A LostHead with delusions of grandeur

Quixote
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A LostHead with delusions of grandeur

Post by Quixote »

On 1/7/2011 LostHead Woodwalker posted:
Up to date I received a letter today from Auntie and she has requested a hearing at my house or should I say she will be at my address on the 25th at high noon. The big boys in different states have turned my file over to someone in my state, Just wondering what would be the best ammuntion to use when they come knocking?
After several responses from the usual suspects, he clarified:
Sorry I did not make myself clear. The big boys I have been dealing with is the commish and secretary of the treasury. The letter number is 725 (DO). It is about all the penalties and them having me listed as a small business.
IRS Letter 725 is a standardized letter used by a revenue officer to schedule a meeting with the taxpayer to discuss his unfiled returns or, as appears to be the case here, his unpaid penalties. I'll go out on a limb here and doubt that either the "commish" or the Secretary of the Treasury ever had Woodwalker's file.
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Re: A LostHead with delusions of grandeur

Post by rogfulton »

WAG: the meeting isn't scheduled for his address either.
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Famspear
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Re: A LostHead with delusions of grandeur

Post by Famspear »

Now, for some history on "Woodwalker's" tax litigation. To spare him a little humiliation, I am redacting his real name and the case numbers.

On December 14, 2009, "Woodwalker" filed a petition in United States Tax Court. The Internal Revenue Service had asserted a deficiency of $12,787 plus some penalties after he allegedly failed to report $74,056 as income for tax year 2007. On March 11, 2010, the Tax Court dismissed the case for failure to state a claim, etc.

Meanwhile, on January 26, 2010, he had filed a second petition in Tax Court. This petition involved federal income tax for the year 2002. This case was dismissed on May 12, 2010, as having not been timely filed.

On March 9, 2010, he filed a complaint in the United States District Court for the District of New Mexico under 42 USC section 1983 against the Internal Revenue Service, Timothy Geithner (the Secretary of the Treasury), and Susan Meredith (an Automated Collections Service operations manager with the IRS).

First, here is an excerpt from the magistrate's report:
REPORT AND RECOMMENDATION [footnote omitted]

LORENZO F. GARCIA, Magistrate Judge.

THIS MATTER is before the Court pursuant to an Order of Reference [Doc. 4]. The trial judge referred the Plaintiff's Motion to Proceed In Forma Pauperis [Doc. 2], together with his Civil Rights Complaint [Doc. 1], to the undersigned Magistrate Judge for a report and recommendation.

Plaintiff [....] seeks the Court's order authorizing him to proceed with this litigation without the payment of costs or fees. The in forma pauperis statute, 28 U.S.C. § 1915, authorizes a court to waive filing fees and various court costs. The intent of the in forma pauperis statute is to facilitate access to the courts and to guarantee that "no citizen shall be denied an opportunity to commence, prosecute, or defend an action, civil or criminal, `in any court of the United States' solely because . . . [lack of funds] makes it impossible . . . to pay or secure the costs [of litigation]." Adkins v. E.I. DuPont de Nemours & Co., 335 U.S. 331, 342 (1948).

In Forma Pauperis Application

[.... Plaintiff's] Motion to Proceed In Forma Pauperis contains conflicts and inconsistencies. He contends, for example, that he is employed as a supervisor for Southwestern Public ServiceCompany. Yet, he represents that his entire monthly income amounts to $38.58. It defies belief that a utility firm's supervisor, who is making monthly payments of $4,264.02, only takes home $38.58 per month. It is more likely that the $38.58 per month represents his excess cash flow after payment of monthly expenses.
In other words, the Magistrate has not caught on that the Plaintiff is a follower of Peter Hendrickson's Cracking the Code scam. My guess is that the Plaintiff is using the same fraudulent theory in Court that he presumably uses on his tax returns: that private sector, non-federally privileged earnings are not "income."

