IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF FLORIDA


Warren Thomas Barry,      }
Plaintiff                 }
                          }	
  vs.                     }   Case No. 2:06-cv-284-FtM-29SPC
                          }         Status Report
UNITED STATES OF AMERICA, }
Defendant                 }
         

Plaintiff, Warren Thomas Barry, hereby files this Status Report in compliance with the Court’s ORDER TO SHOW CAUSE filed on April 2, 2007.

  1. This is a case of first impression.

  2. The Department of Justice does not know how to handle this case and that is why the DOJ has not filed their customary motion for summary judgment. This case is more than a typical Collection Due Process Hearing appeal.

  3. Under the law, TITLE 26 , Subtitle F, CHAPTER 68, Subchapter B , PART I , § 6703, c, 2, this Court is to adjudicate cases pertaining to the five hundred dollar penalty under IRC § 6702.

    The IRS does not have an administrative appeal for the five hundred dollar penalty, nor a ninety day letter nor a provision for appeal in Tax Court. The Congress, in IRC §6330, requires the U.S. District Court to decide on the validity of any tax issue not already covered by the Notice of Deficiency system.

  4. The Due Process clause in the 5th and 14th amendments of the U.S. Constitution mandates that any adverse decision by an administrative agency is subject to the due process requirements including a day in court. Until Congress placed jurisdiction regarding the five hundred dollar penalty in the District Court under IRC § 6330, no appeals process existed. Unnoticed by the court system, the tax service issued almost one million of these penalties; however, they seldom collected these penalties. Congress recently increased this penalty to five thousand dollars. Some court somewhere needs to make a definitive decision on this issue.

  5. Plaintiff denies he owes the five hundred dollar penalty under IRC § 6702 because the law is unconstitutional and the amount is not correct. This case should be remanded to the IRS for an administrative determination of the amount and an administrative appeal should be permitted even if the law is constitutional.

    The Internal Revenue Code is so complex and confusing that nobody knows what it means. Barry, a loyal American, questioned the IRS, with no response, he paid money to experts and in short, did his best to understand the Code. However, the IRS did not approve the 1040 form that Barry filed, then, they issued a fine of $500.00 and refused to discuss this issue at a proper hearing. The amount of the fine should be less if the law is constitutional.

    Umbrella of the Due Process Clause of the US Constitution, 5th & 14th Amendments
  6. Plaintiff seeks judicial review of the IRS actions under the due process clause of the United States Constitution. No government agency can take any action against any citizen absent judicial intervention. Government agents are not allowed into people’s homes or people’s pocketbooks without review by the independent judiciary. Plaintiff points out the important new Schulz v. IRS decision (a.k.a. Schulz II) by the Second Circuit Court of Appeals (413 F.3d 297, 95 A.F.T.R.2d 2005-3007, 2005 WL 152090, June 29, 2005).

    a) In Schulz II, the Appellate Court held:

    The rule of due process upon which we relied in Schulz I, and upon which we rely now, can be stated thus: any legislative scheme that denies subjects an opportunity to seek judicial review of administrative orders except by refusing to comply, and so put themselves in immediate jeopardy of possible penalties “so heavy as to prohibit resort to that remedy,” Oklahoma Operating Co. v. Love, 252 U.S. 331, 333 (1920), runs afoul of the due process requirements of the Fifth and Fourteenth Amendments. This is so even if “in the proceedings for contempt the validity of the original order may be assailed.” Id. 1 at 335; see also Reisman, 375, 2 U.S. at 446; Ex parte Young, 209 U.S. 123, 147-48 (1908). [Bold emphasis added]
    In saying “any legislative scheme” and specifying “administrative orders”, the Court broadened its ruling to include not only IRS summonses but also all other IRS administrative edicts.

    b) Because of Schulz II, the IRS must comply with the judicial decisions set forth for other institutions that attempt to collect debts. The debtor is entitled to an independent judge to scrutinize the enforcement activities of all collection agencies.

    c) Until Schulz II, the IRS has been able to conduct seizures without judicial review. The recent ruling changed how the IRS must comply with judicial review, including how it conducts CDP hearings. Now the IRS too is finally constrained by the “fundamental principles of due process” ad its seizure attempts are subject to review by the independent judiciary in order to protect the rights of citizens.

