Cheyenne, WY 82009

Arlington, VA 22209-2004

Attorneys for the Plaintiff
MARILYN PATRIOT,				)       
Plaintiff,                       				)	CIVIL NO:   2:08-cv-00156-xxx
v.                                 				)
Defendant.					)						
1.	Plaintiff Marilyn Patriot filed a complaint in the U.S. District Court for the District of Columbia against Defendant
(Case No. 07-1837-RMU) seeking damages for Illegal Tax Collections under IRC §7433. Honorable U.S. District Judge Ricardo M. Urbina issued an Order on June 3rd 2008
denying the Department of Justice (DOJ) motion to dismiss and transferring the case to the U.S. District Court of Wyoming.
2. In his Memorandum Opinion, the Honorable Judge Urbina wrote: “the strength of the plaintiff’s allegations indicate
that transfer is in the interest of justice. The facts and circumstances presented to the court, when construed in the light most favorable to the plaintiff, raise considerable questions about the propriety and duration of the levy placed on the plaintiff’s pension.
The plaintiff alleges that the levy withdrew fifty-five percent of her pension each month, which if proved to be true, exceeds the statutory
maximum of fifteen percent. See 26 U.S.C. § 6331(h). She provides documentation which corroborates her claims that the IRS continued to
levy her pension after the $6,573.00 unpaid balance was satisfied, and she submits a letter from the Michigan Department of Management
& Budget stating that it sent the IRS a total of $49,168.08 from he
pension. Based on the plaintiff’s allegations and supporting documentation, the court easily concludes that the plaintiff has satisfied the
pleading standards required to survive a motion to dismiss. Accordingly, it is in the interest of justice that this matter
proceed to the transferee district for adjudication on its merits.”
3. In adjudicating the merits of this case, Plaintiff satisfied the pleading standards and proven that Defendant had pursued illegal tax collection
measures. Plaintiff asks this Honorable Court to grant the relief herein requested.
II. FACTS 4. Plaintiff is the sole supporter of herself and main financial supporter of her husband. She is a resident of Buffalo, Wyoming and
a retiree of the Michigan Public School System.
5. On May 14, 2001, the IRS issued a Notice of Levy to the Michigan Public School Employees Retirement System allegedly due to federal income tax
deficiencies owed by the plaintiff for the years of 1985-1994 in the amount of $6,573.00. (Exhibit D).
6. On September 25, 2001, the IRS levied Plaintiff’s teaching pension, and the state of Michigan began withholding $945.54 per month. This continued
until June 2006, and a total of $53,895.78 (Exhibits E & F) was illegally removed from her pension. In addition, $3,449.10
was levied from Plaintiff’s social security checks (Exhibit H).
7. Plaintiff has exhausted her administrative remedies. She had corresponded with the IRS by mail and phone and had filed two Administrative Claims
for Unauthorized Collection Actions with the IRS.
8. On May 25, 2006, Plaintiff met with IRS Agent Thomas Bentley in Billings, Montana, and the IRS terminated the levy immediately. On March 16,
2007, the IRS sent Plaintiff two checks for a total amount of $10,954.18 (Exhibit A). Terminating the levy and refunding money to
Plaintiff were clearly an unmistakable acknowledgment by the IRS that the levy was excessive or unauthorized in the amount which
they levied.
9. Plaintiff, first, seeks damages under IRC §7433 as a result of the IRS improper collection practices and, second, to recover the remainder
of her money improperly collected by the IRS.
III. SUMMARY OF ISSUES 10. First, even if the issue is only a measure of “assessment” as Defendant claims, Plaintiff will prove that Defendant had made an improper
11. Second, Plaintiff will prove that the manner by which Defendant pursued the levy against Plaintiff was improper – regardless of the amount
allegedly owed.
12. In analyzing this case, the court must treat the complaint's factual allegations-including mixed questions of law and fact-as true and draw
all reasonable inferences in the plaintiff's favor. Macharia v. United States, 334 F.3d 61, 64, 67 (D.C.Cir.2003); Holy Land
Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C.Cir.2003).
