Opinion
Case No. 04-22991-CIV-GARBE R.
July 7, 2006
OMNIBUS ORDER
This cause is before the Court on Defendant's Motion for Summary Judgment (D.E. #13) and Plaintiffs Cross-Motion for Summary Judgment (D.E. #19). For the reasons set forth below, Defendant's Motion for Summary Judgment is DENIED and Plaintiff's Cross-Motion for Summary Judgment is GRANTED IN PART AND DENIED IN PART.
BACKGROUND
This action relates to assessments of federal taxes against Ralph Rosenberg ("Rosenberg") for tax years 1980, 1987, and 1988; interest on those allegedly unpaid taxes; and, pursuant to 26 U.S.C. § 6672, penalties which the IRS assessed because of Rosenberg's alleged failure to pay taxes withheld from the wages of employees of a company (U.S. Rehabilitative Services, Inc.) for whom Rosenberg allegedly was a "responsible person." See, e.g., Thosteson v. United States, 331 F.3d 1294, 1299 (11th Cir. 2003) ("A person is responsible within the meaning of § 6672 if he has a duty to collect, account for, or pay over taxes withheld from the wages of a company's employees."). The Government assessed the following taxes relevant to this action:
Tax period Assessment date Amount of taxes
1980 Aug. 28, 1987 $58,285.00 1987 Jan. 9, 1989 $9,428.00 1987 Feb. 26, 1991 $49,823.79 1987 July 25, 1991 $131,673.00 1987 July 20, 1992 $46,370.65 1988 Dec. 11, 1989 $1,930.00 1988 July 25, 1991 $2,213.00
"An `assessment' is a procedure in which the I.R.S. records the liability of the taxpayer in I.R.S. files." Behren v. United States, 82 F.3d 1017, 1018 n. 1 (11th Cir. 1996) (citing 26 U.S.C. § 6203; Treas. Reg. (26 C.F.R.) § 301.6203-1)).
On July 29, 1997, Rosenberg signed a Form 900, Tax Collection Waiver ("Form 900 Waiver"), which on its face extended the collection limitations period for each of those tax liabilities to December 31, 2005.
On November 4, 1997, Rosenberg filed with the IRS an Offer in Compromise ("OIC"), which the IRS originally rejected on July 2, 1999. According to the Government — and Defendant disputes these two facts — on July 29, 1999, Rosenberg requested that the IRS reconsider that rejection, and on January 29, 2001, the IRS's Appeals Division sustained that rejection.
On September 18, 2001, Rosenberg filed with the IRS a second OIC. On March 3, 2003, the IRS rejected that OIC with no appeal rights.
On November 29, 2004, the Government commenced this action. On approximately October 29, 2005, Rosenberg passed away. On March 31, 2006, the Court appointed the personal representative of Rosenberg's estate as the proper party Defendant.
SUMMARY JUDGMENT STANDARD OF REVIEW
A party seeking summary judgment must demonstrate that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Maniccia v. Brown, 171 F.3d 1364, 1367 (11th Cir. 1999); Campbell v. Sikes, 169 F.3d 1353, 1361 (11th Cir. 1999). The movant bears the initial responsibility of informing the Court of the basis for its motion and of identifying those materials which demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986).In response to a properly supported motion for summary judgment, "the adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts which show a genuine issue for trial." Fed.R.Civ.P. 56(e). If the non-moving party fails to "make a sufficient showing on an essential element of her case with respect to which she has the burden of proof," then the Court must enter summary judgment for the moving party. Celotex Corp., 477 U.S. at 323, 106 S. Ct. at 2552. The Court, however, must view the evidence and factual inferences reasonably drawn from the evidence in the light most favorable to the nonmoving party. See Maniccia, 171 F.3d at 1367.
"By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 2510 (1986) (emphasis added). The Court is not to resolve factual issues, but may only determine whether factual issues exist. A material fact is one which "might affect the outcome of the suit under the governing law. . . ." Id. at 248, 106 S. Ct. at 2510. The Court's inquiry therefore is whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S. Ct. at 2511.
DISCUSSION
Defendant contends that he is entitled to summary judgment because the Government commenced this action after the statutory limitations period had lapsed. The Government contends that it is entitled to summary judgment because it timely filed this action, because the assessments the IRS made are presumptively correct, and because Defendant has not disputed those assessments.
Statute of limitations
The parties disagree whether the Government commenced this action before expiration of the applicable limitations period. That legal determination is dependent on several factual issues. The Court concludes that the Government is entitled to summary judgment as to several issues but that summary judgment regarding the Government's claim in its entirety is inappropriate because there remain disputed factual issues which govern the determination of whether the limitations period expired before the Government commenced this action: specifically, whether on July 29, 1999, or any other date Rosenberg requested that the IRS reconsider its rejection of Rosenberg's November 4, 1997, OIC; and if so, when the IRS's Appeals Division sustained the rejection of that OIC.