The magistrate continues:
[Plaintiff] owns a limited number of stocks, and also has a 401K retirement plan to which he contributes $320.30 each month. He represents that the value of his retirement account is only $3,755.76. That representation, however, is belied by a monthly loan payment of $2,062.74. As loans from a retirement account are fully secured by the account itself, it is not likely that his loan payment is $2,062.74, while the value of his account is only $3,775.76. It appears that [Plaintiff] is less than candid in discussing his assets and liabilities.

As a result, the Court has the option of halting the proceedings while [Plaintiff] submits supplementary affidavits and disclosures explaining the inconsistencies. That procedure, however, would only serve to delay a recommendation that the case be dismissed since a sua sponte evaluation of [Plaintiff's] Complaint, as authorized under 28 U.S.C. § 1915, would compel the Court to dismiss the Complaint for failure to state a cause of action. Thus, requiring additional supporting information for the Motion to Proceed In Forma Pauperis is not a productive use of Court time.

Accordingly, the undersigned Magistrate Judge recommends that the Court exercise its broad discretion and grant the in forma pauperis request. 28 U.S.C. § 1915(a)(1) (stating that a court "may authorize" the commencement of a lawsuit without prepayment of fees if certain requirements are met). See also Denton v. Hernandez, 504 U.S. 25, 33 (1992) (frivolousness determination is a discretionary one); Scherer v. Kansas, 263 F. App'x 667, 669 (10th Cir. Feb. 4, 2008) (unpublished decision) ("district court has broad discretion in determining whether to grant or deny an application to proceed in forma pauperis").


Plaintiff's Complaint

[Plaintiff's] Complaint names as Defendants the Internal Revenue Service ("IRS"), Timothy F. Geithner, Secretary of the Treasury, and Susan Meredith, apparently, a Department of Treasury employee. He brings his Complaint "[p]ursuant to 42 U.S.C. § 1983" [Doc. 1, Complaint, p. 1], and invokes this Court's jurisdiction "pursuant to 28 U.S.C. § 1343(3) [and]

42 U.S.C. § 1983." [Doc. 1, p. 2, ¶ A.4].

[Plaintiff] complains that he is a victim of "involuntary servitude." He alleges, in part, that the IRS engaged in "malicious acts and threats, duress, coercion [and] fraud . . . ." [Doc. 1, p. 2, ¶ B.1]; that the IRS filed "maritime" notices, including tax liens [Id.]; that IRS employees lacked "proper pocket commission of enforcement or oath of solemn affirmation" [Id.]; that the IRS's acts violated "the laws of the United States of America, the state of New Mexico and the Law of Nations. . . ." [Id.]; that liens were filed in violation fo [sic] the Uniform Commercial Code [Doc. 1, p. 3, ¶ C.1(B)(1)]; that the IRS filed the lien without a "financing statement/security agreement . . . . [Doc. 1, p. 3, ¶ C.1(B)(2)(B)]; and, that the IRS only has the power to act as a collecting agent for the Alcohol, Tobacco and Firearms (ATF) . . . . [Doc. 1, p. 4, ¶ (C)(2)].

Analysis

"In order to state a § 1983 claim, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law." Bruner v. Baker, 506 F.3d 1021, 1025-26 (10th Cir. 2007) (quoting West v. Atkins, 487 U.S. 42, 48, 108 S.Ct. 2250 (1988)). See also Gomez v. Toledo, 446 U.S. 635, 640 (1980).

[Plaintiff] asserts that his various constitutional rights were violated [Doc. 1, p. 2, ¶ B.1], but he does not allege that any deprivation occurred "under color of sate law." See West, 487 U.S. at 48 (section 1983 authorizes relief when a party's federally protected rights have been violated by a state or local official or by another person acting under color of state law). Here, it is clear that the IRS and its employees acted under federal law, not state law. Thus, a key element of his 42 U.S.C. § 1983 claim is missing, and this defect cannot be cured by simply redrafting the Complaint.

Moreover, this is not a complaint that the Court can construe as a Bivens action. See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999 (1971). See also Abell v. Sothen, 214 F. App'x 743, *7 (10th Cir. Jan. 24, 2007) (unpublished decision) (Bivens claims not available in tax-related dispute). Nor does [Plaintiff's] complaint raise cognizable claims under the Federal Tort Claims Act.