IV. ANALYSIS 13. On June 17, 2008, The Department of Justice (DOJ) filed an Answer with this Court requesting “that the Complaint be dismissed....” However,
the DOJ had already lost a motion to dismiss in this case, and now they are repeating a request for what they had lost previously.
Honorable Judge Urbina of the U.S. District Court for the District of Columbia clearly stated that “the court easily concludes
that the plaintiff has satisfied the pleading standards required to survive a motion to dismiss.”
14. Instead of considering all arguments and evidence presented since the inception of this case, the DOJ chose to submit to this Court solely
an Answer to the complaint filed on October 11, 2007 -- as if nothing had happened since then. Such a DOJ tactic is apparently aimed at burdening
and harassing Plaintiff.
15. What is this case about? On one side, we have several highly paid attorneys defending the IRS; On the other side, there is a sole practitioner
representing a penniless, elderly, retired school teacher Plaintiff who paid her attorney only $500 for over eight months -- $350 of which
went to file the case.
16. Instead of seeking to settle, the DOJ is using its unlimited resources against an impoverished citizen. The DOJ’s strategy seems aimed
at placing a heavy burden on Plaintiff and her attorney, especially when the DOJ Answer makes general denials, and sometimes denying what is obvious
– apparently to make Plaintiff spend time and resources to prove them wrong when the DOJ attorneys already know that the IRS acted wrong..
17. Defendant claims that IRS checks issued to Plaintiff (Exhibit A) do not constitute “an admission by the United States.” If the IRS had
not levied a $1.00 more than what was necessary, then why did they issue a refund? If the IRS did not have a levy for a day more than what was necessary,
then why did they stop it? These two measures were clear admissions of guilt or fault by the United States.
18. When Defendant “denies that the levy was illegal” and “denies that any amount was removed illegally from Plaintiff’s pension”, could
Defendant present an argument that all violations mentioned in previous Plaintiff pleadings and mentioned below under “Responses to DOJ Affirmative Defenses”
are legal?
19. Defendant’s denials were made without offering viable proof about the legality of what Plaintiff describes to be illegal. Again, if the
levy was not illegal, then why did Defendant stop it or send two checks to Plaintiff?
20. When Defendant “denies that Plaintiff has alleged sufficient facts”, could Defendant specifically present what more facts are needed to
bring a claim under USC 7433? Is Defendant claiming that every single violation mentioned in previous Plaintiff pleadings or mentioned below under “Responses
to DOJ Affirmative Defenses” as being insufficient to bring a claim under USC 7433?
21. The DOJ is aware of at least one violation and one sufficient fact: the levy of Plaintiff’s pension “exceeds the statutory maximum of
fifteen percent.” This fact was mentioned repeatedly by Plaintiff and noted by Judge Urbina. Since the DOJ has the knowledge of at least one act, then
it is denying illegality and sufficiency of facts before the Court?
22. This case is seeking damages for Illegal Tax Collections under IRC §7433. However, for the last several months, the DOJ keeps ignoring
the substance of the case and continuously claim that the case is about “assessment.” If the DOJ wants to discuss assessment, then let us briefly review
the issue.
A. “Assessment” according to Plaintiff 23. For tax years 1985 through 1993, Plaintiff filed tax returns on time and jointly with her husband. All amounts owed were paid on time: 1985
($3,039); 1986 ($1,672); 1987 ($484); 1988 ($1,100.29); 1989 ($679); 1990 ($1,204); 1991 ($1,526); 1992 ($1,189); and 1993 ($1,151). The total owed
1985 through 1993 is zero dollars since every amount listed was paid on time.
24. For other years, the amount of taxable figure was not originally declared by Plaintiff – but by the IRS. 25. For tax years 1994 through 2003, Plaintiff did not file her tax returns on time. Therefore, the IRS completed tax returns for her whereby
they did not give her credit for her deductions, expenses, etc. Later, Plaintiff filed corrected tax returns as follows: for 1994, on August 18, 2004;
for 1995 through 1997, on October 13, 2005; and for 1998 through 2003, on May 23, 2005.
