United States District Court, D. Oregon
Scott Moede, Volunteer Attorney, Lewis & Clark Low-Income
Taxpayer Clinic, Of Attorneys for Plaintiff.
Richard E. Zuckerman, Principal Deputy Assistant Attorney
General, and Boris Bourget, Trial Attorney, Tax Division,
United States Department of Justice, and Billy J. Williams,
United States Attorney, United States Attorney's Office,
Of Attorneys for Defendant.
OPINION AND ORDER
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE.
Hockin (“Plaintiff”) brings this action against
the United States of America (“Defendant”),
seeking a refund of taxes collected by the Internal Revenue
Service (“IRS”) for the 2007 tax year. Defendant
moves to dismiss Plaintiff's claims for lack of subject
matter jurisdiction. U.S. Magistrate Judge Jolie Russo issued
findings and a recommendation that the Court grant
Defendant's motion as it relates to Plaintiff's claim
that it was inequitable to hold her responsible for the
unpaid tax or deficiency incurred on the joint tax returns
that her ex-husband filed when they were married and as to
Plaintiff's quasi-estoppel claim. For the reasons that
follow, the Court adopts in part and rejects in part the
Findings and Recommendation. Defendant's motion to
dismiss is denied in part and granted in part.
the Federal Magistrates Act (“Act”), the Court
may “accept, reject, or modify, in whole or in part,
the findings or recommendations made by the
magistrate.” 28 U.S.C. § 636(b)(1). If a party
objects to a magistrate judge's findings and
recommendations, “the court shall make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.” Id.; Fed.R.Civ.P. 72(b)(3).
those portions of a magistrate judge's findings and
recommendations to which neither party has objected, the Act
does not prescribe any standard of review. See Thomas v.
Arn, 474 U.S. 140, 152 (1985) (“There is no
indication that Congress, in enacting [the Act], intended to
require a district judge to review a magistrate's report
to which no objections are filed.”); United States.
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (holding that the court must review de novo
magistrate judge's findings and recommendations if
objection is made, “but not otherwise”). Although
in the absence of objections no review is required, the Act
“does not preclude further review by the district
judge sua sponte . . . under a de novo or
any other standard.” Thomas, 474 U.S. at 154.
Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b)
recommend that “[w]hen no timely objection is filed,
” the Court review the magistrate judge's
recommendations for “clear error on the face of the
courts are courts of limited jurisdiction. Gunn v.
Minton, 568 U.S. 251, 256 (2013) (quotation marks
omitted). As such, a court is to presume “that a cause
lies outside this limited jurisdiction, and the burden of
establishing the contrary rests upon the party asserting
jurisdiction.” Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994) (citations omitted);
see also Robinson v. United States, 586 F.3d 683,
685 (9th Cir. 2009); Safe Air for Everyone v. Meyer,
373 F.3d 1035, 1039 (9th Cir. 2004). A motion to dismiss
under Federal Rule of Civil Procedure 12(b)(1) for lack of
“subject-matter jurisdiction, because it involves a
court's power to hear a case, can never be forfeited or
waived.” United States v. Cotton, 535 U.S.
625, 630 (2002). An objection that a particular court lacks
subject matter jurisdiction may be raised by any party, or by
the court on its own initiative, at any time. Arbaugh v.
Y&H Corp., 546 U.S. 500, 506 (2006); Fed.R.Civ.P.
12(b)(1). The Court must dismiss any case over which it lacks
subject matter jurisdiction. Fed.R.Civ.P. 12(h)(3); see
also Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir.
2015) (noting that when a court lacks subject-matter
jurisdiction, meaning it lacks the statutory or
constitutional power to adjudicate a case, the court must
dismiss the complaint, even sua sponte if
12(b)(1) motion to dismiss for lack of subject matter
jurisdiction may be either “facial” or
“factual.” See Safe Air for Everyone,
373 F.3d at 1039. A facial attack on subject matter
jurisdiction is based on the assertion that the allegations
contained in the complaint are insufficient to invoke federal
jurisdiction. Id. “A jurisdictional challenge
is factual where ‘the challenger disputes the truth of
the allegations that, by themselves, would otherwise invoke
federal jurisdiction.'” Pride v. Correa,
719 F.3d 1130, 1133 n.6 (9th Cir. 2013) (quoting Safe Air
for Everyone, 373 F.3d at 1039)). When a defendant
factually challenges the plaintiff's assertion of
jurisdiction, a court does not presume the truthfulness of
the plaintiff's allegations and may consider evidence
extrinsic to the complaint. See Terenkian v. Republic of
Iraq, 694 F.3d 1122, 1131 (9th Cir. 2012);
Robinson, 586 F.3d at 685; Safe Air for
Everyone, 373 F.3d at 1039. A factual challenge
“can attack the substance of a complaint's
jurisdictional allegations despite their formal
sufficiency.” Dreier v. United States, 106
F.3d 844, 847 (9th Cir. 1996) (citation and quotation marks
omitted). Plaintiff timely filed an objection to which
Defendant responded. Plaintiff objects to the portion of
Magistrate Judge Russo's recommendation that the Court
conclude that it lacks jurisdiction to consider
Plaintiff's innocent spouse claim and Plaintiff's
facial challenge, the Court draws the facts from the
allegations in Plaintiff's complaint. Plaintiff married
Shawn Harrison (“Harrison”) in 1997. While they
were married, Harrison had complete control over the family
finances and took responsibility for the family's taxes.
Plaintiff was unaware of any potential financial problems
until, at the end of 2008, several of the family's
vehicles were repossessed and the bank foreclosed on the
family home. Plaintiff alleges that Harrison was suffering
from alcohol abuse and addiction and was physically violent
with her daughters. On July 30, 2009, Plaintiff and Harrison
filed for divorce. The divorce was finalized on August 5,
2009. Two days earlier, on August 3, 2009, Harrison filed a
joint tax return for the 2007 tax year. On October 26, 2009,
Harrison filed a joint tax return for the 2008 tax year.
Plaintiff claims that she did not sign either the 2007 or
2008 tax returns. No. party has located a copy of the 2007
2014, the IRS told Plaintiff that she owed $10, 000 for tax
year 2007 and $80, 000 for tax year 2008. Plaintiff filed a
claim with the IRS for innocent spouse relief under 26 U.S.C.
§ 6015(f). The IRS denied Plaintiff's claim for
innocent spouse relief for both 2007 and 2008 but granted
Plaintiff other relief for the 2008 tax year because it
concluded that Plaintiff did not sign the return for tax year
2008. In December 2014, the IRS issued a letter
ruling informing Plaintiff of its decision to deny innocent
spouse relief as to the 2007 tax year.
alleges that she made several payments on the 2007 tax
liability, totaling more than $10, 000. Plaintiff filed a
claim with the IRS, seeking a refund of these payments plus
interest and penalties. The IRS denied Plaintiff's claim
for a refund. Plaintiff then sued in United States District
Court, seeking a refund of these payments under 28 U.S.C.
§ 1346(a)(1) and 26 U.S.C. § 7422(a).
asserts three theories of recovery. First, she claims that
she did not sign the 2007 tax return and so it is not a valid
joint tax return and any tax liability collected on the 2007
tax return was erroneously or illegally collected. Magistrate
Judge Russo concluded that Plaintiff had stated a valid
refund claim under 28 U.S.C. § 1346(a)(1) and therefore
recommended that the Court deny ...