that the IRS was without authority to place a lien on their property because no Treasury Department Delegation of Authority Order had issued pursuant to 44 U.S.C. §§ 1501, 1505 (concerning publication in the Federal Register). A federal tax lien arises by statute. Section 6321 states that, after demand, the unpaid amount of tax "shall be a lien in favor of the United States." 26 U.S.C. § 6321.
The Watts' second argument is that the IRS, through its employees, is unable to act under 26 U.S.C. § 6321, without implementing regulations as set forth in 26 U.S.C. § 7805(a) Section 7805(a) provides, in relevant part, "the Secretary shall prescribe all needful rules and regulations for the enforcement of this title." Id. By "needful rules and regulations," Congress did not intend to require the promulgation of unnecessary regulations. Section 6321 has the force of law which Congress gave it, with or without implementing regulations.
In their response in opposition to the IRS's motion, plaintiffs cite California Bankers Assoc. v. Shultz, 416 U.S. 21, 39 L. Ed. 2d 812, 94 S. Ct. 1494 (1974), for the proposition that absent specific implementing regulations, the Internal Revenue Code "would impose no penalties on anyone." Id. at 64. California Bankers, however, did not concern the Internal Revenue Code, but addressed the constitutionality of the Bank Secrecy Act of 1970.
The Court, indeed, held that the Bank Secrecy Act was not self-executing. Id. This holding has no bearing on Section 6331 of the Internal Revenue Code, which is self-executing. As the Supreme court observed in another context, "federal tax liens are wholly creatures of federal statute." United States v. Brosnan, 363 U.S. 237, 240, 4 L. Ed. 2d 1192, 80 S. Ct. 1108 (1960). The alleged lack of implementing regulations, even if true, would not affect the validity of a federal tax lien, or the authority of the IRS to impose it.
More importantly, having an adequate remedy at law, the Watts may not invoke the equitable jurisdiction of this Court. Congress has provided taxpayers the means to challenge assessments made by the IRS. Taxpayers may challenge a notice of deficiency via a petition in the United States Tax Court. 26 U.S.C. §§ 6212(a)-(c), 6213(a). Alternatively, a taxpayer may sue in the proper district court or the United States Claims Court for a refund of taxes already paid. 26 U.S.C. § 7422.
What taxpayers may not do is seek an injunction preventing the IRS from collecting the tax. With few exceptions, none of which is applicable to the facts and circumstances of this case, the Internal Revenue Code provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." 26 U.S.C. § 7421(a). Under this clear statutory mandate, the Court must dismiss any action that seeks the release or cancellation of a federal tax lien. Bob Jones University v. Simon, 416 U.S. 725, 743, 40 L. Ed. 2d 496, 94 S. Ct. 2038 (1974) (courts must adhere to the plain meaning of the Anti-Injunction Act).
2. Alleged Unauthorized Disclosures of Return Information
Even when read in the most generous light, plaintiffs' complaint does not state a claim for unauthorized disclosure of their return information. Section 7431 provides a private cause of action for civil damages against an employee of the United States under the following circumstances:
If any officer or employee of the United States knowingly, or by reason of negligence, discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court if the United States.
26 U.S.C. § 7431(a)(1). In order to prevail under this Section, the Watts must prove: (1) a violation of § 6103, and, (2) that the violation resulted from knowing or negligent conduct. Venen v. United States, 38 F.3d 100, 104 (3d Cir. 1994). It is apparent from the allegations of the complaint that the IRS employees, in placing the tax lien, acted within the scope of their employment. Treasury regulations expressly authorize IRS employees to disclose return information, as necessary, in connection with their duties in establishing liens against a delinquent taxpayer's assets. Treas. Reg. § 301.6103(k)(6). See also Christensen v. United States, 733 F. Supp. 844 (D.N.J. 1990) (IRS employees' actions benefit from a presumption of regularity and plaintiff bears the burden of showing irregularity), aff'd, 925 F.2d 416 (3d Cir. 1991). It is clear that even if the Watts proved the facts alleged in their complaint, they would be entitled to no relief because there has been no violation of Section 6103. Accordingly, the Watts' claim based on Section 7431 must be dismissed.
D. Count 4
Count 4 of plaintiffs' complaint seeks damages for alleged defamation, presumably by the named individual employees of the IRS. This appears to be a claim factually related to the claim for unauthorized disclosure of return information. In any event, this Court has no jurisdiction to hear actions based on libel and slander when they are brought against the United States. The Federal Tort Claims Act ("FTCA") provides the exclusive remedy against the United States for all actions sounding in tort. 28 U.S.C. § 2679(b). The FTCA includes a specific waiver of sovereign immunity, however, it preserves sovereign immunity as a defense against certain claims, notably those based on libel and slander. 28 U.S.C. § 2680(h); Accardi v. United States, 435 F.2d 1239, 1240 (3d Cir. 1970).
