UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF PENNSYLVANIA

CHAKA FATTAH, JR., : CIVIL ACTION
Plaintiff :
:
v. : No. 14-1092-TJS
:
UNITED STATES OF AMERICA, et al., :
Defendants

PLAINTIFFS BRIEF IN SUPPORT OF HIS REPLY TO DEFENDANTS
MOTION TO DISMISS CLAIMS AND FOR SUMARY JUDGMENT
Defendants are relying on flawed theories and legal conclusions in their hope for
dismissal. Contrary to the Defendants contention, Plaintiffs opposition to dismissal show
why the Defendants request for dismissal and summary judgment should be denied. With
respect to the Privacy Act claim, Plaintiff submits that the deficiencies can be cured by
amendment. Plaintiff submits that there are no deficiencies related to the claims under 26
U.S.C. 7431 for unauthorized disclosure of tax return information. Plaintiff submits that his
opposition to summary judgment has significant merit and therefore the arguments are not
immaterial as a matter of law. Defendants have gone to great lengths to explain why the court
should dismiss the section 7433 and 7431 claims. Their claims lack merit.
Plaintiff respectfully requests oral argument regarding the Defendants brief (Doc. 14),
reply brief (Doc. 16), and his responses thereto (Doc. 15, 17).
Even if this Court grants the Defendants summary judgement for civil penalties, and
motion for dismissal with respect to only the Privacy Act claim, there are significant issues to
be decided with respect to the section 7433 and 7431 claims. Based on the Defendants
lackluster claims in support of dismissing the section 7433 and 7431 claims against all
Defendants in the present matter, and Plaintiffs research, it is apparent that certain aspects of
this action is a first impression case.
In Bell Atl. Corp. v. Twombly et.al., 550 U.S. 544, 555 (2007), the Court made clear
that it would not require a heightened fact pleading of specifics but only enough facts to
state a claim to relief that is plausible on its face. The Federal Rules reject the approach
that pleading is a game of skill in which one misstep by counsel may be decisive to the
outcome and accept the principle that the purpose of pleading is to facilitate a proper
decision on the merits. Conley v. Gibson, 355 U.S. 41, 48 (1957).
A. The February 2012 Events Were Collection Actions Against Plaintiff
Plaintiff submits that the waiver of sovereign immunity in section 7433 includes any
violation of section 6304. Plaintiff has made numerous factual allegations about violations of
section 6304 by Defendants IRS and USA. Some of those allegations are supported by
documentary evidence submitted by both Plaintiff and Defendant. Plaintiff agrees that the
waiver of sovereign immunity has to be related to claims made in connection with the
collection of any unpaid tax. Section 7433 does not, in its plain language, list a specific set
of collection actions, and then list or even mention actions that are not collection actions.
Section 7433 does not contain any waiver stating that no claims can be made related to
criminal investigations.
Plaintiff submits that the Equal Protection clause of the U.S. Constitution is relevant
as it relates to potential dismissal of only the section 7433 claims. Notably, in the present
action, this is the only claim Defendants IRS and USA are making in which they simply do
not believe that IRS Criminal Investigation employees are subject to the same laws as other
IRS employees. Particularly where, as in the present action, the laws at issue (section 6304,
and 7433) make plain that the violation has to be by an officer or employee of the Internal
Revenue Service. Job title, or division, at the IRS, and criminal investigation, are not
mentioned in those laws (sections 6304 and 7433) and are therefore immaterial. Plaintiff is
entitled to the same protections under section 6304 and 7433 as any other U.S. Citizen under
the Equal Protection clause.
