Mullins et al v. Internal Revenue Service
REPORT AND RECOMMENDATIONS: 28 The Government's Motion for Partial Summary Judgment be GRANTED. Objections to R&R due by 7/12/2017. Signed by Magistrate Judge Sharon L. Ovington on 6-28-17. (mcm)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
JAMES R. MULLINS, III, et al.,
INTERNAL REVENUE SERVICE,
Case No. 3:15cv00106
District Judge Thomas M. Rose
Magistrate Judge Sharon L. Ovington
REPORT AND RECOMMENDATIONS1
Plaintiffs James R. Mullins, III and Kathleen L. Mullins are married and residents of
Eaton, Ohio. They bring this case pro se against the United States Internal Revenue Service
(the Government2) concerning Mr. Mullins’s personal tax liability in tax year 2007. From
the Government’s viewpoint, Mr. Mullins incorrectly claimed in his 2007 tax return that his
then-fiancée Kathleen Mullins’s children qualified as his dependents. Plaintiffs believe the
opposite. They contend that James Mullins correctly invoked the child tax credit and earned
income tax credit because Kathleen Mullins’s children were his “qualifying children” in
2007. Plaintiffs seek a refund of the amount, $6,732.00 (plus interest), James Mullins
allegedly overpaid for the 2007 tax year.
Attached hereto is a NOTICE to the parties regarding objections to this Report and Recommendations.
The United States is the proper party defendant in a tax refund case. See 28 U.S.C. §1346(a).
The case is presently pending upon the Government’s Motion for Partial Summary
Judgment (Doc. #28), Plaintiffs’ Answer, essentially their Memoranda in Opposition (Doc.
#32), the Government’s Reply (Doc. #34), and the record as a whole.
During the 2007 tax year, Plaintiffs were engaged; they married in September 2008.
(Doc. #32, PageID #410). Ms. Mullins is the biological mother of Tayler Lance and
Brehanna Durham, who were children in 2007 and are now adults. Mr. Mullins is not their
biological father. (Doc. #28, PageID #300).
In May 2008, when Tayler and Brehanna were children, Mr. Mullins filed a Form
1040 for tax year 2007 claiming child tax credits and earned income tax credits with respect
to Tayler and Brehanna. He also claimed dependency exemptions for himself, Tayler, and
Brehanna. During 2007, Mr. Mullins, Tayler, and Brehanna lived together at the same
address in Eaton, Ohio. Ms. Mullins also lived with them at that address during 2007,
except for the months she spent in jail in late 2007.
The Government has submitted a Certificate of Official Record attesting to the
accuracy of the information in an attached document (Form 4340) concerning Mr. Mullins’s
tax return the 2007 tax year. Id. at 145. The Government states, “On or about August 15,
2008, the Government issued a statutory Notice of Deficiency, advising Mr. Mullins that it
was disallowing the earned income tax credit, the child tax credits, and the dependency
exemptions that were claimed in his 2007 tax return.” (Doc. #28, PageID #122, ¶11).
In October 2008, Mr. Mullins filed an amended 2007 tax return again claiming child
tax credits, earned income tax credits, dependency exemptions for Tayler and Brehanna, and
adding Ms. Mullins as a dependent. (Doc. #28, PageID #s 146-47). In late December 2008,
the Government assessed additional tax of $2,365 against Mr. Mullins for the 2007 tax year,
and reversed its decision to allow the two tax credits he had claimed in his 2007 tax return:
the child tax credit of $1,092 and the earned income tax credit of $2,245. Id.
In 2009, Mr. Mullins turned to the U.S. Tax Court seeking a redetermination of his
2007 tax-year deficiency. In November 2009, the Tax Court dismissed his action as
untimely. Id. at 328-30.
The Government acknowledges that the income tax assessed upon Mr. Mullins for
the 2007 tax year has been paid in full. (Doc. #28, PageID #123, ¶s 15-16).
A party is entitled to summary judgment when the there is no genuine dispute over
any material fact, and the moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Barker v.
Goodrich, 649 F.3d 428, 432 (6th Cir. 2011). The initial burden is on the moving party “to
show that the non-moving party has failed to establish an essential element of his case upon
which he would bear the ultimate burden at trial.” Guarino v. Brookfield Tp. Trustees, 980
F.2d 399, 403 (6th Cir. 1992); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th
Cir. 1989). In response, “the nonmovant must show sufficient evidence to create a genuine
issue of material fact.” Bell v. Ohio State University, 351 F.3d 240, 247 (6th Cir. 2003). “A
mere scintilla of evidence is insufficient; ‘there must be evidence on which the jury could
reasonably find for the [non-movant].’” Id. (quoting, in part, Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986)).
To resolve whether a genuine issue of material fact exists, the Court draws all
reasonable inferences from the underlying facts in the light most favorable to the nonmoving party. Richland Bookmart, Inc. v. Knox County, Tenn., 555 F.3d 512, 520 (6th Cir.