In the absence of an event sufficient to toll the limitations period, the Government has ten years from the date of assessment to collect an unpaid tax. See 26 U.S.C. § 6502(a). Defendant contends that the limitations period expired on December 25, 2003, and that this action therefore was untimely because the Government commenced it on November 29, 2004. The Government, on the other hand, contends that the limitations period did not expire until December 13, 2004.
Although in the past § 6502(a) prescribed a six-year limitations period, the parties agree that the ten-year limitations period applies to this action. See, e.g., Defendant's Motion for Summary Judgment (D.E. # 13), at 3 ¶ 9 n. 6; Plaintiff's Opposition and Cross Motion for Summary Judgment (D.E. #19), at 5 n. 1.
Generally, the limitations period may be extended by written agreement. See, e.g., 26 U.S.C. § 6502(a)(2). Additionally, during certain periods a taxpayer's submission of a written OIC has tolled the limitations period. The parties' dispute focuses in large part on the somewhat complicated interplay among three statutes which Congress enacted in 1998, 2000, and 2002, regarding suspensions and extensions of the limitations period by virtue of OIC's and other written agreements. In 1998, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. Law 105-206, 112 Stat. 685 ("the 1998 Act"), which took effect on January 1, 2000. Two provisions of the 1998 Act are relevant to this action. First, § 3461(c)(2) of the 1998 Act, which was not codified in the United States Code, provides:
PRIOR REQUEST — If, in any request to extend the period of limitations made on or before December 31, 1999, a taxpayer agreed to extend such limitations period beyond the 10-year period referred to in section 6502 (a) of the Inte rnal Revenue Code of 1986, such extension shall expire on the latest of —
(A) the last day of such 10-year period;
(B) December 31, 2002; or
(C) in the case of an extension in connection with an installment agreement, the 90th day after the end of the period of such extension.
It is undisputed that Rosenberg did not enter into an installment agreement with the IRS.
Pub. Law 105-206, 112 Stat. 685. With the possible exception of one issue which the Court will discuss infra — specifically, Rosenberg's assertion that he was coerced to sign the 1997 Form 900 Waiver — the parties agree that by virtue of the 1998 Act, the parties' agreed-upon extension of the limitations period until December 31, 2005 — an agreement which they made in the context of Rosenberg's 1997 Form 900 Waiver — was amended so that the limitations period was scheduled to expire on December 31, 2002. See, e.g., D.E. #13, at 3; D.E. #19, at 9; D.E. #22, at 2; United States v. Elton, ___ F. Supp. 2d ___, ___, 2006 WL 1193268, at * 14 (E.D.N.Y. May 4, 2006); United States v. Ryals, No. 1:03-CV-00090-MP-AK, 2005 WL 3338720, at *5 (N.D. Fla. Dec. 8, 2005); United States v. Whitehead, No. Civ. A. 02-9363, 2005 WL 2202992, at *4 (E.D. Pa. Aug. 3, 2005); United States v. Cook, No. Civ. A. 02-CV-09475, 2004 WL 690804, at *7-*8 (E.D. Pa. Mar. 22, 2004); United States v. Biondic, No. 1:02CV2446, 2003 WL 22765021, at *I (N.D. Ohio Oct. 29, 2003) ("Biondic filed a Form 900 Tax Collection Waiver with respect to his 1979 and 1980 tax years on July 14, 1997. This extended the collection statute through December 31, 2008. The Internal Revenue Restructuring and Reform Act of 1998, however, reduced this extension to December 31, 2002.").
By virtue of the following provisions, effective January 1, 2000, the 1998 Act also amended 26 U.S.C. § 6331 to suspend the limitations period while an OIC was pending and for an additional thirty days after the IRS rejected an OIC: § 6331(k)(1) prohibited the IRS from making any levy during the time an OIC was pending and for thirty days after the IRS rejected the OIC (and, if a taxpayer filed an appeal within thirty days of a rejection of the OIC, during the period when the appeal was pending); § 6331(k)(3) incorporated § 6331 (i)(5) as being applicable to § 6331(k)(1); and § 6331 (i)(5) provided: "The period of limitations under section 6502 shall be suspended for the period during which the Secretary is prohibited under this subsection from making a levy." See also, e.g., United States v. Ryals, No. 1:03-CV-00090-MP-AK, 2005 WL 3338720, at *3 (N.D. Fla. Dec. 8, 2005); United States v. McCarville, No. 01-C-787, 2003 WL 22327931, at *5 (E.D. Wis. Aug. 21, 2003).
