Judge dismisses RICO suit against IRS

By Amanda Thomas | Apr 29, 2018

A federal judge has dismissed a lawsuit accusing the IRS of engaging in unauthorized collection activities in violation of the Racketeer Influenced and Corrupt Organizations Act.

SAN DIEGO –  A federal judge has dismissed a lawsuit accusing the IRS of engaging in unauthorized collection activities in violation of the Racketeer Influenced and Corrupt Organizations Act. 

In an April 10 ruling, U.S. District Judge Dana M. Sabraw granted the defendant’s motion to dismiss Brian and Kathleen Kenner’s First Amendment Complaint, citing a lack of subject matter jurisdiction and failure to state a claim. In the complaint, which was filed in February, the Kenners substituted the United States as a defendant instead of individual IRS employees. 

The case stems from an October 2010 lawsuit the Kenner’s filed against individual Internal Revenue Service employees, attorney Barbara Dunn, and Dunn’s law firm Lacey, Dunn & Do. Dunn formerly represented several defendants in a prior lawsuit where the plaintiffs sued their tax professionals. 

The complaint accuses the IRS employees of violating the RICO Act by engaging in unauthorized collection activities while trying to collect unpaid federal taxes. It also accuses Dunn of conspiring with them. In May 2011, Judge Anthony J. Battaglia granted the defendant’s motion to dismiss with prejudice and the Kenners appealed. 

In July 2011, the Kenners filed the present action against the same defendants, claiming “essentially identical claims for relief.” The court noted the underlying facts of the case arose from the same events as the first lawsuit. Battaglia stayed the case pending resolution of in the first lawsuit because the claims in the present action were “nearly identical to those in the first.”

While the appeal was pending in the first lawsuit, the Kenners filed a third action in October 2011 in San Diego County Superior Court against Battaglia, the same IRS employees, Capital One and Judge Barry Ted Moskowitz. In that complaint, they accuse the judges of acting with the other defendants “as conspirators to defeat the RICO lawsuits.” 

The Kenners allege the defendants used “threats, intimidation, and coercion” to force them to abandon their rights. A judge later granted the defendant’s motion to dismiss, citing a “lack of subject matter jurisdiction and failure to state a claim.” The Kenners, who appealed the dismissal in July 2012, had filed a fourth lawsuit in April 2012 against the United States, Eric Holder and Tim Geithner with the underlying facts of the case coming from the same events as the other lawsuits. 

In December 2012, a judge granted a motion from the defendants to dismiss that case, which the Kenners appealed nine days later. In October 2013, the Ninth Circuit appeals court affirmed the dismissal of the first lawsuit. The appeals court affirmed the dismissals of the third and fourth actions in June 2017 and June 2015, respectively.

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U.S. District Court for the Southern District of California U.S. Internal Revenue Service

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