           In the United States Court of Federal Claims
                                           No. 13-229T
                                    (Filed: November 8, 2013)

**************************************
JEREMIAH HARRIS,                      *
                                      *                  RCFC 12(b)(6); Tax Refund Suit;
                  Plaintiff,          *                  Economic Reality; No Funds on
                                      *                  Which Instrument Draws;
v.                                    *                  Redemption Theory
                                      *
THE UNITED STATES,                    *
                                      *
                  Defendant.          *
**************************************

Jeremiah Harris, Kennesaw, GA, pro se.

David R. House, United States Department of Justice, Washington, DC, for defendant.

                                    OPINION AND ORDER

SWEENEY, Judge

        In this tax refund action, plaintiff Jeremiah Harris asks the court to award a refund in the
amount of $334,082 for the taxes he claims were paid to defendant. However, plaintiff did not
pay to the United States Treasury the monies he now seeks to have refunded, and therefore the
court dismisses plaintiff’s complaint for failure to state a claim upon which relief can be granted.

                                       I. BACKGROUND

         This case arises out of plaintiff’s filing in September, 2011 of an amended tax return for
the 2010 calendar year using the Internal Revenue Form 1040X. 1 Plaintiff claimed the reason
for his filing was “[a]mending . . . Form 1099 changes.” Compl., Ex. 1. In his Form 1040X,
plaintiff reported $485,000 in taxable income and that the entire amount had been withheld. 2 Id.
Attached to the Form 1040X was Schedule B which reported three interest payments plaintiff
received from “C E Warrington” in the amounts of $350,000, $75,000, and $60,000. Id.
Plaintiff’s Form 1040, which was attached to his Form 1040X, stated that the $485,000 in
income was withheld in its entirety as reported on from “Forms 1099-INT, DIV and OID,” but
       1
         Neither party has provided a signed and dated copy of plaintiff’s 2010 tax return or the
signed and dated Form 1040X.
       2
          While plaintiff did not attach a copy of his tax return to his amended complaint, he did
attach a copy to the original complaint and the court will look to the original complaint.
copies of those filings were not provided. The filings attached to plaintiff’s complaint provide
no other information about this $485,000 payment. Plaintiff accordingly claimed a refund in the
amount of $340,879. Id.

        By letter dated November 18, 2011, the Internal Revenue Service (“IRS”) responded to
plaintiff’s 1040X filing. Am. Compl., Ex. 2. The letter explained that in processing the
amended return, the IRS “made some corrections to [his] Form 1040X which may have affected”
the amount that plaintiff was eligible to receive in refund. Id. The IRS reduced the amount
potentially refundable to $334,082. Am. Compl. ¶ 12; Am. Compl., Ex. 3. The IRS letter also
informed plaintiff that “[i]f the adjustment results in a refund . . . [he should] get a refund of [his]
overpayment in four to six weeks.” Am. Compl., Ex. 2. On December 5, 2012, the IRS mailed
plaintiff a notice indicating that he should receive $334,082 within two to three weeks. Compl.,
Ex. 4. According to plaintiff, the promised refund was never received. Plaintiff contacted the
IRS and “was informed that a freeze hold, which no agent could explain, had been placed on the
refund which presently sits in the account.” Am. Compl. ¶ 17. Plaintiff alleges that he made
numerous telephone calls, visits, and written correspondence to the IRS to receive his refund, but
that the refund has never been paid.

        However, according to the Amended Complaint, on November 26, 2012, plaintiff mailed
a “Notice to Fiduciary” to the Secretary of the Treasury. Am. Compl. ¶¶ 29-33; see also Compl.,
Ex. 4 (copy of the “Notice”). This notice purported to assign to the Secretary of the Treasury a
Uniform Commercial Code (“U.C.C”) Article 3 instrument, “Registered Security RB 591 446
200 US, instrument No. 1004” in the amount of $485,366. Id. at ¶ 31; see also Compl., Ex. 5
(attaching a copy of the instrument).

