1

11528658.1
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

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

DEFENDANTS REPLY BRIEF IN SUPPORT OF THEIR
MOTION TO DISMISS AND FOR SUMMARY JUDGMENT

Instead of establishing a plausible claim or creating a genuine issue of material fact,
Plaintiffs opposition to dismissal and summary judgment demonstrates why the Defendants
motion should be granted in full. He confirms that his claim under 26 U.S.C. 7433 relates to
an apparent criminal investigation and not a collection action against Plaintiff by the IRS. He
concedes that he failed to plead a claim under the Privacy Act. He fails to cure the deficiencies
in his claim under 26 U.S.C. 7431 for unauthorized disclosure of tax information. And his
only substantive opposition to summary judgment on his refund claim is to make additional
arguments that are immaterial as a matter of law. The Court should grant Defendants motion
with prejudice and without leave to amend the complaint because amendment would be futile.
1

A. The February 2012 Events Were Not IRS Collection Actions Against Plaintiff.
It bears repeating that 26 U.S.C. 6304 does not, by itself, create a cause of action.
Taxpayers may only state a claim that falls within the waiver of sovereign immunity in section

1
On page 20 of his opposition, Plaintiff refers to the Equal Protection clause of the U.S. Constitution. (Doc. 15 at
20.) That is the first mention of the Equal Protection clause in this civil action; no claim appears in either the
Complaint or his Amended Complaint. (See Docs. 1-2, 1-3, 11.)

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11528658.1
7433. See 26 U.S.C. 6304(e). Section 7433 only waives immunity for claims challenging
collection actions by the IRS. See 26 U.S.C. 7433(a); see also 26 U.S.C. 6304(a) (also
limiting harm to collection). The United States moved to dismiss the 7433 claim in this case
because Plaintiff alleges that IRS special agents criminal investigators conducted an
interview at his residence on February 29, 2012. The activity Plaintiff challenges in this case
was not a collection action.
2

In response, Plaintiff submits evidence that further supports the United States position.
He attaches the business cards of the special agents, employed by the IRSs Criminal
Investigation division. (Doc. 15-7 at 2.) Moreover, after implying in his Amended Complaint
that the IRS special agents served a collection summons (Doc. 11 12), Plaintiff conceded that
was incorrect. He attaches the legal process, which lays to rest any plausibility that may have
attached to the 7433 claim. First, the IRS special agents served Plaintiff with grand jury
subpoenas. (Doc. 15-5.) Not only are these matters relating to a criminal investigation (rather
than a civil collection action), but they are also demands for information issued by a grand jury
which plays a unique, independent role in the federal justice system. E.g., In re Impounded, 241
F.3d 308, 314-316 (3d Cir. 2001); Whitehouse v. U.S. District Court, 53 F.3d 1349, 1356-1357
(1
st
Cir. 1995). Second, it appears that the IRS special agents may have been investigating a
taxpayer other than Plaintiff. Contrary to Plaintiffs allegations, the grand jury subpoenas were
not even directed to Plaintiff they were issued to 259 Strategies LLC (Doc. 15-5 at 1-6), and
Legal Marketing Strategies LLC (Doc. 15-5 at 7-11). Therefore, Plaintiffs claim that the

2
Plaintiff concedes that his section 7433 claim must be dismissed as against Defendants Department of Justice and
Federal Bureau of Investigation. (Doc. 15-1 at 18.)

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11528658.1
events of February 29, 2012 were an IRS collection action against him lacks any factual or legal
support, and it certainly fails to assert a plausible claim for relief under the strictly-construed
waiver of sovereign immunity in 26 U.S.C. 7433(a).
The best Plaintiff can muster is his own unfounded assumption that the questions asked
by the special agents were aimed at collecting taxes. (Doc. 15-1 at 8, 11.) That naked
speculation is insufficient under Iqbal and Twombly. See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009), quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (after stripping away
[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, there must remain sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.); Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)
(courts are not required to accept as true unsupported conclusions and unwarranted inferences
or legal conclusions); Twombly, 550 U.S. at 555 (Factual allegations must be enough to raise
a right to relief above the speculative level, and the Court demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation.).
Nor does Plaintiffs wrongful collection claim should survive dismissal simply because a
criminal investigation might ultimately result in money paid to the United States. (Doc. 15-1 at
13-14.) Of course, restitution can be imposed as part of a criminal sentence, including in a
criminal tax matter. But, restitution is a criminal penalty imposed by the Court not the Internal
Revenue Service, and it is not limited to tax matters. Courts impose restitution orders in
connection with a variety of crimes. Therefore, Plaintiffs argument is without merit: the
possibility that a criminal penalty will include an order of restitution is not action encompassed
by the narrow waiver of sovereign immunity for claims that the IRS improperly attempted to

