United States District Court, D. Kansas
MEMORANDUM & ORDER
MURGUIA UNITED STATES DISTRICT JUDGE.
matter comes before the court upon defendant Internal Revenue
Service (“IRS”)'s Motion to Dismiss for Lack
of Jurisdiction (Doc. 8). For the reasons explained below,
the motion is granted.
Distribution, LLP was a commercial transportation company
formed by Craig Cunningham in 2003. Craig Cunningham owned HP
Distribution, LLP, and his wife, Kim, became a partner in
2009 or 2010. HP Distribution, LLP incurred IRS tax
liabilities and fines from the Federal Motor Carrier Safety
Administration (“FMCSA”). In 2012, HP
Distribution, LLP ended its operations. That same year,
Craig's son, Tanner Cunningham, and Kim Cunningham formed
plaintiff HP Distribution, LLC. The FMCSA, after determining
HP Distribution, LLC was HP Distribution, LLP's
reincarnation, ordered HP Distribution, LLC to pay HP
Distribution, LLP's fines. HP Distribution, LLC has no
outstanding tax liabilities.
collect HP Distribution, LLP's unpaid tax liabilities,
defendant is attempting to determine whether plaintiff is a
successor-in-interest to HP Distribution, LLP and is liable
as a transferee for HP Distribution, LLP's unpaid taxes.
To make this determination, defendant issued and served
summonses to Allen Buchholz Insurance
(“Buchholz”) in Olathe, Kansas, and Bibby
Financial Services (“Bibby”) in Kennesaw,
Georgia, in November and December 2016. These summonses
request documents that may demonstrate plaintiff uses the
same assets as HP Distribution, LLP. Defendant did not
provide notice of the summonses to HP Distribution, LLP or
brought this Motion to Quash Third-Party Summonses because
plaintiff has no outstanding tax liabilities and the IRS
failed to notify plaintiff of the summonses. (Doc. 4).
Defendant argues in its Motion to Dismiss for Lack of
Subject-Matter Jurisdiction: plaintiff failed to follow
Federal Rule of Civil Procedure 4(i) when filing its motion
because it failed to obtain and serve the United States with
a summons; the court lacks jurisdiction over the Bibby
Financial Services summons; the United States has not waived
its sovereign immunity; and plaintiff lacks standing under 26
U.S.C. § 7609 to file its motion. (Doc. 9).
the Proper Parties
preliminary matter, the court finds that the United States of
America should be substituted as the proper defendant. The
IRS is not subject to suit-any suit brought against it is
therefore deemed to be a suit brought against the United
States. Abell v. Sothen, 214 Fed.Appx. 743, 750-51
(10th Cir. 2007) (citing Posey v. U.S. Dep't. of the
Treasury-Int'l Revenue Ser., 156 B.R. 910, 917
Should Have Complied with the Federal Rules and Served
the court notes that defendant was never served with a
summons. Rule 4(i)(1)(A) states that a party suing the United
States must deliver the complaint and summons to the United
States Attorney for the district where the action is brought
and to the United States Attorney General in Washington, D.C.
Fed.R.Civ.P. 4(i)(1)(A)(i-ii). There is no indication in the
court's records that plaintiff obtained a summons or
served it on the United States Attorney or the Attorney
argues it satisfied the notice requirements under 26 U.S.C.
§ 7609(b)(2)(B) by mailing its petition to the persons
summoned (Allen Buchholz Insurance and Bibby Financial
Services) and to the office where the Secretary of Treasury
directed notice be sent (IRS Revenue Officer Anthony Ingo).
However, when a party is entitled to notice, IRS form 6639
instructs plaintiffs to serve their petitions to quash upon
the appropriate parties under Rule 4. This indicates the
statutory requirements supplement the Rules of Civil
Procedure instead of supplanting them.
case law does not clearly establish whether a party must
comply with the Federal Rules in addition to §
7609's requirements. See, e.g., Robert S. v.
United States, 2016 WL 7046851, at *3 (W.D. Wis. Dec. 2,
2016) (discussing differences within the Seventh Circuit.)
There also is no consistent practice within this district.
Courts in this district have decided several motions to quash
third-party summonses where the plaintiffs did not request or
serve a summons. See, e.g., HP Distribution, LLC
et. al v. United States, No. 14-237-JAR (D. Kan. June 1,
2016) (decided on the merits); Manke et. al v. United
States, No. 12-1086-EFM-KGG (D. Kan. Dec. 7, 2012) (case
dismissed for failure to answer show cause order); Beat
v. United States, No. 4-1062-WEB-KMH (D. Kan. Dec. 6,
2004) (dismissed following joint motion to dismiss);
Hennessy v. United States, No. 98-110-MLB-KMH (D.
Kan. Jan. 4, 1999); Renoe v. United States et. al.,
No. 98-212-KHV (D. Kan. Oct. 14, 1998) (motion voluntarily
withdrawn by movants); Pflum v. United States, No.
97-4029-RDR (D. Kan. Aug. 19, 1997), aff'd on merits
by 125 F.3d 862 (10th Cir. 1997); Ewy v. United
States, No. 94-2342-KHV (D. Kan. Oct. 28, 1994);
Britling v. Int'l Revenue Serv., No. 94-207-KMH
(D. Kan. Oct. 19, 1994); Renner v. United States,
No. 93-226-GLR (D. Kan. July 28, 1994). None of the orders in
these cases discussed the plaintiff's failure to obtain
and serve a summons.
the court has heard many cases where the plaintiffs did serve
a summons on the defendant. See, e.g., Lange v.
Int'l Revenue Serv., No. 5-cv-2151-KHV-JPO (D. Kan.
Aug. 4, 2005) (dismissed for untimely filing); Beat v.
United States, No. 5-1008-MLB-DWB (D. Kan. Mar. 16,
2005) (dismissed following defendant's voluntary motion
to dismiss case); Alexander v. Int'l Revenue Serv.,
Comm'r Everson et. al., No. 5-1129-JTM-DWB (D. Kan.
Aug. 23, 2005) (dismissed under sovereign immunity);
Krause v. United States, No. 5-1243-WEB-DWB (D. Kan.
Dec. 20, 2005) (consolidated under No. 5-mc-113-WEB-DWB and
dismissed following joint stipulation of voluntary
dismissal); Bandy v. United States et. al., No.
7-1386-MLB-DWB (D. Kan. Apr. 24, 2008) (dismissed in part for
untimely filing; remaining issues decided on the merits);
Gangi et. al. v. United States, No. 10-1138-EFM-KGG
(D. Kan. Feb. 25, 2011) (decided on the merits). Because the
court dismisses this case on other grounds, this court does
not need to address the adequacy of plaintiff's filing.
But the court notes that it is, at the very least, a best
practice to serve the defendant according to Rule 4.
Court Lacks Jurisdiction Over ...