United States of America v. Bedford et al

MOTION for summary judgment

M.D. Fla.September 29, 2016

-1- 14444221.1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) Case No. 8:15-cv-02487-RAL-JSS ) ROBERT N. BEDFORD, ) LINDA J. BEDFORD, DAWN THOMPSON ) DISPOSITIVE MOTION POOL CARE, and BB&T BANK, ) ) Defendants. ) ) UNITED STATES’ MOTION FOR SUMMARY JUDGMENT Plaintiff United States of America, pursuant to Federal Rule of Civil Procedure 56, respectfully moves for summary judgment on all counts of the Complaint against Defendants Robert N. Bedford and Linda J. Bedford. The undisputed material facts demonstrate that Mr. Bedford currently owes the United States $113,668.97 in unpaid, income taxes, interest and penalties for 1999 through 2003. The undisputed material facts also demonstrate that Mrs. Bedford owes the United States $20,127.15 in unpaid income taxes (including interest and penalties) for those same years. As a result of those tax assessments, federal tax liens arose in favor of the United States and attached to the Bedford’s real property. Since there is no dispute as to their respective liabilities, the Court should enter judgment against the Bedfords and in favor of the United States for the tax years at issue. In addition, the Court should direct the foreclosure and sale of the subject properties to satisfy those unpaid liabilities. In support of this Motion, the United States submits the following memorandum of law, the United States’ Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 1 of 12 PageID 108 -2- 14444221.1 Statement of Undisputed Material Facts, the Declaration of Joanna L. Barry, and Government Exhibits 1 to 6. MEMORANDUM The United States initiated the above-captioned action by filing a Complaint on October 22, 2015 to: (i) reduce to judgment federal income tax liabilities assessed against Mr. Bedford for tax years 1999 through 2003; (ii) reduce to judgment federal income tax liabilities assessed against Mrs. Bedford for tax years 1999 through 2001; and (iii) foreclose the federal tax liens that attach to certain real property once owned jointly by the Bedfords and now owned solely by Mrs. Bedford. Despite litigating certain tax liabilities in United States Tax Court and stipulating to the tax liabilities for tax years 1999 through 2001, the Bedfords have not satisfied those liabilities. The United States now asks that the Court reduce those federal income tax liabilities to judgment and permit the United States to enforce its tax liens against the property located at 11680 Oak Avenue, Seminole Florida 33772 (the “Property”) through a decree of foreclosure and order of sale.1 UNDISPUTED FACTS After the Bedfords filed joint income tax returns for the tax years 1999 through 2001, the Internal Revenue Service (“IRS”) examined those returns and determined that the Bedfords owed additional income tax. See Morris Decl. ¶ 5.2 The Bedfords petitioned the United States Tax Court to redetermine the proposed deficiencies and in February 2007 agreed to a stipulated 1 As required by section 7403(b) of the Internal Revenue Code (26 U.S.C.), the United States named as additional defendants BB&T Bank and Dawn Thompson Pool Care, both of whom hold liens against the Property. The United States concedes the validity of those defendants interests and anticipates being able to stipulate to their relative priority. 2 The Declaration of Revenue Officer Bryan Morris of the IRS, including its exhibits A through L, is attached hereto as Government Exhibit 1. Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 2 of 12 PageID 109 -3- 14444221.1 decision regarding the amounts they owed for tax years 1999 to 2001. See Morris Decl. ¶ 5, Morris Decl. Exhs. A, B; Def. Linda Bedford Answer ¶ 3 (ECF 22) (admitting Tax Court decision and amounts) (“L. Bedford Ans.”). After those taxes were assessed against the Bedfords jointly, Mrs. Bedford filed for innocent spouse relief and agreed to a stipulated decision from the United States Tax Court in January 2013. See Morris Decl. ¶16, Morris Decl. Exh. E. The stipulated decision reduced the amount that Mrs. Bedford owed for tax years 1999 to 2001 and the IRS abated portions of the original assessments to reflect the smaller liability that Ms. Bedford owed, individually. See Morris Decl. ¶ 19. The abatements did not affect Mr. Bedford’s liability for those years. See Morris Decl. ¶¶ 6, 13, Morris Decl. Exh. B. Mr. Bedford filed individual federal income tax returns for tax years 2002 and 2003. See Morris Decl. ¶ 7. The IRS also examined those returns and determined that Mr. Bedford owed more income tax than reported on those returns. See Morris Decl. ¶¶ 5,7. Mr. Bedford did not