Plaintiff submits that the attachment of the business cards of the special agents, does
not in any way assist the Defendants motion. In fact, the business cards show the special
agents fall squarely into Section 7433s plain language any officer or employee of the
Internal Revenue Service. Plaintiff submits there is no plain language exception in section
6304 or 7433 that states that IRS employees, or officers, assigned to the Criminal
Investigation division are not subject to those laws (6304, 7433). Plaintiff did not imply
or use the words collection summons in the Amended Complaint, contrary to Defendants
contention, or mistaken belief, in their reply brief (Doc. 16, A.) The legal process attached by
Plaintiff does not affect the validity of the 7433 claim. Plaintiff submits that the grand jury
subpoenas do not, on their face, authorize the Defendants IRS and USA to interview the
Plaintiff, or to visit the Plaintiffs then-residence at 1414 South Penn Sq, Unit 9E,
Philadelphia PA 19102. The grand jury subpoenas also do not allow any IRS officer or
employee to leak information to the media. The grand jury subpoenas have no effect on the
7433 claim. Defendants contend that the IRS special agents may have been investigating
a taxpayer other than Plaintiff. Defendants counsel acts as if they do not represent the IRS,
and have no ability to verify or not verify any information related to this matter. The Plaintiff
was given the subpoenas, and he is the sole owner of those entities. Plaintiff submits that the
subpoenas were directed to Plaintiff as the Custodian of Records (Doc. 15-5) , contrary to
Defendants statement (Doc. 16, A.). Plaintiff submits that the two business entities are not
separate taxpayers, and are actually pass-through entities which are filed on Plaintiffs
personal tax return. Plaintiff submits that the interview, among other things as alleged,
without his prior consent, violated Section 7433.
Plaintiff submits that the amended complaint (Doc. 11) contains factual allegations
that the questions asked by the special agents were communication in connection with the
collection of any unpaid tax, in violation of section 6304. In the Amended Complaint (Doc.
11 11) Plaintiff alleged that The IRS employees asked Plaintiff questions about alleged
unpaid tax liabilities from tax years 2005-2010, including amount that were already assessed.
Plaintiff answered various questions asked by the IRS employees. The agents for example
asked (paraphrasing from memory) if any payments had been made on the 2010 tax years
income tax liability. Plaintiff contends that theses are factual allegations, made under
penalty of perjury, and are not naked speculation, as Defendants would have this Court
believe. In addition, Plaintiffs allegations in the Amended Complaint (Doc. 11) are not
threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements. The elements of a cause of action under Sections 6304 and thereby 7433 do not
contain the word assessment. Plaintiff submits the Section 7433 claim is plausible on its
face. The Defendants submitted evidence, the IRS transcript for 2010 and 2007, which
further supports the Plaintiffs position that he was represented prior to Feb. 29, 2012 if the
Secretary knows the taxpayer is represented by any person authorized to practice before the
Internal Revenue Service (See 6304(a)(2)). Plainly, the IRS [Secretary] knew Plaintiff
was represented by Morgan, Lewis, and Bockius, LLP, had knowledge of, or can readily
ascertain, the name and address of Plaintiffs representatives. See name and address of Mark
Matthews and T. Joshua Wu on Doc. 15-12, page 2.
The Defendants have implicitly conceded that an interview by IRS special agents, as
Plaintiff alleged, did in fact take place on February 29, 2012 prior to 7:00 a.m. at Plaintiffs
then-residence. The Defendants have also implicitly conceded that Plaintiffs 2010 federal
taxes were unpaid as of February 29, 2012. As Plaintiff alleged in the Amended Complaint
(Doc. 11 11), These oral questions are communication in connection with the collection of
an unpaid tax (at the time). (emphasis added). Section 6304 requires the communication
be in connection with the collection of any unpaid tax. Oral questions are undoubtedly
communication.
Plaintiff references the following documents herein: Doc. 11 and Doc.15-1, I.
