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United States v. Estate of Lafevre

United States District Court, N.D. Indiana, Hammond Division

October 24, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
ESTATE OF JAMES H. LAFEVRE, deceased, by and through Executor JAMES E. LAFEVRE, Defendant.

          OPINION AND ORDER

          THERESA L. SPRINGMANN, CHIEF JUDGE

         This matter is before the Court on the Government's Motion for Summary Judgment [ECF No. 93], filed on October 6, 2017. For the reasons stated below, the Government's Motion for Summary Judgment is GRANTED.

         LEGAL STANDARD

         “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 Supreme Court has explained that “the burden on the moving party may be discharged by ‘showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If the moving party has properly supported his motion, the burden shifts to the non-moving party to come forward with specific facts showing that there is a genuine issue for trial.” Spierer v. Rossman, 798 F.3d 502, 507 (7th Cir. 2015). “To survive summary judgment, the nonmoving party must establish some genuine issue for trial such that a reasonable jury could return a verdict in [his] favor.” Gordon v. FedEx Freight, Inc., 674 F.3d 769, 772-73 (7th Cir. 2012). Within this context, the Court must construe all facts and reasonable inferences from those facts in the light most favorable to the nonmoving party. Frakes v. Peoria Sch. Dist. No. 150, 872 F.3d 545, 550 (7th Cir. 2017). However, the nonmoving party “is only entitled to the benefit of inferences supported by admissible evidence, not those ‘supported by only speculation or conjecture.'” Grant v. Trs. of Ind. Univ., 870 F.3d 562, 568 (7th Cir. 2017) (citing Nichols v. Michigan City Plant Planning Dep't, 755 F.3d 594, 599 (7th Cir. 2014)). Likewise, irrelevant or unnecessary factual disputes do not preclude the entry of summary judgment. Carroll v. Lynch, 698 F.3d 561, 564 (7th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         STATEMENT OF MATERIAL FACTS

         James H. LaFevre (the Taxpayer) was the sole owner of Applied Computer Techniques (ACT) from 1994 through 1999. Decl. of Yvette Stiger, ¶ 4, ECF No. 38-2. The Taxpayer closed ACT at the end of 1999. Id. However, the Taxpayer did not file timely returns for (1) certain liabilities associated with withheld income and taxes pursuant to the Federal Insurance Contribution Act (FICA); (2) the employer's portion of FICA taxes (employment taxes), reportable on Internal Revenue Service Form 941; and (3) Federal Unemployment Tax Act taxes (federal unemployment taxes), reportable on Internal Revenue Service Form 940. Id. ¶ 5.

         From 1994 through 1998, a delegate of the Secretary of the Treasury made assessments against the Taxpayer for liabilities associated with (1) withheld income and FICA taxes, (2) the employer's portion of FICA taxes, and (3) federal unemployment taxes. Id. ¶ 6. The dates of the assessments for “tax type” 941 were June 30, 1994, September 30, 1994, December 31, 1994, March 31, 1995, June 30, 1995, September 30, 1995, December 31, 1995, March 31, 1996, June 30, 1996, September 30, 1996, December 31, 1996, March 31, 1997, June 30, 1997, September 30, 1997, December 31, 1997, March 31, 1998, June 30, 1998, September 30, 1998, and December 31, 1998. The date of the assessments for “tax type” 940 were December 31, 1994, December 31, 1995, December 31, 1996, December 31, 1997, and December 31, 1998. Id. Delegates of the Secretary of the Treasury issued notice of these assessments and demanded payment from the Taxpayer. Id. ¶ 8. However, the Taxpayer failed, neglected, or refused to fully pay the assessed liabilities and statutory interest. Id. ¶ 9.

         The IRS sent the Taxpayer notices of collection, including notices of intent to levy. Id. ¶ 10. In 2007, the Taxpayer filed requests for collection due process hearings, which were considered by the IRS Appeals Office and then the United States Tax Court. Id. ¶¶ 11-13. In February 2009, the United States Tax Court upheld the IRS's actions. Id. ¶ 13. In June 2009, the Taxpayer made an offer in compromise regarding his tax liability. Id. ¶ 15. In May 2011, a delegate of the Secretary of the Treasury denied the offer in compromise. Id. ¶ 16.

         The Taxpayer died testate on January 11, 2013. Id. ¶ 17. His health was compromised by his military service in the Vietnam War. See Def.'s Trial Rule 56 Designation of Facts Precluding Summ. J., ¶¶ 1-5, ECF No. 73. On February 7, 2013, the Taxpayer's probate case, which remains pending, was filed in the Superior Court of Porter County, Indiana. Decl. of Yvette Stiger, ¶ 18. James E. LaFevre was named Executor of his father's estate. Id. ¶ 19. The IRS filed a claim for internal revenue taxes against the Defendant, which is the Taxpayer's estate. Id. ¶ 20. Yvette Stiger, a revenue officer with the IRS, states within her declaration that the Taxpayer “has failed, neglected or refused to fully pay the assessed [(tax)] liabilities” and that the Defendant owes “$3, 423, 621.48 as of September 30, 2017, plus statutory additions and interest according to law that continue to accrue after September 30, 2017.” Id. ¶ 9. Stiger based her conclusion upon the IRS Certificates of Assessments, Payments, and Other Specified Matters (Forms 4340) and an IRS computer generated payoff calculator showing total interest owed as of September 30, 2017. Id. ¶ 7; see also Ex. A, Certificates of Assessments, Payments, and Other Specified Matters, ECF Nos. 38-3 through 38-10; and Ex. B, Payoff Calculations, ECF No. 38-11.

         ANALYSIS

         The Government requests that the Court grant its Motion for Summary Judgment and order that judgment be entered against the Defendant in the amount of $3, 423, 621.48, plus applicable fees and interest until the judgment is satisfied. The Defendant responds that (1) there is a question of material fact as to the amount of taxes owed and (2) the Court should enjoin collection of any applicable taxes due to “special circumstances.” The Court addresses these issues in turn.

         A. The Amount of Taxes Owed

         The Defendant argues there is a question of material fact as to the amount of taxes owed. The Court disagrees.

         “An ‘assessment' amounts to an IRS determination that a taxpayer owes the Federal Government a certain amount of unpaid taxes.” United States v. Fior D'Italia, Inc.,536 U.S. 238, 242 (2002). “Certificates of Assessments and Payments establish the fact of assessment and carry with them a presumption of validity and that the assessments they reflect were properly made.” Hefti v. Internal Revenue Serv.,8 F.3d 1169, 1172 (7th Cir. 1993); see also United States v. Maier, No. 17 C 08433, 2019 WL 1399983, at *6 (N.D. Ill. Mar. 28, 2019) (“The IRS records its assessments on Forms 4340, which ‘establish the fact of assessment and carry with them a presumption of validity and that the assessments they reflect were properly made.'” (quoting Hefti, 8 F.3d at 1172)); United States v. Ritland, No. 15 C 1062, 2017 WL 25468, at *2 (E.D. Wis. Jan. 3, 2017) (“The IRS uses Form 4340, the certificate of assessments, payments, and other specified matters, to assist in its calculation. Form 4340 establishes the presumption of a valid tax assessment of the amounts the taxpayer ...


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