Barron v. IRS

• Court: District Court, D. New Hampshire
• Decided: March 18, 1998
• Docket: CV-97-271-JD
• Status: Published

Opinion

Barron v. IRS CV-97-271-JD 03/18/98 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Shirley Barron

v. Civil No. 97-271-JD

United States of America, et al.

O R D E R

The plaintiff, Shirley Barron, both individually and in her

capacity as administratrix of the estate of Bruce Barron, brought

this action against the United States of America and Revenue

Agent Donna Greeley, a revenue officer of the Internal Revenue

Service ("IRS"). The plaintiff alleges that Greeley engaged in

outrageous conduct during the course of her attempts to collect

taxes owed by the Barrens, that the conduct of Greeley and other

IRS agents caused her husband Bruce Barron to commit suicide, and

that the IRS wrongfully failed to follow through on its agreement

to compromise the Barrens' tax liability. Before the court is

Greeley's motion to dismiss the claims against her in count II

(document n o . 6).

Background1

The IRS assessed outstanding tax liabilities of the Barrens

1The court summarizes the factual background of the case relevant to the instant motion. Disputed issues of fact are presented as alleged by the plaintiff. from the years 1986, 1988, 1989, 1991, and 1992. By April 1993,

the outstanding tax liability of the Barrens, including interest,

exceeded $200,000. The IRS assigned the case to Revenue Agent

Greeley for collection. Greeley "intentionally and maliciously"

abused her power as a revenue agent by conducting "unauthorized,

unwarranted and malicious collection procedures" against the

Barrens. Pis.' Second Am. Compl., 1 12.

The Barrens lacked sufficient assets to satisfy their total

tax liability. In April 1994, the Barrens made an offer in

compromise as authorized by 26 U.S.C. §§ 7121, 7122. In August

1994, they submitted a revised offer. In a letter dated May 30,

1995, the IRS informed the Barrens that their offer in compromise

would be rejected within thirty days, unless they reguested an

appeals conference. The Barrens reguested the appeals con­

ference, which was held in September 1995.

The plaintiff alleges that at the meeting. Appeals Settle­

ment Officer Ken Shuman informed the Barrens that Greeley had

acted improperly and stated that he would be preparing an

acceptance of the Barrens' offer in compromise in the near

future. No acceptance of the offer in compromise was ever

prepared. In addition, IRS agents failed to keep the Barrens

appraised of the status of their reguest.

On August 6, 1996, Bruce Barron committed suicide at the

family's vacation home in Chatham, Massachusetts. He left behind

2 a note indicating that the actions of the IRS and his primary

lending institution, Pelham Bank & Trust, had caused his

desperation. Just prior to the suicide, Pelham Bank & Trust had

instituted foreclosure proceedings against the Barrens' property,

allegedly because the IRS refused to accept the Barrens' offer in

compromise as it had promised to do.

Bruce Barron had substantial life insurance policies, the

proceeds of which improved the plaintiff's financial situation.

The IRS ceased consideration of the Barrens' offer in compromise

upon learning of the death of Bruce Barron pursuant to an IRS

policy which provides that consideration of an offer in

compromise ceases upon the death of a joint taxpayer.

In count I of her second amended complaint, the plaintiff

alleges that the United States is liable to her for the

collection actions of Greeley and others pursuant to 26 U.S.C.

§ 7433. In count II, she alleges that Greeley is individually

liable under the doctrine of Bivens v. Six Unknown Named Agents

of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). In count III,

the plaintiff alleges that the United States breached a contract

with her and her husband to accept their offer in compromise.

Greeley has moved to dismiss the claim against her in count II

pursuant to Fed. R. Civ. P. 12(b)(6), alleging that the plaintiff

may not properly maintain a Bivens action against her.

3 Discussion

In determining whether to grant a Rule 12(b) (6) motion to

dismiss, the court must accept all of the factual averments

contained in the complaint as true and draw every reasonable

inference in favor of the plaintiffs. See Garita Hotel Ltd.

Partnership v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir. 1992).

Great specificity is not reguired to survive a Rule 12(b)(6)

motion. "[I]t is enough for a plaintiff to sketch an actionable

claim by means of 'a generalized statement of facts from which

the defendant will be able to frame a responsive pleading.'"

Garita, 958 F.2d at 17 (guoting 5A Charles A. Wright & Arthur R.

Miller, Federal Practice and Procedure § 1357 (1990)). In so

doing, however, plaintiff cannot rely on "bald assertions,

unsupportable conclusions, and 'opprobrious epithets.'" Chongris

v. Board of Appeals, 811 F.2d 36, 37 (1st Cir.) (guoting Snowden

v. Hughes, 321 U.S. 1, 10 (1944)). In the end, the court may

grant a motion to dismiss "'only if it clearly appears, according

to the facts alleged, that the plaintiff cannot recover on any

viable theory.'" Garita, 958 F.2d at 17 (guoting Correa-MartInez

v. Arrillaga-Belendez, 903 F.2d 49, 52 (1st Cir. 1990)).