26. Upon filing, the approximate amounts owed were along these figures: 1994 ($1,259); 1995 ($212); 1996 ($118); 1997 ($566); 1998 ($581);
1999 ($201); 2000 ($339); 2001 ($322); 2002 ($230); and 2003 ($179). The return for 1994 was filed separately, the rest were filed jointly. The total owed
for 1994 through 2003 was $4,007.
27. A Notice of Levy was issued (on May 14, 2001) for an amount of $6,573.00 for tax years 1985 through 1994. If one is to add this amount to
the $4,007, then the total would be $10,580.
28. The IRS service center accepted the back returns, but did not send Plaintiff the excess money levied from her and which Plaintiff did not
believe she owes.
29. After the assessment and amended returns, the levy continued. Assessment took place within six weeks from filing or amending returns.
However, Plaintiff received two checks long after the assessment time period – subsequent to the administrative claims being filed and when the IRS probably
knew that a lawsuit is coming soon.
B. “Assessment” according to Defendant 30. Defendant did file a 111-pages report with the court alleging what Plaintiff owed. The report, however, contains certain discrepancies. i. Discrepancies for tax years 1985 to 1993 31. As stated earlier, for tax year periods 1985 through 1993, Plaintiff filed tax returns on time and jointly with her husband. Plaintiff’s
husband, Mr. Fred Patriot, received a “Certificate of Release of Federal Tax Lien” (serial no. 849844493) showing March 2, 1998 as date of assessment for
all these years and an unpaid balance of $500 per year.
32. Defendant did not include on the Certificate the interest amount which was levied. While Plaintiff was put under the impression that she was
levied for $4,500 for years 1985 through 1993, the approximate total Plaintiff had actually paid was $6,438 – according to the IRS/DOJ report.
Plaintiff was put in a situation where she was told an amount owed and paid on the Certificate less than what was actually levied.
ii. Discrepancies for tax year 1994 33. For tax year 1994, Defendant offers the court not one, but two certificates of official records – both of which are certified as to accuracy
but contradictory to each other as to amount owed.
34. According to IRS report, if one adds all the amounts allegedly owed by Plaintiff (on pages 1 to 10), the sum total would be $28,108.65; this
1994 report showed Plaintiff still owing $457.13. However, according to pages 107 to 111, Plaintiff owed $745 (penalty plus interest) – and a balance
equals to zero. Certainly, two different “certified” amounts “owed” for the same year cannot be
accurate – especially since one report was issued only two months from the other.
35. The first $945.54 payment toward year 1994 was levied on February 3, 2003 prior to the IRS assessment date of February 17, 2003. A “credit”
of $393.16 was applied on January 28, 2003. In other words, the IRS was levying Plaintiff and making payments for that particular year even prior to
ascertaining whether or not Plaintiff owed money for that year. This is a clear illegal action by the IRS.
36. In addition, a “Certificate of Release of Federal Tax Lien” (serial no. 148836803) shows a February 17, 2003 date of year 1994 assessment
for an amount of $16,529.46.
37. Another “Certificate of Release of Federal Tax Lien” (serial no. 849844493) issued to Plaintiff’s husband shows an unpaid balance of $500
for year 1994. Plaintiff filed jointly for that year.
38. In summary, and according to IRS records, Plaintiff had an unpaid balance of $16,529.46 (according to certificate no. 148836803), paid a
balance of $28,108.65 (according to DOJ/IRS report on pages 1 to 10), but owed only $745 (according to pages 107 to 111 of report) or $500 (according to
certificate no. 849844493).
39. When Defendant claims that Plaintiff owes “nearly $69,000”, which one of these figures are part of their calculation? Defendant, who has
these reports, continues to insist about lack of irregularity or illegality.
V. RESPONSE TO DOJ’S AFFIRMATIVE DEFENSES 40. The DOJ claims in its Answer’s “affirmative defenses” that Plaintiff has “failed to state a claim” and “cannot seek damages under 26 USC
7433.” The DOJ said that Plaintiff “must prove that the Internal Revenue Service violated a statute or regulation in its method of collection.”
