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United States v. Lovely

United States District Court, M.D. North Carolina

March 18, 2019

MARK A. LOVELY, Defendant.


          Loretta C. Biggs, United States District Judge

         The United States of America (“Plaintiff” or the “United States”) initiated this action on February 15, 2018, to “reduce to judgment federal income tax assessments . . . and civil penalties” against Defendant Mark Lovely. (ECF No. 1 at 1.) Before the Court are three motions filed by Defendant who proceeds pro se in this matter: (i) two motions to dismiss, (ECF Nos. 7, 20); and (ii) a motion for more definite statement, (ECF No. 17). For the reasons set forth below, each of Defendant's motions will be denied.

         I. BACKGROUND

         The Complaint alleges that Defendant is a taxpayer who resides in Kernersville, North Carolina against whom unpaid federal income tax liabilities and civil penalties have been assessed by a delegate of the Secretary of the Treasury. (ECF No. 1 ¶¶ 4, 6.) According to the Complaint, Defendant owes $90, 913 in unpaid federal income taxes and $81, 452 in civil penalties for filing frivolous tax returns. (Id. ¶¶ 6, 12.) Plaintiff seeks a judgment its favor against Defendant for these unpaid assessments. (Id. at 4-5.) In addition to Defendant's three motions currently before the Court, Defendant has filed a pleading captioned, in pertinent part, “Answer, Jurisdictional Challenge, and Demand for Disclosure.” (ECF No. 4.) This filing fails to directly respond to the allegations in Plaintiff's Complaint; rather, it appears to present a series of arguments regarding this Court's jurisdiction to hear this matter. (See id.) Thus, before addressing Defendant's motions currently before the Court, the Court will first address the issue of subject matter jurisdiction.


         Subject matter jurisdiction is a threshold issue that relates to the court's power to hear a case and must be decided before a determination on the merits of the case. Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479-80 (4th Cir. 2005). A motion challenging jurisdiction is generally made pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure and raises the question of “whether [the plaintiff] has a right to be in the district court at all and whether the court has the power to hear and dispose of [the] claim.” Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 452 (4th Cir. 2012). The burden of proving subject matter jurisdiction rests with the plaintiff. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).

         “Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co of Am., 511 U.S. 375, 377 (1994). “The United States Code confers subject matter jurisdiction on the federal district courts in two ways-where there is federal question jurisdiction and where there is diversity jurisdiction.” Holbrook v. W.Va. Reg'l Jail & Corr. Facility Auth., No. 3:16-cv-03705, 2016 WL 7645588, at *6 (S.D. W.Va. Dec. 6, 2016) (citing 28 U.S.C. §§ 1331, 1332), report and recommendation adopted, 2017 WL 55872 (S.D. W.Va. Jan. 4, 2017). “[A] party seeking to adjudicate a matter in federal court must allege and, when challenged, must demonstrate the federal court's jurisdiction over the matter.” Strawn v. AT & T Mobility LLC, 530 F.3d 293, 296 (4th Cir. 2008).

         Here, Plaintiff cites four federal statutory provisions as a basis for jurisdiction by this Court: (1) 28 U.S.C. § 1340; (2) 28 U.S.C. § 1345; (3) 26 U.S.C. § 7401; and (4) 26 U.S.C. § 7402(a). (ECF No. 1 ¶ 1.) These provisions provide, in relevant part, the following:

(1) “[D]istrict courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue, ” 28 U.S.C. § 1340;
(2) “[D]istrict courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, ” id. § 1345;
(3) “No civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture, shall be commenced unless the Secretary authorizes or sanctions the proceedings and the Attorney General or his delegate directs that the action be commenced, ” 26 U.S.C. § 7401; and
(4) “[T]he district courts of the United States . . . shall have such jurisdiction . . . to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws, ” id. § 7402(a).

         This is an action brought by the United States requesting that this Court reduce to judgment federal tax liabilities and civil penalties assessed against Defendant. (See ECF No. 1 at 1.) The statutory provisions outlined above are clear, pertain directly to the issues alleged in Plaintiff's Complaint, and confer upon this Court the power to hear this matter.

         Accordingly, the Court finds that it has federal question subject matter jurisdiction over this case. Defendant does not appear to contest that 28 U.S.C. §§ 1340 and 1345 grant this Court statutory authority to enter orders and decrees in favor of the United States from a civil or criminal proceeding regarding a debt specifically involving internal revenue. (See ECF No. 4 at 2-3.) In addition, although Defendant fails to address the application of 26 U.S.C. §§ 7401 and 7402(a) to this matter, this Court has subject matter jurisdiction over this case pursuant to the plain text of these statutes. See United States v. Carter, Civ. A. No. 3:15cv161, 2015 WL 9593652, at *5 (E.D. Va. Dec. 31, 2015) (“The remedy that the United States seeks, entry of judgment in the amount of unpaid assessments and penalties, is clearly ...

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