
USCA1 Opinion

	




          October 5, 1994                                [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 94-1315                       KENNETH A. HANLEY AND PHYLLIS G. HANLEY,                               Plaintiffs, Appellants,                                          v.                              UNITED STATES OF AMERICA,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                 [Hon. Frank H. Freedman, Senior U.S. District Judge]                                          __________________________                                 ____________________                                        Before                                Torruella, Chief Judge,                                           ___________                            Selya and Cyr, Circuit Judges.                                           ______________                                 ____________________            Kenneth A. Hanley and Phyllis G. Hanley on brief pro se.            _________________     _________________            Loretta C.  Argrett, Assistant  Attorney General,  Gary R.  Allen,            ___________________                                ______________        Charles  E. Brookhart and  Sara Ann Ketchum,  Attorneys, Tax Division,        _____________________      ________________        Department of Justice, on brief for appellee.                                 ____________________                                 ____________________                 Per Curiam.  Appellants  Keith and Phyllis Hanley appeal                 __________            pro  se  from  a  judgment  dismissing  their  first  amended            ___  __            complaint for  lack of  jurisdiction and  from the  denial of            their post-judgment motions to amend the complaint and for  a            new trial.  For the following reasons, we affirm.                                      BACKGROUND                 This is the  second appeal to  this court in  connection            with the Hanleys' 1986  income taxes.  On April 26, 1990, the            Hanleys filed a petition in the United States Tax Court for a            redetermination of deficiency for  tax year 1986.   In Hanley                                                                   ______            v.  Commissioner, No. 92-1035  (1st Cir. Dec.  16, 1992) (per                ____________            curiam), we upheld the Tax Court's finding of a deficiency in            the amount  of $524.  On  April 9, 1993, the  Hanleys filed a            vaguely worded complaint in  the United States District Court            for the District of  Massachusetts alleging that the Internal            Revenue  Service had discriminated  against them and deprived            them of  due  process of  law  by violating  various  federal            statutes in connection with  the assessment and collection of            their 1986 taxes.  Although the  complaint is notably lacking            in factual  detail, the  central allegation is  that the  IRS            failed  to process  a  partnership schedule  attached to  the            Hanleys'  1986  tax  return,  and  as  a  result,  improperly            assessed  them in the amount  of $1,824.   The complaint also            alleges that the IRS  improperly failed to issue a  notice of            deficiency before making  this assessment.1  Read  liberally,            and in light of later filings, the complaint alleges that the            IRS unlawfully  levied on Keith  Hanley's military  pension.2            Finally,  the   complaint  alleges   that  the  IRS   made  a            mathematical error  in computating the Hanleys' tax liability            for 1986 and refuses to correct it.3                 On July 23,  1993, the government  moved to dismiss  the            complaint for lack of jurisdiction.  Among  other things, the            government  argued  that  to the  extent  the  suit  could be            construed as  a claim for  a refund pursuant  to 28 U.S.C.               1346(a) and  26 U.S.C.   7422,  it is barred by  the Hanleys'            failure to allege, as jurisdictional prerequisites, that they                                            ____________________            1.  Although there is no  evidence in the record whether  the            IRS sent the Hanleys a  notice of deficiency before assessing            them $1,824 for tax year 1986,  it is undisputed that the IRS            at some  point determined that  an additional amount  was due            for  that taxable  year  and sent  the  Hanleys a  notice  of            deficiency in the  amount of  $1,217.  Indeed,  it was  after            receiving  this  notice of  deficiency  in  January 1990  for            $1,217 that the Hanleys filed a petition in the Tax Court.            2.  Although the Hanleys contend  that this pension is exempt            from levy,  they rely on chapter 73 of title 10 of the United            States Code,  which exempts annuities payable  to a surviving            spouse  and children--but  not military  pensions--from levy.            See 10 U.S.C.   1440; 26 U.S.C.   6334(6).  