41. In other words, the DOJ is acquiescing that if Plaintiff proves one single incident in which the IRS committed such a violation, then
Plaintiff wins the case and this Court must award Plaintiff damages, interest on her money, attorney fees, costs, and any other relief the court deems appropriate.
In this regard, Plaintiff accepts the challenge.
42. Plaintiff is aware that to prove a claim for improper collection practices, Plaintiff must demonstrate that the IRS did not follow the
prescribed methods of acquiring assets. 28 U.S.C.A. § 2410; Brewer v. C.I.R., 430 F. Supp. 2d 1254, 1260 (S.D. Ala. 2006). Plaintiff had already offered more
than one proof – at least two of which are from the Defendant.
43. Due to Defendant’s continuous denial of the obvious, Plaintiff would like to ask this Court to multiply damages authorized under section 7433
by the number of violations committed by Defendant.
44. IRS violation no. 1 --- Plaintiff’s pension check was about $1,503.87 as of August 2001. After the levy, her check became $558.33. Plaintiff
alleges Defendant’s violation of 26 USC §6331(h) which prohibits any excess of the “15 percent of any specified payment due.” In this case, the IRS
levied approximately 55% of Plaintiff’s monthly pension.
45. Judge Urbina stated that if proved to be true that the levy withdrew fifty-five percent of Plaintiff’s pension, then such amount “exceeds
the statutory maximum of fifteen percent.” This amount can be proven by:
(i) Exhibit E confirming the withholding of $945.54 per month, and (ii) the 111-page report submitted by the DOJ in this case and showing $945.54 being credited to Plaintiff’s account. 46. Based on this issue alone, an issue which Judge Urbina noted and a violation which defendant cannot deny, Plaintiff wins the case by proving that the
IRS – at least once – did not follow the prescribed methods in acquiring assets. This violation alone is sufficient for this Court to issue
a summary judgment in favor of Plaintiff – and restore to Plaintiff her rights as soon as possible.
One violation is certainly sufficient to win under section 7433, but there are few more.
47. IRS violation no. 2 --- Plaintiff filed and paid timely on her returns for years 1985 through 1993. However, the IRS, in 2001, penalized
Plaintiff $500 per year (Exhibit D). Such a penalty was illegal for some of these years due to the statute of limitation.
48. Assessment is normally six weeks after filing, and the statute of limitation begins after the sixth week. It was more than ten years after
the assessment have passed, for some of these years, when that penalty was imposed. Regardless of whether the $500 penalty is right or wrong, the IRS
penalty for some of these years was illegal since they were imposed after the statute of limitation had passed.
49. IRS violation no. 3 --- The “Notice of Levy” was issued for $6,573.00 (Exhibit D). Can Defendant present copies of other notices of levies
pursuant to which more than $50,000 of Plaintiff’s money (Exhibits E & F) was levied? Based on Plaintiff’s record, the answer is no. Plaintiff alleges
deficiency in notice and Defendant’s violation of 26 USC §6303.
50. IRS violation no. 4 --- Did the IRS extend to Plaintiff an opportunity for a hearing before the levy of any amount beyond what is listed in
Exhibit D? Based on Plaintiff’s record, the answer is no. Plaintiff alleges Defendant’s violation of 26 USC §6330 and §6320.
51. IRS violations no. 5 to 16 --- For year 1994, in the DOJ/IRS report on pages 1 to 10, last payment listed was October 31, 2005. The tax lien
was not released until May 2007. 26 USC §6331(c) states that a levy continues “until the amount due … is fully paid” – but not after that period. The
levy against Plaintiff was officially still on the record, despite the fact that her obligations –
whether agreed with or not – had been fully met and paid for. Releasing the levy should have been done subsequent to the last payment, and
not a year-and-a-half later – a clear illegal measure by the IRS.
52. This violation – keeping the levy on record for an unreasonable period after amount due was fully paid – is repeated for years 1985, 1986,
1987, 1988, 1989, 1990, 1991, 1997, 1999, and 2000. Also, tax year 1998 does not show that the levy has been released yet, although the balance is zero.
