00744
- U.S. District Court · Northern District of California
- 4
In Carr v. United States, Judge Orrick granted the United States’ partial motion to dismiss, leaving only Carr’s 2012 federal refund claim.
Phyllis Carr’s claims against the United States concerning tax years 2010 and 2011, her unlawful-taking and constitutional claim, her general discrimination claim, and her claim for damages under the Taxpayer Bill of Rights and 26 U.S.C. § 7433 were dismissed; her 2012 federal refund claim remained.
What happened
In Phyllis Carr v. United States of America, the United States asked the court to dismiss claims other than Carr’s claim seeking a federal tax refund for 2012. Carr represented herself, and the court had previously replaced the Internal Revenue Service and other named parties with the United States as the sole defendant.
The court ruled that any claim involving overpayments from 2010 that were credited toward Carr’s 2012 liability had to be pursued through the 2012 refund claim. It also ruled that Carr’s claims alleging an unlawful taking, discrimination, and damages under the Taxpayer Bill of Rights and 26 U.S.C. § 7433 were insufficient. The court denied Carr’s request to take judicial notice of her taxpayer-specific IRS records.
Judge William H. Orrick granted the United States’ partial motion to dismiss. Only Carr’s 2012 federal refund claim may proceed, and the court set a case-management conference.
The detailed version
- Carr v. Internal Revenue Service · No. 3:20-cv-00744
- William Orrick
- Aug. 10, 2020
Background
Phyllis Carr, representing herself, brought claims concerning federal tax liabilities and alleged overpayments. The United States filed partial motions to dismiss Carr’s First Amended Complaint and Second Amended Complaint. The United States argued that it was the only proper defendant and that the court lacked subject-matter jurisdiction over claims other than Carr’s 2012 federal refund claim or that those claims were not adequately pleaded.
Before this order, the court had allowed Carr to amend her pleading to substitute the United States for the Internal Revenue Service and to dismiss Min Jie Ma, Charles P. Retting, and the IRS without prejudice. Carr then filed a Second Amended Complaint naming only the United States. The court resolved both partial motions to dismiss in this order.
Court’s analysis
The United States did not dispute that the court had subject-matter jurisdiction over Carr’s 2012 federal refund claim. It sought dismissal of any refund claims concerning tax years 2010 and 2011. The court noted that Carr did not appear to dispute the underlying liability for 2011.
As to 2010, the court understood Carr’s claim to concern overpayment credits allegedly transferred from 2010 and applied to her outstanding 2012 liability, rather than a challenge to the 2010 tax liability itself. The court explained that federal law permits overpayments to be credited against another tax liability and requires a taxpayer to seek a refund for the year in which the credit was applied. Accordingly, any recovery for 2010 payments transferred as credits to 2012 had to be pursued, if at all, through Carr’s 2012 refund claim.
The court also concluded that Carr’s “Unlawful Taking and Constitutional Claim” failed because administrative and judicial procedures for recovering overpayments provided constitutionally adequate post-deprivation process. Her “General Discrimination Claim” failed because Title VII of the Civil Rights Act protects employees, and Carr was not an IRS employee. Her unspecified claim for civil damages under the Taxpayer Bill of Rights and 26 U.S.C. § 7433 also failed because a claim under section 7433 requires an IRS employee to have violated a specific Internal Revenue Code or Treasury regulation provision while collecting taxes. The court found that Carr did not appear to challenge an improper collection action; instead, she appeared to dispute the amount of her underlying tax liability, which could be addressed through the pending 2012 refund claim.
Carr asked the court to take judicial notice of IRS transcripts and returns attached to the United States’ motion. The court denied that request, concluding that the records were specific to Carr and were not needed to evaluate the sufficiency of her claims at that stage.
Ruling
The court granted the United States’ partial motion to dismiss. Only Carr’s 2012 federal refund claim in the Second Amended Complaint may proceed. The court also set a case-management conference for September 15, 2020, and required a joint case-management conference statement by September 8, 2020.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.