Although under 26            ___            U.S.C.    6334(6),  special  pension payments  received by  a            person whose name  has been  entered on the  Army, Navy,  Air            Force,  and Coast Guard Medal  of Honor roll  are exempt from            levy,  appellants have  never alleged  that Keith  Hanley has            been  entered on this honor  roll or receives  such a special            pension.              3.  The original complaint names the Commissioner of Internal            Revenue   as  defendant.      The  first   amended  complaint            substitutes the United States as defendant.                                         -3-            filed an administrative  claim for refund  and paid the  full            tax assessed.  In addition, the government argued that such a            suit  is barred  by 26  U.S.C.    6512(a), which  prohibits a            taxpayer  who  has petitioned  the  Tax Court  from  filing a            refund suit for the  same taxable year.  The  government also            argued  that to  the extent  the complaint  could be  read as            alleging a  common law  tort, such a  claim is  barred by  28            U.S.C.    2680(c).   Finally, the government  argued that any            claim  under 26 U.S.C.    7433 for damages  caused by the IRS            during  the  collection of  taxes is  barred by  the Hanleys'            failure to allege that they exhausted administrative remedies            pursuant to 26 U.S.C.   7433(d)(1).                   On November  23, 1993, the district  court dismissed the            first  amended  complaint  for  lack  of  jurisdiction.    On            December 7, 1993,  the Hanleys  filed a motion  to amend  the            complaint.  A proposed  second amended complaint, attached to            this  motion,  added  the  allegation that  the  Hanleys  had            exhausted  administrative  remedies,  but was  not  otherwise            significantly  different  than the  first  amended complaint.            Approximately a week later, on December 13, 1993, the Hanleys            filed a motion for new trial.   Appended to this motion was a            copy of a document headed:                 ADMINISTRATIVE    DEMAND     TO    THE    SECRETARY                 (COMMISSIONER  OF  INTERNAL  REVENUE  SERVICE)  FOR                 RETURN OF  ALL ILL  GOTTEN OR OVER  COLLECTED MONEY                 TAKEN BY  THE REVENUE SERVICE BY  MEANS OF MISTAKE;                 OVER   ASSESSMENT;  LEVIES;   AUTOMATED  COLLECTION                 PROCESS  OR OTHER  MEANS  NOT SPECIFICALLY  LEGALLY                                         -4-                 AUTHORIZED TOO UNDER THE REVENUE LAWS AND TO RETURN                 ALL  OVER  ASSESSED  PENALTIES;  AND  INTEREST  NOT                 ENTITLED TO, AS PER THE IRS CODE . . .             The  district court  denied  both post-judgment  motions, and            this appeal followed.                                      DISCUSSION                 We  begin with  the  basic proposition  that the  United            States,  as a  sovereign, is  immune from  lawsuit  unless it            consents to be sued.   United States v. Testan, 424 U.S. 392,                                   _____________    ______            399  (1976).   Accordingly,  any lawsuit  against the  United            States must be brought in compliance  with a specific statute            which  expressly waives sovereign immunity.   Id. at  399.  A                                                          ___            plaintiff has  the burden  of showing  a waiver  of sovereign            immunity.  See Baker v. United States, 817 F.2d 560, 562 (9th                       ___ _____    _____________            Cir. 1987), cert. denied, 487 U.S. 1204 (1988).                        ____________                 The  Hanleys contend that 28 U.S.C.    1346(a)(1) and 26            U.S.C.   7422, which together authorize a taxpayer to sue the            government for a tax refund, provide a jurisdictional    base            for  their suit.    They further  argue  that they  not  only            alleged, but submitted evidence to prove, that they satisfied            the  requirements for such a suit by filing an administrative            claim  and  paying all  taxes due.    See McMillen  v. United                                                  ___ ________     ______            States Dep't of Treasury,  960 F.2d 187, 188 (1st  Cir. 1991)            ________________________            (per curiam) (ruling that district court  lacked jurisdiction            over refund  action where  these requirements were  not met).            Appellants   also  contend   that  the  district   court  had                                         -5-            jurisdiction under 26  U.S.C.   7433,  and that they  alleged            and  proved that they  exhausted the  administrative remedies            necessary to bring  an action under this  statute for damages            incurred  during the  collection of taxes.   See  Conforte v.                                                         ___  ________            United States,  979 F.2d 1375,  1377 (9th Cir.  1992) (ruling            _____________            that district  court lacked  jurisdiction over    7433 action            where plaintiff failed to exhaust administrative remedies).                   There is  no question  that the first  amended complaint            fails to allege that the Hanleys exhausted the administrative            remedies necessary to bring a refund suit or a   7433 action.            In  their opposition to  the motion to  dismiss, however, the            Hanleys   allege  that   "all  administrative   avenues  were            exhausted."   The proposed  second amended  complaint alleges            that  the  Hanleys filed  for  an  administrative refund  and            "exhausted  all legal  and administrative  avenues."   In the            accompanying motion to  amend, the Hanleys cite as proof that            they made an administrative  claim, the document, attached to            the motion for new trial, demanding "return of all ill gotten            or  over collected money."  In their  motion for a new trial,            appellants  cite  this  same  document  as  proof  that  they            exhausted the administrative requirements for filing a   7433            claim.                  Even if  we indulge appellants  as pro se  litigants and            construe their  first amended complaint  to incorporate later            allegations of having  exhausted administrative remedies,  we                                         -6-            are persuaded that the refund and   7433 claims were properly            dismissed.  The applicable Treasury regulations  require that            an administrative  refund claim include  a detailed statement            providing  the grounds for relief.  See 26 C.F.R.   301.6402-                                                ___            2(b)(1).  If  this requirement is not  met, meaningful review            of  the   refund  claim   at  the  administrative   level  is            impossible,  and  a  district  court  lacks  jurisdiction  to            entertain  the refund suit.  See, e.g.,  Hefti v. IRS, 8 F.3d                                         ___  ____   _____    ___            1169, 1173  (7th Cir. 1993);  Goulding v. United  States, 929                                          ________    ______________            F.2d 329, 332 (7th  Cir. 1991), cert. denied, 113  S. Ct. 188                                            ____________            (1992).  In the instant case,  the document alleged to be the            Hanleys' administrative refund claim utterly fails to specify            any grounds for relief,  and district court jurisdiction was,            accordingly, lacking.4   The Treasury regulations  for filing            an administrative claim pursuant  to   7433 similarly require            a statement  of the  grounds for  relief.   See  26 C.F.R.                                                           ___            301.7433-1(e)(2).   We  think  it equally  apparent that  the            purported administrative demand for "return of all ill gotten                                            ____________________            4.  In light of our ruling that  appellants failed to satisfy            the jurisdictional  prerequisites for a refund  suit, we need            not  reach the  government's argument  that  the filing  of a            petition in the Tax  Court serves as a jurisdictional  bar to            any  refund suit.   We  observe, however,  that as  a general            rule,  the Tax  Court's  jurisdiction extends  to the  entire            subject  of the correct tax  for the particular  year, and 26            U.S.C.    6512(a) serves  to deprive  the  district court  of            jurisdiction once  the Tax  Court has  been petitioned.   See                                                                      ___            Solitron Devices v.  United States, 862  F.2d 846, 848  (11th            ________________     _____________            Cir. 1989).  Appellants have not argued that the instant case            falls within any of the exceptions set forth in   6512(a).                                                         -7-            or over  collected money"  was inadequate to  confer district            court jurisdiction over the Hanleys'   7433 claim.                 For similar reasons, we uphold the denial of appellants'            motion to amend the complaint.  We note as an  initial matter            that once  a district court  enters judgment on  a dismissal,            the filing  of  an  amendment  cannot be  allowed  until  the            judgment  is set aside or vacated under Federal Rule of Civil            Procedure  59(e)  or   60(b).    See  Acevedo-Villalobos   v.                                             ___  __________________            Hernandez,  22 F.3d  384, 389  (1st Cir. 1994),  petition for            _________                                        ____________            cert. filed, 63 U.S.L.W.  3161 (U.S. Aug. 29, 1994)  (No. 94-            ___________            362).   