Anuforo v. Comm'r Of Internal Revenue, No. 09-2375.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtRILEY, Chief Judge.
Citation614 F.3d 799
PartiesCyril C. ANUFORO, Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
Decision Date04 August 2010
Docket NumberNo. 09-2375.

614 F.3d 799

Cyril C. ANUFORO, Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellee.

No. 09-2375.

United States Court of Appeals,Eighth Circuit.

Submitted: May 11, 2010.
Filed: Aug. 4, 2010.


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Patricj Chinedu Nwaneri, argued, Eagan, MN, for appellant.

Melissa Briggs, argued, U.S. Dept. of Justice, Tax Division, Washington DC, for appellee.

Before RILEY, Chief Judge, JOHN R. GIBSON and MURPHY, Circuit Judges.

RILEY, Chief Judge.

Cyril C. Anuforo owned two home healthcare companies, Comfort Plus Health Care, Inc. (Comfort Plus) and U.S. Central Comfort Plus Care Systems, Inc. (U.S.Central). Anuforo repeatedly failed to file the companies' tax returns in a timely manner, and he also failed to make full payment of the employment taxes he withheld from his employees. As a result, the Internal Revenue Service (IRS) assessed penalties against Anuforo under 26 U.S.C. § 6672. Anuforo filed an action in the district court challenging the penalties. The government counterclaimed, seeking to reduce the penalties to judgment. The district court 1 granted summary judgment to the government on Anuforo's claims and the government's counterclaims. Anuforo appeals, and we affirm.

I. BACKGROUNDA. Unpaid Taxes

Anuforo was the sole owner of Comfort Plus and U.S. Central, and Anuforo was the person responsible for ensuring the companies' employment taxes were paid. Despite this responsibility, Anuforo consistently failed to pay each companies' employment taxes. 2 At issue in this case are

614 F.3d 803

several calendar quarters during which Comfort Plus and U.S. Central failed to file timely returns and make full payment of employment taxes. Comfort Plus failed to file timely employment taxes or make any payment for eight calendar quarters at various times from 1999 through 2003. Similarly, U.S. Central failed to make full payment of its employment taxes during seven calendar quarters at various times from 1999 through 2003. Of these seven calendar quarters, Anuforo filed all but one return late, and he made no payment at all for five of the seven quarters.

Initially, the IRS worked with Anuforo on the delinquencies and short-payment of taxes. In July 2000, the IRS agreed with Comfort Plus and U.S. Central to address specific quarters of delinquent or underpaid taxes in 1999 through installment agreements. Under these agreements, Anuforo agreed to make installment payments and to extend the time during which the IRS could assess penalties against him for his failure to make payments during the specified periods in 1999. The agreements provided the IRS could assess penalties for these periods until December 31, 2010.

Both companies defaulted on their agreements with the IRS when, for various periods in 2000 and 2001, Comfort Plus and U.S. Central failed to file on time and to pay their tax returns. The IRS repeatedly informed Anuforo he would be in default if he failed to remain current on the companies' tax obligations. On March 22, 2002, the IRS mailed a letter to each company notifying them they were in default.

On June 4, 2002, Anuforo notified the IRS two of his employees had been convicted of embezzling funds from his companies, and claimed the embezzlement was the reason he was unable to pay his tax obligations. One employee admitted to embezzling approximately $20,000 from both companies from August 15, 1999, until 2001. Anuforo later acknowledged the employee had repaid $21,000 by the second quarter of 2002. A second employee admitted to taking $50,861.24 from Comfort Plus from April 27, 2001, until January 18, 2002. This employee was required to pay restitution in the amount of $165,040.74, but it is unclear from the record if restitution was made. Comfort Plus's income tax returns included deductions for fraud loss in 2001, 2002, and 2003. Despite the embezzlement, Comfort Plus and U.S. Central filed tax returns in 2001 and 2002 acknowledging the companies' payment of over $1 million in wages and hundreds of thousands of dollars in other expenses.

On March 1, 2004, and April 8, 2004, the IRS issued certified letters to Anuforo, proposing penalties for U.S. Central's and Comfort Plus's unpaid taxes, and providing 60 days to appeal the proposed penalties. On May 19, 2004, Anuforo filed a timely appeal as to Comfort Plus, and an untimely appeal as to U.S. Central. The IRS Appeals Office sustained the penalties on October 25, 2005. The IRS assessed penalties against Anuforo on February 14, 2005, for U.S. Central's delinquent taxes, and on December 26, 2005, for Comfort Plus's delinquent taxes.

B. Litigation

On April 3, 2007, Anuforo filed a complaint in the district court pertaining to the Comfort Plus penalties. Anuforo asserted two former employees embezzled from his companies, causing the companies to become financially distressed and to default on tax payments. Anuforo asserted he was “not vicariously liable for the criminal

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conduct of the fraudulent employees and also not liable for the trust fund recovery penalties for good cause.” Anuforo further argued the penalties were time barred. The magistrate judge liberally construed Anuforo's complaint as a claim for a refund for amounts already paid. On November 13, 2007, the IRS Commissioner filed a motion for summary judgment.

Anuforo filed an amended complaint on December 21, 2007, clarifying he was also seeking relief with respect to the U.S. Central penalties. On December 31, 2007, the government filed an answer and counterclaim asking the district court to reduce the penalties to judgment. Anuforo answered the government's counterclaim by denying he willfully failed to collect or pay employment taxes and denying liability for the penalties.