2009) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88
(1986)). With the reasonable inferences in the forefront, “[t]he central issue is ‘whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of law.’” Jones v. Potter, 488 F.3d 397,
402-03 (6th Cir. 2007) (quoting, in part, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 25152 (1986) and citing Matsushita Elec., 475 U.S. at 587).
The Government contends that it is entitled to partial summary judgment because, as
a matter of law, Tayler and Brehanna were not Mr. Mullins’s qualifying children during tax
year 2007. Plaintiffs raise several counter arguments addressed below.
The child tax credit allows, during each tax year, a deduction of $1,000 “with respect
to each qualifying child of the taxpayer ….” 26 U.S.C. § 24(a) (emphasis added). A
similar tax credit potentially arises under the earned income tax credit in a more roundabout
way. The earned income tax credit allows “an eligible individual” a credit during each tax
year based on a certain percentage of the taxpayer’s earned income. 26 U.S.C. § 32(a)(1)
(emphasis added). To be an “eligible individual”—meaning someone eligible for the earned
income tax credit—the taxpayer must have “a qualifying child for the taxable year ....” 26
U.S.C. § 32(c)(1)(A)(i) (emphasis added).
Who, then, is a qualifying child? A “qualifying child” must bear a one of the
following relationships to the taxpayer:
(A) a child of the taxpayer or a descendant of such a child, or
(B) a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant
of any such relative.
26 U.S.C. §§ 152(c)(1), (2)(A)-(B). The plain meaning of this definition establishes, in part,
that a taxpayer’s child by birth is a “qualifying child.” Yet, not surprisingly, there is more
going on in the tax code, which extends a broader definition to the word “child.” A “child”
is the taxpayer’s “son, daughter, stepson, or stepdaughter,” § 152(f)(1)(A)(i)—Tayler and
Brehanna were none of these in relation to Mr. Mullins in 2007—or, “an eligible foster child
of the taxpayer.” § 152(f)(1)(A)(ii).
The parties disagree over whether Tayler and Brehanna were Mr. Mullins’s eligible
foster children in 2007. Their disagreement leads back to the tax code, which defines an
“eligible foster child” as “an individual who is placed with the taxpayer by an authorized
placement agency or by judgment, decree, or other order of any court of competent
jurisdiction.” § 152(f)(1).
The Government contends that Plaintiffs have not produced evidence showing Tayler
or Brehanna were placed with Mr. Mullins in tax year 2007 by an authorized placement
agency, judgment decree, or court of competent jurisdiction. This is correct. Plaintiffs have
not pointed to any document indicating that a court of competent jurisdiction or placement
agency appointed Mr. Mullins the guardian of Tayler or Brehanna in 2007. Consequently,
Plaintiffs have not met their burden to produce affirmative evidence, see Street, 886 F.2d at
1479, showing a genuine dispute over any material fact underlying the Government’s
assertion that Tayler and Brehanna were not eligible foster children in 2007 as defined by §
Plaintiffs maintain that Ms. Mullins executed a power of attorney appointing Mr.
Mullins the children’s guardian. They have not, however, produced any document
purporting to effect this appointment in 2007. They have also not produced evidence
showing that in 2007, an Ohio probate court appointed Mr. Mullins as Tayler’s or
Brehanna’s guardian under Ohio Rev. Code § 2111.02, or that in 2007, he met Ohio’s
definition of a guardian, see Ohio Rev. Code § 2111.01(A), or that Ms. Mullins’ nominated
him as their guardian in compliance with Ohio Rev. Code § 2111.121.
To show Mr. Mullins’s guardianship status, Plaintiffs point to Ms. Mullins’s formal
request to her divorce attorney to file a motion to allow Mr. Mullins to act as a temporary
guardian for Tayler and Brehanna in 2007. Plaintiffs argue that Ms. Mullins’s formal
request for temporary guardianship, and the fact that a court hearing was set in August 2007,
are sufficient to establish that Mr. Mullins was Tayler’s and Brehanna’s legal guardian in
2007. Yet, Plaintiffs have not produced a copy of the guardianship motion Ms. Mullins
asked her divorce attorney to file in 2007, and she could not attend (she was admittedly in
jail) the hearing August 2007 and so it was cancelled. Additionally, during Mr. Mullins’s
deposition, he was asked if, in 2007, he was ever the legal guardian of Brehanna. He
answered, “Via a court document stating that I am the guardian, no.” (Doc. #28, PageID
#311:16-19). When asked the same question about Tayler, he answered the same. Id. at
311:20-23. The colloquy continued:
Q: But you never had to go to court?
A: No, not in the guardianship issue, no.
Q: When you say guardianship issue, you mean with respect to
Brehanna Durham and Tayl[e]r Lance?
A. Yes, correct.
Id. at PageID #311-12. In light of Mr. Mullins’s testimony, there is no genuine dispute over
the fact that whatever steps Ms. Mullins’s attorney took to secure guardianship for Mr.