In addition, [....the....] Complaint does not withstand Fed. R. Civ. P. 12(b)(6) scrutiny under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007), or the United States Supreme Court's more recent decision in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). In Twombly, the Court noted that the plaintiff's "obligation to provide the "grounds" of his "entitle[ment] to relief" require[d] more than labels and conclusions. . . . [A] formulaic recitation of the elements of a cause of action will not do . . . . Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (internal citations omitted). While Rule 8 does not require "detailed factual allegations," "it demands more than an unadorned, the-defendant-unlaw-fully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555).

In Iqbal, the Supreme Court further explained:

A complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of `entitlement to relief.'" Iqbal, 129 S. Ct. at 1949 (internal citations omitted).

[...The...] complaint is replete with the tiresome tax protestor refrains that this country's tax laws are unconstitutional or otherwise unenforceable for a variety of reasons. [Plaintiff's] arguments have been dismissed by sister courts as "unworthy of further discussion." See Dibble v. United States, No. 1:05-CV-201, 2006 WL 958599, at *1 (W.D. Mich. Apr. 10, 2006) (finding similar stock tax protestor arguments unsupported, "and charitably speaking, . . . frivolous").

In Lonsdale v. United States, 919 F.2d 1440, 1448 (1990) (imposing sanctions on plaintiff for raising unsupported and frivolous tax protestor arguments) our own circuit rejected arguments on the invalidity of the IRS Code, and courts routinely have deemed [Plaintiff's] other tax protestor claims as "frivolous," "specious," and "preposterous." See United States v. Maczka, 957 F. Supp. 988, 991 (W.D. Mich. 1996) (collecting cases).

The Court concludes that [Plaintiff] did not "`nudge[] [his] claims across the line from conceivable to plausible.'" Robbins v. Oklahoma ex rel. Dep't of Human Servs., 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570).


Recommendation

The undersigned magistrate judge recommends:

(1) that [Plaintiff's] Motion to Proceed In Forma Pauperis [2] be GRANTED; and

(2) that his Complaint be DISMISSED, with prejudice, for failure to state a claim.
(bolding was added). That concludes the magistrate's report.

My next post will show the decision of the District Court judge.
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Famspear
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Re: A LostHead with delusions of grandeur

Post by Famspear »

On April 22, 2010, the District Court judge released the decision in "Woodwalker's" case:
On March 17, 2010, pursuant to an Order of Reference [Doc. 4], the referral Magistrate Judge filed a Report and Recommendation [Doc. 5]. He proposed to dismiss [Plaintiff's] Civil Rights Complaint with prejudice. The Report and Recommendation provided, pursuant to 28 U.S.C. § 636(b)(1), that [Plaintiff] was entitled to file written objections within fourteen days. Indeed, the Report provided, "A party must file any objections within the fourteen-day period allowed if the party wants to have appellate review of the report and recommendation." [Doc. 5, p. 1, n. 1]. [Plaintiff] neither filed any objections nor sought an extension of time within which to object. Rather, he filed an amended Complaint on April 5, 2010 [Doc. 6]. A comparison between his original Complaint and his amended Complaint shows few differences. In the amended Complaint, he no longer pursues claims against Secretary of the Treasury, Timothy F. Geithner, and Susan Meredith, ACS operation manager. The gravamen of his amended Complaint, however, remains the same as in his original Complaint. That is, he contends the Internal Revenue Service filed liens without the benefit of a court order or formal assessment.

He further alleges that the liens violate § 9 of the Uniform Commercial Code. In addition, he raises contentions that the tax code is applicable only in the federal District of Columbia; that it applies only to the manufacture of weapons pursuant to the Alcohol, Firearm and Tobacco Act; that it applies only to government employees; or that it applies only to those who have a contract with the United States.