file a petition in United States Tax Court disputing the proposed deficiencies for those years, and the deficiencies were assessed against him. See Morris Decl. ¶¶ 7-8. As of September 22, 2016, Mr. Bedford owes $113,668.97 on account of the tax liabilities for tax years 1999 through 2003, plus uncalculated interest for 1999, and penalties and interest that continue to accrue as provided by law. See Morris Decl. ¶¶ 12-14, Morris Decl. Exh. F. Mrs. Bedford still owes $20,127.15 on account of the tax liabilities for 1999 through 2001, plus the uncalculated interest for tax year 1999 and penalties and interest that continue to accrue as provided by law. See Morris Decl. ¶ 20, Morris Decl. Exh. H. While the Bedfords were married, they acquired a property located at 11680 Oak Avenue, Seminole Florida 33772 (the “Property”) on August 21, 1997. See Morris Decl.¶ 23. When the Bedfords divorced in 2013, Mr. Bedford purportedly transferred the Property to Mrs. Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 3 of 12 PageID 110 -4- 14444221.1 Bedford via a Quitclaim deed. See Morris Decl. ¶ 27, Morris Decl. Exh. K. However, prior to that transfer, a delegate of the Secretary of the Treasury made the tax assessments described above and filed Notices of Federal Tax Liens in the public records of Pinellas County, Florida against the Bedfords for the assessments described above. See Morris Decl. ¶¶ 25-26, Morris Decl. Exh. J.3 ARGUMENT The Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “The burden of establishing that there is not genuine issue of material fact lies with the moving party. Once the moving party has met that burden by presenting evidence which, if uncontradicted, would entitle it to a directed verdict at trial, Fed. R. Civ. P.(e)4 shifts to the non-moving party the burden of presenting specific facts showing that such contradiction is possible.” Walker v. Darby, 911 F.2d 1573, 1576 (11th Cir. 1990). The undisputed material facts in this case establish that the Bedfords are liable to the United States for the amounts in Bryan Morris’s declaration because the assessments against them are correct. Consequently, the Court should enter judgment against them and in favor of the United States in the amount of those liabilities, plus interest and other statutory additions. 3 Defendants BB&T Bank and Dawn Thompson Pool Care also have liens against the Property. See id. ¶ 28, Exh. L. The BB&T Bank mortgage lien has priority over the United States’ liens. See Exh. L. The January 11, 2010 Dawn Thompson Pool Care lien has priority over the federal tax liens filed on August 15, 2011 and August 16, 2013. See id. The October 10, 2011 Dawn Thompson Pool Care lien is senior only to the federal tax lien filed on August 16, 2013. See id. 4 This reference is to the subdivisions of the rule prior to the amendments that took effect in 2007 and 2010. The advisory committee commentary to the rule reflects that the “changes are intended to be stylistic only,” and “[t]he standard for granting summary judgment remains unchanged.” Fed. R. Civ. P. 56 advisory committee’s note. Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 4 of 12 PageID 111 -5- 14444221.1 The Court should also enter judgment that the federal tax liens attach to the Property and those liens should be foreclosed and the Property sold. I. MR. BEDFORD IS LIABLE TO THE UNITED STATES FOR THE FEDERAL INCOME TAX LIABILITIES ALLEGED AGAINST HIM. The United States is entitled to a judgment against Mr. Bedford for his unpaid federal tax liabilities as set forth in this memorandum. Mr. Bedford has produced no competent evidence to rebut the presumptive correctness of the assessments of income tax made against him for tax years 1999 through 2003 and it is undisputed that he has not made payments on those liabilities. An assessment of federal income tax by the Internal Revenue Service is presumed valid. See, e.g., Welch v. Helvering, 290 U.S. 111, 115 (1933); United States v. Chila, 871 F.2d 1015, 1018 (11th Cir. 1989); United States v. Dixon, 672 F.Supp. 503, 506-07 (M.D. Ala. 1987) aff’d, 849 F.2d 1478 (11th Cir. 1988). A 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. See Olster v. Comm’r, 751 F.2d 1168, 1174 (11th Cir. 1985) (citing Mersel v. United States, 420 F.2d 517, 520 (5th Cir. 1969)); Dixon, 672 F. Supp. at 506. Mr. Bedford has failed to produce any competent evidence to rebut the presumptive correctness of the assessments made against him, so the Court should enter judgment against him. The undisputed material facts establish that a delegate of the Secretary of Treasury assessed the federal income tax liabilities including penalties and interest, against Mr. Bedford for the years at issue. The United States has submitted the declaration of Revenue Officer Bryan Morris with transcripts establishing the amount and existence of the assessments. See Morris Decl. Exh. B. The United States has also submitted the Tax Court stipulation regarding the 1999 to 2001 tax liabilities. See Morris Decl. Exh. A. Therefore, the Court should accept the presumptive validity of the assessments for 1999 through 2003. Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 5 of 12 PageID 112 -6- 14444221.1 Mr. Bedford has asserted that the assessments for tax years 1999 through 2003 were “based on phantom income” that he never received and that he agreed to the assessments “under duress.” Govt Exh. 3, Rog. 1. First, for tax years 1999 through 2001, Mr. Bedford is bound by his Tax Court stipulation under the doctrine of res judicata. See Baptiste v. Comm’r, 29 F.3d 1533, 1539-40 (11th Cir. 1994), cert. denied, 513 U.S.C 1990 (1995); United States v. Lezdey, 2010 WL 6237113, at *3 (M.D. Fla. June 1, 2010). Second, Mr. Bedford produced no documents regarding his phantom income during the course of discovery in response to the United States’ document requests. See Govt. Exh. 4. Finally, when asked about the basis for his claim, Mr. Bedford could not recall any details and could not recall any documents other than some undetermined “audit results” that would support him. See Govt. Exh. 2, 12:11-14:9. With respect to tax years 1999 through 2001, Mr. Bedford also asserts that those tax liabilities “were written off by the Internal Revenue [Service].” Govt. Exh. 3, Rog. 3. Mr. Bedford’s claim that the tax liabilities were written off relies solely on the transcripts that he produced dated January 8, 2013. See Govt. Exh. 2, 17:2-5; Morris Decl. Exh. D. As he stated in his deposition, Mr. Bedford’s understanding that the balances were written off comes solely from his reading of the transcripts, as he never spoke to any one at the IRS about those balances. See Govt. Exh. 2, 16:4-17:1. The transcripts to which he refers, however, demonstrate that upon receipt of Mrs. Bedford’s innocent spouse claim, the balances were transferred to separate split liability accounts. See Morris Decl., Exh. D (see designation “Married Joint Filing” and entries for Codes 971 on September 4, 2009 and November 2, 2009). As Revenue Officer Morris explains in his declaration, when an individual files an innocent spouse claim the joint filing assessments in the MFT 30 account transcripts are abated and a new set of MFT 31 transcripts for each individual spouse is generated. See Morris Decl. ¶ 11; compare Morris Decl. Exh. B Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 6 of 12 PageID 113 -7- 14444221.1 (account transcripts reflecting“1040 Separate Assessment”) with Morris Decl. Exh. D (account transcripts reflecting “Married Joint Filing”). The MFT 31 are generated to reflect the taxes assessed and owed solely as to Mr. Bedford and demonstrate that his tax liabilities were not written off. See Morris Decl. ¶11, Morris Decl. Exh. B. Although Mr. Bedford’s interrogatory responses and deposition testimony indicate that he disagrees with the assessments for tax years 1999 to 2001, he has produced no competent evidence to rebut the presumptive validity of those assessments. Consequently, the Court should enter judgment against Mr. Bedford and in favor of the United States for all of the years at issue in the amount established by the Morris Declaration: $113,668.97, plus the uncalculated interest for tax year 1999 and penalties and interest that continue to accrue as provided by law. II. MRS. BEDFORD IS LIABLE TO THE UNITED STATES FOR THE FEDERAL INCOME TAX LIABILITIES ALLEGED AGAINST HER. The United States is also entitled to a judgment against Mrs. Bedford for her unpaid federal tax liabilities as set forth below. Mrs. Bedford has produced no competent evidence to rebut the presumptive correctness of the assessments of income tax made against her for tax years 1999 through 2001 and it is undisputed that she has not satisfied the amounts due on those liabilities. As noted above, the IRS’s assessments are presumptively valid and the burden is on Mrs. Bedford to overcome that presumtion. See United States v. Hounsom, No. 6:14-cv-93, 2015 WL 6152964, at *2 (M.D. Fla. Aug. 11, 2015). Mrs. Bedford has failed to produce any competent evidence to rebut the presumptive correctness of the assessments made against her, so the Court should enter judgment against her. The undisputed material facts establish that a delegate of the Secretary of Treasury assessed the federal income tax liabilities including penalties and interest, against