United States of America v. Limanni et al

Filing 60

///ORDER granting 52 Motion for Summary Judgment. Charles and Linda Limanni have an unpaid tax debt of $48,970.77 plus additional interest accruing after 11/10/14. A tax lien has attached to Limannis' property in Barrington, NH. Judgment in favor of the government and against Charles Limanni in amount of $48,970.77 plus additional interest accruing after 11/10/14. Government to file motion for order of sale as outlined. So Ordered by Judge Joseph A. DiClerico, Jr.(dae)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE

United States of America
v.

Civil No. 12-cv-114-JD
Opinion No. 2015 DNH 058

Charles Limanni, et al.
O R D E R
The United States of America brought suit to reduce to
judgment income tax assessments against Charles Limanni and to
foreclose the government’s tax lien on real property in which
Limanni holds an interest.

The government also named Linda

Limanni, the Town of Barrington, and Artella Chase as defendants.
The government and the Town of Barrington have entered a
stipulation, and default was entered against Artella Chase.
Trial was scheduled for December 3, 2013.

Before trial

began, the parties agreed to a continuance to allow time for
Limanni to provide his records to the government for review and
to determine whether the matter could be resolved.

The parties

made progress toward a settlement, resolving several issues,
which left Limanni’s unpaid tax liability for 1999 as the only
remaining dispute.

Limanni did not respond to the government’s

proposed judgment on the unpaid tax liability, and the government
asked the court to set new scheduling dates for summary judgment
and trial if necessary.

The court set a date for filing a

stipulated judgment, and a date for the government to move for
summary judgment if the remaining issues were not resolved by
November 4, 2014.

The government has moved for summary judgment on the
Limannis’ tax liability for 1999 and for an order of sale of the
Limannis’ property in Barrington, New Hampshire, to satisfy the
tax liens on the property.

Charles Limanni filed a response to

the motion for summary judgment in which he disputes the amount
that the government asserts is owed.1

The government filed a

reply in which it addressed the issues Limanni raised in his
objection.
After reviewing the parties’s filings, the court directed
the government to file a supplemental memorandum to address the
calculation of the tax liability.

Specifically, the court noted

that the government had agreed to accept the income and deduction
figures on Limanni’s 1999 tax return but then did not accept the
amount of tax owed on the return, creating an ambiguity as to the
actual tax liability.

The government has filed a supplemental

memorandum, and Limanni filed a response.

Standard of Review
Summary judgment is appropriate when “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.”
P. 56(a).

Fed. R. Civ.

In deciding a motion for summary judgment, the court

draws all reasonable inferences in favor of the nonmoving party.

1

To the extent Charles Limanni raises issues about his real
estate taxes, the size of the property he owns in Barrington, and
any dispute with the Town of Barrington, those matters are not
properly before the court and will not be considered here.
2

Foodmark, Inc. v. Alasko Foods, Inc., 768 F.3d 42, 47 (1st Cir.
2014).

“A genuine issue of material fact must be built on a

solid foundation--a foundation constructed from materials of
evidentiary quality” so that “conclusory allegations, empty
rhetoric, unsupported speculation, or evidence which, in the
aggregate, is less than significantly probative will not suffice
to ward off a properly supported motion for summary judgment.”
Garcia-Gonzalez v. Puig-Morales, 761 F.3d 81, 87 (1st Cir. 2014).
In response to a properly supported motion for summary judgment,
opposing parties must provide competent record evidence that
shows there is a genuine issue for trial.

Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 250 (1986); Mosher v. Nelson, 589 F.3d
488, 492 (1st Cir. 2009).

Background
Charles and Linda Limanni did not file income tax returns
for the years 1999 through 2003 when they were due.

After the

IRS investigated Charles Limanni’s income liability, the IRS made
assessments against him for 1999 through 2003.

When Limanni

failed to pay the amounts assessed, the government brought this
action to enforce the tax lien against property owned by Charles
and Linda Limanni.
In response to the suit, the Limannis provided their joint
tax returns for the years of 1999 through 2003.

The government

examined the returns and agreed to accept the figures reported
for income and deductions and to adjust the previous tax
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assessments based on the returns.

Based on the returns and the

government’s examination, the government determined that the
Limannis have a remaining joint tax liability for 1999, which was
$48,970.77 as of November 10, 2014, with interest continuing to
accrue.
Charles and Linda Limanni acknowledge that they filed joint
tax returns and are jointly liable for the 1999 tax liability.
Limanni calculated their remaining 1999 tax liability, after
subtracting claimed credits, refunds, and payments, at $4,096.00.
In response, the government contends that the Limannis are
mistaken about the applicable amount from the 1999 tax return and
disputes the additional refunds, interest, and credits that
Limanni claims.

