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Bierman v. Commissioner of Social Security Administration

United States District Court, E.D. Wisconsin

October 15, 2019



          HON. PAMELA PEPPER United States District Judge.

         This case was removed from state court to federal court in October 2016. Dkt. No. 1. The same day, the defendant moved to dismiss the case. Dkt. No. 2. A month or so later, the court ordered the plaintiff to respond to that motion. Dkt. No. 7. The plaintiff filed an opposition brief on December 14, 2016. Dkt. No. 8. The case then sat idle for twenty months, solely through the fault of this court. Then, on August 8, 2018, the court issued an order liberally construing the plaintiff's claims and denying the motion to dismiss. Dkt. No. 10. The court ordered the defendant to answer or otherwise respond to the complaint, id.; on October 11, 2018, the defendant filed a motion to dismiss or, in the alternative, a motion for summary judgment, dkt. no. 15. The plaintiff responded. Dkt. No. 16. Because the plaintiff has not stated a claim for which a federal court may grant relief, the court will dismiss the case.


         A. August 8, 2018 Order

         The court's August 8, 2018 order first recounted the claims in the complaint:

The complaint alleged that under 26 U.S.C. §6702, which the plaintiff described as “tax code submitting inaccurate information to the IRS, ” the SSA submitted an inaccurate 1099 form to the IRS for tax year 2009. Id. at 3. The plaintiff alleged that in tax year 2009, the SSA reported to the IRS that the plaintiff received $51, 280 in disability payments, when she had received only $22, 900 that year. Id. She asserted that she had been asking the defendant to give her a corrected 1099, so that she could file an amended 2009 tax return. Id. The plaintiff alleges that since 2009, the IRS has “been adding fines, penalties and late fees, ” doubling the amount of money that the defendant claims to have paid the plaintiff. Id. at 4. She says that, while the defendant's own statement says that she repaid $22, 990, it also says that “a check was returned to [SSA] that [the plaintiff] never received and a 2nd checked [sic] was sent to [the plaintiff] that I did receive in the amount of $22, 900.” Id. The plaintiff alleged that because of the SSA's error, the IRS had been trying to collect $28, 000 from her. She seeks damages for emotional distress under Wis.Stat. §895.443, contributory neglect under §895.045, punitive damages under §893.043 as well as damages from the Wisconsin Department of Revenue. Id. at 4.

Dkt. No. 10 at 2.

         The court observed that the plaintiff had alleged that 26 U.S.C. §6702, titled “Frivolous Tax submissions, ” gave her the ability to file a case in federal court. Id. at 5. The court's order informed the plaintiff that that section did not provide a private right of action for a citizen to sue the person who allegedly filed the frivolous return. Id. Because the plaintiff didn't have a lawyer helping her with the complaint, however, the court liberally construed her claims, speculating that her allegations might fit under 26 U.S.C. §7434, “civil damages for fraudulent filing of information returns.” Id. The court denied the defendant's motion to dismiss (which was based on a theory of “no derivative jurisdiction”), apologized for the delay and ordered the defendant to respond to the complaint. Id. at 7-9.

         B. Defendant's Motion to Dismiss (Dkt. No. 15)

         After the court granted an extension of time, dkt. no. 14, the defendant responded to the plaintiff's complaint by filing a motion to dismiss, dkt. no. 15. He asked the court to dismiss the case under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6); alternatively, he asked the court to grant summary judgment under Fed.R.Civ.P. 56. Id.

         Under Rule 12(b)(1), the defendant asserts that the plaintiff cannot sue under 26 U.S.C. §7434. Id. He argues that the plaintiff alleged that the Social Security Administration had misstated the amount of disability benefits on her “1099” form. Dkt. No. 15 at 12 (citing Dkt. No. 1-1 at 3). He says that the “1099” form to which the plaintiff refers is Form SSA-1099, which the SSA mails to beneficiaries so that beneficiaries can report the amount of benefits they received to the IRS. Id. at 12-13. The Commissioner asserts that whether the 1099 form was misleading is irrelevant because 26 U.S.C. §7434(f) limits the types of false “information returns” for which a taxpayer may recover to the nine listed in 26 U.S.C. §6724(d)(1)(A). Id. at 13 (citing Cavoto v. Hayes, 634 F.3d 921, 924 (7th Cir. 2011)). Form SSA-1099 is not on this list of nine. Accordingly, the Commissioner argues that the plaintiff has no basis for bringing a claim under 26 U.S.C. §7434 because her 1099 form is not an “information return” for which the statute allows her to recover. Id.

         Also under Rule 12(b)(1), the Commissioner contends that the plaintiff has not exhausted her claim under the Federal Tort Claims Act (“FTCA”). Id. The commissioner observes that the FTCA provides the exclusive waiver of sovereign immunity for tort actions seeking monetary damages against the United States, its agencies and its employees. Id. at 13-14. He asserts that the FTCA required the plaintiff to file her claim with the appropriate federal agency before filing a suit in federal court. Id. at 14 (citing 28 U.S.C. §2675(a); McNeil v. United States, 508 U.S. 106, 113 (1993)). The Commissioner points out that the plaintiff has not alleged that she followed the steps in 20 C.F.R. §429.101-110, which shows that she has not exhausted her remedies and requires the court to dismiss the case. Id.

         The Commissioner's argument under Rule 12(b)(6) is brief; he asserts only that the plaintiff has not proven that the court has jurisdiction over the claim. Id. at 15.

         Finally, the Commissioner asks the court to grant summary judgment because “the evidence plainly demonstrates that Defendant did not send an inaccurate Form SSA-1099 to Plaintiff regarding her benefits in 2009.” Id. at 16. He reviews the Form SSA-1099 form sent to the plaintiff and explains that the numbers on the form were not misleading but were an accurate accounting of the benefits that had been dispensed. Id. He says the form accurately advised the plaintiff what she should report as income to the IRS. Id.

         The plaintiff responded on October 25, 2018. Dkt. No. 16. She asserted that she wanted this court to proceed under “State Statute USC$6702 tax Code submitted inaccurate information to the IRS.” Id. at 1. She explained that this is the same statute that the court applied in Waukesha County Case No. 2014CV991882, Sophia Bierman v. Charles A. Kass, Marianne Kass. She says that in 2011, Marianne Kass filed an incorrect 1099 for her for $29, 900 when it should have been $2, 900. In that case, she says that “Judge Van De Water ruled that Charles A. Kass DDS had to file an Affidavit of Correction for the 1099 and had to be filed with the IRS and Wisconsin Department of Revenue on [her] behalf.” Id. The plaintiff then notes that in the Commissioner's original motion to dismiss the federal case, the Commissioner asserted that he had removed the case to federal court because the state court lacked jurisdiction. Id. (apparently referencing Dkt. No. 2 at 2). She argues that in the second motion to dismiss, the commissioner is arguing that this court does not have jurisdiction and that she has not stated a claim. Id. at 2. The plaintiff sees these two positions as contradictory and confusing. Id. She also ...

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