Green v. United States (In re Green)

• Citation: 472 B.R. 347,109 A.F.T.R.2d 2012
• Decision Date: 27 April 2012
• Docket Number: Adversary No. 11–1238–HCM.,Bankruptcy No. 10–11781–HCM.
• Parties: In re John Oliver GREEN, Debtor. John Oliver Green, Plaintiff v. United States of America (Internal Revenue Service), Defendant.
• Court: United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Western District of Texas

472 B.R. 347

109 A.F.T.R.2d 2012-1979

In re John Oliver GREEN, Debtor.John Oliver Green, Plaintiff

v.United States of America (Internal Revenue Service), Defendant.

Bankruptcy No. 10–11781–HCM.

Adversary No. 11–1238–HCM.

United States Bankruptcy Court,

W.D. Texas,

Austin Division.

April 27, 2012.

John Oliver Green, pro se.

MEMORANDUM OPINION AND ORDER (1) GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DE # 9) AND (2) DENYING PLAINTIFF'S CROSS–MOTION FOR SUMMARY JUDGMENT (DE # 15)

H. CHRISTOPHER MOTT, Bankruptcy Judge.

This adversary proceeding pits plaintiff, debtor and taxpayer John Oliver Green (“Plaintiff Green”)—who is no stranger to the Bankruptcy Court, Tax Court, and Fifth Circuit Court of Appeals—against defendant United States of America, on behalf of the Internal Revenue Service (“Defendant IRS”)—which is also no stranger to the Bankruptcy Court, Tax Court, and Fifth Circuit Court of Appeals.

Plaintiff Green filed this adversary proceeding to determine whether his federal income tax liabilities for the years 1997, 1999, and 2000 were discharged in this Chapter 7 bankruptcy case, and to determine the validity and amount of federal tax liens. Defendant IRS filed a Motion for Summary Judgment, and Plaintiff Green filed a Cross–Motion for Summary Judgment. For the reasons stated in this Memorandum Opinion, the Court grants the Defendant's Motion for Summary Judgment and denies Plaintiff's Cross–Motion for Summary Judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure (“FRCP”), which are incorporated into Rule 7056 of the Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”).

I. PROCEDURAL BACKGROUND

On September 26, 2011, Plaintiff Green, pro se, filed his Complaint to Determine Dischargeability of Tax Claims and Validity and Extent of Lien Rights (“Complaint”) (DE # 1). In general, through the Complaint, Plaintiff Green requested that the Court determine that his unpaid federal tax liabilities for the years 1997, 1999, and 2000 have been discharged in this Chapter 7 case, to determine the validity and extent of Defendant IRS' lien rights, and to enforce his bankruptcy discharge. On October 6, 2011, Defendant IRS filed its Answer to the Complaint (“Answer”) (DE # 4). In general, in its Answer, Defendant IRS requested the Court to determine that Plaintiff Green's federal tax liabilities for the 1997, 1999, and 2000 years were not discharged in this Chapter 7 case and that its federal tax liens attached to Plaintiff Green's assets. On November 21, 2011, Plaintiff Green filed his Amended Verified Reply With Incorporated Legal Authority to the Answer (“Reply”) (DE # 8).

On November 23, 2011, Defendant IRS filed a Motion for Summary Judgment (“Defendant's MSJ”) (DE # 9), together with its Declaration (DE # 10). On December 15, 2011, Plaintiff Green filed its Opposition to Defendant's MSJ with Incorporated Memorandum of Law (DE # 16). On January 11, 2012, Defendant IRS filed its Response to Plaintiff's Opposition to Defendant's MSJ (DE # 29), and a Corrected Declaration in Support of Defendant's Response (DE # 33).¹ On January 20, 2012, Plaintiff Green filed his Reply to Defendant's Response (DE # 36).

Meanwhile, on December 15, 2011, Plaintiff Green filed his Cross–Motion for Summary Judgment With Incorporated Memorandum of Law (“Plaintiff's MSJ”) (DE # 15). On January 11, 2012, Defendant IRS filed a Response in Opposition to Plaintiff's Cross–Motion for Summary Judgment (DE # 27), along with a Corrected Declaration in Support (DE # 32). On January 20, 2012, Plaintiff Green filed a Reply to Defendant's Response in Opposition to Plaintiff's MSJ (DE # 37).

On February 9, 2012, the Court conducted a hearing on Defendant's MSJ and Plaintiff's MSJ, and took its ruling under advisement. Plaintiff Green and counsel of record for Defendant IRS appeared and made arguments and stipulations at the hearing.

On February 9, 2012 after the hearing and pursuant to FRCP 56(e)(1), the Court signed an Order Granting Leave to Supplement Summary Judgment Record (DE # 38), authorizing the parties to file supplements or stipulations with respect to the outstanding amount of taxes and tax liens. Pursuant to such Order, on February 24, 2012, Plaintiff Green and Defendant IRS filed a Joint Supplement to Summary Judgment Record (“Joint Supplement Stipulation”) (DE # 40), whereby the parties stipulated to certain facts with respect to the amount of outstanding taxes and federal tax liens.

II. JURISDICTION

The Court has jurisdiction over this adversary proceeding under 28 U.S.C. § 157 and § 1334. This adversary proceeding is a “core proceeding” under 28 U.S.C. § 157(b)(2)(I) and (K), and the Court is authorized to enter a judgment in this adversary proceeding under 28 U.S.C. § 157(b)(1).

III. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when a movant shows that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. SeeFRCP 56(a); Piazza's Seafood World, LLC v. Odom, 448 F.3d 744, 752 (5th Cir.2006); Placid Oil Co. v. Williams (In re Placid Oil Co.), 450 B.R. 606, 612 (Bankr.N.D.Tex.2011). A genuine issue of material fact is present when the evidence is such that a reasonable fact finder could return a verdict for the non-movant. Piazza's Seafood, 448 F.3d at 752 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Material facts are those that could affect the outcome of the action. Wyatt v. Hunt Plywood Co., Inc., 297 F.3d 405, 409 (5th Cir.2002), cert. denied,537 U.S. 1188, 123 S.Ct. 1254, 154 L.Ed.2d 1020 (2003).

In the summary judgment context, the court should view evidence in a light most favorable to the non-moving party. Piazza's Seafood, 448 F.3d at 752. Factual controversies must be resolved in favor of the non-movant. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). If the movant satisfies its burden, the non-movant must then come forward with specific evidence to show that there is a genuine issue of fact. Placid Oil, 450 B.R. at 613, citing Ashe v. Corley, 992 F.2d 540, 543 (5th Cir.1993). The non-movant may not merely rely on conclusory allegations or the pleadings; rather, it must demonstrate specific facts identifying a genuine issue to be tried in order to avoid summary judgment. FRCP 56(c)(1); Piazza's Seafood, 448 F.3d at 752;Placid Oil, 450 B.R. at 613.

IV. UNDISPUTED MATERIAL FACTS

Based on the summary judgment record, the following material facts are not in genuine dispute:

Plaintiff Green's federal tax liabilities for the years at issue—1997, 1999, and 2000—have previously been litigated with Defendant IRS and adjudicated by the U.S. Tax Court (“Tax Court”) and affirmed by the Fifth Circuit Court of Appeals. See Green v. Commissioner, T.C. Memo 2008–130 (T.C.M.2008) (“Tax Court Opinion”); Green v. Commissioner, 322 Fed.Appx. 412 (5th Cir.2009) ( “Fifth Circuit Opinion”). (DE # 10, pp. 13–27; DE # 15–1, pp. 30–31; DE # 10, pp. 28–36).

Plaintiff Green is a former federal civil service employee (with the IRS). Plaintiff Green received disability-retirement payments for a medical condition from the Office of Personnel Management (“OPM”). Plaintiff Green is also a tribal member of the Potawatomi Citizens Tribe of Oklahoma. (DE # 10, pp. 16, 29–31).

This bankruptcy case is not Plaintiff Green's first visit to the Bankruptcy Court. Plaintiff Green has filed Chapter 7 bankruptcy before in 1996 in this Court, case no. 96–13645–FM (“First Bankruptcy Case”). Plaintiff Green filed an adversary proceeding against Defendant IRS in the First Bankruptcy Case, adversary no. 97–1044–FM, regarding his federal income tax liabilities for the years 1981, 1982, and 1983. Such adversary proceeding and the dischargeability of Plaintiff Green's tax liabilities for those years (1981, 1982, 1983) were resolved by an Agreed Judgment entered into between Plaintiff Green and Defendant IRS and signed by this Court on June 30, 1998 (“Agreed Bankruptcy Judgment”) (DE # 8–1, pp. 48, 49). Plaintiff Green's federal tax liabilities for the years at issue in this adversary proceeding and this second bankruptcy case—1997, 1999, and 2000—were not addressed in Plaintiff Green's First Bankruptcy Case filed in 1996.

After an IRS internal examination of his tax liability for 1997, 1998, 1999, and 2000,² Defendant IRS issued notices of deficiency to Plaintiff Green, although the notices were not mailed to Plaintiff Green's proper address. Plaintiff Green filed a petition in Tax Court, but Defendant IRS filed a Motion to Dismiss for Lack of Jurisdiction in order to send the deficiency notices to the correct address and provide Plaintiff Green time to correctly challenge the deficiencies. The Tax Court granted the Motion and entered an order to dismiss for lack of jurisdiction on April 5, 2005. (DE # 8–1, p. 79; DE # 10, pp. 16, 29).

Defendant IRS issued a new notice of deficiency to Plaintiff Green at his correct address. On June 27, 2005, Plaintiff Green then timely filed a petition in Tax Court to contest the deficiencies for the 1997, 1999, and 2000 tax years, and litigation on the merits in Tax Court proceeded. (DE # 8–1, pp. 61–63; DE # 10, p. 16, 29).

In Tax Court, Plaintiff Green contested the deficiency on multiple grounds. According to the Tax Court Opinion, Plaintiff Green did not file federal income tax returns for 1997, 1999, and 2000 using the traditional documentation. Instead, Plaintiff Green submitted what has been referred to as “treaty-based position disclosure documents” (described by the Tax Court as “disclosure documents”). Plaintiff Green claimed authority to do so pursuant to Section 6114 of the Internal Revenue Code (herein “IRC”). Plaintiff Green claimed in Tax Court that due to his status as a member of the Potawatomi Citizens Tribe of Oklahoma, his treaty-based “disclosure documents” constituted “tax returns” that triggered the running of the statute of limitations. See Tax...