Discussion
The government moves for summary judgment that the Limannis’
tax liability for 1999, with interest and penalties, was
$48,970.77 as of November 10, 2014, and seeks an order of sale of
the Limannis’ property located in Barrington, New Hampshire.
Charles Limanni objects to the tax liability assessed by the
government, arguing that the government failed to accept his tax
records for 1999 as was agreed, that the government failed to
credit the full amount of refunds with interest, and that the
government’s calculation did not credit a penalty assessed in

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2003 that has been paid.2

Limanni represents that the total

amount of tax liability remaining is $4,096.00.

In its reply,

the government addressed each issue raised by Limanni and
explained the calculation of the tax liability.
Tax assessments by the IRS are presumed correct.

Hostar

Marine Transport Sys., Inc. v. United States, 592 F.3d 202, 208
(1st Cir. 2010).

For that reason, taxpayers who challenge the

IRS’s assessment of a tax deficiency bear the burden of proving
that it is erroneous.

Id.

In addition, “[i]t is well-

established that tax assessments pursuant to [IRS] Form 4340 are
presumed correct and therefore obligates the taxpayer to provide
sufficient evidence to contradict the tax liability.”

United

States v. Hughes, --- F. Supp. 3d ---, 2014 WL 4536291, at *2 (D.
Mass. Sept. 15, 2014).

A.

Tax Records
Limanni argues that the government improperly used

$20,613.00 as the amount owed for 1999 when the Limannis’ tax
records showed that he and Linda owed $19,014.00 for 1999.

He

argues that because the government agreed to accept his tax
records it is bound by that agreement and cannot provide a
different number to calculate his tax liability.

In response,

the government asserts that the $20,613.00 amount is correct.
The Limannis’ tax return for 1999 shows a total tax amount

2

Charles Limanni is proceeding pro se.
represented and has not appeared pro se.
5

Linda Limanni is not

of $20,613.00.

Following that entry, the Limannis deducted

$1,796.00 for taxes withheld, leaving a tax amount owed of
$19,014.00.
As is shown on the certificate of assessments and payments,
IRS Form 4340, the government calculated the base amount of tax
liability for 1999 by starting with the amount of taxes assessed
by the IRS on February 13, 2006, which was $36,661.00.

The

government then granted the Limannis a tax abatement of
$16,048.00 on July 28, 2014, when the government agreed to accept
the income and deduction figures reported on the Limannis’ 1999
return.

The abatement made the assessed amount $20,613.00, which

is the “total tax” amount shown on the Limannis’ 1999 return at
line 56, before that amount was adjusted for withholding.

After

the federal tax withheld was deducted, the tax return shows at
line 68 that the Limannis owed taxes in the amount of $19,014.00.
The government’s explanation for not accepting the
$19,014.00 figure as the amount of taxes owed is as follows.
During the examination process that resulted in the calculation
of the tax assessment of $36,661.00 for 1999, the government
deducted $1,796.00 for federal taxes withheld.

Therefore, the

government contends, the assessment of $36,661.00 included the
deduction of $1,796.00.

When the government agreed to accept

Limanni’s tax calculations, the government now explains, it meant
it would accept the gross calculation of tax liability,
$20,613.00, not the net amount due after the deduction for
withholding, $19,014.00.

The government argues that it could not
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credit the withholding deduction taken on the 1999 tax return
because that would result in the Limannis getting credit twice
for the amount of the withholding.
At this stage, it appears the government’s position is that,
regardless of what it agreed to initially or how the agreement
might be interpreted, it will only accept the gross amount of
taxes as entered on line 56 of the Limannis’ 1999 tax return,
which is $20,613.00.

Based on the $20,613.00 gross tax liability

stated in the 1999 return, the government abated the tax
assessment from $36,661.00 to $20,613.00 and assessed the tax
liability with penalties and interest based on that amount.
Given the presumption in favor of the government’s tax assessment
and the circumstances of the abatement, $20,613.00 is the amount
of the tax liability accepted from the Limannis’ 1999 tax return.

B.

Credits for Overpayments Claimed for 2000, 2001, and 2002
Limanni claims that the government owed him refunds for tax

overpayments in 2000, 2001, and 2002.

He contends that the

government erred in failing to give him credit for those amounts
against the total tax assessed for 1999.