The total is twelve violations for failure to release levy on time.
53. Regardless of what the IRS considers Plaintiff owes, this Court must return to Plaintiff all her money taken since the first levy (in addition
to other relief requested) to teach the DOJ a lesson not to deny the obvious, and not to drag a case that could have been settled amicably long time
54. If these IRS actions are not illegal collection activities, it would be more respectful to the court and everyone’s time for Defendant to
state specifically how these acts can be classified as legal.
55. Instead of making arguments to address issues similar to these raised previously by Plaintiff and upon which Judge Urbina made his decision,
the DOJ is instead ignoring all these matters and requesting another dismissal – an act of disrespect to Judge Urbina’s opinion, to this court’s time,
and Plaintiff’s.
56. Claiming that Plaintiff owes “nearly $69,000” is not sufficient to make Plaintiff liable for this amount. A mere declaration that Plaintiff
owes money has no legal standing, and particularly not in the face of Plaintiff's disagreement.
VI. DAMAGES 57. Defendant admitted liability at least twice. On May 25, 2006, Mrs. Wallace met with IRS Agent Thomas Bentley in Billings, MT. The agent
immediately ended the levy. Such action was a clear IRS admission that the levy was already in excess of $1.00 and that the garnishment was illegal for at
least one day. On March 16, 2007 the IRS sent Plaintiff two checks totaling $10,954.18 (Exhibit A).
This is clearly an unmistakable acknowledgment by the IRS that the levy was excessive or unauthorized in the amount which they levied.
58. It has been shown herein that Defendant did act illegally and pursued wrongful collection measures. As a result of Defendant’s actions,
Plaintiff did sustain actual and economic damages.
59. Marilyn Wallace is sole supporter of herself and main financial supporter of her husband. The illegal levy consisted of 55% of her pension and
all of her social security benefit --- despite the fact that 26 USC §6331(h) states that a “levy shall attach up to 15 percent of any specified
payment due…” First, the IRS levied what Plaintiff allegedly owed. Then, the IRS kept the levy for a lengthy
period afterward. Such excessive and illegal levy caused financial hardship to Plaintiff and her family.
60. Plaintiff and her husband are elderly, unable to work. They live in an isolated area far from relatives and friends. To stop the robbery of her
pensions, Plaintiff had to hire tax professionals to assist her. The extent and amount of the levy caused Plaintiff to suffer mental anguish,
anxiety, and emotional distress. As a result, Plaintiff succumbed to new ailments, such as high blood pressure
(Exhibit G and H).
61. According to Plaintiff’s letter to her attorney (Exhibit H), Plaintiff says: “I am now almost 73 years old and I have wasted so much time of
the past 12 years answering their mail that life has literally passed me by during that time. I estimate 2,000+ hours of my life wasted – equivalent
of 250 eight-hour days of working in an office…. All the time wasted and money taken represents
countless lost opportunities. I wanted to become more proficient in music, but never did…. I never got the horse I wanted due to lack of money…
My little sister was ill during most of this time. I wanted to take her to a clinic that might have helped her, but the money I would have used to do this was
stolen from me. Too late now. She died in April of this year.” For how long shall Defendant’s harassment of Plaintiff continue and at what price?
62. Plaintiff stated very clearly her cause of action: unauthorized and excessive levy. She has shown that illegal acts were committed against her.
She has clearly listed the improper collection activities. She has proved that the IRS did not follow the prescribed methods of acquiring assets.
VII. CONCLUSION 63. The United States Congress has studied bureaucratic misconduct in governmental agencies, such as the IRS, and decided to
take action. Congress passed many laws for a private right of action including the Unauthorized Tax Collection Act IRC §7433. These “federal bounty hunter statutes”
authorize statutory damages to give the bureaucracies incentive to obey the laws that Congress has passed.
Further, the elective representatives of the people want the courts to award maximum damages to give incentives to the people to file
complaints in federal courts and to enforce the laws that Congress wants enforced.
