UNITED STATES OF AMERICA v. SANCHEZ et al
Filing
63
OPINION. Signed by Judge Robert B. Kugler on 6/4/2018. (dmr)
Case 1:16-cv-03024-RBK-JS Document 63 Filed 06/04/18 Page 1 of 4 PageID: 351
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
UNITED STATES OF AMERICA,
Plaintiff,
v.
HECTOR DANIEL SANCHEZ, et al.,
Defendants.
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Civil No. 16-3024 (RBK/JS)
OPINION
KUGLER, United States District Judge:
This case arises from Hector Daniel Sanchez’s (“Defendant”) alleged failure to pay federal
income taxes and delinquent tax assessments. The Court previously determined that default
judgment against Defendant was appropriate, and granted such a judgment in favor of the United
States of America (“Plaintiff”). The issue presently before the court is one of damages owed by
Defendant upon receipt of Plaintiff’s explanatory papers, as ordered by the Court (See Doc. No.
60). For the reasons set forth below, Plaintiff’s motion is GRANTED and Plaintiff is AWARDED
$210,917.49 IN DAMAGES as of March 19, 2018, as well as interest that may accrue1 after such
time and until the damages are paid in full.
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26 U.S.C. § 6622 (1982).
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I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY2
The facts of the case have not significantly changed since this Court’s opinion granting
Plaintiff’s motion for default judgment against Defendant. United States v. Sanchez, No. 16-3024,
2018 WL 1151710, at *1-2 (D.N.J. Mar. 5, 2018). After granting Plaintiff’s motion for default
judgment, the Court requested further briefing from Plaintiff regarding total damages, pursuant to
Federal Rule of Civil Procedure 55(b)(2)(B). Id. at *4.
Plaintiff subsequently submitted a supplemental memorandum, in which it calculated the
total damages to be $210,917.49. (Pl. Supp. Memo. at 1). This total was based on a combination
of penalties for failure to make payments, late payments, lack of accuracy in regards to payments,
and outstanding interest compounded daily. (Id. at 2-4) (See 26 U.S.C. §§ 6654, 6651, 6621, 6622).
Defendant has made no attempt to defend himself in any way in this case and has neither answered
nor responded to Plaintiff’s calculation of damages.
II. STANDARD
Federal Rule of Civil Procedure 55(b)(2) allows the Court, upon a plaintiff’s motion, to
enter default judgment against a defendant that has failed to plead or otherwise defend a claim for
affirmative relief. The Court should accept as true all well-pleaded factual allegations in the
complaint by virtue of the defendant’s default except for those allegations pertaining to damages.
Chanel, Inc. v. Gordashevsky, 448 F. Supp. 2d 532, 536 (D.N.J. 2008) (citing Comdyne I, Inc. v.
Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)). The Court also does not adopt Plaintiff’s legal
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This Court will accept as true all well-pleaded factual allegations in the complaint by virtue of
the defendant’s default except for those allegations pertaining to damages. Chanel, Inc. v.
Gordashevsky, 448 F. Supp. 2d 532, 536 (D.N.J. 2008) (citing Comdyne I, Inc. v. Corbin, 908 F.2d
1142, 1149 (3d Cir. 1990)).
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conclusions because whether the facts set forth an actionable claim is for the Court to decide. Doe
v. Simone, No. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013).
While the decision to enter default judgment is left principally to the discretion of the
district court, there is a well-established preference in the Third Circuit that cases be decided on
the merits rather than by default judgment whenever practicable. Hritz v. Woma Corp., 732 F.2d
1178, 1180-81 (3d Cir. 1984). The Court has already determined that default judgment is
appropriate in the case at hand, leaving only the question of damages to be decided. Sanchez, 2018
WL 1151710, at *1-2.
III. DISCUSSION AND ANALYSIS
A. Damages
Plaintiff seeks damages totaling $210,917.49, as of March 19, 2018, plus interest accrued
since March 19, 2018, compounded daily, as allowed by 26 U.S.C. § 6621(a)(2) and 26 U.S.C. §
6622(a) (citing § 1961(c)(1)). It is “well established” that the government’s tax assessments are
“entitled to a legal presumption of correctness[.]” United States v. Fior D’Italia, 536 U.S. 238,
242 (2002). Plaintiff submitted documentation showing that Defendant owes $210,917.49 for
unpaid taxes, penalties, fees, and outstanding interest, as of March 19, 2018. (Decl. of Susan
Johnston ¶ 11).
Plaintiff has offered evidence demonstrating that, per Defendant’s own tax filings,
Defendant owed $64,161.00 in taxes for the 2005 tax year and $90,717.00 for the 2006 tax year.
(Id. at ¶ 6). Fees of $50.00 were assessed for each tax year, pursuant to 26 U.S.C. § 6331(a) to
cover the expenses of collecting the taxes by levy, for a total of $100.00. (Id. at ¶ 9). Additionally,
Defendant accrued numerous statutory penalties for his failure to make estimated payments
pursuant to 26 U.S.C. § 6654, late payments pursuant to 26 U.S.C. § 6651(a)(2), and inaccuracy
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with the filing and payments pursuant to 26 U.S.C. § 6662. (Id. at ¶¶ 7-8). These penalties
amounted to $16,978.35 for the 2005 tax year and $32,850.75 for the 2006 tax year, totaling
$49,829.10. Finally, Defendant accrued interest under 26 U.S.C. §§ 6621-6622 amounting to
$44,573.82 for the 2005 tax year and $59,645.68 for the 2006 tax year, totaling $104,219.50. (Id.
at ¶ 6). The interest rate under § 6621 is the federal short-term rate, as determined by the Secretary
of the Treasury, plus three percentage points. After subtracting Defendant’s payments and credits
for the 2005 and 2006 tax years, totaling $98,109.11, Defendant is left with an outstanding balance
of $210,917.49 as of March 19, 2018. (Id.).
Plaintiff is also entitled to continuing interest payments, compounded daily, pursuant to
§6622(a), until such time as Defendant’s outstanding damages are paid in full.
IV. CONCLUSION
For the reasons set forth above, Plaintiff’s motion is GRANTED and Plaintiff is
AWARDED $210,917.49 IN DAMAGES as of March 19, 2018, plus accruing interest
compounded daily after March 19 and until such time as the damages are paid in full. An
appropriate order shall issue.
Dated: 06/04/2018
/s Robert B. Kugler
ROBERT B. KUGLER
United States District Judge
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