Jonathan Kaplowitz v. Douglas H. Shulman et al., No. 6:10-cv-1172-ORL-31GJK (USDC M.D. Fla. 10/7/2010).
KAPLOWITZ v. SHULMAN
JONATHAN KAPLOWITZ, Plaintiff,
v.
DOUGLAS H. SHULMAN, COMMISSIONER OF INTERNAL REVENUE; WILLIAM J. WILKINS; R. A. MITCHELL; DEBRA K. HURST; G. CARPENTER; and NIKKI DAVIDSON, Defendants.
Case No. 6:10-cv-1172-Orl-31GJK.
United States District Court, M.D. Florida, Orlando Division.
October 7, 2010.
ORDER DISMISSING COMPLAINT and ORDER TO SHOW CAUSE
GREGORY A. PRESNELL, District Judge.
This matter comes before the Court on the Motion to Dismiss (Doc. 15) filed by the Defendants and the Objection (Doc. 22) to that motion filed by the Plaintiff, Jonathan Kaplowitz ("Kaplowitz"), which the Court construes as a response.
I. BACKGROUND
The Internal Revenue Service has determined that Kaplowitz owes federal income taxes, penalties, and interest in varying amounts for the years 1995 through 2001. In 2004, Kaplowitz filed suit to challenge that determination. This Court found that his arguments were frivolous and his suit was barred by the Anti-Injunction Act. (Doc. 19 at 2-3 in Case No. 6:04-cv-42-GAP). In 2004 and 2005, Kaplowitz filed a number of bogus judgments against employees of the IRS and the United States Tax Court in the public records of Orange County, Florida. The government sued to have the bogus judgments nullified. (Doc. 1 in Case No. 6:05-cv-1212). Again, Kaplowitz made a number of arguments, all of them frivolous, and this Court ruled against him. The Court's decisions were upheld on appeal. (Doc. 115 in Case No. 6:05-cv-1212).
As part of its efforts to collect the taxes and penalties Kaplowitz owes, the IRS has filed notices of federal tax lien in the public records of Orange County and Seminole County. By way of the instant suit, Kaplowitz seeks to have the notices removed and to have the IRS enjoined from further collection efforts against him. (Doc. 1 at 19). The Defendants contend that this suit, like the first suit Kaplowitz filed, is barred by the Anti-Injunction Act, 26 U.S.C. § 7421. That act provides, in pertinent part, that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person." 26 U.S.C. § 7421(a). If the Anti-Injunction Act applies, this Court lacks subject matter jurisdiction over the dispute. See Gulden v. U.S., 287 Fed.Appx. 813 (11th Cir. 2008).
Kaplowitz responds that the Government must file an affidavit of tax liability before the Anti-Injunction Act can apply to a case, and that it has not done so here. (Doc. 22 at 5). This is incorrect. Kaplowitz has misread Commissioner v. Shapiro, 424 U.S. 614 (1976), which held that such an affidavit might be required as a consequence of an equitable exception to the Anti-Injunction Act first announced in Enoch v. Williams Packing Co., 370 U.S. 1 (1962).
The Williams Packing court had held that, despite the Anti-Injunction Act, an injunction might issue if the taxpayer made two showings: (1) that he or she faced irreparable harm and (2) that it was "clear that under no circumstances could the government ultimately prevail." Id. at 7. In Shapiro, the taxpayer, who was being extradited to Israel, sought injunctive relief after the IRS froze his bank accounts. Shapiro at 619. He alleged that without the money in those accounts, he could not make bail, and that he would be unable to pursue a refund suit or Tax Court suit from an Israeli jail cell. Id. at 620. After meeting the first requirement of the Williams Packing exception, the taxpayer argued that it was impossible for him to meet the second — i.e., to show that the government could not ultimately prevail — unless the Government revealed the evidence allegedly demonstrating that he owed back taxes.[1] Id. at 623. The Shapiro court held that where a taxpayer had pled facts showing that "his remedy in the Tax Court or in a refund suit is inadequate to repair any injury that might be caused by an erroneous assessment or collection of an asserted tax liability," and where the evidence purportedly establishing tax liability was solely in the government's hands, the government was obligated to produce some evidence that it might ultimately prevail to avoid application of the Williams Packing exception. Id. at 629.
Shapiro has no application to this case, because Kaplowitz has not alleged facts to show that he may suffer irreparable harm if the government's collection efforts continue. (Instead, he simply asserts that he does not owe any money, and that the government should be stopped from trying to make him pay up.) As a result, the Williams Packing exception cannot apply. And because the exception cannot apply, the Anti-Injunction Act does apply, no matter what evidence the Government has or has not produced. This Court therefore lacks subject matter jurisdiction over this latest attempt by Kaplowitz to impede the Government's collection efforts.[2]
However, that is not the end of the matter. The first time he appeared before this Court, Kaplowitz was advised that his arguments were "of a kind so patently frivolous that, should he persist in advancing them, he faces a substantial risk of incurring sanctions." (Doc. 19 at 4 in Case No. 6:04-cv-42). In the instant case, he again attempts to rely on tax protester arguments rejected as frivolous by every court to hear them. As grounds for the contention that he owes no taxes, Kaplowitz argues that "[t]he sale of a free man's labor to a private party within a union state is not subject to a federal tax". (Doc. 1 at 3). It is beyond dispute that wages are income, and subject to the federal income tax. See, e.g., U.S. v. Morse, 532 F.3d 1130, 1132-33 (11th Cir. 2008) (stating that argument that defendant's income, which had been derived from employment in private sector, was not subject to federal taxation, was of a type long held to be frivolous, and citing cases). See also Barrett v. United States, 369 Fed.Appx. 65, 66 (11th Cir. 2010) (noting that court had held that individuals who sue for a refund of income taxes and assert "that their wages are not income subject to tax," or "that only public servants are subject to tax liability" are subject to sanctions for advancing frivolous claims," and citing Motes v. United States, 785 F.2d 928, 928 (11th Cir. 1986)).
Accordingly, it is hereby
ORDERED that the Motion to Dismiss (Doc. 15) is GRANTED IN PART and DENIED IN PART AS MOOT, and this case is DISMISSED pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction. And it is further
ORDERED that the Plaintiff, Jonathan Kaplowitz, shall SHOW CAUSE by written response filed on or before October 25, 2010, not to exceed ten pages in length, why sanctions should not be imposed for his continuing to advance frivolous arguments. The government may file a ten page reply to Kaplowitz's filing on or before November 8, 2010.
DONE and ORDERED.
[Footnotes]
1. The government had resisted being required to produce any evidence, arguing that it was the taxpayer's burden to establish that the Williams Packing exception applied rather than its burden to establish that it did not apply. Id. at 624-25.
2. This determination makes it unnecessary for the Court to address the Defendant's remaining arguments in favor of dismissal.