  7. 7. The seizure actions of virtually all other federal agencies are subject to judicial review. A hearing must be held prior to the agency seizing a man’s property. In Fuentes v. Shevin, 407 U.S. 67, 80, 96-97 (1972), the U.S. Supreme Court recognized “the right to a prior opportunity to be heard before chattels are taken from their possessor.”
    The appellees do not suggest that these [contractual] provisions waived the appellants’ right to a full post-seizure hearing to determine whether those events had, in fact, occurred and to consider any other available defenses. By the same token, the language of the purported waiver provisions did not waive the appellants’ constitutional right to a pre-seizure hearing of some kind...We hold that the Florida and Pennsylvania prejudgment replevin provisions work a deprivation of property without due process of law insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their possessor...Since the essential reason for the requirement of a prior hearing is to prevent unfair and mistaken deprivations of property, however, it is axiomatic that the hearing must provide a real test. “[D]ue process is afforded only by the kinds of ‘notice’ and ‘hearing’ that are aimed at establishing the validity, or at least the probable validity, of the underlying claim against the alleged debtor before he can be deprived of his property... ”Sniadach v. Family Finance Corp., supra, at 343 (Harlan, J., concurring). See Bell v. Burson, supra, at 540; Goldberg v. Kelly, supra, at 267.
  8. In Sniadach v. Family Fin. Corp. of Bay View, 395 U.S. 337, 342 (1969), the U.S. Supreme Court addressed “the issue of whether a post-seizure hearing is meaningful in terms of due process and deciding that a pre-deprivation notice and opportunity to be heard is necessary absent an important governmental or public interest to the contrary [—i.e., under special circumstances]”:
    Recent investigations of the problem have disclosed the grave injustices made possible by prejudgment garnishment whereby the sole opportunity to be heard comes after the taking [as noted by Congressman Sullivan, Chairman of the House Subcommittee on Consumer Affairs who held extensive hearings on this and related problems]...Thus, the U.S. Supreme Court ruled that where the taking of one’s property is so obvious [, egregious, and sinister in effect], it needs no extended argument to conclude that absent notice and a prior hearing (cf. Coe v. Armour Fertilizer Works, 237 U.S. 413, 423) this prejudgment garnishment procedure violates the fundamental principles of due process [Sniadach, supra].
  9. The Due Process Clause of the Constitution forbids arbitrary deprivations of liberty, and the U.S. Supreme Court has been careful to protect citizens from abuse by government agencies. “Where a person’s good name, reputation, honor, or integrity is at stake because of what the government is doing to him” (Wisconsin v. Constantineau, 400 U.S. 433 [1971]), the minimal requirements of the Clause must be satisfied. “[F]airness can rarely be obtained by secret, one-sided determination of facts decisive of rights....” (Joint Anti-Fascist Committee v. McGrath, 341 U.S. 123, 170). “Secrecy is not congenial to truth-seeking and self-righteousness gives too slender an assurance of rightness. No better instrument has been devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case against him and opportunity to meet it” (Goss vs. Lopez, 419 U.S. 565, 580 [1975]) “Whether any procedural protections are due depends on the extent to which an individual will be ‘condemned to suffer grievous loss.’” (Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 168 [1951]; cf. Morrissey v. Brewer, 408 U.S. 471, 481 [1972]. “[T]he Fourth Amendment “balance between individual and public interests always has been thought to define the ‘process that is due’ for seizures of person or property” (Albright v. Oliver, 510 U.S. 266 [1994]).

  10. Whereas, Defendant admits in their response that Petitioner filed his CDPH request in a timely manner and whereas, the law mandates a proper hearing, Petitioner requests that the CDPH determination be overturned by this Court; the Notice of Determination Letter dated February 17, 2006 be withdrawn and this case be remanded to the IRS Appeals Division and a proper face-to-face CDP hearing be held in Fort Myers, FL.

Wherefore Plaintiff requests the relief stated above.

Certificate of Service: I do hereby certify that on this date, I sent properly a copy of this pleading to the party listed below by depositing a copy thereof, first-class postage prepaid, in the United States mail addressed to the following:

Philip Doyle
U.S. Dept. of Justice
Ben Franklin Station
P.O. Box 14198
Washington, DC 20044

____________________________                   April 9, 2006
Warren Thomas Barry, Petitioner pro se
5362 Colony Court
Cape Coral, Florida 33904
239-281-7900