Kehmeier v. Atlas Air, Inc.

Background

Thomas L. Kehmeier, proceeding without a lawyer, sued Atlas Air, Inc. He alleged that Atlas Air improperly withheld taxes from his wages and issued him a 2019 W-2 form because he was not an “employee” under the Internal Revenue Code. He claimed this violated the Fifth Amendment’s Due Process Clause.

Kehmeier sought declaratory relief—a court statement about the parties’ legal rights—and injunctive relief, meaning a court order requiring or prohibiting conduct. Specifically, he asked the court to require Atlas Air to issue a corrected 2019 W-2 reporting zero wages and zero withheld taxes, and to prohibit future reporting and withholding that he considered improper.

Atlas Air moved to dismiss the first amended complaint under Rule 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. The court instead addressed subject-matter jurisdiction, the court’s legal authority to hear the dispute.

Jurisdictional Analysis

The court dismissed the case on its own initiative because it lacked subject-matter jurisdiction.

For the requested injunction concerning federal tax withholding, the court applied the Anti-Injunction Act, 26 U.S.C. § 7421(a). That law generally prevents courts from hearing suits brought to stop the assessment or collection of taxes. The court determined that withholding taxes from wages is a method of collecting taxes, so the Act barred Kehmeier’s request for injunctive relief.

For the requested declaration concerning federal taxes, the court applied the Declaratory Judgment Act, 28 U.S.C. § 2201. That law prevents federal courts from issuing declaratory relief concerning federal taxes. The court therefore could not hear Kehmeier’s request for a declaration that Atlas Air had improperly subjected him to taxation.

The court also stated that, to the extent Kehmeier asserted claims involving state-law tax withholding, the Tax Injunction Act, 28 U.S.C. § 1341, barred federal-court relief when a state provides a plain, speedy, and efficient remedy.

The court rejected Kehmeier’s arguments that the Anti-Injunction Act did not apply because he considered himself a “nontaxpayer” and because he was not an employee under the Internal Revenue Code. Because the court lacked jurisdiction, it did not decide the merits of his claims. The court nevertheless noted that Atlas Air was legally required to withhold taxes and therefore could not be liable merely for complying with that requirement.

Disposition

The court dismissed the case for lack of subject-matter jurisdiction. It denied Atlas Air’s Rule 12(b)(6) motion as moot. The court also certified that any appeal would not be taken in good faith and denied permission to appeal without paying filing fees. The opinion does not state that the dismissal was with or without prejudice.