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11528658.1
collect unpaid taxes.
3
Indeed, as we have previously demonstrated, tax assessment actions
undertaken by the IRS do not come under section 7433, even though the assessment is intended
to lead to collection of those taxes by the IRS. E.g., Buaiz v. United States, 471 F. Supp. 2d 129,
135-137 (D.D.C. 2007)( actions based on and related to the IRS's alleged calculation of tax
assessments are not collection-related); Springer v. United States, No. 08-cv-4, 2009 WL
981856, at *1 (N.D. Okla. Apr. 10, 2009)(dismissing section 7433 claims against special agents
conducting investigation); cf. Hart v. United States, Civil No. 96-5639, 1997 WL 732466, at *1-
2 (E.D. Pa. Nov. 21, 1997)(recognizing limited scope of collection). If that assessment-based
claim does not state a cause of action under section 7433, then certainly the investigation of a
criminal charge which might or might not result in a court order of restitution, and which is not
even necessarily collected by the IRS does not create a section 7433 action.
B. Plaintiff Concedes He Has Failed To Plead a Privacy Act Claim, and any
Amendment Would Be Futile.

Plaintiff agrees with the United States that his claim under the Privacy Act should be
dismissed. (Doc. 15-1 at 20.) Plaintiff, however, argues that he should be granted leave to
amend his Privacy Act claim to cure the numerous deficiencies. (Id.) The Court should deny
Plaintiffs request because any amendment would be futile. E.g., Holst v. Oxman, 290 Fed.
Appx. 508, 510 (3d Cir. 2008), citing Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000).
Plaintiff misunderstands the scope of the Privacy Act, and he fails to address the fundamental
flaws that would doom even his proposed amendments.

3
Plaintiff concedes that his harassment claim under 26 U.S.C. 6304(b) is insufficient without discovery or
amendment. (Doc. 15-1 at 19.) He seeks damages under 6304(b) for the alleged disclosure of his tax return
information, which is only remedied by a valid claim under 26 U.S.C. 7431. Therefore, neither a fishing
expedition in discovery nor amendment will save Plaintiffs section 6304(b) claim.

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11528658.1
First, despite the Defendants motion, Plaintiff still cannot present factual allegations to
show a record contained within an identified agencys systems of records was disclosed in
violation of the Privacy Act. Those essential elements are lacking and, based on Plaintiffs
representations, they cannot be cured in a second amended complaint. He again offers legal
conclusions (Doc. 15-5 at 20-21), which are insufficient to survive a motion to dismiss. In his
amended complaint, Plaintiff alleges that information about him was disclosed, but, at best, all he
can allege is that comments about information were disclosed. There is no factual allegation that
a record was disclosed from an identified system of records, both of which are terms defined
by the Privacy Act.
Second, Plaintiff cannot allege which provision of the Privacy Act was violated and by
which alleged disclosure. On page 21 of his brief in opposition, he asserts the agencys
disclosure violated a provision of the Privacy Act. Plaintiff presumably wants to conduct
extensive discovery regarding his various claims based on the speculation that there must have
been a violation that he can identify later. That approach to civil litigation is precisely what the
Supreme Court rejected in its decisions in Iqbal and Twombly. If Plaintiff does not know now
which disclosure, by which agency, violated which provision of the Privacy Act, there is no
reason to believe that further amendment will cure these flaws.
Third, Plaintiff suggests that his claim is valid under subsection (g)(10) of the Privacy
Act because he is able to propose a rule or safeguard that should have been in place to prevent
the alleged violation under section (e)(10) of the Privacy Act. (Doc. 15-1 at 22.) That
presumes contrary to the conclusions of competent federal courts that the extensive
regulations already in place are somehow insufficient under the Privacy Act, which Plaintiff has
failed to challenge by any factual allegation whatsoever. (See Doc. 14-1 at 7-8 (discussing

