Appeal from the United States Bankruptcy Court for the Eastern District of California. BK. No. 92-28539-B-7, ADV. No. 92-2496. Honorable David E. Russell, Bankruptcy Judge, Presiding
Before: Russell, Volinn, and Jones, Bankruptcy Judges.
The debtor filed a complaint under 11 U.S.C. § 505*fn2 seeking to have his tax liability determined, claiming that he was constitutionally exempt from federal income taxes. The IRS filed a motion to dismiss. The bankruptcy court granted the IRS's motion. The debtor appeals. We AFFIRM.
The debtor, John D. Robnett ("Robnett") had failed to file his federal income tax returns for the years 1984 through 1989. Consequently, the appellee, the Internal Revenue Service ("IRS") prepared substitute returns after conducting audits and made deficiency assessments against Robnett for those years. In addition, the IRS charged Robnett with civil penalties for the years 1990 and 1991 relating to filing a false W-4 form and frivolous income tax returns.
On September 29, 1992, Robnett filed a Chapter 7 petition. On October 13, 1992, Robnett filed a complaint to determine his federal tax liability. Essentially, Robnett is alleging that the IRS assessments are constitutionally invalid because "Congress never intended U.S. citizens earning only ordinary wages to be liable for the personal income tax."
On February 8, 1993, the IRS filed a motion to dismiss. The motion to dismiss was based on several grounds:
(1) insufficient service of process against the United States;
(2) no statute waives the United States' sovereign immunity; and
(3) Robnett failed to state a cause of action for which relief can be granted.
On March 16, 1993, the bankruptcy court held a hearing on the IRS's motion to dismiss. The bankruptcy court granted the motion to dismiss in favor of the IRS. The debtor filed a timely notice of appeal.
Whether the bankruptcy court erred in dismissing the debtor's complaint under § 505 seeking to constitutionally exempt him ...