Mrs. Bedford Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 7 of 12 PageID 114 -8- 14444221.1 for the years at issue. The United States has submitted the declaration of Revenue Officer Bryan Morris with transcripts establishing the amount and existence of the assessments. See Morris Decl. Exh. G. The United States has also submitted the Tax Court stipulations for the additional assessments for 1999 through 2001, following Mrs. Bedford’s claim for innocent spouse relief. See Morris Decl. Exh. E. Therefore, the Court should accept the presumptive validity of the assessments for 1999 through 2001. Like Mr. Bedford, Mrs. Bedford also asserts that the tax liabilities for tax years 1999 through 2001 “were written off by the Internal Revenue [Service].” Govt. Exh. 5, Rog. 3. Mrs. Bedford’s claims must similarly fail for the reasons discussed above and as explained in Revenue Officer Morris’s declaration. See Morris Decl. ¶¶ 11, 22; compare Morris Decl. Exh. G (“1040 Separate Assessment”) with Morris Decl. Exh. D (“Married Joint Filing”). The MFT 31 are generated to reflect the taxes assessed and owed solely as to Mrs. Bedford and demonstrate that his tax liabilities were not written off. See Morris Decl. Exh. G. Mrs. Bedford further asserts that she has made payments that were not recorded by the IRS. See Govt. Exh. 5, Rog. 3. The account transcripts, however, reflect numerous codes “766” for “Credit to your account” based on payments made. Morris Decl. Exh. G. Mrs. Bedford has not identified any specific payment that is not reflected in those transcripts. Although Mrs. Bedford’s interrogatory responses indicate that she disagrees with the assessments for tax years 1999 to 2001, she has produced no competent evidence to rebut the presumptive validity of those assessments. Consequently, the Court should enter judgment against Mrs. Bedford and in favor of the United States for all of the years at issue in the amount established by the Morris Declaration: $20,127.15, plus the uncalculated interest for tax year 1999 and penalties and interest that continue to accrue as provided by law. Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 8 of 12 PageID 115 -9- 14444221.1 III. THE FEDERAL TAX LIENS ATTACH TO THE PROPERTY AND SHOULD BE FORECLOSED. A tax lien arises by operation of law upon the assessment of tax. See 26 U.S.C. §§ 6321,6322. At that time, a tax lien attaches to all property and rights to property belonging to the taxpayer. See id. § 6321. The language of Section 6321 “is broad and reveals on its face that Congress mean to reach every interest in property that the taxpayer might have.” United States v. National Bank of Commerce, 472 U.S. 713, 719-20 (1985). Because of the unpaid income tax assessments against the Bedfords, it is beyond dispute that federal tax liens attach to all of their property. Moreover, it is appropriate for the Court to enter judgment that those federal tax liens attach to the Property and that those liens should be foreclosed and the properties sold. The Bedfords have also asserted that they did not receive copies of the Notices of Federal Tax Lien and that the liens are therefore defective. See Govt. Exh. 3, Rog 2. Govt. Exh. 5, Rog 2. Under Section 6321, “[t]he IRS lien is fully perfected and enforceable against the taxpayer upon assessment; to prevail against the taxpayer there is no need for the IRS to file a notice of lien in the public records,” because a statutory lien under Section 6321 is “silent.” United States v. Rivera, No. 14-0579, 2015 WL 4042197, at *18 (D.N.M. June 30, 2015). “The notice of federal tax lien is required to be recorded only to be effective as against third parties.” Korman v. I.R.S., No. 06-81294, 2007 WL 1206742, at *4, n. 5 (S.D. Fla. Feb. 20, 2007). Moreover, the IRS did send Notices of Federal Tax Lien to the Bedfords’ address. Mrs. Bedford’s document production to the United States in response to its document requests includes the August 16, 2013 Federal Tax Lien filed at Book 18125, Page 1225. See Govt. Exh. 6 (item 39). Each of the other three Notices of Federal Tax Liens include letters indicating the date of mailing and that they were sent to the Property. The August 2011 lien based on Mr. Bedford’s 2000-2001 tax liabilities was sent to Mr. Bedford at the Property via certified mail on Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 9 of 12 PageID 116 -10- 14444221.1 September 29, 2011 with tracking no. 7105 5678 7185 0277 0828. See Morris Decl. Exh. J. Mr. Bedford’s document production to the United States in response to its document requests includes that Notice. See Govt. Exh. 6. The December 2007 lien based on the Bedfords 1999 tax liabilities was sent to the Bedfords