In 2000, Congress passed the Community Renewal Tax Relief Act of 2000, Pub. Law 106-554 App. G, § 313, 114 Stat. 2763 ("2000 Act"). Effective December 21, 2000, the 2000 Act eliminated the suspension of the limitations period during the pendency of an OIC. See, e.g., United States v. Elton, ___ F. Supp. 2d ___, ___ n. 5, 2006 WL 1193268, at * 16 n. 5 (E.D.N.Y. May 4, 2006); United States v. Ryals. No. 1:03-CV-00090-MP-AK, 2005 WL 3338720, at *3 (N.D. Fla. Dec. 8, 2005); United States v. McCarville, No. 01-C-787, 2003 WL 22327931, at *5 (E.D. Wis. Aug. 21, 2003). Specifically, in the 2000 Act, Congress amended 26 U.S.C. § 6331(k)(3) — which, as this Court discussed in the preceding paragraph, Congress had amended in the 1998 Act — by deleting the reference to § 6331(i)(5). See Pub. Law 106-554, App. G, § 313(b)(3), 114 Stat. 2763A-642 ("Paragraph (3) of section 6331(k) is amended by striking `(3), (4), and (5),' and inserting `(3) and (4)'."). In other words, Congress deleted the portion of § 6331(k)(3) which had provided that the limitations period was suspended "for the period during which the Secretary is prohibited under this subsection from making a levy. . . .," a period which had included the time when an OIC was pending.
The Government and several courts have cited this Act as a portion of Pub. Law 106-5543. See, e.g., D.E. #19, at 8; United States v. Elton, ___ F. Supp. 2d ___, ___ n. 5, 2006 WL 1193268, at * 16 n. 5; United States v. Ryals, 2005 WL 3338720, at *3. It appears, however, that consistent with Defendant's citation, see D.E. #13, at 4; D.E. #14, at 3 ¶ 12, the correct citation is Pub. Law 106-554, see Pub. Law 106-554 App. G, § 313, 114 Stat. 2763A-640; United States v. McCarville, No. 01-C-787, 2003 WL 22327931, at *5 (E.D. Wis. Aug. 21, 2003).
The Government wrote that the enactment date and effective date of the relevant portions of the 2000 Act were December 20, 2000. See D.E. #19, at 8; see also, e.g., United States v. Ryals, 2005 WL 3338720, at *5 n. 3 (stating that the effective date of the 2000 Act was December 20, 2000). Consistent with Defendant's representation, however, see D.E. #13, at 4; D.E. # 14, at 3 ¶ 12, the 2000 Act's enactment date and the effective date of the relevant portions of the 2000 Act were December 21, 2000. See Pub. Law 106-554, 114 Stat. 2763 (Title page) (listing enactment date as December 21, 2000); Pub. Law 106-554, App. G, § 313(f), 114 Stat. 2763A-643 ("The amendments made by subsections (a) and (b) shall take effect on the date of enactment of this Act.").
Finally, in 2002, Congress enacted the Job Creation and Worker Assistance Act of 2002 ("the 2002 Act"), Pub. Law. 107-147, 116 Stat. 21. The parties agree that pursuant to the 2002 Act, effective March 9, 2002, Congress reinstated the suspension of the limitations period during the pendency of an OIC. See, e.g., D.E. #13, at 4; D.E. #19, at 8; United States v. Elton, ___ F. Supp. 2d ___, ___ n. 5, 2006 WL 1193268, at * 16 n. 5 (E.D.N.Y. May 4, 2006); United States v. Ryals, No. 1:03-CV-00090-MP-AK, 2005 WL 3338720, at *4 (N.D. Fla. Dec. 8, 2005). Specifically, in § 416(e)(1) of the 2002 Act, Congress provided:
(1) Section 6331 (k)(3) (relating to no levy while certain offers pending or installment agreement pending or in effect) is amended to read as follows:
"(3) CERTAIN RULES TO APPLY. — Rules similar to the rules of —
"(A) paragraphs (3) and (4) of subsection (i), and
"(B) except in the case of paragraph (2)(C), paragraph (5) of subsection (i),
shall apply for purposes of this subsection."
Pub. Law. 107-147, § 416(e)(1), 116 Stat. 21. In other words, Congress reinstated the provision of § 6331(k)(3) which had incorporated § 6331(i)(5) as being applicable to § 6331 (k)(1) and which therefore had provided that the limitations period was suspended "for the period during which the Secretary is prohibited under this subsection from making a levy. . . .," i.e., a period which included the time when an OIC was pending.
1997 Form 900 Waiver
Rosenberg concedes that he signed the 1997 Form 900 Waiver, and in his Motion for Summary Judgment he conceded that one effect of that waiver, when considered in conjunction with the 1998 Act, was to extend the limitations period to December 31, 2002. See D.E. #13, at 2 ¶ 4, 5 ¶ 19. In Defendant's Motion for Summary Judgment and in all other documents which Rosenberg filed before he filed his Reply to the Government's Opposition and Cross-Motion for Summary Judgment, Rosenberg did not claim that he had been coerced to sign the Form 900 Waiver and did not assert any other basis upon which the Court conceivably could conclude that the Form 900 Waiver was invalid.