ANALYSIS

The Court grants liberal construction to a pro se litigant's pleadings. Ledbetter v. City of Topeka, 318 F.3d 1183, 1187 (10th Cir. 2003) (citing Haines v. Kerner, 404 U.S. 519, 520-21, (1972)). However, even a liberal construction makes it difficult to construe the amended Complaint as objections to the Magistrate Judge's Report and Recommendation.

For example, nowhere in his amended Complaint does [Plaintiff] respond to the Magistrate Judge's assessment that the Complaint improperly attempts to bring a civil rights action against the United States pursuant to 42 U.S.C. § 1983. In his Report and Recommendation, the Magistrate Judge determined:

"In order to state a § 1983 claim, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law." Bruner v. Baker, 506 F.3d 1021, 1025-26 (10th Cir. 2007) (quoting West v. Atkins, 487 U.S. 42, 48, 108 S.Ct. 2250 (1988)). See also Gomez v. Toledo, 446 U.S. 635, 640 (1980). [Doc. 5, p. 4]. The Magistrate Judge concluded, "It is clear that IRS and its employees acted under federal law, not state law. Thus, a key element of his 42 U.S.C. § 1983 claim is missing, and this defect cannot be cured by simply redrafting the Complaint." Id. [Plaintiff's] amended Complaint does not address this deficiency.

Further, the Magistrate Judge determined that [Plaintiff's] claim could not be construed as a Bivens action against a federal agency. [footnote omitted..... ] The Magistrate Judge appropriately noted that our Circuit previously concluded that claims of this nature may not be filed as Bivens actions as they relate to tax disputes. Abell v. Sothen, 214 F. App'x 743, *7 (10th Cir. Jan. 24, 2007) (unpublished decision). [Plaintiff's] amended Complaint fails to address this deficiency as well.

Secondly, the Magistrate Judge determined that [Plaintiff's] Complaint could not withstand scrutiny under Fed. R. Civ. P. 12(b)(6) and the Supreme Court's recent rulings in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). In Twombly, the Supreme Court found that a pleader's "obligation to provide the `grounds' of his `entitle[ment] to relief' require[d] more than labels and conclusions. . . . [A] formulaic recitation of the elements of a cause of action will not do. . . ."

In this case, [Plaintiff] did not even submit a formulaic recitation of the elements of a cause of action because, as the Magistrate Judge observed, he is asserting a 42 U.S.C. § 1983 claim, but cannot establish the requisite elements. So, too, in Iqbal, the Supreme Court noted:

A complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of `entitlement to relief.'" Iqbal, 129 S. Ct. at 1949 (internal citations omitted).

[Plaintiff's] amended Complaint simply echos tax protesters' refrains which have been soundly rejected in this and every district. See, e.g., Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990) (imposing significant sanctions on the plaintiff for bringing the same or similar frivolous claims as those raised by [Plaintiff]). In Lonsdale, the Tenth Circuit Court of Appeals rejected a pro se litigant's claims that the Sixteenth Amendment to the Constitution was invalid; that it applied only to corporations; that wages were not income; that income tax was voluntary; that there was no statutory authority for imposing income taxes on individuals; that the term "income" was vague and indefinite; that individuals are not required to file tax returns; and that the Anti-Injunction Act was invalid.

The Lonsdale court also rejected arguments that the Commissioner of the Internal Revenue Service and its employees had no power or authority to administer tax laws. Moreover, in Lonsdale, the Tenth Circuit rejected the same claims raised by [Plaintiff] in this case, i.e., that the IRS had no power to issue summons, liens, or levies. Id. See also United States v. Andra, 923 F.Supp. 157, 159 (D. Ida. 1996) (court papers issued in an IRS case are not commercial or negotiable instruments and the use of UCC formulae is inapplicable); United States v. Van Skiver, 1990 WL 251738, at *7 (D. Kan. Dec. 13, 1990) (tax protesters' convoluted, "stream of consciousness" arguments regarding supposed applicability of UCC were "virtually unintelligible, frivolous, misapply the law, or do not address issues relevant to this case"), aff'd by U.S. v. Kettler, 934 F.2d 326 (10th Cir. 1991). The law in this circuit is clear. Unless a party files objections to a magistrate judge's report and recommendation, further review is not permitted. See Morales-Fernandez v. INS, 418 F.3d 1116, 1119 (10th Cir. 2005) (a party who fails to make a timely objection to the magistrate judge's findings and recommendations waives appellate review of both factual and legal questions).