In response, the

government explains that the Limannis were not entitled to credit
for any overpayment of taxes in those years because they did not
make a timely claim to have those amounts credited to them.
“In the case of any overpayment, the Secretary, within the
applicable period of limitations, may credit the amount of such
overpayment including any interest allowed thereon, against any
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liability in respect of an internal revenue tax on the part of
the person who made the overpayment and shall, subject to
subsections (c), (d), (e), and (f) refund any balance to such
person.”

26 U.S.C. § 6402(a).

The limitation period for filing

a refund claim is three years from the date of the tax return or
two years from the time the tax was paid.

26 U.S.C. § 6511(a).

In addition, a taxpayer can claim a refund only for “the portion
of the tax paid within the three years immediately preceding the
refund claim . . . .”

Dickow v. United States, 654 F.3d 144, 146

(1st Cir. 2011) (citing § 6511(b)(2)(A)).

For purposes of

§ 6511(b)(2)(A), taxes “are ‘paid’ on the due date of the
taxpayer’s income tax return.”

Baral v. United States, 528 U.S.

431, 432 (2000).
In this case, the Limannis did not file timely returns for
2000, 2001, and 2002.

The government assumes that the tax

returns the Limannis filed in June of 2012 for 2000, 2001, and
2002, would qualify as refund claims for those years.

To the

extent the Limannis overpaid taxes for those years, those amounts
were deemed paid on due dates of their tax returns for those
years, that is April of 2001, 2002, and 2003.

The Limannis did

not make a claim for overpayment credit, however, until June of
2012.
Applying § 6511(b)(2)(A), the Limannis could not recover
credit for taxes paid more than three years before June of 2012.
See Oropallo v. United States, 994 F.2d 25, 26-27 (1st Cir.
1993).

Because the claim was made in June of 2012 but the taxes
8

were overpaid in 2001, 2002, and 2003, the Limannis waited too
long to claim credit for overpayment.

Therefore, § 6511(b)(2)(A)

bars the overpayment credit that Limanni claims.

C.

Interest on Refunds for 2008 through 2013
Limanni contends that the government erred in failing to

include interest on the tax overpayments made in 2008 through
2013 in the credits allowed.

Generally, the government pays

interest on overpayments of taxes.

26 U.S.C. § 6611(a).

Interest is not paid, however, when a credit for the overpayment
is applied to satisfy a prior tax deficiency.

26 U.S.C.

§ 6611(b).
The government shows that the tax overpayments in the years
2008 through 2013 were credited toward the Limannis’ tax
underpayments for prior years.

For that reason, the Limmanis

were not entitled to interest on their tax overpayments.

D.

Enforcement of the Lien
“If any person liable to pay any tax neglects or refuses to

pay the same after demand, the amount (including any interest,
additional amount, addition to tax, or assessable penalty,
together with any costs that may accrue in addition thereto)
shall be a lien in favor of the United States upon all property
and rights to property, whether real or personal, belonging to
such person.”

26 U.S.C. § 6321.

The tax lien arises on the

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state of the tax assessment and continues until the tax liability
is paid.

26 U.S.C. § 6322.

The transcript of the Limannis’ taxes for 1999, form 4340,
shows a balance of $39,569.24, and the account transcript, form
1040A, shows a balance with accrued interest as of November 10,
2014, of $48,970.77.

The transcript shows that the Limannis were

first notified of a balance due on March 20, 2006, and received
subsequent notices in 2008 and 2014.
the amount owed.

The Limannis have not paid

Therefore, the government has a valid lien on

the Limannis’ real property located at 674 Route 202, Barrington,
New Hampshire, for the Limannis’ tax liability of $48,970.77,
plus interest that has accrued after November 10, 2014.

Conclusion
For the foregoing reasons, the government’s motion for
summary judgment (document no. 52) is granted.
Charles and Linda Limanni have an unpaid tax debt of
$48,970.77, plus additional interest accruing after November 10,
2014.

A tax lien for that amount has attached to the Limannis’

real property located at 674 Route 202, Barrington, New
Hampshire.
Judgment is entered in favor of the government and against
Charles Limanni in the amount of $48,970.77, plus additional
interest accruing after November 10, 2014.
The government shall file a motion for an order of sale of
the property pursuant to 28 U.S.C. § 2001 or 26 U.S.C. § 7403, or
10

both, to address the terms and conditions of the sale and the
distribution of the proceeds of the sale.
SO ORDERED.

____________________________
Joseph A. DiClerico, Jr.
United States District Judge
March 23, 2015
cc:

Thomas P. Cole, Esq.
Steven M. Witley, Esq.
Charles Limanni, pro se
Linda Limanni

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