UNITED STATES OF AMERICA v. Goldstein et al

Filing 16

MEMORANDUM re 10 MOTION for Summary Judgment filed by UNITED STATES OF AMERICA.Signed by Honorable A. Richard Caputo on 11/21/12. (jam)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,
CIVIL ACTION NO. 3:CV-11-2177

Plaintiff,

(JUDGE CAPUTO)

v.
PHILIP A. GOLDSTEIN and SHARON A.
GOLDSTEIN,
Defendants.

MEMORANDUM
Presently before the Court is the Motion for Summary Judgment (Doc. 10) filed by
Plaintiff United States of America. The United States seeks to: (1) reduce to judgment the
tax assessments made against Philip A. Goldstein (“Mr. Goldstein”) and Sharon A.
Goldstein (“Mrs. Goldstein”), jointly, for unpaid federal income taxes and statutory additions
to taxes for the 1997, 2004, 2008, and 2009 tax years; and (2) reduce to judgment the
individual tax assessments made against Mr. Goldstein for unpaid income taxes and
statutory additions to taxes for the 2001, 2002, and 2003 tax years. Because the United
States has established its prima facie case for liability and Defendants have not produced
any evidence creating an issue of fact as to the correctness of the tax assessments, the
motion for summary judgment will be granted.
I. Background
On November 21, 2011, the United States commenced this action by filing a
Complaint for Federal Taxes. (Compl.) In Count I of the Complaint, the United States seeks
to reduce to judgment joint tax assessments against Mr. Goldstein and Mrs. Goldstein. (Id.
at ¶¶ 8-13.) As relief, the United States requests judgment be entered in its favor for unpaid
federal income taxes, penalties, and interest relating to the tax years 1997, 2004, 2008, and
2009, as well as interest and penalties that will continue to accrue until payment. (Id. at ¶
13.)

In Count II, the United States seeks to reduce to judgment the individual tax

assessments against Mr. Goldstein. (Id. at ¶¶ 14-19.) The United States requests judgment
in its favor for unpaid federal income taxes and penalties from tax years 2001, 2002, and
2003, as well as interest and penalties that will continue to accrue until payment. (Id. at ¶
19.)
On October 1, 2012, the United States filed the instant motion for summary judgment
seeking judgment as a matter of law on both Counts of the Complaint. (Doc. 10.) In support
of its motion, the United States attached the Declaration of Eric Conahan, a Revenue
Officer in the Scranton, Pennsylvania office of the Internal Revenue Service, and copies of
signed and certified IRS Forms 4340, Certificates of Assessments and Payments, for the
income tax years 1997, 2001, 2002, 2003, 2004, 2008, and 2009. (Conahan Decl., ¶¶ 1-15,
Exs. 101-107.)
According to Mr. Conahan, Mr. Goldstein and Mrs. Goldstein have an unpaid balance
of tax assessments, including statutory additions, interests, and penalties, totaling
$288,138.75 as of October 8, 2012 for tax years 1997, 2004, 2008, and 2009. (Id. at ¶¶ 5,
9.) And, despite notice and demands for payments of these assessments, Mr. Goldstein
and Mrs. Goldstein have failed to fully pay the accrued and assessed tax liability. (Id. at ¶
7.) As to Mr. Goldstein’s delinquent federal income tax liabilities for the years 2001, 2002,
and 2003, Mr. Conahan asserts that the total amount of the assessments along with
accrued interest and penalties owed by Mr. Goldstein equals $264,443.48 as of October 8,
2012. (Id. at ¶¶ 11-15.) Despite notice and demands for payments, Mr. Goldstein has failed
to pay in full the accrued and assessed tax liabilities. (Id. at ¶ 13.) Based on the Declaration
of Mr. Conahan, along with the Certificates of Assessments and Payments attached to the
Declaration, the United States asserts that no genuine issue of material fact exists in this
action.
In opposition, Defendants argue that issues of material fact remain in this case.