Putting  aside  the fact  that  the Hanleys  did  not            accompany their motion to amend with the requisite Rule 59(e)            or  60(b) motion, we could  not find that  the district court            abused its  discretion.  The  only significant change  in the            proposed  second  amended  complaint  was   the  addition  of            allegations   that   the  Hanleys   exhausted  administrative            avenues.    Assuming,  without  deciding,  that  the proposed            changes  cured  certain  facial  deficiencies  in  the  first            amended complaint with respect  to the Hanleys' refund  and              7433 claims,  it is  plain, for the  reasons just  discussed,            that the  proposed amendments  were futile.   See  Jackson v.                                                          ___  _______            Salon, 614 F.2d 15, 17 (1st Cir. 1980) (post-judgment  motion            _____            to amend  complaint properly denied where  amendment would be            futile).                                         -8-                 We  need not  devote  as much  attention to  appellants'            remaining arguments.   The  Hanleys contend that  the Federal            Tort Claims  Act (FTCA),  28 U.S.C.    2671-2680,  provides a            jurisdictional basis  for their  action.  Section  2680(c) of            the  FTCA, however,  prohibits  any suit  against the  United            States "arising in respect of the assessment or collection of            any tax . . . "  See McMillen,  960 F.2d at 188.  The conduct                             ___ ________            alleged  by the Hanleys as  the basis of  their lawsuit falls            squarely within  the parameters of this  exclusion.  Contrary            to the position taken  by the Hanleys,    2680(c) encompasses            any activities of an  IRS agent even remotely related  to his            or  her official  duties  of assessing  or collecting  taxes,            including  unlawful  or  unauthorized actions.    See,  e.g.,                                                              ___   ____            National Commodity  & Barter Ass'n  v. Gibbs, 886  F.2d 1240,            __________________________________     _____            1246 n.5 (10th Cir. 1989) (rejecting argument that    2680(c)            is  inapplicable  where IRS  failed  to comply  with  its own            procedures); Capozzoli v. Tracey, 663 F.2d 654, 657 (5th Cir.                         _________    ______            Dec.  1981)  (rejecting argument  that  tortious or  wrongful            conduct by an agent  cannot, by definition, be in  respect of            his official duties of assessing or collecting taxes); Morris                                                                   ______            v. United States, 521 F.2d 872, 874 (9th Cir. 1975) (unlawful               _____________            seizure and levy  of property fell  within exempted group  of            tort   claims  arising  out   of  tax   collection  efforts).            Appellants'   constitutional  challenge   to      2680(c)  is            meritless.                                         -9-                 We also reject  appellants' argument  that the  district            court's  dismissal of their  first amended complaint deprived            them  of their right to  a jury trial  under the Constitution            and various federal  statutes.  Where,  as here, federal  law            provides no  basis for the exercise  of federal jurisdiction,            there  is  no  cognizable  cause  of  action  to   which  any            constitutional or statutory  right to a jury trial can apply.            See County of  Suffolk v.  Long Island Lighting  Co., 710  F.            ___ __________________     _________________________            Supp.  1387, 1404 (E.D.N.Y. 1989), aff'd in part and rev'd in                                               __________________________            part,  907  F.2d 1295  (2d  Cir. 1990)  (ruling  that Seventh            ____            Amendment  right to  a jury  trial  was not  implicated where            plaintiff's claim  was dismissed  for lack of  jurisdiction).            We add, however, that  the Seventh Amendment right to  a jury            trial does not  extend to actions against  the United States,            see,  e.g., Hudson v. United States, 766 F.2d 1288, 1292 (9th            ___   ____  ______    _____________            Cir. 1985); and  that Article III, Section 2, Clause 3 of the            Constitution, which provides that "the trial of  all crimes .            . . shall be by jury", is not applicable to the instant civil            action alleging violations of civil statutes.                   We  have considered appellants'  remaining arguments and            find them to be without merit.5                   Affirmed.                 _________                                            ____________________            5.  We also deny appellants' request for oral argument.                                         -10-