Count 4 also states that "plaintiff is not an 'officer, employee, or elected official of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia," and asserts therefore that his wages may not be attached by "notice of levy." Complaint P 22(c) (quoting 26 U.S.C. § 6331(a)). Although the statute specifies how a levy can be made upon the "salary or wages of any officer, employee, or elected official," it cannot be read to limit that method of levy to federal employees. This result would place the second sentence of this section in contradiction to the first, which begins, "if any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the levy) by levy upon all property . . . ." 26 U.S.C. § 6331(a) (emphasis added). See also United States v. National Bank of Commerce, 472 U.S. 713, 714-15, 86 L. Ed. 2d 565, 105 S. Ct. 2919 (1985).
In Sims v. United States, 359 U.S. 108, 3 L. Ed. 2d 667, 79 S. Ct. 641 (1959), the IRS had directed notices of levy to the State of West Virginia in order to collect deficiencies owed by three state employees. Id. at 109. When the State Auditor refused to enforce the levies, the IRS sued. Id. The Court rejected the auditor's argument that Congress, by providing for levy upon the salary of federal employees in Section 6331, meant to exclude levies on the salaries of state employees. Id. at 112. As the Court pointed out, by providing a method by which to levy against the salaries of federal employees, which would not be permitted in the absence of express congressional authorization, Congress did not intend to exclude from he reach of the statute those persons upon whose salary the service might levy without express authorization. Plaintiffs are in this latter category. There is no merit to their argument that Section 6331 can be interpreted to prohibit the IRS from issuing a "notice of levy" against an individual taxpayer's wages or salary.
Plaintiff, Michael Watts, also claims that the levy on his salary is illegal because there are no implementing regulations pursuant to 26 U.S.C. § 7805(a) which would make Section 6331 applicable to him. This is a mere reprise of the argument made in Count 3. See, infra part III.C.1. As noted, the Secretary is empowered by Section 7805 to pass "needful" regulations, Section 6331 is not without the force of law simply because the Secretary does not find that any regulations for its enforcement are needed. See also Yalkut v. Gemignani, 873 F.2d 31, 35 (2d Cir. 1989) (noting that the Internal Revenue Code provides for collecting assessed taxes by levy pursuant to 26 U.S.C. § 6331 and that the authority to levy had been delegated to defendant IRS agents through 26 C.F.R. § 301.6331-1).
Plaintiff also makes a demand in Count 4 for judgment pursuant to 26 U.S.C. § 7214, alleging extortion, willful oppression and the making and signing of fraudulent entries, certificates, returns and/or statements. Section 7214 provides for fines up to $ 10,000.00 and imprisonment up to 5 years for any officer or employee who is guilty of extortion, willful oppression, the making and signing of fraudulent entries, certificates, returns or statements, or any of numerous other offenses. 26 U.S.C. § 7214(a)(1)-(9). However, if an individual taxpayer's suit for damages under this section is available, it may only be brought after the criminal conviction of the revenue officer or agent. See Brunwasser v. Jacob, 453 F. Supp. 567, 572-73 (W.D. Pa. 1978), aff'd, 605 F.2d 1194 (3d Cir. 1979). Whether such an action may be brought, however, need not be decided, since plaintiffs' allege no facts which would bring this complaint within the purview of Section 7214.
Because this is an action against the United States, and the United States is immune from suit for defamation, that portion of Count 4 of plaintiffs' complaint which alleges defamation must be dismissed for lack of jurisdiction. Insofar as plaintiffs seek damages under Section 7214(a), Count 4 of their complaint fails to state a claim upon which relief may be granted.
For the reasons set forth above, the complaint of plaintiffs, Michael H. Watts and Barbara Watts, against the Internal Revenue Service and the individual defendants will be dismissed. The court will enter an appropriate order.
STEPHEN M. ORLOFSKY
United States District Judge
Dated: April 19, 1996
This matter having come before the Court on April 19, 1996, on the Motion defendants, Internal Revenue Service, J.J. Jennings, L. Walling and Cynthia Moody, to Dismiss Plaintiffs' Complaint for Lack of Jurisdiction and Failure to State a Claim Upon Which Relief May be Granted, plaintiffs, Michael H. Watts and Barbara Watts, appearing pro se, and Lawrence P. Blaskopf, Esq., of the United States Department of Justice, Tax Division, appearing for defendants, and the Court having considered plaintiffs' complaint, as well as the briefs filed in support of and in opposition to this Motion, for the reasons set forth in this Court's OPINION filed concurrently with this ORDER;
It is on this 19th day of April, 1996, ORDERED that Defendants' motion to dismiss plaintiffs' complaint is GRANTED.
STEPHEN M. ORLOFSKY
United States District Judge