In Defendant's Reply, however, he claimed for the first time that he had been coerced to sign the 1997 Form 900 Waiver. See D.E. #22, at 2 ¶ 3(c), 3 ¶ 4(c), 4 ¶ 5(c), 5 ¶ 6(c). It is unclear for what purpose Defendant raised that assertion because despite the fact that Rosenberg claims he was coerced to sign the 1997 Form 900 Waiver, in his Reply — consistent with his representations in his Motion for Summary Judgment — he repeatedly, explicitly wrote that the limitations period was extended to December 31, 2002, by virtue of the Form 900 Waiver. See D.E. #22, at 3 ¶ 4(1), 5 ¶ 4(1), 8 ¶ 6(17), 8 ¶ 9 ("Rosenberg and the IRS agree that [the 1998 Act] limited extensions of the statute of limitations by waivers made prior to December 31, 1999. Thus, Rosenberg's 1997 Form 900 waiver which extended the statute of limitations to December 31, 2005, was changed by law to expire on December 31, 2002.") (emphasis omitted), 8 ¶ 11("Rosenberg and the IRS agree that the waiver of the statute of limitations by agreement of Rosenberg and the IRS that was included in the first OIC filed in 1997 was changed by law to expire on December 31, 2002.") (emphasis omitted), 9 ¶ 14, 111 A (requesting that "[t]he Court find that the 1997 OIC waiver extended the statute of limitations to December 31, 2002 and no further").
Additionally, in Defendant's Reply he repeatedly wrote that the limitations period expired on December 25, 2003. See D.E. #22, at 2 ¶ 3(j) (m), 3 ¶ 4(1), 5 ¶ 5(l), 6 ¶ 6(k), 7 ¶ 6(15), 8 ¶ 6(18), 11 ¶ B (requesting that "the Court find that the statute of limitations for collection of the tax liabilities at issue herein expired on December 25, 2003"). Defendant's argument that the limitations period expired on December 25, 2003, is dependent on the conclusion that the 1997 Form 900 Waiver, considered in conjunction with the 1998 Act, extended the limitations period to December 31, 2002. In other words, Defendant's argument regarding when the limitations period expired is based on his representation that the 1997 Form 900 was effective to extend the limitations period to December 31, 2002, despite his assertion that he was coerced to sign the 1997 Form 900.
Even if Defendant were relying on his assertion regarding coercion to claim that the 1997 Form 900 did not extend the limitations period to December 31, 2002, he did not make any allegations, let alone present any evidence, to support his conclusory assertion that he was coerced to sign the Form 900; and he did not make any allegations, let alone present any evidence, regarding the circumstances of the alleged coercion, such as who allegedly coerced him, by what method or statements those individuals or entities allegedly coerced him, and when and where the alleged coercion took place. In order to avoid summary judgment, Defendant may not rely on his conclusory allegations or asse rtions but instead must direct the Court to evidence which supports his arguments. See, e.g., Mosley v. MeriStar Mgmt. Co., LLC, 137 Fed. Appx. 248, 250-52 (11th Cir. 2005); Bass v. Singletary, 143 F.3d 1442 (11th Cir. 1998) (J. Roney); Hammer v. Slater, 20 F.3d 1137, 1141 (11th Cir. 1994).
It appears that Defendant's only assertions which he may have made in an attempt to support his allegation of coercion are:
1'his waiver was extracted from Rosenberg at the eleventh hour of the ten year statute for 1980, which he signed only because he was given no other choice. Cases of similar overzealousness on the part of the IRS [are] what inspired Congress to limit the power of the IRS to extract waivers.
D.E. #22, at 10 ¶ 21 (emphasis omitted). For several reasons, those assertions do not support Rosenberg's claim of coercion. First, Defendant has not presented any evidence to support those assertions, particularly his assertion that he "was given no other choice" but to sign the Form 900 Waiver, and unsupported allegations are insufficient to defeat summary judgment. Second, even if Defendant had submitted an affidavit which mirrored those assertions, the statement that Rosenberg "was given no other choice" but to sign the Form 900 Waiver is vague, conclusory, and insufficient to create a genuine issue as to whether the Government coerced him to sign the Form 900 Waiver. For example, Defendant has not clarified by virtue of what actions taken against him or what statements made to him he "was given no other choice" but to sign the Form 900 Waiver, what individuals or entities took those actions or made those statements, when those individuals or entities took those actions or made those statements, or precisely how those actions or statements amounted to coercion. Because Defendant has not submitted evidence (or even made allegations) to clarify the meaning of his assertion that he "was given no other choice" but to sign the Form 900 Waiver, the Court would have to engage in impermissible speculation to divine its meaning.
