United States of America v. Bogart et al

Filing 176

ORDER: Having considered all of the parties' arguments, the Court: ACCEPTS Magistrate Judge Brown's R & R concerning Count 1 127 ; GRANTS Plaintiff's partial-summary-judgment motion on Count 1 91 ; DENIES Defendants cross-motion for partial summary judgment 118 ; ACCEPTS IN PART and REJECTS IN PART Magistrate Judge Brown's R & R concerning Count 2 163 ; GRANTS Plaintiff's motion for summary judgment on Count 2 150 . The remainder of the pending motions are denied as moot. Signed by District Judge Kevin H. Sharp on 7/24/14. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(dt)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
UNITED STATES OF AMERICA
Plaintiff,
v.
DUSTIN B. BOGART,
MARCY A. BOGART, and
SOUTHERN COUNTRY RANCH,
Defendants.

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No. 3:12-cv-179
Judge Sharp

ORDER
The United States filed this suit to reduce to judgment assessments against Defendant
Dustin Bogart for unpaid federal income taxes, penalties, and interest (Count 1), and to foreclose
federal tax liens and nominee liens against real property located at 5380 State Route 147 in
Stewart, Tennessee to satisfy that judgment (Count 2). Pending before the Court are two Reports
and Recommendations (R & Rs) Magistrate Judge Brown has issued in the matter.
The first R & R concerns cross-motions for partial summary judgment on Count 1.
(Docket No. 127). In it, Magistrate Judge Brown set forth the basic facts underlying the case:
The defendant, Dustin Bogart (“Defendant”), failed to file tax returns or to
pay federal income taxes from 2000 through 2003. Accordingly, the Internal
Revenue Service (“IRS”) determined Defendant’s gross income and the resultant
tax liability from “other” reporting sources. Plaintiff assessed the outstanding tax
liability, penalties, and interest against Defendant, [c]ertified those assessments,
provided notice to Defendant of the outstanding liability, and made demand for
payment. Plaintiff also filed liens against Pennsylvania and Tennessee property in
which Defendant purportedly has an ownership interest. Plaintiff was
unsuccessful in securing payment from Defendant and instituted this action on
February 13, 2012 to reduce these assessed taxes and statutory penalties to final
judgment.

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(Id. at 1–2 (record citations omitted)).
A Certificate of Assessment the IRS uses to calculate a taxpayer’s tax liability—like the
one used in this case—is prima facie evidence of a taxpayer’s tax burden. See United States v.
Fior D’Italia, Inc., 536 U.S. 238, 242 (2002); United States v. Janis, 428 U.S. 433, 440 (1976).
Such evidence carries with it a presumption of correctness and provides an adequate basis on
which to reduce an assessed tax liability to final judgment. See United States v. Hillman, 60 F.
App’x 563, 564 (6th Cir. 2003) (citing United States v. Walton, 909 F.2d 915, 919 (6th Cir.
1990)). When the government presents it, the burden shifts to the taxpayer to provide
convincing evidence showing the government’s assessment is erroneous. Id.
In this case, the United States offered up the Certificate of Assessment the IRS used to
calculate Bogart’s tax liability, which was $295,194 as of October 17, 2013. Bogart, however,
provided no evidence to cast that figure into doubt. Instead, he presented a host of frivolous
arguments. One is that the federal tax code subjects only resident aliens and foreign corporations
to its mandatory withholding and reporting requirements, but makes those voluntary for U.S.
citizens like Bogart. Another is that the tax code contains no provisions that compel Bogart to
file tax returns. And yet another is that the Certificate of Assessment is just a speculative
estimate that is insufficient to establish his tax liability.
Bogart misses the mark with well-worn, tax-protester arguments that the courts—
including this one—have uniformly rejected. See generally Dillender v. Carpenters’ Pension
Trust Fund of St. Louis, 2014 WL 1289599, at *2 (M.D. Tenn. Mar. 31, 2014) (citing cases);
U.S. v. Bowden, 2014 WL 1289596, at *3 (M.D. Tenn. Mar. 28, 2014) (same). Because Bogart
failed to meet his burden, Magistrate Judge Brown recommended that the Court grant the United
States’s motion for summary judgment on Count 1 and deny Bogart’s cross-motion.

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The Court has conducted a de novo review of the R & R and wholly agrees with its
findings and conclusions. Moreover, the Court has read and carefully considered Bogart’s
objections to the R & R (Docket No. 140). Unfortunately, a 23-page rehash of Bogart’s
summary-judgment filings does not get him any closer to convincing the Court his previously
rejected views should win the day. His objections are overruled.
The second R & R pending before the Court pertains to the United States’s summaryjudgment motion against Defendant Southern Country Ranch on Count 2 of the complaint.1
(Docket No. 163). The government’s motion contends that Dustin Bogart is the equitable owner
of the real property and that Southern Country Ranch merely holds title to the property as
Bogart’s nominee and/or alter ego. The United States seeks a declaration that the federal tax
liens and nominee liens against the property, as well as its rights to property Dustin Bogart owns,
are valid. And it asks that the liens filed against Southern Country Ranch be foreclosed so that
the funds derived from its sale be used to satisfy the judgment rendered against Dustin Bogart
under Count 1. As the R & R notes, Bogart and Southern Country Ranch failed to respond to
these assertions. (Id. at 7).
Magistrate Judge Brown’s R & R lays out in painstaking detail the web of entities and
bank accounts through which the United States alleges that Dustin Bogart transferred the real
property at issue. (Id. at 3–6). On that basis, the R & R concludes that Southern Country is the
alter ego/nominee of Dustin Bogart. (Id. at 9).
But the R & R then goes a step further. Because the tax liability owed under Count 1 is
that of Dustin Bogart individually—and not the joint liability of Dustin and Marcy Bogart—the

