Opinion
Civil Action No. 01-6419.
November 2, 2004
ORDER
Presently before this Court is the United States' unopposed Motion for Partial Summary Judgment (Doc. 9) to reduce the tax assessments to judgments in Counts I and II. The United States brought this civil action against the Defendant, Poppa's Pizza Shops, Inc. ("Poppa's Pizza") to reduce to judgment federal tax assessments against this Defendant, to validate and foreclose its federal tax liens against property owned by this Defendant, and to seek an order to sell the properties to satisfy this Defendant's tax liabilities.
Plaintiff states that the Defendant, Poppa's Pizza, consented to the entry of judgment against itself for the underlying tax at issue, but did not consent to the entry of judgment for the corresponding penalties and interest. Accordingly, Plaintiff filed this motion to prove the validity of the assessments, including the assessed penalties, seeks to reduce to judgment the tax assessments, to prove that the United States has valid and subsisting tax liens, and to evidence that the transfer of the liquor license by Poppa's Pizza to Y-Doow-It, Inc. was subject to the federal tax lien. Pls. Mem. at n. 1.
The Commissioner of the Internal Revenue Service assessed taxes, penalties, and interest against Poppa's Pizza for the periods ending June 30, 1991 and September 30, 1991. The Commissioner found Poppa's Pizza to have an outstanding tax deficiency resulting from the failure to pay employment taxes during those above-mentioned periods. The Government avers that proper notices and demands for payment of the aforementioned assessments were made on Poppa's Pizza. As of March 31, 2003, the balance of the unpaid assessments together with statutory additions, interest, and costs totaled $12,438.70.
In 1991, a Pennsylvanialiquor license under License Number R-16158 was issued to Poppa's Pizza. A notice of federal tax lien was filed with the Prothonotary of Lehigh County, Pennsylvania on July 13, 1992. That notice relates to the unpaid tax assessments described above. On November 22, 2000, Poppa's Pizza transferred its Pennsylvania liquor license under License Number R-16158 to Y-Doow-It, Inc.
Pursuant to Fed.R.Civ.P. 56(e):
. . . When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegation or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue of trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
The Commissioner of the Internal Revenue Service makes findings regarding tax liabilities of individuals. 26 U.S.C. § 6201. When outstanding liabilities are found, the Commission will issue a Certificate of Assessments and Payments outlining the liabilities and transactions upon them. 26 U.S.C. § 6203. Specifically, the Certificate of Assessments and Payments details the dates of assessment of debts, and credits upon those debts, resulting in a total itemized enumeration of the amount owed by the individual in question.
The issuance of a Certificate of Assessments and Payments is given a presumption of validity as to its correctness in the determination of outstanding liabilities. Janis v. U.S., 428 U.S. 433, 440-441 (1976); Freck v. I.R.S., 37 F.3d 986, 992 (3d Cir. 1994); Pstay v. U.S., 442 F.2d 1154, 1160 (3d Cir. 1971). These Certificates have been used as evidence in various courts; specifically, these Certificates have been used as evidence in summary judgment proceedings. See Hansen v. U.S., 7 F.3d 137 (9th Cir. 1993); U.S. v. Lorson Electric Co., 480 F.2d 554 (2d Cir. 1973); Driscoll v. I.R.S., 1991 U.S. Dist. LEXIS 9829, *7 (E.D. Pa. 1991). Used in this manner, the certificates are evidence to establish the individual's outstanding tax liability. "Certificates of Assessments and Payments are routinely used to prove the tax assessment has in fact been made. They are presumptive proof of a valid assessment." Freck, 37 F.3d at 737.
Further, liens may be imposed upon individuals who have outstanding tax liabilities. 26 U.S.C. § 6321 (2004). A lien imposed for tax deficiencies operates to attach to the property until the deficiency is satisfied by payment. Id. at § 6322. The lien remains attached to the property, even during transfers, until the obligation is fulfilled. U.S. v. Natl. Bank of Commerce, 472 U.S. 713, 719 (1985). The lien allows its holder to force a sale of the property to which it is attached to fulfill the outstanding tax deficiency. 26 U.S.C. § 7403(c).
The Defendant, Poppa's Pizza, was found by the Commissioner to have an outstanding tax deficiency. This outstanding liability is give a presumption of validity because the Commissioner is the finder of fact. Due to the outstanding liability, the United States obtained a lien on the Defendant's property and filed the lien with the Lehigh County Prothonotary. This filing established the interest of the United States in the liquor license. The lien remained attached to the license, as the obligation had not been fulfilled, when Poppa's Pizza Shops transferred the liquor license to Y-Doow-It.
Defendant has failed to provide this Court with any evidence to rebut the presumption of validity as relates to the outstanding tax liability. In addition, the Defendant offers no evidence to suggest that the Plaintiff's tax lien for the outstanding deficiency is invalid. The lien attaches to the property until the debt is satisfied, regardless of the Defendant's transfer to a third party. Therefore, this Court finds that because Defendant has failed to put forth any evidence demonstrating that there is a genuine issue of material fact for trial regarding the outstanding tax liability and the tax lien held by the Government, summary judgment is appropriate. This Court will grant the United States' Motion for Partial Summary Judgment.
AND NOW, this _____ day of November, 2004, upon consideration of the United States' unopposed Motion for Partial Summary Judgment (Doc. 9), IT IS HEREBY ORDERED and DECREED that the United States' Motion for Partial Summary Judgment is GRANTED. IT IS FURTHER ORDERED that:
1. JUDGMENT is entered in favor of the United States and against Defendant Poppa's Pizza Shops, Inc. for the employment tax assessments for the periods ending June of 1991 and September of 1991, in the amount of $12,275.23, plus statutory additions and interest accruing thereon from December 1, 2003, until paid in accordance with 26 U.S.C. § 6601; and
2. The United States has a valid and subsisting federal tax lien, which attached and remains attached to Pennsylvania liquor license R-16158.
3. The Clerk of the Court shall mark Defendant Poppa's Pizza Shops, Inc. as TERMINATED.