United States District Court, D. Colorado
ERIC D. SPEIDELL, Petitioner,
UNITED STATES OF AMERICA, through its agency the Internal Revenue Service, Respondent.
A. BRIMMER Chief United States District Judge.
matter is before the Court on petitioner's Amended
Petition to Quash Summons [Docket No. 6], the United
States' Motion to Dismiss [Docket No. 10], and the
Petitioner's Motion for the Court to Postpone its Ruling
Until an Opinion has Been Issued in Appellate No. 16-1281
[Docket No. 18].
is an owner and operator of The Green Solution Retail, Inc.
and several related entities (collectively, “The Green
Solution”) that are engaged in the retail sale of
marijuana-related products in Colorado. Docket No. 10-1 at 2,
¶ 4. The Internal Revenue Service (“IRS”) is
conducting a civil audit of petitioner and The Green
Solution's tax liability for fiscal years 2013 and 2014.
Id. at 2-3, ¶¶ 9-10, 12. In relation to
the audit, the IRS seeks records to establish the federal tax
liability for The Green Solution. Id. at 3,
¶¶ 13-14, 17. On July 5, 2016, the IRS sent a
summons to the Colorado Department of Revenue's Marijuana
Enforcement Division (“MED”) seeking information
about “marijuana licenses and business names used by
Mr. Speidell.” Docket No. 10-1 at 4, ¶ 22. The
same day, the IRS sent a notification to petitioner by
certified mail that the summons had issued. Docket No. 10-1
at 17. Petitioner states that his attorneys received the
summons on July 28, 2016. Docket No. 6-2 at 1, ¶ 4.
Petitioner now seeks to quash the summons. Docket No.
United States' motion to dismiss is brought, in part,
under Fed.R.Civ.P. 12(b)(1). A motion under Fed.R.Civ.P.
12(b)(1) is a request for the Court to dismiss a claim for
lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). A
petitioner bears the burden of establishing that the Court
has jurisdiction. Basso v. Utah Power & Light
Co., 495 F.2d 906, 909 (10th Cir. 1974). When the Court
lacks subject matter jurisdiction over a claim for relief,
dismissal is proper under Rule 12(b)(1). See Jackson v.
City and Cty. of Denver, 2012 WL 4355556 at *1 (D. Colo.
Sept. 24, 2012).
12(b)(1) challenges are generally presented in one of two
forms: “[t]he moving party may (1) facially attack the
complaint's allegations as to the existence of subject
matter jurisdiction, or (2) go beyond allegations contained
in the complaint by presenting evidence to challenge the
factual basis upon which subject matter jurisdiction
rests.” Merrill Lynch Bus. Fin. Servs., Inc. v.
Nudell, 363 F.3d 1072, 1074 (10th Cir. 2004) (quoting
Maestas v. Lujan, 351 F.3d 1001, 1013 (10th Cir.
2003)). The court may review materials outside the pleadings
without converting the Rule 12(b)(1) motion to dismiss into a
motion for summary judgment. Davis ex rel. Davis v.
U.S., 343 F.3d 1282, 1296 (10th Cir. 2003).
United States is immune from suit without its consent.
United States v. Testan, 424 U.S. 392, 399 (1976). A
waiver of sovereign immunity must be unambiguously expressed
in statutory text and is strictly construed in favor of the
sovereign. Lane v. Pena, 518 U.S. 187, 192 (1996).
One such statutory waiver of sovereign immunity allows a
taxpayer to bring petitions to quash summonses when the IRS
seeks information from third parties about that taxpayer. 26
U.S.C. § 7609 (I.R.C. § 7609). If a taxpayer wishes
to bring a proceeding to quash a summons issued to a third
party, he or she must do so no later than the 20th day after
the day notice of the summons is given. 26 U.S.C. §
7609(b)(2)(A) (I.R.C. § 7609(b)(2)(A)). Notice is deemed
sufficient if it is sent by certified or registered mail to
the last known address of the person entitled to notice. 26
U.S.C. § 7609(a)(2) (I.R.C. § 7609(a)(2)).
Revenue Agent David Hewell states that he issued the summons
to MED on June 7, 2016 and provided notice to petitioner via
certified mail sent to petitioner's address on the same
day. See Docket No. 10-1 at 4-5, ¶¶ 22,
25. Petitioner filed his motion to quash on July 29, 2016,
more than 20 days after Revenue Agent Hewell provided
petitioner with notice by certified mail. See Docket
No. 2. As a result, petitioner's petition appears to be
untimely. See Cosme v. I.R.S., 708 F.Supp. 45, 46-47
raises several arguments in response. First, he suggests that
considering Revenue Agent Hewell's declaration converts
defendant's motion into a motion for summary judgment,
requiring a different standard of review. See Docket
No. 14 at 7. However, the Court may review materials outside
the pleadings without converting a Rule 12(b)(1) motion into
a motion for summary judgment. See Davis, 343 F.3d
at 1296. Petitioner, not defendant, has the burden of
establishing that this Court has subject matter jurisdiction
to hear the case. See Basso, 495 F.2d at 909.
Second, petitioner argues that “authentic and
admissible evidence” does not indicate that Revenue
Agent Hewell mailed the summons to petitioner. See
Docket No. 14 at 7. This argument ignores Revenue Agent
Hewell's sworn affidavit that he mailed the summons,
along with an accompanying certificate and mail receipt.
See Docket No. 10-1 at 4-5, ¶¶ 22, 25; and
at 17. Third, petitioner suggests that the Post Office has no
record of the certified mail receipt provided by defendant.
See Docket No. 14 at 8. However, the tracking number
on the screenshot provided by petitioner does not match the
tracking number on the certified mail receipt.
Compare Docket No. 10-1 at 17 (tracking number
70110470000197685653) with Docket No. 14-2 (tracking
number 70110470000197605653). Thus, his argument lacks
support. Finally, petitioner asks the Court to make the
“reasonable inference” that petitioner would have
filed a timely response if he had received the summons.
See Docket No. 14 at 8. However, the statute only
requires that the summons be mailed within a certain time,
not that petitioner actually receives the summons.
See 26 U.S.C. § 7609(b)(2)(A) (I.R.C. §
petitioner did not file his petition within 20 days of notice
being sent by the IRS, the Court does not have subject matter
jurisdiction to hear this case. See Cosme, 708
F.Supp. at 47.
that petitioner's Amended Petition to Quash Summons
[Docket No. 6] is DISMISSED for lack of
subject matter jurisdiction. It is further
that the United States' Motion to Dismiss [Docket No. 10]
is GRANTED. The summons issued to the
Colorado Department of Revenue's Marijuana Enforcement
Division is ENFORCED pursuant to 26 U.S.C.
§ 7604. It is further
that the Petitioner's Motion for the Court to Postpone
its Ruling Until an Opinion has Been Issued in Appellate No.
16-1281 [Docket No. 18] is DENIED as moot.
It is further