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Feldman v. Berkheimer Tax Adminstrator

United States District Court, W.D. Pennsylvania

July 11, 2014

BARBARA JEAN FELDMAN and LEE FELDMAN, Plaintiffs,
v.
BERKHEIMER TAX ADMINSTRATOR, et al., Defendants.

MEMORANDUM OPINION

NORA BARRY FISCHER, District Judge.

I. INTRODUCTION

On December 2, 2013, Plaintiffs Barbara Jean Feldman ("Mrs. Feldman") and Lee Feldman ("Mr. Feldman) (collectively, "Plaintiffs") initiated this civil action against Berkheimer Tax Administrator ("Berkheimer"), Jordan Tax Service ("Jordan"), Dormont Borough ("Dormont"), Keystone Oaks School District ("Keystone Oaks"), and Goehring, Rutter & Boehn ("Goehring") (collectively, "Defendants"). In their complaint, Plaintiffs assert several causes of action based on alleged violations of their Fourth and Fourteenth Amendment rights (Counts I-IV) in addition to raising claims of abuse of process (Count VII), conspiracy (Count VIII), embezzlement (Count IX), intentional infliction of emotional distress (Count X), and a state constitutional law challenge (Count XI).

Presently pending before the Court are Motions to Dismiss filed by Keystone Oaks (Docket No. 9), Dormont (Docket No. 19), Berkheimer (Docket No. 29), Jordan (Docket No. 34, and Goehring (Docket No. 36). For the reasons set forth below, Defendants' Motions to Dismiss are each GRANTED.

II. FACTUAL AND PROCEDURAL BACKGROUND

As Plaintiffs are proceeding pro se, the factual allegations in their complaint are to be construed liberally. Erickson v. Pardus, 551 U.S. 89, 94 (2007); see also Washam v. Stesis, 321 Fed.Appx. 104, 105 (3rd Cir. 2009). In 1992, Berkheimer, an entity employed by Dormont and Keystone to collect taxes, filed an action in Magisterial District Court alleging that Mrs. Feldman had failed to pay income tax on contributions to her 401(k) retirement account in 1989. (Docket No. 6 at ¶ 2). Magisterial Judge William J. Ivill III entered judgment in favor of Mrs. Feldman, apparently determining that an income tax could not be collected on her 401(k) contributions. (Id. at ¶¶ 5-6). Thereafter, from approximately 1992 through 2012, Mrs. Feldman failed to pay income tax on contributions to her 401(k) retirement account. (Id. at ¶ 11).

Consistent with her established practice, Mrs. Feldman filed a tax return in 2012 claiming a refund for the amount of tax withheld on her 401(k) contributions in 2011. (Id. at ¶ 13). The amount in question totaled $147. (Id. at ¶ 18). Jordan, a tax administrator for Dormont and Keystone, informed her that an employee's 401(k) contributions may not be deducted from her taxable income and that no refund would be remitted. (Id. at ¶ 13). The Plaintiffs challenged Jordan's position, citing the 1992 ruling by Magisterial Judge Ivill, to no avail. (Id. at ¶ 15). The instant lawsuit ensued.

In their complaint, Plaintiffs raise a litany of claims, each focused on the same question: whether a taxpayer's self-contributions to a qualified 401(k) plan are taxable under state and local law. Each of these claims is summarized below:

• Count I asserts that Defendants violated Plaintiffs' Fourth Amendment right to be free from unlawful invasions by attempting to collect the tax in question.
• Count II asserts that Defendants violated Plaintiff's due process rights as guaranteed by the Fourteenth Amendment by ignoring Magisterial Judge Ivill's 1992 decision.
• Count III alleges that the taxation of 401(k) contributions violates the equal protection clause of the Fourteenth Amendment and represents an unlawful taking.
• Count IV contends that the definition of taxable income in 61 Pa. C.S.A. 101.6(k) is unconstitutionally vague.
• Count V duplicates the equal protection claim set forth in Count III.
• Count VI raises an equal protection claim based on Defendants' alleged failure to inform the public of Magisterial Judge Ivill's 1992 ...

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