Opinion
Civil Action No. 90-822-CB
March 10, 2003
MEMORANDUM AND OPINION
This matter is before the Court on Plaintiff's Motion for Summary Judgment. Doc. 18. Defendants have filed a Response in Opposition. Doc. 20. For the following reasons, the Court finds that Plaintiff's Motion should be GRANTED.
PROCEDURAL HISTORY
The United States filed this civil action on October 30, 1990, seeking judgment against Defendants, for unpaid federal income tax liabilities for the years of 1974, 19764981, in the amount of $3,434,094.87 as of August 1, 1989, plus further interest and statutory additions thereon as provided by law. Doc. 1. On March 14, 1991, Defendants answered the complaint denying that the assessed amounts of the tax liabilities were correct. Doc. 6. On April 19, 1991, Defendants filed a petition in bankruptcy in the United States Bankruptcy Court for the Southern District of Alabama. Thus, this action was stayed. Doc. 14.On February 15, 1996, a superseding indictment was filed in this Court against Defendants for tax evasion, among other counts. Doc. 18 (Exhibit 1). Following trial, Defendants were convicted. Id. (Exhibits 2 3). The Eleventh Circuit affirmed the convictions and sentences. Doc. 18 at p. 2. On February 1, 1999, the bankruptcy court denied Defendants a discharge of their debts pursuant to 11 U.S.C. § 727. Id. (Exhibit 4). On February 18, 1999, the Court was informed that the automatic stay was lifted. Doc. 15. Plaintiff now moves for summary judgment in the action. Doc. 18.
BACKGROUND
The Secretary of the Treasury of the United States made the following assessments against Defendants, jointly and severally, for unpaid federal income tax, interest and penalties thereon, and gave notice and demand for payment of these liabilites:Tax Year Notice Demand Assessed* Additions to Tax* Liability** $3,648,642.41
Date of Assessed Unpaid Assessment Tax Interest Balance of 1974 10/13/1975 $ 496.42 10/31/1984 $ 10,736.65 $ 18,343.02 $ 113,866.03*** 1976 07/20/1981 $ 149.00 $ 123.19 09/07/1987 $ 15,105.00 $ 31,556.79 $ 182,961.38 1977 07/27/1981 $ 255.00 $ 181.34 08/31/1987 $ 25,874.00 $ 50,965.80 $ 163,195.65 1978 08/31/1987 $ 52,957.00 $ 98,969.83 $ 322,665.25 1979 07/27/1981 $ 2,947.00 $ 1,352.26 08/31/1987 $153,602.00 $268,472.92 $1,303,400.54 1980 08/17/1981 $ 2,867.00 $ 371.61 08/31/1987 $424,431.00 $568,001.14 $3,924,079.63 1981 11/22/1982 $ 2,576.00 $ 1,192.47 08/03/1987 $332,243.00 $251,725.62 TOTAL $9,658,810.89 * Plus interest and statutory additions thereon as provided by law. ** Unless otherwise noted, as of December 31, 2002, plus further interest and statutory additions thereon as provided by law. *** As of January 6, 2003, plus further interest and statutory additions thereon as provided by law.Doc. 18 at p. 4.
Despite timely notice of these assessments and demand for their payment, Defendants failed to make full payment of the assessed and unassessed amounts and, as of December 31, 2002, are each indebted to the United States in the amount of $9,658,810.89, plus further interest and statutory additions thereon as provided by law. Doc. 18 at p. 4. Defendants are jointly and severally liable to the United States for this amount. Id. Furthermore, the amounts of Defendants' liabilities take into account payments received from the liquidation of Defendants' property through the bankruptcy case, and applied against their federal income tax liabilities for the years 1977-79, in the total amount of $668,004.39. Id. at pp. 4-5.
SUMMARY JUDGMENT STANDARD
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. Civ. P. 56(c). The district court must view the evidence and all reasonable inferences drawn therefrom in the light most favorable to the non-movant. Alexander v. Fulton County, 207 F.3d 1303, 1335 (11th Cir. 2000). The party seeking summary judgment bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party has satisfied its burden, the burden shifts to the nonmovant to "demonstrate that there is indeed a material issue of fact." Clark, 929 F.2d at 608. A factual dispute is "`genuine' . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it "might affect the outcome of the suit under the governing [substantive] law[.]" Anderson, 477 U.S. at 248.