The Court determines that the Magistrate Judge appropriately analyzed [Plaintiff's] Complaint and proposed dismissal with prejudice. [Plaintiff] failed to object. Accordingly, the Court now adopts the Magistrate Judge's Report and Recommendation [Doc. 5]. While, the Court authorizes the initial Complaint to be filed without payment of costs or fees [Doc. 2], the action, in its entirety, including the amended complaint, is DISMISSED, with prejudice.

IT IS SO ORDERED.
(bolding added). End of District Court's decision in Woodwalker's case.
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Famspear
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Re: A LostHead with delusions of grandeur

Post by Famspear »

I wonder whether "Woodwalker" is going to be a candidate for a criminal prosecution for the allegedly false 2007 tax return. Over $70,000 in unreported income, with $12,000+ in tax.
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Re: A LostHead with delusions of grandeur

Post by LaVidaRoja »

IIRC, IRS procedures (I know, not law and not binding) prohibit initation of a criminal case once a civil report has been issued. IIRC, if the initial report doesn't have a fraud penalty, they can't even raise civil fraud for the same year.
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Re: A LostHead with delusions of grandeur

Post by The Observer »

rogfulton wrote:WAG: the meeting isn't scheduled for his address either.
More likely than not, the revenue officer intended for a meeting to occur at the taxpayer's residence or place of business. But most revenue officers know that the meeting is likely to not happen. So after the obligatory effort to contact the taxpayer one more time to resolve the liability with the taxpayer's cooperation, the revenue officer will then start to resolve it without the taxpayer.
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Re: A LostHead with delusions of grandeur

Post by Gregg »

The Observer wrote:
rogfulton wrote:WAG: the meeting isn't scheduled for his address either.
More likely than not, the revenue officer intended for a meeting to occur at the taxpayer's residence or place of business. But most revenue officers know that the meeting is likely to not happen. So after the obligatory effort to contact the taxpayer one more time to resolve the liability with the taxpayer's cooperation, the revenue officer will then start to resolve it without the taxpayer.

I see, so going to the house is a kind of "pre appraisal"?

Well, at least he has a good record of correcting the governments assumptions, this isn't a big deal....if nothing else he can go north a bit and share a bridge with George Tran, casey Serin and DMVP
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Re: A LostHead with delusions of grandeur

Post by The Observer »

Gregg wrote:I see, so going to the house is a kind of "pre appraisal"?
Yes and no. The main reason is to make a honest "last chance" effort to contact the taxpayer in person to see if the liability can be resolved with the taxpayer's cooperation. It also provides the opportunity for the revenue officer to gather some information about the taxpayer and his/her economic lifestyle and standing (apparent value of the real estate, vehicles in the driveway, contacting of neighbors to inquire about where the taxpayer works, banks, etc.).

If no contact can be made, the revenue officer will leave a business card, asking for phone contact with a short deadline to respond. If no response, at that point the revenue officer will be making decisions in regards to whether a final notice and demand needs to be issued, if a notice of lien should be recorded, if bank and wage levies can be issued and if the taxpayer's Collection Due Process appeal period has expired for any final notices that had been issued prior to the assignment of the case to the revenue officer.

But it is fair to point out that those decisions are not being made only when the taxpayer has failed to respond to the visit. Those decisions are going to be made by the revenue officer even when they have a cooperative taxpayer. The moral of this story is that if you have an outstanding tax liability, it is far better to get it resolved before your case is assigned to a revenue officer.
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Re: A LostHead with delusions of grandeur

Post by Gregg »

Well, I doubt he's done that. Methinks what he needs to arrange is two men and a truck.
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