Additionally, Defendant has not cited any authority suggesting that extracting a Form 900 Waiver at the eleventh hour of the ten year" limitations period is, standing alone, improper; and he has not submitted any evidence, or even made any allegations, to support his conclusory assertion that the IRS's actions constituted improper "overzealousness."
Offers in compromise
The parties dispute whether, and if so then for what time periods, the limitations period was suspended by virtue of either the 1997 OIC or the 2001 OIC.
2001 OIC
As discussed supra, on September 18, 2001, Rosenberg filed with the IRS a second OIC. On March 3, 2003, the IRS rejected that OIC without appeal rights. The Government contends that the 2001 OIC suspended the limitations period for the 359-day period from March 9, 2002, i.e., the effective date of the 2002 Act, when Congress reinstated the suspension of the limitations period during the pendency of an OIC, until March 3, 2003, the date the IRS rejected that OIC without appeal rights. See D.E. #19, at 10 ("Thus, the second offer-in-compromise suspended the statute of limitations from March 9, 2002, the effective date of the 2002 Act, through March 3, 2003, the date until which the second offer remained pending, a period of 359 days.").
In Defendant's Motion for Summary Judgment and accompanying Memorandum of Law, he explicitly or implicitly made three alternative arguments: (1) that the second OIC did not suspend the limitations period at all, see D.E. #13, at 4 ¶ 17 ("For the second Offer in Compromise filed by Rosenberg, the collection statute of limitations was suspended, if at all, from no earlier than March 9, 2002 (the effective date of the reinstatement of the suspension for Offers in Compromise) to March 3, 2003, (359 days).") (emphasis added); id. at 6 ¶ 21 ("Even if the suspension of the collection statute for the second Offer in Compromise can doubly extend the collection statute as extended by the two waivers. . . ."); (2) that the second OIC did not suspend the limitations period from March 9, 2002, until December 31, 2002 (i.e., that the second OIC only suspended the limitations period from January 1, 2003, until March 3, 2003), see D.E. #13, at 4 ¶ 17, 5 ¶ 20; and (3) that the second OIC did not suspend the limitations period from March 20, 2002, until December 31, 2002 (i.e., that the second OIC only suspended the limitations period from March 9, 2002, until March 19, 2002, and from January 1, 2003, until March 3, 2003), see D.E. # 14 (Memorandum of Law), at 4-5 ¶ 18.
In Defendant's Reply memorandum and at the July 21, 2005, hearing regarding the pending summary judgment motions, however, Defendant conceded that the second OIC suspended the limitations period for the 359-day period from March 9, 2002, until March 3, 2003. See D.E. #22, at 8 ¶ 8 ("Rosenberg and the IRS agree that the second OIC suspended the collection statute of limitations by 359 days.") (emphasis omitted); id. at 3 ¶ 4(1) ("Rosenberg admits that the statute of limitations was extended by waivers and suspended by the second OIC to December 25, 2003, just as the IRS records reflect.").
Although Defendant did not explicitly write that the 359-day suspension period should be added to the end of the otherwise-applicable December 31, 2002, expiration of the limitations period, Defendant implicitly conceded that fact because he repeatedly wrote that the limitations period expired on December 25, 2003. See D.E. #22, at 2 ¶ 3(j) (m), 3 ¶ 4(1), 5 ¶ 5(1), 6 ¶ 6(k), 7 ¶ 6(15), 8 ¶ 6(18), 11 ¶ B (requesting that "the Court find that the statute of limitations for collection of the tax liabilities at issue herein expired on December 25, 2003"). Defendant's argument that the limitations period expired on December 25, 2003, is dependent on the conclusion that 359 days should be added to the end of the otherwise-applicable December 31, 2002, expiration date.
Even if Defendant had not conceded those facts in his Reply memorandum, the Court would find that the Government's position regarding the 2001 OIC is correct as a matter of law. Defendant's reference to March 20, 2002, as opposed to March 9, 2002, in one of his three alternative arguments in support of his Motion for Summary Judgment appears to have been a typographical error. The only discernable basis for that argument and Defendant's citation of that date was that the 2002 Act reinstated the suspension of the limitations period for OIC's. The effective date of the 2002 Act, however, was March 9, 2002, not March 20, 2002.
Defendant's other arguments in his Motion for Summary Judgment regarding the 2001 OIC were based on two alternative grounds. First, Defendant contended that "the first Offer in Compromise waiver and the second Offer in Compromise suspension overlap for the period March 20, 2002 through December 31, 2002," and the limitations period "may not be extended twice for the same period, i.e., from March 20, 2002 through December 21, 2002 for the first Offer in Compromise waiver, and then again for the same period for the suspension of the second Offer in Compromise from March 20, 2002 through December 31, 2002." D.E. #14, at 4-5 ¶ 18; see also id at 5 ¶ 18 ("Historically, when extensions of the statute of multiple offers in compromise overlap, the overlap period is only counted once."). Contrary to Defendant's argument, even if the Court accepted as true the Government's assertion that Rosenberg requested reconsideration of the IRS's rejection of the first OIC and that the IRS sustained that rejection on January 29, 2001, the periods when the two OIC's were pending did not overlap. The first OIC was pending until, at the latest, January 29, 2001, and Rosenberg did not file the second OIC until September 18, 2001.