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Specifically, Defendants claim:
They have specifically denied the monetary amounts that the United States’
complaint alleges are due. The Defendants also have denied the United
States’ allegation that they have not paid the amounts due; to the contrary, the
Defendants have alleged that they have made payments toward these
amounts. The amounts due to the United States at the time of any
assessment, and after any payments were made by the Defendants, are thus
in dispute. Summary judgment must be denied because of these factual
issues.
(Doc. 14.) Additionally, Defendants argue that summary judgment is inappropriate because
the individual tax assessments claimed against Mr. Goldstein for the taxable years 2001,
2002, and 2003 are asserted against the incorrect taxpayer, as he filed an amended tax
return for those years. (Id.) Mr. Goldstein and Mrs. Goldstein in their opposition to the
motion for summary judgment, however, fail to attach any supporting evidence by way of
affidavits, declaration, or deposition testimony to substantiate their claim that the tax
assessments are inaccurate. Instead, Defendants simply rely on the denials in their
pleading (the Answer to the Complaint).
In reply to Defendants’ opposition, the United States notes that the mere denial of
allegations in a pleading is insufficient to create an issue of material fact to survive summary
judgment. (Doc. 15.)

And, because its prima facie case has not been rebutted by

Defendants, the United States argues that it is entitled to judgment as a matter of law. (Id.)
Now, as the motion for summary judgment has been fully briefed, it is ripe for disposition.
II. Legal Standard
Summary judgment shall be granted “if 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.”
Fed. R. Civ. P. 56(a). “Summary judgment is appropriate when ‘the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
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.’” Wright v. Corning, 679 F.3d 101, 103 (3d Cir. 2012)
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(quoting Orsatti v. N.J. State Police, 71 F.3d 480, 482 (3d Cir. 1995)). A fact is material if
proof of its existence or nonexistence might affect the outcome of the suit under the
applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986).
Where there is no material fact in dispute, the moving party need only establish that
it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Where, however, there
is a disputed issue of material fact, summary judgment is appropriate only if the factual
dispute is not a genuine one. Anderson, 477 U.S. at 248. An issue of material fact is
genuine if “a reasonable jury could return a verdict for the nonmoving party.” Id. Where
there is a material fact in dispute, the moving party has the initial burden of proving that: (1)
there is no genuine issue of material fact; and (2) the moving party is entitled to judgment
as a matter of law. See 2D Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2727 (2d ed.1983). The moving party may present its own evidence or, where
the nonmoving party has the burden of proof, simply point out to the court that “the
nonmoving party has failed to make a sufficient showing on an essential element of her
case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986).
“When considering whether there exist genuine issues of material fact, the court is
required to examine the evidence of record in the light most favorable to the party opposing
summary judgment, and resolve all reasonable inferences in that party's favor.” Wishkin v.
Potter, 476 F.3d 180, 184 (3d Cir. 2007). Once the moving party has satisfied its initial
burden, the burden shifts to the non-moving party to either present affirmative evidence
supporting its version of the material facts or to refute the moving party's contention that the
facts entitle it to judgment as a matter of law. Anderson, 477 U.S. at 256–57. The Court
need not accept mere conclusory allegations, whether they are made in the complaint or

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a sworn statement. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S. Ct. 3177, 111
L. Ed. 2d 695 (1990). And, “[t]o defeat summary judgment, [the non-moving party] ‘cannot
rest simply on the allegations in the pleadings,’ but ‘must rely on affidavits, depositions,
answers to interrogatories, or admissions on file.’” GFL Advantage Fund, Ltd. v. Colkitt, 272
F.3d 189, 199 (3d Cir. 2001) (quoting Bhatla v. U.S. Capital Corp., 990 F.2d 780, 787 (3d
Cir. 1993)); see also Tilden Fin. Corp. v. Palo Tire Serv., Inc., 596 F.2d 604, 608 (3d Cir.
1979).
“To prevail on a motion for summary judgment, the non-moving party must show
specific facts such that a reasonable jury could find in that party's favor, thereby establishing
a genuine issue of fact for trial.” Galli v. New Jersey Meadowlands Comm'n, 490 F.3d 265,
270 (3d Cir. 2007) (citing Fed.R.Civ.P. 56(e)). “While the evidence that the non-moving
party presents may be either direct or circumstantial, and need not be as great as a
preponderance, the evidence must be more than a scintilla.” Id. (quoting Hugh v. Butler
County Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005)). In deciding a motion for summary
judgment, “the judge's function is not himself to weigh the evidence and determine the truth
of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477
U.S. at 249.
III. Analysis
As set forth above, the United States seeks to reduce joint tax assessments and
individual tax assessments to judgment in this case. In tax law, “an assessment is closely
tied to the collection of a tax, i.e., the assessment is the official recording of liability that
triggers levy and collection efforts.” Hibbs v. Winn, 542 U.S. 88, 101, 124 S. Ct. 2276, 159
L. Ed. 2d 172 (2004); see also 26 U.S.C. § 6203.
“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