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While Count 1 concerns only Dustin Bogart’s outstanding tax liability, the complaint also names Marcy
Bogart and Southern Country Ranch as third parties who allegedly share ownership interests in real
property located in Tennessee with Dustin Bogart. (Docket No. 1 at 2).
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R & R reasons that the United States’s claims may extend only to the ownership interest of
Dustin Bogart, the delinquent taxpayer. (Id.) Tennessee law presumes that couples who acquire
property during a marriage hold it as a tenancy by the entirety, unless proven otherwise. See
Simpson v. Fowler, 2014 WL 1601137, at *9 (Tenn. Ct. App. April 22, 2014). Because no
evidence exists of how the Bogarts took title to the property, Magistrate Judge Brown
determined that the presumption applies. As a result, the R & R concluded that the United States
can only use half of the proceeds from the sale of the property to satisfy Dustin Bogarts’s tax
liabilities, since Marcy Bogart is entitled to the other half. (Docket No. 163 at 9–10).
The United States objects on various grounds to the R & R’s conclusion that the Bogarts
intended to create a tenancy by the entirety in the subject property, (Docket No. 166), and the
Court agrees that Magistrate Judge Brown erred in concluding they did. Indeed, the Bogarts
unequivocally state that Marcy Bogart does not claim an interest in the property. In its
complaint, the United States joined Marcy Bogart as a defendant “because she may claim an
interest in the Real Property located [at 5380 State Route 147, Stewart, Tennessee.]” (Docket
No. 1 at 2). In their answer, the Bogarts plainly “den[y]” that “Marcy A. Bogart may claim an
interest in the Real Property plaintiff wishes to put in issue.” (Docket No. 85 at 3). Similarly,
the Bogarts answer in one word the government’s assertion that “Marcy Bogart is the spouse of
the Taxpayer and may claim an interest in the Real Property,” (Docket No. 1 at 6): “Denies,”
(Docket No. 85 at 6). If the Bogarts themselves deny that Marcy Bogart has an interest in the
property at issue, the Court sees no reason to conclude to the contrary.
As the Court’s conclusions respecting Magistrate Judge Brown’s two R & Rs resolve the
substantive merits of the case, the remainder of the pending motions are denied as moot.
Therefore, having considered all of the parties’ arguments, the Court:

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

ACCEPTS Magistrate Judge Brown’s R & R concerning Count 1 (Docket No. 127);



GRANTS Plaintiff’s partial-summary-judgment motion on Count 1 (Docket No. 91);



DENIES Defendants cross-motion for partial summary judgment (Docket No. 118);



ACCEPTS IN PART and REJECTS IN PART Magistrate Judge Brown’s R & R
concerning Count 2 (Docket No. 163);



GRANTS Plaintiff’s motion for summary judgment on Count 2 (Docket No. 150);



ORDERS 1) that the United States has valid and subsisting tax liens against the
property at issue; 2) the foreclosure of the federal tax liens attached to the property at
issue; 3) the sale of the property free and clear of any right, title, lien, claim, or
interest of any of the parties herein; and 4) the distribution of the sale proceeds first to
pay the expenses of the sale, second to the United States to satisfy Dustin Bogart’s
federal income tax liabilities for the taxable years 2000, 2001, 2002, and 2003, and
third to Defendants;



DENIES AS MOOT Plaintiff’s motion for default judgment (Docket No. 92);
Defendants’ motion for partial summary judgment (Docket No. 97); Defendants’
motion to compel (Docket No. 125); Defendants’ motion to exclude (Docket No.
135); Defendants’ motion for stay (Docket No. 141); Defendants’ motion to stay and
for leave to file additional evidence (Docket No. 155); Defendants’ motion for
clarification (Docket No. 156); Defendants’ motion to stay and for leave to file
additional evidence (Docket No. 157); Defendants’ motion for sanctions (Docket No.
167); Defendants’ motion to dismiss (Docket No. 171); Defendants’ motion to be
notified by mail (Docket No. 173); and Defendants’ motion to compel (Docket No.
174); and
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

DIRECTS Plaintiff to submit within 14 days the revised amount of unpaid federal
income taxes, penalties, and interest that Defendant Dustin Bogart owes Plaintiff as of
the date of the entry of this Order, along with documentation supporting the revision.
The Court will then enter final judgment in this matter.

It is SO ORDERED.

_________________________________________
KEVIN H. SHARP
UNITED STATES DISTRICT JUDGE

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