64. Our elected representatives, after careful deliberation, have decided that the best remedy for the tendency of government agencies
to make errors or actual wrongdoing is remedial litigation in the form of citizens’ self-help statutes. For over 130 years, our Congress has passed many
“Private Attorney General Statutes” authorizing private citizens to file suit in federal courts, and upon
prevailing collect their fees and costs.
65. The Bounty Hunter Statutes soon followed and provided incentive for citizen action. Congress and the experts feel this is the best
motivation for the federal agencies to obey laws which incidentally cost the taxpayers a lot of money to be enacted.
66. The Unauthorized Tax Collection Act and its sister laws are part of the Taxpayer Bill of Rights II or the IRS Reform and Restructuring
Act of 1998. These remedial statutes were passed after much research and study. The principle advisor to this and all legislation are the top authorities
at the Department of Justice. No statute of this type would pass with the opposition of the Attorney
General. The Unauthorized Tax Collection Act was supported and authorized by the legislative and executive branches.
67. For the Judiciary to hold the IRS accountable, IRS supervisors would be motivated to better obey the law and supervise their employees.
A large damage award would cause the IRS to stop pursuing certain illegal tactics and activities.
68. Plaintiff is entitled to maximum damages due to IRS illegal collection activities outlined herein against Plaintiff. 69. Despite these facts, instead of resolving the matter with least expense for all parties, Defendant sought not once, but twice
– in two courts – to dismiss the case as if Plaintiff has no rights at all with them.
70. The DOJ is undermining the legal system by defending actions of the IRS that are clearly illegal. By doing so, the DOJ is
acting against Congressional intent which aims at redressing abuses by the IRS in collecting taxes. The DOJ’s focus must be on justice, or what is right or wrong, and
not winning at any cost – especially not at the expense of an elderly Plaintiff, a retired school teacher, unable to finance a lengthy litigation.
71. The facts and the law prove that Defendant did pursue illegal and improper collection activities. Plaintiff’s cause of action is
proper. Defendant has not proven that the IRS is authorized to levy what it has levied and in the manner in which it pursued the levy.
The IRS levied more than the percentage permitted from Plaintiff’s pension and more than what it listed on its notice of levy.
There was no notice to levy the excess money which was levied – at least not in Plaintiff’s record. A clear illegal and excessive levy took
72. In addition, the IRS levied Plaintiff’s social security retirement benefit in the amount of $3,449.10. Further, they levied her husband’s
social security check for the joint tax returns for $3,074.09.
73. Such excessive and illegal levy caused emotional distress and financial hardship to Plaintiff and her family. 74. This mistreatment of the citizen and waste of taxpayer dollars must be stopped. Strong action by one federal judge will cause Defendant
to be more responsive to taxpayers and have more respect to the citizens’ suffering from IRS wrongdoings. As this Court well knows, a remedy to this
problem exists.
75. This Court should deny Defendant’s request to dismiss this case. Honorable Judge Urbina clearly stated that “the court easily concludes that the plaintiff
has satisfied the pleading standards required to survive a motion to dismiss.”
76. This Court should grant Plaintiff damages, interest, attorneys fees and costs according to 26 U.S.C. §7433 and other relief the Court deems appropriate. Respectfully submitted, _______________________ Date: July 1, 2008 PATRIOT LAWYERS CERTIFICATE OF SERVICE IT IS HEREBY CERTIFIED that a true and correct copy of the foregoing Motion for Admittance Pro Hac Vice, along with the
attached Declaration of Patriot Lawyer, in support thereof and the attached Proposed Order have been served upon the following
by electronic filing and U.S. mail – postage prepaid
on or about July 1st 2008:
KELLY H. RANKIN United States Attorney CAROL A. STATKUS Assistant United States Attorney 2120 Capitol Avenue, Room 4002 Cheyenne, Wyoming 82001 ADAIR F. BOROUGHS Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 683 Washington, DC 20044 Attorneys for the United States ________________________ Date: July 1, 2008 Patriot Lawyers,
Attorneys for Plaintiff