"A mere `scintilla' of evidence supporting the [non-moving] party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citation omitted). "[T]he nonmoving party may avail itself of all facts and justifiable inferences in the record taken as a whole." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir. 1992). "[T]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton, 965 F.2d at 999. If the non-moving party fails to make "a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof," then the moving party is entitled to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To avoid summary judgment, the non-moving party "may not rest upon the mere allegations or denials of [its] pleading[.]" FED. R. Civ. P. 56(e). Nor may the non-moving party defeat summary judgment by providing a mere "scintilla" of evidence. Burger King Corp. v. Weaver, 169 F.3d 1310, 1321 (11th Cir. 1999).
There must be a genuine factual conflict in the evidence to support a jury question. Continental Cas. Co. v. Wendt, 205 F.3d 1258, 1261 (11th Cir. 2000). However, the evidence need not be in a form that would be admissible at trial, as long as it could be reduced to admissible evidence. Celotex, 477 U.S. at 324-27. Flexibility is offered in the form of evidence submitted on summary judgment, but this flexibility does not eliminate a party's need to comply with the rules of evidence. Id.
TAX ASSESSMENTS
Plaintiff contends that the only issue to be resolved here is whether Defendants are indebted to the United States in the amount sought. Doc. 18 at p. 5. Plaintiff has submitted Certificates of Assessments and Payments pertaining to Defendants' federal income tax liabilities for the tax years 1976-81. Id. (Exhibit 5). Furthermore, Plaintiff submitted the sworn declaration of Katherine Young, an IRS employee, pertaining to Defendants' federal income tax liability for the tax year of 1974. Id. (Exhibit 6). The Certificates of Assessments and Payments are based upon Internal Revenue Service transcripts and accounting records maintained pursuant to Title 26 of the United States Code. Id. at p. 6. In accordance with Treasury Regulation § 301.6203-1, the Certificates identify Defendants as taxpayers; identify the character of the liability assessed as an income tax liability; identify the taxable period by the last month of the year; and show the amount of the assessments. Id. Notices of the assessments and demands for payment of the liabilities were mailed to Defendants on the assessment dates, in accordance with the usual IRS practices. Id. See Geiselman v. United States, 961 F.2d 1, 5 (1st Cir. 1992) (stating that notices of deficiency need only contain the amount of the deficiency and the tax year involved).It is well settled that tax assessments are presumptively valid. See, e.g., Welch v. Helvering, 290 U.S. 111, 115 (1933); and Olster v. Commissioner, 751 F.2d 1168, 1174 (11th Cir. 1985). Similarly, Certificates of Assessments and Payments evidencing the tax assessment or assessments are presumed to be correct, meet the requirements of the Internal Revenue Code and 26 C.F.R. § 301.6203-1, and establish a prima facie case of liability. United States v. Chila, 871 F.2d 1015, 1017-18 (11th Cir. 1989). The taxpayer has the burden of overcoming the presumption of correctness by proving that the method of computing the tax, and therefore the assessment, is arbitrary and without foundation. Olster, 751 F.2d at 1174.
Here, Plaintiff, by submitting the Certificates of Assessments and Payments for the years 1976-81, and the sworn declaration of an IRS agent for the year 1974, has established a prima facie case that Defendants are jointly and severally liable to Plaintiff for unpaid federal income tax liabilities for the years 1974, 1976, 1977, 1978, 1979, 1980, and 1981, in the total amount of $9,658,810.89, plus further interest and statutory additions thereon as provided by law. Doc. 18 at p. 8. Defendants entire rebuttal consists of the following:
Please take note that [Defendants] wish to destst [sic] this judgment for the reason [sic] it is in-correct, we was [sic] railroaded through the trial and the figers [sic] they said we owed was the total sale and our lawyers did not stop it or make any move to correct them.
Doc. 20. If the non-moving party fails to make "a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof," then the moving party is entitled to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To avoid summary judgment, the non-moving party "may not rest upon the mere allegations or denials of [its] pleading[.]" FED. R. Civ. P. 56(e). Here, obviously, Defendants, by resting upon mere denials, have failed to rebut the Certificates of Assessments and Payments, and sworn declaration submitted by Plaintiff. Thus, the Court finds that summary judgment for Plaintiff is warranted.
ORDER
In light of the foregoing, the Court finds that Plaintiff's Motion for Summary Judgment, is due to be and hereby is GRANTED.