Brief order in James E. Leaf v. IRS et al., No. 12-41276 (5th Cir. 4/12/2013):
Fifth Circuit wrote:JAMES E. LEAF,
Plaintiff-Appellant,
v.
INTERNAL REVENUE SERVICE;
DOUGLAS H. SCHULMAN, COMMISSIONER OF
THE INTERNAL REVENUE SERVICE,
Defendants-Appellees.
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Summary Calendar
Appeal from the United States District Court
for the Southern District of Texas
No. 3:12-CV-48
Before SMITH, PRADO, and HIGGINSON, Circuit Judges.
PER CURIAM:*
James Leaf is a tax protester whose suit claims the income tax is unlawful. The district court dismissed the action, opining that "Leaf's claim lacks facial plausibility because it is frivolous."
The district court gave its reasons in a short but sufficiently thorough order. Granting mercy to Leaf, the court denied sanctions. The appeal is DISMISSED as frivolous. See 5TH CIR. R. 42.2.
FOOTNOTE
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
END OF FOOTNOTE
The District Court order is somewhat more interesting, but still the same old, same old:
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
JAMES E LEAF,
Plaintiff,
VS.
INTERNAL REVENUE SERVICE, et al,
Defendants.
CIVIL ACTION NO. G-12-48
ORDER
The Sixteenth Amendment to the United States Constitution grants Congress the “power to lay and collect taxes on incomes, from whatever source derived.” U.S. Const. amend XVI, § 1. Despite the Constitution’s status as the “supreme law of the land,” id. art. VI, cl. 2, there are those individuals who maintain that the federal government lacks the power to assess or collect income tax.
Plaintiff James E. Leaf is one such tax protestor. He filed a pro se complaint alleging various canards about the supposed unlawfulness of the income tax. Among other things, Leaf argues that federal income taxation applies only to the “territorial states,” and that he is thereby exempt from tax liability and collection. Docket Entry No. 8, at 2. He seeks a judgment against the IRS and IRS Commissioner imposing $2.2 million in compensatory and consequential damages, and another $2.2 million in punitive damages.
Defendants filed their motion to dismiss, arguing that the United States is immune to suit; that the action is barred by the Declaratory Judgment Act and Anti-Injunction Act; and that Leaf’s claims are frivolous. To withstand a motion to dismiss for failure to state a claim, Leaf must allege a claim for relief that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Leaf’s claim lacks facial plausibility because it is frivolous. Federal courts have consistently rejected these challenges to the federal income tax. See, e.g., Stelly v. C.I.R., 761 F.2d 1113, 1115 (5th Cir. 1985) (collecting cases). As the Fifth Circuit has noted, there is “no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit.” Crain v. C.I.R., 737 F.2d 1417, 1417 (5th Cir. 1984). Because the tax system’s constitutionality “has long been established,” id. at 1418, Leaf’s claim is implausible on its face. See Twombly, 550 U.S. at 570. Leaf’s frivolous lawsuit will not be allowed to further consume the resources of this Court, which is funded by those citizens who comply with the law and pay their taxes.
Defendants also move for Rule 11 sanctions or an award of fees pursuant to 28 U.S.C. § 2412, which provides that, when the United States is party to a lawsuit, costs and attorneys fees may be awarded to the prevailing party. See 28 U.S.C. § 2412(a)–(b). While the Court agrees with Defendants that this suit has no basis in law or fact, at this time the court declines to impose sanctions. Should Leaf continue to waste the Court’s time and taxpayer money with additional frivolous filings, sanctions may be imposed. At this time, the Defendants’ motion for
sanctions is DENIED.
The Defendants’ Motion to Dismiss (Docket Entry No. 6) is GRANTED and the motion for sanctions is DENIED.
It is so ordered.
SIGNED this 5th day of September, 2012.
___________________________________
Gregg Costa
United States District Judge
edited to add closing quotes -- AndyK
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