Anuforo filed a motion to compel the testimony of IRS Revenue Officer Jill Dutcher (Officer Dutcher) and a “Request for Refusal or Continuance of Defendant's Motion for Summary Judgment.” The magistrate judge liberally construed Anuforo's motions and attached declaration as a Fed.R.Civ.P. 56(f) affidavit. 3 On June 4, 2008, the magistrate judge held a hearing on the government's motion for summary judgment and Anuforo's motion to compel. The magistrate judge denied Anuforo's motion to compel, and recommended the district court grant the government's motion for summary judgment. Anuforo timely filed objections to the magistrate judge's report and recommendation. The district court overruled Anuforo's objections, adopted the magistrate judge's report and recommendation, granted the government's motion for summary judgment as to Anuforo's claims involving Comfort Plus, and affirmed the magistrate judge's denial of Anuforo's motion to compel.

The government filed a second motion, seeking summary judgment on its counterclaims, and as to Anuforo's requested relief from the U.S. Central penalties. On January 14, 2009, the magistrate judge filed a report and recommendation advising the district court to grant the government's motion. The district court adopted the magistrate judge's report and recommendation, and granted the government's motion for summary judgment in its entirety.

Anuforo appeals the district court's grants of summary judgment, claiming (1) the penalties related to Comfort Plus are barred by statute, (2) Anuforo did not act willfully, (3) there are genuine issues of material fact in dispute, (4) the district court abused its discretion by denying Anuforo's motion to compel Officer Dutcher's testimony, (5) Officer Dutcher's statements and partial deposition testimony should be stricken from the record, (6) the district court erred by improperly weighing the evidence, (7) Anuforo is improperly being held vicariously liable for the conduct of his employees, and (8) Anuforo is entitled to a theft-loss deduction to offset the penalties.

II. DISCUSSIONA. Statute Barred Penalties

Anuforo claims the IRS penalties arising out of Comfort Plus are barred because the government did not comply with statutory requirements. The Internal Revenue Code (I.R.C.) states any person who is required to collect and pay over

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trust-fund employment taxes, and willfully fails to do so, is liable for a penalty in an amount equal to the total amount of tax not paid over. See I.R.C. § 6672(a). While employers generally pay trust-fund employment taxes in quarterly installments, the employment taxes are deemed to be filed on April 15 of the next calendar year. See I.R.C. § 6501(b)(2). The Commissioner typically has three years from the date a taxpayer files a return in which to assess penalties. See I.R.C. § 6501(a). However, the taxpayer and the Secretary may agree in writing to an extended assessment period. See I.R.C. § 6501(c)(4).

The IRS may not impose a penalty under I.R.C. § 6672(a) unless the Secretary notifies the taxpayer in writing he is subject to an assessment of such a penalty. See I.R.C. § 6672(b). Anuforo does not deny he received notice he was subject to assessments for penalties, or that the IRS made the assessments. Instead, Anuforo argues the government failed to provide Anuforo with notice and demand after the assessments were completed. Pursuant to I.R.C. § 6303(a), the IRS is required to give notice to each person liable for an unpaid tax, stating the amount and demanding payment, within sixty days after the Commissioner conducts an assessment.

While the government does not concede it failed to give Anuforo notice and demand under I.R.C. § 6303(a), it argues such notice was not required. The government acknowledges such notice and demand would be required if the government proceeded against Anuforo administratively. However, the government insists “[e]very court of appeals that has addressed the issue has held that notice and demand is not a prerequisite to the Government's bringing a civil proceeding to reduce assessments to judgment.”

The government is correct our sister circuits have consistently held...

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    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • October 24, 2018
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010). Courts do not decide whether to grant a motion for summary judgment by conducting a paper trial. Rather, a "district ......
  • And v. City of N. Liberty, 3:18-cv-00102
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    • March 31, 2020
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010) (emphasis added). A summary judgment motion does not authorize courts to conduct a paper trial. Rather, a "district co......
  • Beving v. Union Pac. R.R. Co., 3:18-cv-00040
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • August 14, 2019
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010). Courts do not decide whether to grant a motion for summary judgment by conducting a paper trial. Rather, a "district ......
  • Rosemann v. Sigillito, No. 10–CV–1165–LRR.
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • July 9, 2013
    ...1018 (2012). “[S]elf-serving allegations and denials are insufficient to create a genuine issue of material fact.” Anuforo v. Comm'r, 614 F.3d 799, 807 (8th Cir.2010). “To survive a motion for summary judgment, the nonmoving party must substantiate [its] allegations with sufficient probativ......
  • Request a trial to view additional results
104 cases
  • Pia v. URS Energy & Constr., Inc., 3:16-cv-00045
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • October 24, 2018
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010). Courts do not decide whether to grant a motion for summary judgment by conducting a paper trial. Rather, a "district ......
  • And v. City of N. Liberty, 3:18-cv-00102
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • March 31, 2020
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010) (emphasis added). A summary judgment motion does not authorize courts to conduct a paper trial. Rather, a "district co......
  • Beving v. Union Pac. R.R. Co., 3:18-cv-00040
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • August 14, 2019
    ...Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010). Courts do not decide whether to grant a motion for summary judgment by conducting a paper trial. Rather, a "district ......
  • Rosemann v. Sigillito, No. 10–CV–1165–LRR.
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • July 9, 2013
    ...1018 (2012). “[S]elf-serving allegations and denials are insufficient to create a genuine issue of material fact.” Anuforo v. Comm'r, 614 F.3d 799, 807 (8th Cir.2010). “To survive a motion for summary judgment, the nonmoving party must substantiate [its] allegations with sufficient probativ......
  • Request a trial to view additional results

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