This quotation from Defendant's Reply memorandum actually related only to Rosenberg's first (1997) OIC, not his second (2001) OIC. In Defendant's Motion for Summary Judgment, however, he relied on the same logic regarding the 2001 OIC.
Second, Defendant argued that a portion of the period when the second OIC was pending and the limitations period allegedly was suspended — specifically, March 9, 2002, through December 31, 2002 — overlapped with the period during which the limitations period was extended by virtue of the 1997 Form 900 Waiver and the 1998 Act, and that that period may not be "double counted." In making that argument, Defendant appears to have misapprehended the distinction between extensions of the limitations period and suspensions of the limitations period, a distinction which the Court will discuss infra in relation to the first (1997) OIC. As the Court also will discuss infra, during the relevant time periods, the limitations period could be suspended during periods when the limitations period had been extended. Therefore, despite the fact that the limitations period had been extended to December 31, 2002, the limitations period was suspended from March 9, 2002, through December 31, 2002; and in order to properly calculate when the limitations period expired, the total number of suspended days must be added to the end of the otherwise-applicable December 31, 2002, limitations expiration date. The second OIC suspended the limitations period for 359 days and, without considering the first OIC, extended the limitations period to December 25, 2003, as Defendant ultimately conceded in his Reply memorandum.
1997 OIC
As the Court discussed supra, on November 4, 1997, Rosenberg filed with the IRS his first OIC, which the IRS originally rejected on July 2, 1999. According to the Government — and Defendant disputes these two facts — on July 29, 1999, Rosenberg requested that the IRS reconsider that rejection, and on January 29, 2001, the IRS's Appeals Division sustained that rejection. As discussed infra, a genuine factual dispute exists as to the latter issues: whether Rosenberg requested that the IRS reconsider its rejection of the second OIC on July 29, 1999; and if so, whether the IRS's Appeals Division sustained that rejection on January 29, 2001. Also as discussed infra, that factual dispute is material because if, as Rosenberg alleges, Rosenberg did not request reconsideration of the denial of his first OIC, then the Government commenced this action after the limitations period expired; but if Rosenberg requested reconsideration and the IRS's Appeals Council sustained the rejection on the dates which the Government alleges, then the Government timely commenced this action.
The Govermnent's argument regarding Rosenberg's alleged appeal of the rejection of his first OIC and the IRS's actions in sustaining that rejection is based solely on the Declaration of Revenue Officer Ivette Aquilo. See Statement of Undisputed Material Facts in Support of Opposition and Cross Motion for Summary Judgment (attached to D.E. #19), at 3 ¶¶ 10-11. According to Revenue Officer Aquilo, she based her testimony on the IRS's computerized database of taxpayer records related to Rosenberg for tax years 1980, 1987, and 1988. See Aquilo Decl. ¶¶ 3-8. Revenue Officer Aquilo testified in her Declaration that those computerized records demonstrate that on July 29, 1999, Rosenberg requested that the IRSs Appeals Division reconsider the IRS's rejection of the first OIC, see id. ¶¶ 5f, 6f, 7f, 8e; and that on January 29, 2001, the IRS's Appeals Division sustained the rejection of the first OIC, see id. ¶¶ 5g, 6g, 7g, 8f. Neither Revenue Officer Aquilo nor the Government cited the precise records on which Revenue Officer Aquilo based that testimony, and the Government did not submit those computerized records.
In Defendant's Reply, he denied that Rosenberg filed a timely appeal of the IRS's rejection of his first OIC. See D.E. #22, at 2 ¶ 3(f) (g). 3 ¶ 4(f) (g), 4 ¶ 5(f) (g), 5 ¶ 6 (e) (f), 7 ¶ 6(11) (12), 9 ¶ 18. In support of Defendant's Motion for Summary Judgment, he filed what appear to be IRS computerized records regarding Rosenberg's 1980, 1987, and 1988 taxes. See D.E. #15, Exh. 2. All of those records reflect that Rosenberg filed his first OIC on November 4, 1997; that the IRS rejected the first OIC on July 2, 1999; that Rosenberg filed a second OIC on September 18, 2001; and that the IRS rejected the second OIC on March 3, 2003. None of those records reflect, however, that on July 29, 1999, Rosenberg requested that the IRS reconsider the rejection of his first OIC, or that on January 29, 2001, the IRS's Appeals Division sustained that rejection. In other words, those records do no support Revenue Officer Aquilo's testimony but instead support Defendant's assertions.