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against a taxpayer in court.” United States v. Fior D’Italia, Inc., 536 U.S. 238, 242-43, 122
S. Ct. 2117, 153 L. Ed. 2d 280 (2002) (citing United States v. Janis, 428 U.S. 433, 440, 96
S. Ct. 3021, 49 L. Ed. 2d 1046 (1976); Palmer v. IRS, 116 F.3d 1309, 1312 (9th Cir. 1997);
Psaty v. United States, 442 F.2d 1154, 1160 (3d Cir. 1971); United States v. Lease, 346
F.2d 696, 700 (2d Cir. 1965)). Thus, “the United States can establish a prima facie case
of the tax liability charged by introducing into evidence certified copies of the certificates of
tax assessment.” United States v. Stuler, 396 F. App’x 798, 801 (3d Cir. 2010) (citing United
States v. Sarubin, 507 F.3d 811, 816 (4th Cir. 2007)); see also Psaty, 442 F.2d at 1159
(“The presumption of correctness afforded the Commissioner's determination allows the
Government to establish a prima facie case of liability merely by offering into evidence a
certified copy of the Commissioner's assessment.” (citing Adams v. United States, 358 F.2d
986, 994 (Ct. Cl. 1966))). Once a prima facie case has been established, the taxpayer
bears the burden of proving that the assessment is incorrect. See Stuler, 396 F. App’x at
801 (citing Francisco v. United States, 267 F.3d 303, 319 (3d Cir. 2001)).
Here, the United States has established its prima facie case against Defendants.
Specifically, the United States submitted the Declaration of Revenue Officer Eric Conahan
and copies of the Certificates of Assessments and Payments. (Conahan Decl.) Pursuant
to the aforementioned authority, this is sufficient evidence for the United States to establish
its prima facie case to reduce to judgment the federal tax assessments made against
Defendants.

As such, Mr. Goldstein and Mrs. Goldstein must present evidence

demonstrating that a genuine issue of material fact exists as to the accuracy of the
assessments in order to withstand the United States’ motion for summary judgment.
The United States’ motion will be granted because Defendants have failed to present
any evidence creating an issue of fact as to the correctness of the tax assessments.
Instead, Defendants have simply relied on the denials in their pleading as support for their

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assertion that a genuine issue of material fact exists in this case. However, it is well-settled
that the non-moving party cannot defeat summary judgment by simply relying on the denials
in its pleading. See, e.g., GFL Advantage Fund, Ltd., 272 F.3d at 199. Indeed:
Given the opportunity to respond to a movant's affidavits, an adverse party
may not rest upon a mere cryptic and conclusory allegation in his pleading, but
must set forth specific facts showing that there is a genuinely disputed factual
issue for trial. Where this opportunity to supplement the record is ignored,
summary judgment for the movant who has carried his burden of proof is
appropriate.
Tilden Fin. Corp., 596 F.2d at 607-08 (quoting Tunnell v. Wiley, 514 F.2d 971, 976 (3d Cir.
1975)). Defendants’ insistence that mere denials contained in their pleading establish a
genuine issue of material fact is directly contradicted by the law as set forth in Tilden and
GLF Advantage Fund. Thus, Defendants’ denials of Plaintiff’s allegations are insufficient
to create an issue of fact. And, as no evidence has been provided by Defendants
supporting their claim that the assessments are inaccurate, they fail to carry their burden
to demonstrate that an issue of material fact exists as to the correctness of the
assessments. Accordingly, summary judgment will be granted to the United States on
Counts I and II of the Complaint.
IV. Conclusion
For the above stated reasons, Plaintiff United States of America’s motion for
summary judgment will be granted. Judgment will be entered in favor of the United States
and against Mr. Goldstein and Mrs. Goldstein on Count I of the Complaint, and judgment
will be entered in favor of the United States and against Mr. Goldstein on Count II of the
Complaint.
An appropriate order follows.

November 21, 2012
Date

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge
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