at the Property via certified mail on December 4, 2007 with tracking no. 7105 5678 5911 1897. See Morris Decl. Exh. J. The March 2007 lien based on the Bedfords 2000-2003 tax liabilities was sent to the Bedfords at the Property via certified mail on March 20, 2007 with tracking no. 7105 5678 7184 6029 9805. See id. During the periods when the liens were issued and notices mailed to the Property both of the Bedfords were living there. See Govt Exh. 2, 10:21-11:13. In other contexts, where notice of tax deficiency is required to be mailed, the United States Court of Appeals for the Eleventh Circuit has held “actual receipt of a notice of deficiency is not required if mailed to the taxpayer’s last known address.” United States v. Goldston, 324 F. App’x 835, 838 (11th Cir. 2009). The Bedfords’ claim that the federal tax liens do not attach to the Property because “the referenced property was awarded to [Mrs. Bedford] in the divorce settlement, not subject to any liens placed on [Mr. Bedford]” see Govt. Exh. 5, Rog. 3; Govt. Exh. 3, Rog. 2, is equally baseless. Once a federal tax lien attaches to the property, “it follows that property into the hands of any other transferee.” United States v. Domenico, No. 8:09-cv-1282, 2010 WL 3029019, at *2 (M.D. Fla. Apr. 29, 2010); see also United States v. Bess, 357 U.S. 51, 57 (1958) (“The transfer of the property subsequent to the attachment of the lien does not affect the lien, for ‘it is of the very nature and essence of a lien, that no matter into whose hands the property goes, it passes cum onere.”). Here, three of the liens attached prior to the transfer of the property to Mrs. Bedford. See Morris Decl. Exhs. J and K. The fourth lien is solely with respect to Mrs. Bedford Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 10 of 12 PageID 117 -11- 14444221.1 and her tax liabilities and therefore attaches to her fee simple interest in the Property. See Morris Decl. Exh. J. There being no dispute that the tax liens against the Bedfords attach to the Property, and given the fact that a federal tax lien is not self-executing, the Court should decree the foreclosure and sale of the Property subject to those liens. See 26 U.S.C. § 7403; see also United States v. Rodgers, 461 U.S. 677 (1982) (District Courts to order foreclosure under Section 7403 unless certain factors are present that weigh against foreclosure). Such an order is appropriate in this case. Mr. Bedford owes over $100,000 in unpaid income tax liabilities and Mrs. Bedford owes over $20,000 more. Despite the tax liabilities having been due for approximately eight years, the Defendants have failed to pay those assessments after notice and demand. See Morris Decl. ¶¶ 10, 20. The Court should order that the liens that arose upon the assessment of the Bedfords liabilities and attached to the Property be foreclosed and direct that the Property be sold. CONCLUSION For all these reasons, the Court should enter summary judgment in favor of the United States and against defendants Robert and Linda Bedford. Dated: September 29, 2016 Respectfully submitted, CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General By: /s/ Joanna L. Barry JOANNA L. BARRY Trial Attorney, Tax Division Department of Justice P.O. Box 14198 Washington, DC 20044 Telephone: (202) 353-7205 Fax: (202) 514-9868 joanna.l.barry@usdoj.gov Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 11 of 12 PageID 118 -12- 14444221.1 CERTIFICATE OF SERVICE I hereby certify that on September 29, 2016, I electronically filed the foregoing document with the Clerk of Court using the CM/ECF system, which will send notification of such filing to all registered users in this proceeding, including the following: Elizabeth C. Fitzgerald Robert Coplen, P.A. Suite 5A 10225 Ulmerton Rd Largo, FL 33771 Elizabeth@coplenlaw.com In addition, I certify that this document was sent by U.S. mail on September 29, 2016 to the following: Robert N. Bedford P.O. Box 48295 St. Petersburg, FL 33743 Pro se Linda J. Bedford 11680 Oak Avenue Seminole, FL, 33772 Pro se Dawn Thompson Pool Care 24168 Kiwi Lane Brooksville, FL 34601 Pro se /s/ Joanna L. Barry Joanna L. Barry Trial Attorney United States Department of Justice Tax Division Case 8:15-cv-02487-RAL-JSS Document 41 Filed 09/29/16 Page 12 of 12 PageID 119 -1- 14429564.1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) Case No. 8:15-cv-02487-RAL-JSS ) ROBERT N. BEDFORD, ) LINDA J. BEDFORD, DAWN THOMPSON ) POOL CARE, and BB&T BANK, ) ) Defendants. ) ) UNITED STATES’ STATEMENT OF UNDISPUTED MATERIAL FACTS The United States submits this statement of undisputed facts in support of its Motion for Summary Judgment (“Motion”), pursuant to paragraph 6(b) of the Court’s Case Management and Scheduling Order (ECF 29).1 I. Robert Bedford’s Unpaid Federal Income Tax Liabilities 1. Defendants Robert N. Bedford and Linda J. Bedford filed joint income tax returns for the tax years 1999 through 2001. See Morris Decl. ¶ 5. 