At this stage of the proceedings, based on the apparent inconsistency between the records which Defendant submitted and Revenue Officer Aquilo's Declaration testimony, there is a factual dispute as to whether Rosenberg requested that the IRS reconsider the rejection of his first OIC on July 29, 1999, and as to whether the IRS's Appeals Division sustained that rejection on January 29, 2001. In order to determine whether that factual issue is material, the Court must determine whether it affects the determination of whether the Government timely commenced this action, and the Court therefore will analyze the effect of the first OIC on the statutory limitations period based on two different assumptions: (1) consistent with Defendant's assertions, that Rosenberg did not request reconsideration of the IRS's initial denial of his first OIC; and (2) consistent with the Government's assertions, that on July 29, 1999, Rosenberg requested that the IRS reconsider the rejection of his first OIC, and that on January 29, 2001, the IRS's Appeals Division sustained that rejection.
If Rosenberg did not request reconsideration of the IRS's initial denial of his first OIC, then that OIC was pending from November 14, 1997, through July 2, 1999. If that were the case, then the first OIC did not suspend the limitations period for any period because the Government has not cited statutory authority for the proposition that prior to January 1, 2000, i.e., the effective date of the 1998 Act, the limitations period was suspended solely by virtue of the fact that an OIC was pending. If Rosenberg did not request reconsideration of the IRS's initial denial of his first OIC, therefore, then the limitations period expired on December 25, 2003, and the Government commenced this action after expiration of the limitations period.
On the other hand, the Government timely commenced this action if Rosenberg requested that the IRS reconsider the rejection of his first OIC on July 29, 1999, and if the IRS's Appeals Division sustained that rejection on January 29, 2001. If that were the case, then the limitations period was suspended for the approximately 355-day period from January 1, 2000 (the effective date of the 1998 Act, in which Congress amended 26 U.S.C. § 6331 to suspend the limitations period while an OIC was pending) until December 21, 2000 (the effective date of the 2000 Act, in which Congress eliminated the suspension of the limitations period during the pendency of an OIC). Adding 355 days to the end of the previously-calculated December 25, 2003, expiration of the limitations period results in a re-calculated limitations period expiration date of approximately December 14, 2004. If that were the correct expiration date, then the Government timely commenced this action on November 29, 2004.
The Government calculated the expiration date to be December 13, 2004. For purposes of this Order, the Court does not need to determine whether the limitations period actually expired on December 13, 2004, or on December 14, 2004, because either date is at least two weeks after the Government commenced this action.
Defendant objects apparently to the latter calculation on at least two related grounds. First, he contends that because Rosenberg signed both the 1997 Form 900 Waiver and the 1997 OIC prior to December 31, 1999, the 1998 Act provided that December 31, 2002, was the absolute deadline for the waivers contained within each of those documents. See D.E. #22, at 9 ¶¶ 14-16. Second, Defendant contends that the 1997 Form 900 Waiver and the 1997 OIC contained overlapping waivers of the statute of limitations, and that the overlapping portions of those waivers cannot be "`double counted" because "whether a period is suspended for one reason or for ten reasons, the effect is the same: the period is simply suspended." D.E. #22, at 9 ¶ 12; see also id at 8-9 ¶¶ 9-16.
Defendant's objections are based on a misapprehension of the distinction between extensions of the limitations period and suspensions of the limitations period. In the 1998 Act, Congress expressly distinguished between extensions and suspensions. As discussed supra, in § 3461(c)(2) of the 1998 Act. Congress provided that, inter alia:
If, in any request to extend the period of limitations made on or before December 31, 1999, a taxpayer agreed to extend such limitations period beyond the 10-year period referred to in section 6502(a) of the Internal Revenue Code of 1986, such extension shall expire on the latest of —
(A) the last day of such 10-year period;
(B) December 31, 2002; or
(C) in the case of an extension in connection with an installment agreement, the 90th day after the end of the period of such extension.
Pub. Law 105-206, 112 Stat. 685 (emphasis added). Also as discussed supra, by virtue of the 1998 Act, Congress amended 26 U.S.C. § 6331 to suspend the limitations period while an OIC was pending and for an additional thirty days after the IRS rejected the OIC. Nothing in the 1998 Act, or in any other statute to which the parties have directed the Court or which the Court has found through its own research, suggests, let alone explicitly provides, that the limitations period may not be suspended during a period when the limitations period was extended. The Court therefore concludes that the limitations period may be suspended during a period when the limitations period was extended. See United States v. Rvals, No. 1:03-CV-00090-MP-AK, 2005 WL 3338720 (N.D. Fla. Dec. 8, 2005) (concluding that an offer-in-compromise which was pending during a period when the limitations period could been extended had the effect of suspending the limitations period; the expiration of the limitations period was extended from December 31, 1999, to December 31, 2002, and the offer-in-compromise suspended the limitations period from June 14, 2000, until December 20, 2000, and from March 9, 2002, until March 12, 2002, resulting in a re-calculated limitations period expiration date of July 9, 2003). Accordingly, if Rosenberg requested that the IRS reconsider the rejection of his first OIC on July 29, 1999, and if the IRS's Appeals Division sustained that rejection on January 29, 2001. then the limitations period was suspended for the approximately 355-day period from January 1, 2000, until December 21, 2000. Adding 355 days to the end of the previously-calculated December 25, 2003, limitations period expiration date results in a re-calculated limitations period expiration date of approximately December 14, 2004. If that were the correct expiration date, then the Government timely commenced this action on November 29, 2004.