         In an affidavit attached to his original complaint, plaintiff explains that his $485,000 in
interest payments come from a “Pure Naked Trust” that was created in his favor at birth,
“resulting by defacto technical definition in a certain widely held fixed investment trust
(WHFIT) . . . .” Pl.’s Aff. ¶ 3. Plaintiff claims to be the “Beneficial Owner of the WHFIT of the
JEREMIAH ELIJAH ALEXANDER HARRIS Estate . . . “ Id. at ¶ 7. Plaintiff provides no
information concerning where such a trust is held, who the trustees are, or where the trust is
located. Plaintiff does, however, aver that “instructions on how to report a private issue debt
instrument with OID does not exist in [IRS Regulation 1.1271 through 1.275 of Title 26 ] . . . .”
Id. at ¶ 21. Plaintiff alleges that he issued a valid U.C.C. Article 3 instrument that drew on his
“Pure Naked Trust” and “was issued in purview of Public Policy [House Joint Resolution 192]”
and various provisions of the U.C.C. Id. at ¶ 41. Plaintiff also alleges that this instrument was
accepted by the Secretary of the Treasury. Id. at ¶¶ 39, 42-46.

        On April 1, 2013, plaintiff filed a “Complaint for Just Compensation of Taxes” to recover
his tax refund. On June 13, 2013, plaintiff filed a motion for leave to file an amended complaint,
which was granted by the court on June 17, 2013 pursuant to Rule 15(a)(1)(B) of the Rules of the
United States Court of Federal Claims (“RCFC”).

        Defendant filed a motion to dismiss on June 26, 2013. The parties have completed
briefing and oral argument is unnecessary.



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                                    II. LEGAL STANDARDS

                                  A. Subject Matter Jurisdiction

        Whether the court possesses jurisdiction to decide the merits of a case is a threshold
matter. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95 (1998); see also
Matthews v. United States, 72 Fed.Cl. 274, 278 (2006) (subject matter jurisdiction is “an
inflexible matter that must be considered before proceeding to evaluate the merits of a case”).
“Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to
declare the law, and when it ceases to exist, the only function remaining to the court is that of
announcing the fact and dismissing the cause.” Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514
(1868). The parties or the court sua sponte may challenge the court's subject matter jurisdiction
at any time. Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006).

                                            B. Pro Se Plaintiffs

        A pro se plaintiff’s complaint, “‘however inartfully pleaded,’ must be held to ‘less
stringent standards than formal pleadings drafted by lawyers’ . . . .” Hughes v. Rowe, 449 U.S.
5, 10 n.7 (1980) (quoting Haines v. Kerner, 404 U.S. 519, 520-21 (1972) (per curiam)). Courts
have “strained [their] proper role in adversary proceedings to the limit, searching . . . to see if
plaintiff has a cause of action somewhere displayed.” Ruderer v. United States, 412 F.2d 1285,
1292 (Ct. Cl. 1969). Although plaintiff’s pleadings are held to a less stringent standard, such
leniency “with respect to mere formalities does not relieve the burden to meet jurisdictional
requirements.” Minehan v. United States, 75 Fed. Cl. 249, 253 (2007); see also Kelley v. Sec’y,
U.S. Dep’t of Labor, 812 F.2d 1378, 1380 (Fed. Cir. 1987) (“[A] court may not similarly take a
liberal view of that jurisdictional requirement and set a different rule for pro se litigants only.”);
Bernard v. United States, 59 Fed. Cl. 497, 499 (noting that pro se plaintiffs are not excused from
satisfying jurisdictional requirements), aff’d, 98 F. App’x 860 (Fed. Cir. 2004).