Mullins did not bear fruit in the form of an order from an Ohio probate court or an
appointment by an authorized Ohio placement agency in 2007.
Plaintiffs next rely on “pages and pages of documents” they “sent to the IRS over the
course of almost 7 years. These documents included school papers with Mr. Mullins[’s]
name as the guardian of the children, proof of payment of the household expenses and bills,
proof from the Plaintiff’s doctors of Mrs. Mullins[’s] disability that caused Mr. Mullins to
move into the home to become the guardian of the children and take care of Mrs. Mullins,
and much more.” (Doc. #32, PageID #409). Plaintiffs also assert that Ms. Mullins kept
certain guardianship documents in a lockbox that was removed from her home by federal
agents when they executed a warrant.
The problem with the documents Plaintiff’s rely on is that although they may be
probative of Plaintiffs’ intent to establish Mr. Mullins’s guardianship of Tayler and
Brehanna in 2007, the record lacks evidence showing that in 2007, they established Mr.
Mullins’ guardianship of Tayler and Brehanna under Ohio law. Again, the record lacks
evidence showing that Mr. Mullins was nominated to be their guardian under Ohio Rev.
Code § 2111.121 or appointed to be their guardian under Ohio Rev. Code § 2111.02.
Consequently, there is no genuine issue of fact underlying Mr. Mullins’s claim to
guardianship status in 2007, and the undisputed facts establish that, as a matter of law,
Tayler and Brehanna were not his eligible foster children or qualifying children in tax year
Plaintiffs also challenge the Government’s submission of documents relating to a
probate case concerning her children in 2003. Because the above analysis does not involve
those documents, there is no need to address Plaintiffs’ challenge to the Government’s
submission of those documents.
The Government lastly argues that Ms. Mullins lacks standing to sue for a refund
concerning Mr. Mullins’s 2007 individual tax return. Plaintiffs do not address this standing
argument. Consequently, and for the reasons advanced by the Government, see Doc. #28,
PageID# 126, n.4; Doc. #34, PageID #418, and because Mr. Mullins filed individually in
tax year 2007, and because Plaintiffs were not yet married in 2007, Ms. Mullins lacks
standing to seek a refund concerning Mr. Mullins’s individual tax return for the 2007 tax.
Cf. United States v. Williams, 514 U.S. 527, 536 (1995) (“28 U.S.C. § 1346(a)(1) clearly
allows one from whom taxes are erroneously or illegally collected to sue for a refund of
those taxes. And 26 U.S.C. § 6402(a), with similar clarity, authorizes the Secretary to pay
out a refund to “the person who made the overpayment.”).
Accordingly, the government’s Motion for Partial Summary Judgment is well taken
as to Plaintiffs’ claims related to Mr. Mullins’s assertion of the child tax credit and earned
income tax credit for the 2007 tax year.
It appears at this time that one claim remains pending in this case. In connection
with its previously filed (and later withdrawn) Motion to Dismiss, the government pointed
out that Plaintiffs might be conflating the dependency exemption asserted by Mr. Mullins in
tax year 2007 with the statutes governing the child tax credit and the earned income tax
credit. (Doc. #14, PageID #64). The government’s counsel explained, “[T]he United States
does not move to dismiss the Complaint to the extent it relies upon a claim for a dependency
exemption, as such a claim depends upon different facts, and the Plaintiffs may have alleged
sufficient facts in support thereof.” Id. At present, the government has not sought summary
judgment concerning Mr. Mullins’s eligibility for the dependency exemption related to
Tayler and Brehanna in tax year 2007. If Plaintiffs intend to litigate a claim concerning Mr.
Mullins’s eligibility for the dependency exemption, that potential claim remains presently at
issue and should be subject to an Amended Scheduling Order.
IT IS THEREFORE RECOMMENDED THAT:
The Government’s Motion for Partial Summary Judgment (Doc. #28) be GRANTED.
June 28, 2017
s/Sharon L. Ovington
Sharon L. Ovington
United States Magistrate Judge
NOTICE REGARDING OBJECTIONS
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to the proposed findings and recommendations within fourteen days after being
served with this Report and Recommendations. Pursuant to Fed. R. Civ. P. 6(d), this period
is extended to seventeen days because this Report is being served by one of the methods of
service listed in Fed. R. Civ. P. 5(b)(2)(C), (D), (E), or (F). Such objections shall specify
the portions of the Report objected to and shall be accompanied by a memorandum of law in
support of the objections. If the Report and Recommendations are based in whole or in part
upon matters occurring of record at an oral hearing, the objecting party shall promptly
arrange for the transcription of the record, or such portions of it as all parties may agree
upon or the Magistrate Judge deems sufficient, unless the assigned District Judge otherwise
directs. A party may respond to another party’s objections within fourteen days after being
served with a copy thereof.
Failure to make objections in accordance with this procedure may forfeit rights on
appeal. See United States v. Walters, 638 F. 2d 947 (6th Cir. 1981); Thomas v. Arn, 474
U.S. 140 (1985).
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