26 U.S.C. § 7433 allows taxpayers to bring a civil action

for damages resulting from certain unauthorized actions taken to

collect taxes. See 26 U.S.C.A. § 7433 (West Supp. 1997). It

states, in part, the following:

4 If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States. Except as provided in section 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.

Id. § 7433(a).2 The provision, originally passed in 1988 as part

of the Omnibus Taxpayer Bill of Rights, Pub. L. 100-647, 102

Stat. 3730, was amended in 1996 as part of the Taxpayer Bill of

Rights 2, Pub. L. 104-168, 110 Stat. 1452. Among other things,

the amendment raised the statutory cap on damages from $100,000

to $1,000,000. See 26 U.S.C.A. § 7433(b) (West 1989 & Supp.

1997) . It did not, however, alter the standard of liability

expressed in the statute. See id. § 7433(a) . Both provisions

were passed by Congress to provide remedies for taxpayers

"against an overzealous officialdom." See McMillen v. United

States Dep't of Treasury, 960 F.2d 187, 190 (1st Cir. 1991)

(guoting Cameron v. IRS, 773 F.2d 126, 129 (7th Cir. 1985)).

In Bivens, the Supreme Court held that under some

circumstances an individual may bring an action for damages

against a federal official who violates the individual's

constitutional rights. See 403 U.S. at 389. Since that

226 U.S.C. § 7432, which deals with civil damages for failure to release liens, is inapplicable to this case.

5 decision, the Supreme Court has indicated that an individual will

not be able to pursue a Bivens remedy in certain situations. No

Bivens remedy will be implied where Congress has "expressly

precluded the creation of such a remedy by declaring that

existing statutes provide the exclusive mode of redress." Bush

v. Lucas, 462 U.S. 367, 373 (1983) . Neither will courts create a

Bivens remedy when "special factors counselling hesitation are

present." Chappell v. Wallace, 462 U.S. 296, 298 (1983)

(internal guotation omitted). One such special factor exists

"when the design of a government program suggests that Congress

has provided what it considers adeguate remedial mechanisms for

constitutional violations that may occur in the course of its

administration." Schweiker v. Chilicky, 487 U.S. 412, 423

(1988) .

In Schweiker, the Supreme Court discussed Bivens and its

progeny, concluding as follows:

In sum, the concept of "special factors counselling hesitation in the absence of affirmative action by Congress" has proved to include an appropriate judicial deference to indications that congressional inaction has not been inadvertent. When the design of a Government program suggests that Congress has provided what it considers adeguate remedial mechanisms for constitutional violations that may occur in the course of its administration, we have not created additional Bivens remedies.

Id. To preclude the creation of a Bivens action, the remedial

mechanisms need not provide a remedy for the precise harm

6 suffered. Id. at 425. As the Court noted in Schweiker when it

declined to create a Bivens action for individuals who had their

Social Security benefits wrongfully terminated.

Congress has failed to provide for "complete relief": respondents have not been given a remedy in damages for emotional distress or for other hardships suffered because of delays in their receipt of Social Security benefits. The creation of a Bivens remedy would obviously offer the prospect of relief for injuries that must now go unredressed. Congress, however, has not failed to provide meaningful safeguards or remedies for the rights of persons situated as respondents were.

Id.

Circuit courts have expressed doubt that a Bivens remedy

should be created for the alleged deprivation of constitutional

rights occurring during the collection of federal taxes. See

McMillen, 960 F.2d at 190 ("Even if the [tax collection] behavior

described in the complaint did constitute some sort of

constitutional violation, moreover, we doubt that the creation of

a Bivens remedy would be an appropriate response."); Cameron, 773

F.2d 126, 129 (1985) ("Congress has given taxpayers all sorts of

rights against an overzealous officialdom . . . and it would make

the collection of taxes chaotic if a taxpayer could bypass the

remedies provided by Congress simply by bringing a damage action

against Treasury employees. It is hard enough to collect taxes

as it is; additional obstructions are not needed."); but see

Rutherford v. United States, 702 F.2d 580, 584-85 (5th Cir. 1983)

(suggesting that where a complaint "sketches a portrait of a

7 lawless and arbitrary vendetta fueled by the power of the state,

designed to harass by unwarranted intrusion into the minutia of

[the plaintiffs] financial affairs, and intended to abuse by the

creation of palpably unfounded claims against their property

which they can set to right only by unnecessary litigation," a

Bivens action might be appropriate). In McMillen, the First

Circuit considered a claim against IRS employees similar to this

case. See 960 F.2d at 190. After finding that the conduct

complained of did not rise to the level of a constitutional

violation, the court noted that the statutory scheme of the

Internal Revenue Code ("IRC") provides a wide array of remedies

for abuses by IRS employees:

