TILLEY v. U.S

TERRENCE BOYLE, Chief Judge, District

This matter is before the Court on Respondent's Motion to Dismiss Petitioner's effort to quash a summons issued by the Internal Revenue Service to Centura Bank seeking financial information concerning Petitioner. For the reasons discussed below, Respondent's Motion is GRANTED IN PART and DENIED IN PART.

In this case, the Internal Revenue Service issued a summons to Centura Bank seeking financial records concerning Petitioner for the years 2000 and 2001. On March 21, 2003, Petitioner was served with notice of the summons as required by 26 U.S.C. § 7609 by certified mail to his last known address. On April 26, 2003, twenty six days after being served with notice of the summons, Petitioner filed his Motion to Quash Summons with this Court. On January 6, 2005, Respondent filed its Motion to Dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, alleging that this Court lacks jurisdiction to entertain Petitioner's Motion to Quash. Petitioner responded on January 14, and Respondent replied on February 1. The motion is ripe for ruling.

I. Respondent's Jurisdictional Challenge

Federal courts have limited jurisdiction and are empowered to act only in those specific instances authorized by Congress. Goldsmith v. Mayor City Council, 845 F.2d 61, 63-64 (4th Cir. 1988). A motion pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure challenges a court's jurisdiction to hear a claim.

Respondent has alleged that Petitioner's filing in this case was untimely, and, therefore the Court lacks subject matter jurisdiction to hear Petitioner's Motion to Quash. Under 26 U.S.C. § 7609(b)(2)(A), any individual who is the subject of a third-party summons seeking financial information may begin a proceeding to quash that summons. Such a proceeding must be filed no later than the 20^th day after notice of that summons is given.

By statute, the petition must have been filed by April 10, 2003. In this case, Petitioner argues that his petition was received by the Court on April 10. Respondent argues instead that the petition actually arrived on April 16. The crux of the timing issue turns on a document filed by Petitioner that he argues proves that the petition was actually received April 10. However, Respondent argues that further review of Petitioner's postal evidence actually shows delivery to have occurred on April 16.

The postal document offered by Petitioner indicates that Petitioner's filing was delivered to the 27640 zip code area on April 10. The United States Courthouse is located in the 27601 zip code area. The postal document offered by Respondent indicates that after being delivered to the 27640 zip code area on April 10, the petition was then delivered to the United States Courthouse on April 16. Petitioner has made a showing that he mailed the petition and that it was delivered incorrectly by the Postal Service. Respondent's position would be for this Court to rely on Postal Service error to deny Petitioner his day in court. When a party seeks to defend on the basis of a statute of limitations, a sense of fairness and judicial economy encourages the Court to construe the statute against the defending party. In this case, Petitioner has made a sufficient showing that his filing was timely. Accordingly, the Court has jurisdiction to hear Petitioner's Motion to Quash a third-party summons.

II. Respondent's Rule 12(b)(6) Challenge

Respondent argues that Petitioner's claim that the Bank Secrecy Act, 31 U.S.C. §§ 5311- 5324 (1988), is unconstitutional fails to state a claim and should be dismissed. Petitioner's Motion to Quash challenges the Act's constitutionality; Petitioner argues that "the Federal Government was not expressly delegated the substantive power to enact this legislation." However, in California Bankers Ass'n v. Schultz, 416 U.S. 21, 64 (1974), the Supreme Court upheld the Bank Secrecy Act against challenges on various constitutional grounds. Given the history of the Act, Petitioner's Motion to Quash is impermissibly vague and fails to specify the context in which he has made his challenge. The bald statement that the Act is unconstitutional fails to state a claim for which relief can be granted. Accordingly, in so much as Petitioner has challenged the Bank Secrecy Act as unconstitutional, his challenge fails.

For the reasons discussed above, Respondent's Motion to Dismiss Petitioner's Motion to Quash as untimely, pursuant to Fed.R.Civ.P. 12(b)(1), is DENIED. Respondent's Motion to Dismiss Petitioner's facial challenge to the Bank Secrecy Act is GRANTED, pursuant to Fed.R.Civ.P. 12(b)(6). The matter of Petitioner's substantive challenge to the propriety of the summons served against Centura Bank will proceed forthwith.

SO ORDERED.