United States of America v. Kuglin et al

Filing 1

COMPLAINT against Herenton Investment Company, Vernice B. Kuglin, filed by United States of America. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Kuglin Summons, # 4 Herenton Summons, # 5 Civil Cover Sheet)(Dickey, Melissa)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
VERNICE B. KUGLIN
200 Wagner Place, Apt. 802
Memphis, TN 38103,
and
HERENTON INVESTMENT COMPANY
125 N. Main Street
Memphis, TN 38103,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Civil No.

COMPLAINT FOR FEDERAL TAXES
PLAINTIFF, the United States of America, complains of defendants as follows:
1.

This is a civil action in which the United States seeks to reduce to

judgment the assessments made against Vernice B. Kuglin for Federal income taxes,
penalties, and interest for the 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, and 2004
taxable years; obtain a declaration regarding the validity of the Federal tax liens against
the property and rights to property owned by Vernice B. Kuglin; to foreclose such liens
against the real property located at 220 Dubois, Memphis, Tennessee (“the Real
Property”); and to sell the Real Property, the proceeds of the sale to be distributed in
accordance with the rights of the parties determined herein, with the amounts subject to

the Federal tax liens to be paid to the United States and applied against the tax liabilities
of Vernice B. Kuglin.
JURISDICTION AND VENUE
2.

This civil action is commenced at the request and with the authorization of

the Chief Counsel for the Internal Revenue Service, a delegate of the Secretary of the
Treasury, and at the direction of the Attorney General of the United States, pursuant to
26 U.S.C. §§ 7401 and 7403.
3.

Jurisdiction over this action is conferred upon this Court by virtue of 26

U.S.C. §§ 7402(a) and 7403, and 28 U.S.C. §§ 1331, 1340, 1345.
4.

Venue is proper in this district and division under 28 U.S.C. § 1391(b)(1),

because the defendants reside within this judicial district, and under 28 U.S.C. §
1391(b)(2), because the Real Property to be foreclosed is located within this judicial
district, at 220 Dubois, Memphis, Tennessee.
PARTIES
5.

The plaintiff is the United States of America.

6.

Defendant Vernice B. Kuglin (“the Taxpayer”) resides at 200 Wagner

Place, Apt. 802, Memphis, Tennessee 38103, within the jurisdiction of this Court.
7.

Defendant Herenton Investment Company, whose mailing address is 125

N. Main Street, Memphis, Tennessee 38103, is joined as a defendant because it may
claim an interest in the Real Property which is within this judicial district.

-2-

COUNT I
REDUCE TAX ASSESSMENTS AGAINST VERNICE B. KUGLIN TO JUDGMENT
8.

The United States incorporates paragraphs 1 through 7 of this complaint

as if fully set forth herein.
9.

In accordance with 26 U.S.C. § 6203, a delegate of the Secretary of the

Treasury of the United States assessed federal income taxes, penalties, and interest
against Vernice Kuglin on the dates, for the tax periods, and in the amounts set forth
below:
Taxable Year

Assessment Date

Tax Assessed

1996

9/15/2004

$ 52,095

1997

9/15/2004

$ 46,308

1998

9/15/2004

$ 44,386

1999

9/15/2004

$ 47,349

2000

9/15/2004

$ 53,879

2001

9/15/2004

$ 52,345

2002

12/4/2006

$ 50,682

2003

12/4/2006

$ 36,013

2004

10/8/2007

$ 63,997
TOTAL

10.

$ 447,045

In accordance with 26 U.S.C. § 6303, notices of assessment and demands

for payment were sent to the Taxpayer.
11.

Statutory interest and penalties have accrued, and will continue to accrue,

on the unpaid balance of the tax assessments made against the Taxpayer.

-3-

12.

Vernice Kuglin failed to pay the full amounts due and owing, and there

remains due and owing, including interest and penalties, as of April 11, 2011 the total
amount of $1,339,108, plus interests and costs that have accrued and will continue to
accrue, as set forth below:
Tax Year

Balance Due As Of April 11, 2011

1996

$ 210,419.09

1997

$ 220,582.28

1998

$ 170,225.88

1999

$ 173,839.93

2000

$ 178,157.43

2001

$ 155,089.14

2002

$ 168,081.15

2003

$ 58,356.24

2004

$ 4,357.13

COUNT II
FORECLOSE FEDERAL TAX LIENS AGAINST REAL PROPERTY
13.

The United States incorporates paragraphs 1 through 12 of this complaint

as if fully set forth herein.
14.

By reason of the tax assessments described above in paragraph 9, federal

tax liens arose on the dates of the assessments and attached to all property, and rights to
property, owned or thereafter acquired by the Taxpayer, including the Real Property
that is the subject of this action.

-4-

15.

The Taxpayer is the owner of the Real Property commonly known as 220

Dubois, Memphis, Tennessee, which she acquired on or about April 30, 1996. A copy of
the deed is attached as Exhibit A.
16.

The United States has valid and subsisting Federal tax liens against the

Real Property.
17.

On various dates in 2004 through 2008, Notices of Federal Tax Lien with

respect to the assessments described in paragraph 9 were recorded with the Register of
Deeds for Shelby County, Tennessee.
18.

Herenton Investment Company may claim an interest in the real property

based on a deed of trust recorded with the Register of Deeds for Shelby County,
Tennessee, a copy of which is attached as Exhibit B.
19.

The Real Property described in paragraph 15 should be sold to satisfy the

federal tax liens of the United States.
WHEREFORE, the United States of America respectfully prays for judgment as
follows:
(A)

As to Count I, that this Court grant judgment in favor of the United States

of America and against Vernice B. Kuglin in the amount of $1,339,108, as of April 11,
2011, plus interest and penalties that have accrued and will continue to accrue
according to law, relating to the federal income tax assessments for the taxable years
1996-2004;

-5-

(B)

As to Count II:
(i)

That this Court adjudge and decree that the United States of

America has valid and subsisting tax liens against the Real Property;
(ii)

That this Court order that the Federal tax liens attaching to the Real

Property be foreclosed, and that the Real Property be sold, free and clear of any right,
title, lien, claim or interest of any of the defendants herein;
(iii)

That the proceeds of the sale be distributed, first, to pay the

expenses of the sale; second, to each party according to this Court’s determination of
interest, with the United States receiving all proceeds due to Vernice B. Kuglin and
applying those proceeds against Vernice B. Kuglin’s federal income tax liabilities for the
taxable years 1996-2004; and
//

//

//

//

//

-6-

(C)

That this Court grant the United States such other and further relief as it

deems just and proper.
DATE: August 30, 2011
JOHN A. DiCICCO
Principal Deputy Assistant Attorney General
For The Tax Division
/s/Melissa L. Dickey
MELISSA L. DICKEY
Trial Attorney, Tax Division
U.S. Department of Justice
Post Office Box 227
Ben Franklin Station
Washington, D.C. 20044
Telephone: [phone]
Fax: [phone]
Email: [e-mail]

-7-