2. The Internal Revenue Service (“IRS”) subsequently examined those returns, determined that the Bedfords owed additional income tax, and sent notices of deficiency with respect to those years. See Morris Decl. ¶ 5. 1 In support of these undisputed facts, the United States attached the Declaration of Joanna L. Barry and Government Exhibits 1 through 6. Government Exhibit 1 consists of the Declaration of IRS Revenue Officer Bryan Morris and includes exhibits A through L. Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 1 of 8 PageID 120 -2- 14429564.1 3. The Bedfords petitioned the United States Tax Court to redetermine the proposed deficiencies and in February 2007 agreed to a stipulated decision regarding the amounts they owed for tax years 1999-2001. See Morris Decl. ¶ 5, Morris Decl. Exhs. A, B; Def. Linda Bedford Answer ¶ 3 (ECF 22) (admitting Tax Court decision and amounts) (“L. Bedford Ans.”). 4. Consistent with that decision, a delegate of the Secretary of the Treasury assessed federal income tax, penalties, and interest for the years 1999 through 2001 against Mr. and Mrs. Bedford as follows: Tax Year Assessment Date Amount Type of Assessment Balance Due 1999 11/20/2000 $1,050.00 Tax per return $3,029.27 $12.00 Penalty for not pre-paying tax 5/21/2007 $2,530.49 Interest charged for late payment $817.80 Accuracy related penalty under I.R.C. § 6662 $4,089.00 Additional tax assessed per Tax Court settlement 10/31/2011 $735.60 Penalty for late payment of tax 2000 11/26/2001 $1,732.00 Tax per return $67,914.91 10/6/2004 $793.84 Additional tax assessed by examination $134.33 Interest charged for late payment 6/25/2007 $5,596.00 Accuracy related penalty under I.R.C. § 6662 $27,980.00 Additional tax assessed pursuant to Tax Court settlement $12,855.53 Interest charged for late payment 10/31/2011 $7,015.21 Penalty for late payment of tax 11/4/2013 $16,549.03 Interest charged for late payment 2001 11/25/2002 $487.00 Tax per return $26,530.79 10/18/2004 $1,172.89 Additional tax assessed by examination $156.30 Interest charged for late payment 6/25/2007 $2,528.00 Accuracy related penalty under I.R.C. § 6662 $12,640.00 Additional tax assessed pursuant to Tax Court settlement $4,574.15 Interest charged for late payment 10/31/2011 $3,453.22 Penalty for late payment of tax 11/4/2013 $7,598.50 Interest charged for late payment Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 2 of 8 PageID 121 -3- 14429564.1 See Morris Decl. ¶¶ 6, Morris Decl. Exh. B. 5. Mr. Bedford filed individual income tax returns for years 2002 and 2003. The IRS also examined those returns, determined that Mr. Bedford owed more income tax than reported on those returns, and sent notices of deficiency for those years. See Morris Decl. ¶ 7. 6. On the dates and in the amounts reflected below a delegate of the Secretary of Treasury made assessments against Mr. Bedford for federal income tax, penalties, and interest for tax years 2002 and 2003. Tax Year Assessment Date Amount Type of Assessment Balance Due 2002 11/24/2003 $1,718.00 Tax per return $10,465.83 3/27/2006 $860.40 Miscellaneous penalty $4,302.00 Additional tax assessed by examination 838.85 Interest charged for late payment 10/31/2011 $1,075.50 Penalty for late payment of tax 11/4/2013 $2,771.78 Interest charged for late payment 2003 11/22/2004 $682.00 Tax per return $2,190.11 3/27/2006 $187.80 Miscellaneous penalty $939.00 Additional tax assessed by examination $125.80 Interest charged for late payment 10/31/2011 $234.74 Penalty for late payment of tax 11/4/2013 $577.77 Interest charged for late payment See id. ¶ 7, Morris Decl. Exh. B. 7. Mr. Bedford did not file a petition in United States Tax Court disputing the proposed deficiencies in the reported tax the IRS determined for the 2002 and 2003 tax years. See Morris Decl. ¶¶ 7-8. 8. A delegate if the Secretary of Treasury gave notice to Mr. Bedford of the assessments described above and made demand for payment on him as provided for by law. See Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 3 of 8 PageID 122 -4- 14429564.1 Morris Decl. ¶ 9, Morris Decl. Exh. B (account transcripts, reflecting issuance of notices under code “971”); Morris Decl. Exh. C (letters and demands for payment); Def. Robert Bedford Answer ¶ 3 (ECF 21) (admitting that the IRS made assessments for tax years 1999 to 2003 and that numerous personal visits and correspondence with IRS personnel occurred regarding those tax liabilities) (“R. Bedford Ans.”). 