Conclusions re ag rding statute of limitations
As discussed supra, the Government is entitled to summaryjudgment regarding several legal issues relevant to the statute of limitations. Genuine issues of material fact exist, however, as to whether (and if so, when) Rosenberg requested that the IRS reconsider the rejection of his first OIC and whether (and if so, when) the IRS's Appeals Division sustained that rejection. Because those appear to be the only remaining relevant, unresolved issues regarding the statute of limitations and it is possible that the Court will be able to resolve those issue via motions for summary judgment, the parties may file renewed motions for summary judgment regarding those issues.
Amount of liability
Assuming that the Government timely commenced this action, the Government contends that its assessments are presumptively correct and that in the absence of assertions by Rosenberg that those assessments are incorrect, the Government is entitled to summary judgment as to the amount of Defendant's liability to the Government. See D.E. #19, at 5. "An `assessment' is a procedure in which the I.R.S. records the liability of the taxpayer in I.R.S. files." Behren v. United States, 82 F.3d 1017, 1018 n. 1 (11th Cir. 1996) (citing 26 U.S.C. § 6203; Treas. Reg. (26 C.F.R.) § 301.6203-1)). "It is well established in the tax law that an assessment is entitled to a legal presumption of correctness-a presumption that can help the Government prove its case against a taxpayer in court." United States v. Fior D'Italia, Inc., 536 U.S. 238, 242, 122 S. Ct. 1117, 1122 (2002); United States v. Janis, 428 U.S. 440-41, 96 S. Ct. 3021, 3025-26 (1976); Suarez v. United States, 582 F.2d 1007, 1010 n. 3 (5th Cir. 1978); Carson v. United States, 560 F.2d 693, 695-96 (5th Cir. 1977). "Unquestionably the burden of proof is on the taxpayer to show that the Commissioner's determination is invalid." Helvering v. Taylor, 293 U.S. 507, 515, 55 S. Ct. 287, 291 (1935).
Defendant has not argued, let alone presented evidence, that the IRS's assessments are incorrect. The Government therefore is entitled to summaryjudgment as to question of whether the following assessments are accurate:
Tax period Assessment date Amount of taxes 1980 Aug. 28, 1987 $58,285.00 1987 Jan. 9, 1989 $9,428.00 1987 Feb. 26, 1991 $49,823.79 1987 July 25, 1991 $131,673.00 1987 July 20, 1992 $46,370.65 1988 Dec. 11, 1989 $1,930.00 1988 July 25, 1991 $2,213.00
Those assessments do not, however, reflect interest, penalties, or reductions for payments and abatements. The Government has not argued or presented evidence regarding the amount of interest, penalties, or reductions for payments and abatements; and Defendant argued, but did not present evidence, that the IRS transcripts omit references to certain amounts which Rosenberg paid toward those assessments. See D.E. #22, at 6-7. Therefore, assuming that the Government timely commenced this action based on the parties' briefs and the evidence to which they directed the Court, neither party is entitled to summaryjudgment regarding the amount of interest, penalties, and reductions for payments and abatements, or regarding the precise amount of money which Defendant owes the Government. The parties may address those issues in any renewed motions for summary judgment that they file.
CONCLUSION
Accordingly, it is ORDERED that:
(1) Defendant's Motion for Summary Judgment (D.E . #13) is DENIED,
(2) Plaintiff's Cross-Motion for Summary Judgment (D.E. #19) is GRANTED IN PART AND DENIED IN PART, and
(3) On or before July 27, 2006, either party may file a renewed motion for summary judgment: (a) regarding whether (and if so, when) Rosenberg requested that the IRS reconsider the rejection of his first (1997) offer in compromise and whether (and if so, when) the IRS's Appeals Division sustained that rejection; and (b) assuming that the Government timely commenced this action, regarding the precise amount of Defendant's liability to the Government, including the amount of interest, penalties, or reductions for payments and abatements. If neither party files a renewed motion for summary judgment, then the Court will re-schedule this action for trial. DONE AND ORDERED at the United States Courthouse, Miami, Florida this 7th day of July, 2006.