Opinion
15054-21 4970-22
02-24-2023
ANA M. FRANKLIN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Elizabeth Crewson Paris, Judge
Before the Court is petitioner's Motion for Summary Judgment, as subsequently redacted. On November 30, 2022, petitioner filed an unredacted Motion for Summary Judgment, docket entry 23 in both Nos. 15054-21 and 4970-22. The Court, by Order dated December 14, 2022, docket entry 26 in both Nos. 15054-21 and 4970-22, directed respondent to file a response. On January 13, 2023, respondent filed a Response to Motion for Summary Judgment, docket entry 41 in No. 15054-21 and docket entry 39 in No. 4970-22. On January 25, 2023, petitioner filed a Reply to Response to Motion for Summary Judgment, docket entry 44 in No. 15054-21 and docket entry 42 in No. 4970-22.
The Court, by Order dated January 6, 2023, docket entry 36 in No. 15054-21 and docket entry 28 in No. 4970-22, sealed petitioner's unredacted Motion for Summary Judgment and directed petitioner to redact the Motion in accordance with the Tax Court Rules of Practice and Procedure, and to file the same. On January 30, 2023, as ordered petitioner filed a redacted Motion for Summary Judgment, docket entry 50 in No. 15054-21 and docket entry 48 in No. 4970-22.
These consolidated cases were called for Pretrial Conference Hearing on January 31, 2023, during the Court's January 30, 2023, Birmingham, Alabama remote Trial Session. The parties appeared and were heard, and this Court took petitioner's redacted Motion for Summary Judgment under advisement and ordered respondent to file a Sur-Reply. On February 21, 2023, at docket entry 56 in No. 15054-21 and docket entry 54 in No. 4970-22, respondent filed a Sur-Reply to petitioner's redacted Motion for Summary Judgment.
In the case at No. 15054-21, the dispute between the parties focuses on how much, if any, inmate food account money becomes taxable income of petitioner if moved from one bank account to another but returned in a later tax year or if removed and used for a purpose other than feeding inmates. According to the petitioner, none of it does; according to the respondent, all of it does.
The inmate food account money during the year at issue was governed by a Consent Decree, as issued and amended by the U.S. District Court for the Northern District of Alabama. The Consent Decree, as amended by Order dated January 27, 2009, provided in paragraph 22(a)(i):
The Sheriff of Morgan County shall immediately establish and implement a procedure whereby all funds provided by any source for the feeding of inmates, including funds from the State of Alabama, any municipality, and the federal government, will be used exclusively for the feeding of said inmates incarcerated in the Morgan County Detention Facility. For any year in which there is a shortfall in funds to provide meals for inmates in the County Jail, the Sheriff will not be responsible for the shortfall in funds.
The Northern District of Alabama footnoted the final sentence of the above-quoted text, adding that "[t]he Court makes no determination of whether the Morgan County Commission will be liable for any such shortfall. The issue, should it arise, will be determined when it arises."
Later in the same case, the Northern District of Alabama found, by Order dated June 15, 2017:
As set out in the Joint Stipulation of Facts submitted by the Plaintiffs and Defendant Ana Franklin, the Sheriff of Morgan County, Alabama, . . . the court finds that Sheriff Ana Franklin did remove funds received by her for the feeding of inmates at the Morgan County jail in violation of paragraph 22(a)(i) of the Consent Decree entered in this action, as amended by this Court's Order dated January 27, 2009 . . . .
By the same Order, the Court then terminated paragraph 22(a)(i) of the Consent Decree as of the date of the Order, having concluded petitioner "returned all of the funds in question by January 31, 2017."
In the case at No. 4970-22, the dispute between the parties focuses on legal and accounting expenses that petitioner paid and whether those expenses are deductible. According to the petitioner, all of them are; according to the respondent, none of them are.
Petitioner has premised the Motion for Summary Judgment as a "misunderstanding of the facts."
Reasonable factual inferences drawn from the facts and arguments recited in petitioner's motion and the materials submitted in connection with the motion are submitted to support petitioner's claim. Meanwhile, reasonable factual inferences drawn from the facts and arguments made in respondent's objection and the materials attached to it are submitted to support respondent's objection. If only by inference, the submissions of the parties show an obvious factual dispute that far exceeds a simple "misunderstanding" and that is most certainly material. At this stage of the proceedings, we view inferences in favor of the nonmoving party, here the respondent. See Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). That being so, petitioner has failed to show that the material facts are undisputed and that a decision in these consolidated cases can be rendered in her favor as a matter of law. See Rule 121(b), Tax Court Rules of Practice and Procedure.
It follows, and is, ORDERED that petitioner's redacted Motion for Summary Judgment, filed January 30, 2023, docket entry 50 in No. 15054-21 and docket entry 48 in No. 4970-22, is denied without prejudice to refile.