9. Despite notices of these assessments and demands for payment, Mr. Bedford has failed to pay all of the liabilities described above. See Morris Decl. ¶ 9. 10. As of September 22, 2016, Mr. Bedford owes $113,668.97 on account of the assessments for tax years 1999 through 2003, plus uncalculated interest for 1999, and penalties and interest that continue to accrue as provided by law. See Morris Decl. ¶¶ 11-14, Morris Decl. Exh. F. 11. Mr. Bedford’s tax liabilities for tax years 1999 through 2003 are reflected on account transcripts coded “MFT 31,” because they are a separate assessment following a claim for innocent spouse relief filed by his ex-wife, Linda Bedford. Morris Decl. ¶ 10. 12. Account transcripts based on the Bedfords joint filing of tax returns as married persons are coded “MFT 30.” Id. 13. When Mrs. Bedford filed for innocent spouse relief in 2009, the IRS noted in the MFT 30 transcripts “Innocent spouse claim received,” “Transfer Out” and “Balance transferred to split liability.” Id., Morris Decl. Exhs. D, E. 14. Thereafter, the MFT 30 transcripts reflect a $0 balance and the MFT 31 transcripts reflect the correct amounts assessed and owed by Mr. Bedford. See Morris Decl. ¶ 10, Morris Decl. Exh. B (account transcripts reflecting “1040 Separate Assessment”), Morris Decl. Exh. D (“Married Filing Joint”). Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 4 of 8 PageID 123 -5- 14429564.1 15. No one at the IRS told Mr. Bedford that the MFT 30 transcripts meant that he no longer owed the IRS taxes and Mr. Bedford never made any inquiries of the IRS regarding the MFT 30 transcripts. See Govt. Exh. 2, 16:4-18. II. Linda Bedford’s Unpaid Federal Income Tax Liabilities 16. For tax years 1999 through 2001, Mrs. Bedford filed her taxes jointly with Mr. Bedford as married individuals and was a party to the Tax Court proceeding to redetermine the proposed deficiencies for these years. See Morris Decl. ¶ 15. 17. Accordingly, a delegate of the Secretary of Treasury assessed the federal income tax, penalties, and interest for those years as described in Paragraph 4 above. See id. 18. Mrs. Bedford subsequently filed a claim for innocent spouse relief that was ultimately resolved by a stipulated decision entered by the Tax Court in January 2013. See id. ¶16, Morris Decl. Exh. E. 19. Pursuant to that decision, the United States Tax Court found that Mrs. Bedford owed the following amounts for tax years 1999 through 2001: Tax Year Amount Type of Deficiency 1999 $4,089.00 Income tax due $817.80 Penalty under I.R.C. § 6662(a) 2000 $3,000.00 Income tax due $1,000.00 Penalty under I.R.C. § 6662(a) 2001 $7,425.00 Income tax due $1,264.00 Penalty under I.R.C. § 6662(a) See Morris Decl. ¶ 17, Morris Decl. Exh. E. 20. The amounts assessed against Mrs. Bedford for the 1999 through 2001 tax years were then abated to reflect her Tax Court settlement. See Morris Decl. ¶ 18, Morris Decl. Exh. G. Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 5 of 8 PageID 124 -6- 14429564.1 21. A delegate of the Secretary of Treasury gave notice to Mrs. Bedford of the assessments described and made demand for payment on her as provided for by law. See Morris Decl. ¶ 20, Morris Decl. Exh. C (letters and demands for payment), Morris Decl. Exh. G (account transcripts reflecting issuance of notices under code “971”). 22. Despite notices of these assessments and demands for payment, Mrs. Bedford has failed to pay all of the liabilities described above. See Morris Decl. ¶¶ 19-20 23. As of September 22, 2016, Mrs. Bedford owes $20,127.15 on account of the assessments for 1999 through 2001, plus the uncalculated interest for tax year 1999 and penalties and interest that continue to accrue as provided by law. See id. ¶¶ 21-23, Morris Decl. Exh. H. 24. Mrs. Bedford’s tax liabilities for tax years 1999 through 2001 are reflected on account transcripts coded MFT 31, because they are a separate assessment following her claim for innocent spouse relief. See Morris Decl. ¶ 22. The MFT 31 transcripts attached as Exhibit G reflect the correct amounts assessed and owed by Mrs. Bedford. See id., Morris Decl. Exh. D (account transcripts reflecting “Married Filing Joint”); Morris Decl. Exh. G (account transcripts reflecting “1040 Separate Assessment”). III. Federal Tax Liens on the Property 25. The Bedfords acquired the property located at 11680 Oak Avenue, Seminole Florida 33772 (the “Property”) on August 21, 1997. See Morris Decl. ¶ 24. 