Plaintiff was merely pointing out in his response a number of instances where the IRS
Criminal Investigation division directly links their work to restitution (which included in
many of the cases unpaid taxes and seizure of assets) contrary to Defendants statement in
their brief (Doc. 14-1). The IRS Criminal Investigation division prominently touts its success
in recovering money, in the form of restitution, as part of its work. Also, the Defendants did
not address Plaintiffs remarks on voluntary compliance, which are part of the mission of the
IRS Criminal Investigative division. The Defendants cannot make any viable argument that
voluntary compliance, which of course includes taxpayers paying their unpaid taxes, is not
part of the goal of IRS criminal investigation. In the Defendants original brief (Doc. 14-1,
page 4) they stated Criminal investigations seek to determine whether any criminal violation
of the internal revenue laws has occurred; on the other hand, collection activities by the
IRS seek to recover assets and procure payments of unpaid tax liabilities. Plainly, Plaintiff
was responding to the Defendants inference that the only thing criminal investigations seek
is to determine whether a criminal violation has occurred. The Defendants also cannot make
a viable argument that as pointed out in Plaintiffs reply (Doc. 15-1, page 14) that on its face,
the Defendants have conceded that IRS Criminal Investigation does engage in collection
activities by recovering assets, which fits squarely into their description of collection
activities as stated above, in this paragraph. Defendants would have this Court believe that in
the course of a criminal investigation, the only payments of unpaid taxes comes in the form
of restitution. This is simply untrue. In the present matter, Plaintiff was asked multiple
questions about the 2010 unpaid tax liability on February 29, 2012. Plaintiff paid the 2010
tax liability in April 2012, which is not disputed (Doc. 14-8). Therefore, in the present matter,
Plaintiff is not focusing on restitution. Simply, Plaintiff was asked questions about an unpaid
tax liability, and he subsequently paid it. This example again shows that restitution is not the
only way IRS Criminal Investigation procures payments, which would be in plain language
according to Defendants, as stated above (Doc. 14-1), collection activities. Plaintiff also
does not concede that the 6304(b) claim is insufficient without discovery or amendment.
(Doc. 15-1 at 19). Plaintiff submits if the 6304(b) portion of the claim needs to be
amended (emphasis added)
Defendants talk about the limited scope of collection in their latest brief (Doc. 16).
Plaintiff is not challenging any assessment action in relation to section 7433, or otherwise in
the present civil action. Plaintiff submits that no Court has found that certainly the
investigation of a criminal chargedoes not create a section 7433 action. Defendants make
this legal conclusion without any authority and it should not be considered by this Court.
B. Plaintiff should be allowed to file an Amendment with regard to Privacy Act
claims.
Plaintiff submits that based on all of the pleadings, Plaintiff should be able to amend
the Privacy Act claim. Plaintiff submits that any amendment would not be futile. Plaintiff
submits that any deficiency in the Privacy Act claim can be cured by an amendment. Plaintiff
does not have enough space, based on a ten page limit, to fully address Defendants claims
with regard to the Privacy Act only.
C. Plaintiffs Claim for Damages Due to Unauthorized Disclosure should be
upheld.
The section 7431 claim is timely and is plausible when viewed under the applicable
standards to dismiss for failure to state a claim upon which relief can be granted.
Plaintiff stated that the February 29, 2012 is the first possible operative date under
the two years after the discovery of the alleged disclosure. (Doc. 15-1, page 25). Plaintiff
filed a IFP application on February 21, 2012 which tolled the statute of limitations. Plaintiff
is allowed under the federal rules of civil procedure to file an amended complaint within 21
days of filing. The original complaint was docketed on March 19, 2014. Six days later,
Plaintiff filed an amended complaint on March 25th, 2014. Plaintiff does not believe he has
to explain why he filed the original complaint at the eleventh hour according the the
Defendants. Plaintiff did not make a legal strategy decision to file the original complaint at
the last minute. Simply, Plaintiff, who is not an attorney, spent significant time preparing the
original complaint and filed it on the first possible day after it was drafted. The section 7431
claim was part of the same conduct set forth, or attempted to be set forth, in the original
complaint, as required by the applicable case law (Doc 15-1, III.A.). Plaintiff, according to
Defendant, did not offer any support for why he could not amend the complaint until the
IFP application was approved nor legal support to suggest his inability is sufficient to toll
the statute of limitation (Doc 16, page 6,7). The Defendants either did not understand what
Plaintiff meant, or chose to ignore it. It is settled law that the IFP tolls the statute of
limitations. Based on the Courts procedures, the complaint (Doc. 5) was constructively filed
on February 21, 2014, but not docketed until March 19, 2014. For purposes of the statute of
limitations those two dates are identical in this present matter. On February 21, 2014,
Plaintiff had eight days to file within Defendants asserted statute of limitations. Plaintiff filed
the amendment six days after the original complaint was docketed. Plaintiff submits that
under the Courts procedures he filed the amended complaint (Doc. 11) under the applicable
rules of civil procedure and the amended complaint is timely with respect to section 7431.