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11528658.1
caselaw regarding (g)(10)(D) and (e)(10)). To the extent that Plaintiff would conjure up an
additional safeguard, the United States submits it would likely not be accepted. Moreover, it
would offend basic principles of federal jurisprudence, sovereign immunity, and pleading
standards to allow a Privacy Act claim to proceed on the mere promise by a plaintiff to offer
suggestions of how a federal agency could better safeguard its information. Plaintiffs desire to
suggest additional procedures would not cure the broader flaws in his Privacy Act claim, and
therefore, leave to amend would be futile.
C. Plaintiffs Claim for Damages Due to Unauthorized Disclosure Lacks Merit.
Section 7431 of the Internal Revenue Code waives sovereign immunity for claims that
tax return information was disclosed without authorization. Plaintiff raised a section 7431 claim
in his amended complaint. (See Doc. 11.) That claim is both untimely and, based on the facts
alleged by Plaintiff, implausible.
Plaintiff, having failed to allege facts to the contrary, concedes that the two-year statute
of limitation began to run on February 29, 2012. See 26 U.S.C. 7431(d). Plaintiff also
concedes, as he must, that he added his section 7431 claim in an amended complaint filed on
March 25, 2014. (Doc. 15-1 at 25; see also Doc. 11.) Nonetheless, Plaintiff argues that he was
unable to bring his section 7431 claim. (Doc. 15-1 at 25.) That is factually incorrect and legally
insignificant. He points to the Courts delay in approving his application for in forma pauperis
status. (Id.) But Plaintiff offers no explanation for why he was unable to file his initial
complaint until the eleventh-hour. If his section 7431 claim was part of the same conduct he
sought to challenge in his initial complaint (as he asserts in order to trigger the relation back
doctrine), then he could have filed his complaint earlier, including the section 7431 claim. Nor
does Plaintiff offer any support for why he could not amend the complaint until the IFP

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11528658.1
application was approved, nor legal support to suggest that his inability is sufficient to toll the
statute of limitation. (Doc. 15-1 at 25.) There is no basis for Plaintiffs argument that the time
limitation in section 7431(d) should be tolled. See Aloe Vera of America, Inc. v. United States,
580 F.3d 867, 871-872 (9
th
Cir. 2009).
Thus, the only way that Plaintiffs section 7431 claim can be timely is if he can show that
the initial claims and the section 7431 share a sufficient common core of operative facts so that
the Defendants would be on notice of the possible section 7431 claim, see Fed. R. Civ. P. 15(c),
but Plaintiff fails to meet this standard. Plaintiffs revisionist attempt to characterize his initial
complaint as primarily seeking damages arising from media leaks is plainly refuted by looking at
the initial complaint itself. The initial complaint sought relief under section 6304 for perceived
wrongs relating to the IRSs visit to his residence. (See Doc. 14-1 at 10-12.) The only reference
to the media pertained to a claim of harassment under section 6304(b). Plaintiffs initial
complaint contained no factual allegations regarding tax return information or disclosure thereof,
which is the sole and essential basis for any claim under section 7431.
Nor does Plaintiff cure the insufficient pleading in the amended complaint.
4
The United
States motion identified several deficiencies, including his failure to allege what tax return
information was disclosed. Plaintiffs opposition does not cure those failures. Instead, Plaintiff
doubles down on his contextual arguments, which fall far short. He relies heavily on the
headline drafted by the Washington Times, but Plaintiff has no factual allegations that plausibly

4
Plaintiff also makes a passing reference to seeking leave to further amend his section 7431 claim. (Doc. 15-1 at
32-33.) For the reasons similar to those stated above in connection with his Privacy Act claim, any such amendment
would be futile. He would only add additional speculation or conclusory statements, which would be disregarded
upon a subsequent motion under Fed. R. Civ. P. 12(b)(6).

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assert the basis for the headline (or any other of the news reports) was the unauthorized
disclosure of tax return information. As stated in the United States opening brief, the statement
by the IRS spokesperson in the article contains no taxpayer information. Plaintiffs opposition
also speculates, without alleging any factual basis whatsoever, that the IRS disclosed his
mailing address, name, and the fact that Plaintiffs tax returns were subject to other
investigation or processing. (Doc. 15-1 at 32.) Plaintiff has only his own speculation to support
that statement, and his section 7431 claim even if timely is a perfect illustration of the type of
claim that the Supreme Court addressed in Iqbal and Twombly.
D. Plaintiff Failed to Present Admissible Evidence to Create a Genuine Issue of
Material Fact Regarding His Claim for Refund of Tax Penalties, And as a
Matter of Law, the United States Is Entitled to Summary Judgment.