                                       C. Motion to Dismiss

        Defendant moves to dismiss the complaint for failure to state a claim upon which relief
can be granted under RCFC 12(b)(6). “A complaint must be dismissed under Rule 12(b)(6)
when the facts asserted do not give rise to a legal remedy.” Indian Harbor Ins. Co. v. United
States, 704 F.3d 949, 954 (Fed. Cir. 2013) (citing Lindsay v. United States, 295 F.3d 1252, 1257
(Fed. Cir. 2002)). “When considering an RCFC 12(b)(6) motion, the court “must determine
‘whether the claimant is entitled to offer evidence to support the claims,’ not whether the
claimant will ultimately prevail.” Chapman Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d
934, 938 (Fed. Cir. 2007) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on
other grounds by Harlow v Fitzgerald, 457 U.S. 800, 814-19 (1982)). “A motion made under
Rule 12(b)(6) challenges the legal theory of the complaint, not the sufficiency of any evidence
that might be adduced.” RhinoCorps Co. v. United States, 87 Fed. Cl. 481, 492 (2009).

       “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim of relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2006)).

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“Deciding whether a complaint states a plausible claim for relief will . . . be a context-specific
task that requires the reviewing court to draw on its judicial experience and common sense.”
Iqbal, 556 U.S. at 679. “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.” Id. at 678 (citing Twombly, 550 U.S. at 556). Neither allegations “that are
‘merely consistent with’ a defendants liability,” nor “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements” are sufficient. Id. A court may
dismiss a complaint for lack of jurisdiction when it is “wholly insubstantial and frivolous.” Bell
v. Hood, 327 U.S. 678, 682-83 (1946).

       “The court assumes all well-pled factual allegations are true and indulges in all
reasonable inferences in favor of the nonmovant.” Terry v. United States, 103 Fed. Cl. 645, 652
(2012) (citing United Pac. Ins. Co. v. United States, 464 F.3d 1325, 1327-28 (Fed. Cir. 2006)).
The court is “not bound to accept as true a legal conclusion couched as a factual allegation.”
Twombly, 550 U.S. at 555. A failure to allege a cause of action upon which relief can be granted
warrants a judgment on the merits rather than a dismissal for want of jurisdiction. Litecubes,
LLC v. N. Light Prods., Inc., 523 F. 3d 1353, 1361 (Fed. Cir. 2008).

                                        III. DISCUSSION

         Plaintiff claims that the court has jurisdiction pursuant to 28 U.S.C. §§ 1491 and
1494(1)(3) (2006). Under precedent from the United States Supreme Court, in suits for tax
refunds in the United States Court of Federal Claims, the plaintiff must first pay the tax assessed
in full before suing for refund. Flora v. United States, 357 U.S. 63, 75 (1958). Plaintiff cannot
prove that he paid the tax in question and thus this court has no jurisdiction to consider his claim.

        Plaintiff alleges that he paid his taxes when he sent his Article 3 instrument, “Registered
Security RB 591 446 200 US, instrument No. 1004” to the Secretary of the Treasury. But
plaintiff has provided no evidence that his instrument actually paid anything. Rather, plaintiff’s
putative instrument, complaint, and supporting affidavit demonstrate that he is using the
“redemption theory” to claim his refund. Plaintiff has offered a document sent to the Secretary
of the Treasury that purports to be a negotiable instrument, but the court is not convinced that
this instrument is legitimate. See Bryant v. Wash. Mut. Bank, 524 F. Supp. 2d 753, 758 (W.D.
Va. 2007). As plaintiff explains, a “Pure Naked Trust” was granted in his favor at birth. What
plaintiff does not explain, but which the Bryant opinion does, is that this “trust account” and
instruments drawing on it has a complicated back story which reveals that his instrument is
valueless:

               The foundation of Plaintiff’s claim is equal parts revisionist legal
               history and conspiracy theory. . . . [According to this theory, t]he
               federal government . . . has tricked the populace into becoming
               U.S. citizens by entering into “contracts” embodied in such
               documents as birth certificates and social security cards. With
               these contracts, an individual unwittingly creates a fictitious entity
               (i.e., the U.S. citizen) that represents, but is separate from, the real
               person. Through these contracts, individuals also unknowingly

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               pledge themselves and their property, through their newly created
               fictitious entities, as security for the national debt in exchange for
               the benefits of citizenship. However, the government cannot hold
               the profits it makes from this use of its citizens and their property
               in the general fund of the United States because doing so would
               constitute fraud, given that the profits technically belong to the
               actual owners of the property being pledged (i.e., the real people
               represented by the fictitious entities). Therefore, the government
               holds the profits in secret, individual trust accounts, one for each
               citizen.