Should that analysis fail, Plaintiff responded to the rest of Defendants claims in their
original brief (Doc. 14-1) and the reply brief (Doc. 16). Simply, both the claims in the
original complaint and the amended complaint share a common core of operative facts and
Plaintiff has met the standard. Plaintiff submits the original complaint either set forth, or
attempted to be set forth, using the words of the applicable case law (Doc. 15-1, III.A.) The
Defendants statement that it is a revisionist attempt to characterize his initial complaint as
primarily seeking damages arising from media leaks in plainly refuted by looking at the
initial complaint itself is without merit. On its face, the original complaint is seeking
damages for a media leak. The majority of the claims for damages, $910,000 of the original
damages of $928,001 are for claims of emotional distress, loss of reputation and
inconvenience. The loss of reputation makes up more than half of the total at $500,000. The
emotional distress and inconvenience make up $400,000 of the remaining $410,000. Plainly,
Plaintiff sought damages for emotional distress as a result of the media leak. The loss of
reputation is solely about the media leak. It would strain credulity to suggest that Plaintiff
was originally seeking upwards of one million dollars for waking him up, interviewing him
without his attorneys, and coming early in the morning, in violation of section 6304 of Title
26. Plaintiff submits that the amended complaint, as stated in Plaintiffs original reply (Doc.
15-1) contained additional factual allegations under section 7433 and more specificity related
to the original allegations. Defendants apparently concede that more claims and details
regarding the section 7433 claims were in the amended complaint (Doc. 11) by not
addressing it in their latest reply (Doc. 16). The Defendants asserted in their brief (Doc. 14-1)
that this is one reason this Court should determine that the amended complaint (Doc. 11)
does relate back to the original complaint (Doc. 5).
Plaintiff references the following documents herein: Doc. 11 and Doc.15-1, III.
Plaintiff does not believe that the section 7431 claim is insufficient as plead in the
amended complaint. The United States motion ignores that on its face, in plain language, the
amended complaint (Doc. 11) does, in fact, allege what tax return information was disclosed.
Plaintiff adds detail to his arguments about why the FBI and DOJ were added in relation to
this claim. Under Defendants reasoning or theory, the United States could, in all cases,
simply add one or two more agencies to investigations to escape liability under section 6103
and thereby section 7431. That is contrary to the intent and plain language of section 6103,
which plainly states, no officer or employee of the United States. There is no language in
sections 6103 or 7431 that says a civil action may only be brought against one federal
agency. The statement by the IRS spokesperson, under section 6103, as cited by the
Defendants does contain taxpayer information. See 26 U.S.C. 6103 (information that can be
associated with, to otherwise identify, directly or indirectly, a particular taxpayer). See Doc.
15-1, III. B., pages 30-32. Plaintiff alleged in the amended complaint five (5) alleged
violations of section 6103. His (1) name, (2) mailing address, (3) nature or source (of
income) (4) amount of his income, and (5) whether a return was filed, is or will be examined
or subject to other processing, including collection activity (Doc. 11 39, 96, 94). The news
reports, and photographs, are evidence, that can be admitted in a trial, and Plaintiff requested
that this Court take judicial notice of several of the estimated 25-100 media reports that exist
online regarding the February 29, 2012 actions by the IRS. Defendants did not offer any
other theory on how the media outlets, cited by Plaintiff in the amended complaint, and
original complaint, received information about the IRS and FBI action on February 29, 2012.
That is because the Defendants are the only entities that has the information regarding their
action on February 29, 2012, which was leaked to the media in advance, as alleged. Plaintiff
can also testify in a trial on this claim.
Defendants do not address the shared attorney method cited by Plaintiff in his original
reply (Doc. 15). Defendants implicitly concede that this is another way in which all
Defendants received notice of the section 7431 claim. The media leak, as alleged in the
amended complaint, is the core of both the original complaint and amended complaint. The
alleged conduct in both complaints in this matter arose out of the same conduct, transaction,
or occurrence set forth or attempted to be set forth in the original complaint.
D. Defendants are not entitled to Summary Judgment on the claim for refund of
the tax penalties.