26. The legal description of the Property is: Lot 8, Block 2, Oakhurst Shores Sixth Addition, according to the map or plat thereof as recorded in Plat Book 66, Page 52, Public Records of Pinellas County Florida Parcel identification number 33-30-15-62810-002-0080 Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 6 of 8 PageID 125 -7- 14429564.1 See Morris Decl. ¶ 24, Morris Decl. Exhs. I, K. 27. The Bedfords acquired the Property via a Warranty Deed, which was recorded on August 25, 1997 in the public records of Pinellas County, Florida. See Morris Decl. ¶ 25, Morris Decl. Exh. I. 28. A delegate of the Secretary of the Treasury has filed Notices of Federal Tax Liens in the public records of Pinellas County, Florida against the Bedfords for the assessments described in Sections I and II above as identified in the table that follows: Tax Period Date Recorded Book/Page Taxpayer(s) 2000-2003 March 23, 2007 15700/296 Robert & Linda Bedford 1999 December 6, 2007 16076/132 Robert & Linda Bedford 2000-2001 August 15, 2011 17329/2466 Robert Bedford 2000-2001 August 16, 2013 18125/1225 Linda Bedford See Morris Decl. ¶¶ 26-27, Morris Decl. Exh. J; L. Bedford Ans. ¶ 8 (admitting receipt of Notice of Federal Tax Lien); R. Bedford Ans. ¶ 4 (admitting receipt of correspondence with the IRS regarding filing of federal tax liens).2 29. On July 11, 2013, Mr. Bedford purportedly transferred his interest in the Property to Mrs. Bedford via a Quitclaim deed. See Morris Decl. ¶ 28, Morris Decl. Exh. K. 2 Defendants BB&T Bank and Dawn Thompson Pool Care also have liens against the Property. See Morris Decl. ¶¶ 29-30, Morris Decl. Exh. L. The BB&T Bank mortgage lien has priority over the United States’ liens. See id. The January 11, 2010 Dawn Thompson Pool Care lien has priority over the federal tax liens filed on August 15, 2011 and August 16, 2013. See id. ¶¶ 29- 30, Morris Decl. Exh. L. The October 10, 2011 Dawn Thompson Pool Care lien is senior only to the federal tax lien filed on August 16, 2013. See id. Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 7 of 8 PageID 126 -8- 14429564.1 Dated: September 29, 2016 Respectfully submitted, CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General By: /s/ Joanna L. Barry JOANNA L. BARRY Trial Attorney, Tax Division Department of Justice P.O. Box 14198 Washington, DC 20044 Telephone: (202) 353-7205 Fax: (202) 514-9868 joanna.l.barry@usdoj.gov Case 8:15-cv-02487-RAL-JSS Document 41-1 Filed 09/29/16 Page 8 of 8 PageID 127 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) Case No. 8:15-cv-02487 ) ROBERT N. BEDFORD, ) LINDA J. BEDFORD, DAWN THOMPSON ) POOL CARE, and BB&T BANK, ) ) Defendants. ) ) CERTIFICATION OF CONFERENCE TO NARROW FACTUAL ISSUES As required by paragraph 6(b) of the Court’s Case Management and Scheduling Order (ECF No. 29), the United States, through undersigned counsel, certifies that the United States conferred with Defendants Robert N. Bedford and Linda J. Bedford to narrow the facts in dispute but the parties were unable to agree on all of the undisputed material facts in the above-captioned case. As required by the Case Management and Scheduling Order, the United States’ separate Statement of Undisputed Facts with supporting materials is being filed contemporaneously with the United States’ Motion for Motion for Summary Judgment. Case 8:15-cv-02487-RAL-JSS Document 41-2 Filed 09/29/16 Page 1 of 3 PageID 128 Dated: September 29, 2016 Respectfully submitted, CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General By: /s/ Joanna L. Barry JOANNA L. BARRY Trial Attorney, Tax Division Department of Justice P.O. Box 14198 Washington, DC 20044 Telephone: (202) 353-7205 Fax: (202) 514-9868 joanna.l.barry@usdoj.gov Of counsel: A. Lee Bentley, III United States Attorney Case 8:15-cv-02487-RAL-JSS Document 41-2 Filed 09/29/16 Page 2 of 3 PageID 129 CERTIFICATE OF SERVICE I hereby certify that on September 29, 2016, I electronically filed the foregoing document with the Clerk of Court using the CM/ECF system, which will send notification of such filing to all registered users in this proceeding, including the following: Elizabeth C. Fitzgerald Robert Coplen, P.A. Suite 5A 10225 Ulmerton Rd Largo, FL 33771 Elizabeth@coplenlaw.com In addition, I certify that this document was sent by U.S. mail on September 29, 2016 to the following: Robert N. Bedford P.O. Box 48295 St. Petersburg, FL 33743 Pro se Linda J. Bedford 11680 Oak Avenue Seminole, FL, 33772 Pro se Dawn Thompson Pool Care 24168 Kiwi Lane Brooksville, FL 34601 Pro se /s/ Joanna L. Barry Joanna L. Barry Trial Attorney United States Department of Justice Tax Division Case 8:15-cv-02487-RAL-JSS Document 41-2 Filed 09/29/16 Page 3 of 3 PageID 130 Case 8:15-cv-02487-RAL-JSS Document 41-3 Filed 09/29/16 Page 1 of 2 PageID 131 Case 8:15-cv-02487-RAL-JSS Document 41-3 Filed 09/29/16 Page 2 of 2 PageID 132