               Because the populace is unaware that their birth certificates and
               such are actually contracts with the government, these contracts are
               fraudulent. As a result, the officers of government are liable for
               treason unless they provide a remedy that allows an individual to
               recover what she is owed – namely, the profits held in her trust
               account, which the government has made from its use of her and
               her property in the commercial markets. In 1933, the government
               provided just such a remedy with House Joint Resolution 192, and
               the Uniform Commercial Code (UCC) provides the means for a
               person to implement it. The fact that virtually no one is aware of
               this remedy or how to use it is all part of the government’s scheme
               – if no one takes advantage of the remedy, the government can
               keep the money, so it is in the government’s interest that the
               remedy be obscure. However, one such as Plaintiff, who learns of
               and is able to implement the remedy, can supposedly use the debt
               owed to her by the government to discharge her debts to third
               parties with Bills of Exchange that are drawn on her trust account.

Id. at 758-59 (footnotes omitted). Plaintiff in this case, like the plaintiff in Bryant, attempts to
“redeem” the funds allegedly kept in a government trust account by making various U.C.C.
filings. See Compl., Ex. 4 (attaching plaintiff’s U.C.C. filings); see also Bryant, 524 F. Supp. 2d
at 759 (discussing U.C.C. filings made by plaintiff in that case to “redeem” trust account).

        Merely because plaintiff believes he possesses “redeemed” funds in a fictitious trust
account allegedly created in his name does not mean that he has actually accomplished this
alchemical feat. Indeed, plaintiff has not provided any reality-based averments or proofs that he
actually paid the tax amount for which he now seeks a refund. His intimation that he effectuated
payment through his issuance of a fanciful negotiable instrument drawn on an actual account
simply is not plausible. The court, applying judicial experience and most especially common
sense, cannot make a “reasonable inference” that plaintiff paid any tax on the $485,366
purported instrument. See Iqbal, 556 U.S. at 678. The court has no jurisdiction to order a refund
for a tax that was never paid.

       To the extent that plaintiff is alleging that a contract exists between the United States and
himself to release the amount frozen in his refund account, he must demonstrate the four

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elements of a valid, enforceable contract: mutuality of intent, consideration, unambiguous offer
and acceptance, and authority on the part of the government’s representative to bind the
government. Hanlin v. United States, 316 F.3d 1325, 1328 (Fed. Cir. 2003). Plaintiff cannot do
so. For example, plaintiff argues that by defendant sending him two separate notices stating that
a refund would issue within weeks, defendant’s conduct evidences intent to enter into a contract.
However, the freeze placed on plaintiff’s account demonstrates defendant’s lack of intent to enter
into an agreement. Moreover, plaintiff did not plead any facts demonstrating defendant’s
unambiguous acceptance of plaintiff’s offer to enter into a contract, nor that an IRS official with
the requisite authority entered into a binding contract with plaintiff. Accordingly, there was no
enforceable contract formed between the parties that laid the predicate for plaintiff’s tax refund
claim. 3

        In short, after reviewing plaintiff’s complaint, the court finds that the factual allegations
are so implausible and fanciful that they fail to “raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555.

                                        IV. CONCLUSION

       For the reasons set forth above, the court GRANTS defendant’s motion to dismiss and
DISMISSES plaintiff’s complaint for failure to state a claim upon which relief can be granted.
The clerk is directed to enter judgment accordingly. No costs.

       IT IS SO ORDERED.



                                                       _________________________________
                                                       MARGARET M. SWEENEY
                                                       Judge




       3
          The court also lacks jurisdiction under 28 U.S.C. § 1494 because, even if the court
construes plaintiff’s filing of his Form 1040X as a request to settle an account, plaintiff has not
satisfied the statutorily required three-year waiting period. See 28 U.S.C. 1494(2).
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