Plaintiff submits that he submitted admissible evidence in response to the motion for
summary judgment. Plaintiff believes his pleadings (Doc. 11), and declaration in the previous
reply (Doc. 15) make clear that he is prepared to testify about the penalties at issue. The
Defendants fail to respond to the issue raised regarding Plaintiffs $0 in liability for an
estimated tax penalty for 2007. The problem with Defendants undisputed facts is simply that
most of them are not true or materially omit information to support their statements.
Plaintiff submits that Defendants are incorrect in stating that the years at issue are not
2012 and 2013. More plainly, Plaintiff was assessed the penalties for 2010 in On December
26, 2011 (Doc. 14-8). Plaintiff was assessed the penalties for 2007 on October 15, 2012
(Doc. 14-7). Plaintiff submits that it is not the year after the penalties could have been issued,
2008 and 2011 (based on Doc. 16, page 8), but the year or year after the penalties actually
were assessed. Defendants also have presented no evidence that Plaintiff did not have an
undue financial hardship in 2011 or 2008, the years in which they contend are relevant.
Therefore the Court should deny the Defendants motion for summary judgment.
Defendants have the burden to show the claim is time-barred because they are raising
it in their motion for summary judgment. The Defendants Brief (Doc. 14-1) did not contain
any evidence or declaration saying the IRS did not make a decision, as they now contend.
Plaintiff alleged in the amended complaint that the IRS informed the Taxpayer Advocate
Office that they would not abate the penalties assessed to the Plaintiff for 2007 and 2010.
Plaintiff also alleged in the amended complaint that Plaintiff contacted appeals by phone,
spoke with IRS Appeals employee Chellie Davis, and was told that the decision could not be
appealed to their office. On its face, Plaintiff alleged that he was told by two IRS employees
that the decision, not to refund or abate the penalties, had been made in December 2013. This
renders the time-barred issue moot, because the decision was made. Defendants offer no
explanation as to the status of Plaintiffs refund request for abatement of the 5 penalties at
issue, other that by saying Plaintiff is incorrect that the Secretary took such action (Doc.
16, page 9).
Plaintiff did submit documentary evidence, form 911, request for taxpayer assistance,
which showed that Plaintiff made his financial condition the issue in deciding the request to
refund or abate the penalties. Defendants are incorrect that undue financial hardship must be
shown at the time the tax was owed. The Defendants state that in this case that is 2008 and
2011. The case they cite is not on point. The issue in this case is not failure to pay tax. The
penalties and taxes due for those years have been paid in full, which is undisputed (See Doc.
14-7, 14-8.). It is common sense that the financial condition is relevant at the time the tax is
being paid. Specifically, even under Defendants theory in late 2013 when the request was
made, the 2007 penalties and part of the 2010 penalties were not paid as of December 2013.
At the very least, 4 of the penalties were unpaid as of November and December 2013, despite
some incorrect dates on the transcripts.
Reasonable cause, as a reason to refund IRS civil penalties, for the refund of penalties
is not only found in the IRSs internal guidelines, but is also found in the law (citations
omitted). If the Defendants are correct, and there is some evidentiary issue regarding the
evidence submitted in relation to this claim only, Plaintiff is unaware of the rules which
Defendants rely on. Plaintiff plainly submits that Defendants have not met their burden and
under the applicable law cited in Doc. 15, IV., the factual allegations in the amended
complaint should be held for trial, despite Defendants arguments. Plaintiffs allegations with
respect to the refund of civil penalties, taken as true, are sufficient to proceed to trial.
CONCLUSION
In their reply brief, Defendants have not given any additional information or theory
that would advance their motion to dismiss and for summary judgment. Plaintiffs claims are
not vague, and contain significant specificity sufficient to survive a motion to dismiss.
Plaintiffs claims fall squarely into the narrow waivers of sovereign immunity. Plaintiff can
and should amend the Privacy Act claims. The section 7431 claims and refund claims are not
time-barred. Based on all of the pleadings, Defendants motion to dismiss the section 7431
and section 7433 claims are without merit and should be denied.
Respectfully submitted, this 10th day of June, 2014.
_________________________
CHAKA FATTAH, JR., Pro Se
5783 Nassau Road
Philadelphia, PA 19131
Phone: 215-301-8125
Email: cfattahjr@gmail.com