Today these rights include, in addition to the right to sue for a tax refund under 28 U.S.C. § 1346(a) (1) and 26 U.S.C. § 7422, and the ability to contest the validity of tax liens under 28 U.S.C. § 2410, the remedies enacted in the "Taxpayer Bill of Rights." When they are deployed in their proper time and place . . . these remedies enable an aggrieved taxpayer to recover damages for the sorts of abuses alleged here: the wrongful failure to release tax liens, 26 U.S.C. § 7432, and the reckless or intentional violation of any provision of the tax laws "in connection with any collection of Federal tax . . . ." Congress has deemed Sections 7432 and 7433 the exclusive remedies for damages resulting from such abuses.

The remedies Congress has created may not be perfectly comprehensive, but they do supply "meaningful safeguards or remedies for the rights of persons situated" as the [plaintiffs] were and establish "that Congress has provided what it considers adeguate remedial mechanisms for constitutional violations that may occur in the [administration of the tax laws.]" In such cases, the courts have declined to create new Bivens remedies.

Id. (internal quotations and citations omitted). Furthermore, at

least one district court has held that Congress expressly

precluded the creation of a Bivens remedy for unlawful tax

collection practices by providing that a civil action pursuant to

§ 7433 would be the exclusive remedy for recovering damages. See

Brown v. Johnson, 889 F. Supp. 355, 358 (W.D. Ark. 1995) .

Greeley asserts that the plaintiff may not properly bring a

Bivens action against her as an individual because the detailed

remedial scheme provided in the IRC indicates Congress' intent

not to allow such a remedy. The plaintiff, on the other hand,

attempts to distinguish this case from prior tax collection cases

by characterizing Greeley's actions as conduct that "falls well

beyond the scope of the [IRC's] remedial scheme." See Pl.'s Mem.

of Law in Supp. of Obj. to Mot. to Dismiss, at 3.3 She attempts

3The plaintiff alleges that in addition to unlawful collection activity, Greeley: (1) lied to the Barrens; (2) altered standard IRS documents in order to obtain an otherwise improper levy; (3) engaged in aggressive collection activity while the Barron's offer in compromise was pending and on appeal; (4) failed to notify the Barrens that their proposed settlement offer was only $2610.00 less than the amount determined by Greeley to be appropriate while she continued to engage in aggressive collection activity; (5) delayed resolution of the Barron file while citing erroneous legal and factual bases for doing so despite the protests of the Barrens; and (6) continued all of the above despite having been informed that Bruce Barron was suicidal as a result of her actions. The plaintiff contends that these actions demonstrate an ongoing pattern of oppressive conduct designed not to collect taxes, but to "intimidate and harass" the Barrens. Pl.'s Mem. of Law in Supp. of Obj. to Mot. to draw support for this position from Rutherford v. United

States, 702 F.2d 580, 583-85 (5th Cir. 1983). In Rutherford, the

Fifth Circuit suggested that a Bivens remedy might be appropriate

for certain egregious conduct not redressed by the IRC's remedial

scheme. See id. Rutherford, however, was decided not only

before the Supreme Court's decision in Schweiker, but also before

the passage of both the Omnibus Taxpayer Bill of Rights in 1988

and the Taxpayer Bill of Rights 2 in 1996. These provisions

expand the IRC's remedial scheme to include conduct similar to if

not identical with that complained of by the plaintiff. See

Schweiker, 487 U.S. at 428 ("In light of the complex statutory

schemes involved, the harm resulting from the alleged

constitutional violation can in neither case be separated from

the harm resulting from the denial of the statutory right.").

Even if, as the plaintiff has alleged, Greeley's alleged

constitutional violations go beyond the scope of the remedial

scheme, the comprehensiveness of the scheme suggests that

Congress intended it to be exclusive. See Schweiker, 487 U.S. at

423.

The court notes that Greeley's alleged actions, see supra

note 3, if true, cannot be justified or condoned when viewed in

the light of reasonable standards of behavior with which tax­

to Dismiss, at 4.

10 payers expect revenue officers to comply when performing those

duties entrusted to them. However, the plaintiff has offered,

and the court can discern, no further legal justification for

creating a Bivens remedy against the individual revenue officer

in this case given the current state of the applicable statutory

and decisional law. Therefore, the court holds that the

plaintiff may not maintain a Bivens action against Greeley.4

Conclusion

For the reasons stated above, Greeley's motion to dismiss

the claims against her in count II(document no. 6) is granted.

SO ORDERED.

Joseph A. DiClerico, Jr. District Judge

March 18, 1998

cc: William E. Brennan, Esguire John V. Cardone, Esguire

4Because of the court's determination that Greeley is not a proper defendant in this action, it need not consider her argument that the case against her should be dismissed because she was not properly served.