Plaintiff seeks a refund of tax penalties, and the Defendants moved for summary
judgment because, as a matter of law, Plaintiffs claim fails. Despite the burden to submit
admissible evidence in opposition to summary judgment, Plaintiff failed to submit any
admissible material evidence. Indeed, the only evidence he submits are phone bills and tax
returns for years other than the two years at issue. Moreover, Plaintiffs opposition confirms
that he relies on legal theories that are incorrect or insufficient. Therefore, the Court should enter
summary judgment in favor of the United States.
5


5
As an initial matter, Plaintiff failed to respond to the United States statement of undisputed facts. (See Doc. 15-1.)
Although he did not move for summary judgment, Plaintiff included a statement of undisputed facts. (Id. at 35-
37.) There are numerous problems with Plaintiffs facts. First, most of the paragraphs lack a reference to
admissible evidence in the record. Second, none of the exhibits are accompanied by an affidavit or declaration that
would attempt to render the exhibits admissible. (Doc. 15-2.) Third, the statements contain argument ( 8, 9, 11,
16, 17, 18), legal conclusions ( 6, 8, 9, 11, 16, 17, 18), and inadmissible hearsay ( 1-5, 7, 10-20). Moreover, as
discussed in this reply, Plaintiffs facts are immaterial.

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11528658.1
First, Plaintiff failed to demonstrate that his claim in this case is not time-barred.
Plaintiff apparently concedes that he brought his refund claim in this civil action before the
statutory period of six months had passed after he filed an administrative claim. Instead,
Plaintiff asserts that the Secretary of the Treasury rendered a decision on his administrative
claim. (Doc. 15-1 at 39.) Plaintiff is incorrect that the Secretary took such action, and he only
offers his own testimony that someone told him the IRS made a decision. (Id.) That is not
admissible evidence to support his claim.
Second, Plaintiff tries to salvage his claim that he is entitled to a refund due to undue
financial hardship. (E.g., Doc. 15-1 at 40.) He repeatedly states that he submitted
supplementary evidence to the IRS, but he offers no admissible evidence to support that
contention. He even asserts (without evidentiary support) that the main issue in connection
with 2007 was undue financial hardship. (Id. at 41.) The only evidence he supports is
immaterial. While he submits copies of several tax returns, those only purport to show that he
was unable to pay the penalties in 2012 and 2013. (Doc. 15-1 at 38.) That misses the point
entirely. Undue financial hardship must be shown as of the time the tax was owed in this case,
in 2008 for the 2007 tax year and 2011 for the 2010 tax year. See Christman v. United States,
110 Fed. Cl. 1, 7 (Fed. Cl. 2013) (hardship must be contemporaneous with the failure to pay tax).
Plaintiff has not established his financial condition at the relevant time.
Finally, Plaintiff plainly misunderstands the cause of action on which he relies. He says
that the issue before the Court is not whether he actually is liable for the penalties, but rather
whether IRS employees failed to follow the internal IRS guidelines and procedures. (Doc. 15-1
at 40, 42.) Actually, a tax refund action is a de novo procedure to determine whether the
taxpayer was liable for the tax or penalty that is challenged. E.g., Wells Fargo & Co. v. United

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States, 91 Fed. Cl. 35, 75 (Fed. Cl. 2010). Moreover, Plaintiff does not have a cause of action
that is based on the IRSs failure to follow its internal guidelines. In re Pransky, 318 F.3d 536,
544 n.7 (3d Cir. 2003) (Procedures in the Internal Revenue Manual are intended to aid in the
internal administration of the IRS; they do not confer rights on taxpayers.), quoting Carlson v.
United States, 126 F.3d 915, 922 (7
th
Cir. 1997).
CONCLUSION
In opposition to a motion to dismiss and for summary judgment, Plaintiff has not
advanced his cause. Plaintiffs vague one of the Defendants wronged me allegations remain,
and Plaintiff has re-affirmed his reliance on legal theories that are barred as a matter of law.
Plaintiff, suing various aspects of the federal Government, must do more in order to demonstrate
that his various claims fall within specific waivers of sovereign immunity. To the extent Plaintiff
seeks to punt this decision into the future via leave to further amend his pleadings, further
amendment would be futile and his implicit motion should be rejected.
DATE: June 9, 2014. Respectfully submitted,

TAMARA W. ASHFORD
Acting Assistant Attorney General


/s/ Christopher D. Belen
CHRISTOPHER D. BELEN
Trial Attorney, Tax Division
U.S. Department of Justice
P.O. Box 227
Washington, D.C. 20044
Telephone: (202) 307-2089
Christopher.D.Belen@usdoj.gov