U.S. v. Anderson
| Decision Date | 05 July 2001 |
| Docket Number | No. 3:98CV0317AS.,3:98CV0317AS. |
| Citation | 169 F.Supp.2d 952 |
| Parties | UNITED STATES of America, Plaintiff, v. Gary B. ANDERSON; Gail L. Anderson; Peterson Ross Schloerb and Seidel; Michael T. Slott; Gary B. Anderson Trust, Gail L. Anderson Trustee and Gary B.. Anderson Trustee as Nominees of Gary B. Anderson and Gail L. Anderson, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Douglas W Snoeyenbos, U S Department of Justice, Christine Grant, Jennifer Gazaille Cohen, U S Department of Justice, Tax Division, Washington, DC, for USA, plaintiffs.
Murray J Feiwell, Matthew S Love, Feiwell and Hannoy, Indianapolis, Frank E Schaffer, South Bend, Michael T Slott, [Pro se], c/o Berwanger Inc., Downers Grove, for Gary B Anderson, Gail L Anderson, Peterson Ross Schloerb and Seidel, Michael T Slott fka Michael T Scott, Gary B Anderson Trust, Gail L Anderson, Trustee and Gary B Anderson, Trustee,—Gary B Anderson Trust, Gail L Anderson, Trustee and Gary B Anderson, Trustee as Nominees of Gary B Anderson and Gail L Anderson, defendants.
The Plaintiff, United States of America, (hereinafter "Government") seeks to recover unpaid taxes from the Defendants, Gary and Gail Anderson ("Andersons") filing jointly, Gary Anderson individually, and Gary Anderson as an individual responsible for the Garston or "Garstan" Corporation1 and Brookline Industries, Inc. The Government has included various other parties in an apparent attempt to attach its claim to other property held in trust by the Defendants. On July 31, 2000, this Court entered an order which authorized the Defendants to raise all statute of limitations defenses with respect to the Government's claims. Hearing was held in Lafayette, Indiana on October 6, 2000 with respect to those statute of limitations arguments only.
The first argument presented by the Andersons alleges the Government violated the statute of limitations by filing its complaint to recover unpaid taxes ten years after the date of the assessment. The Andersons contend that the Government's attempt to collect additional taxes for their jointly filed returns for the years 1984, 1985, 1986 (first assessment) is time barred. The Government made assessments on November 25, 1985, December 1, 1986 and August 31, 1987 for those respective years. Additionally, Gary Anderson contends that the Government's attempt to collect additional tax for the Garston Corp. for the years 1982 and 1983 is time barred. The Government made an assessment against Garston Corp on October 21, 1985.
The Andersons submitted an offer of compromise (Form 658) on October 13, 1987, which purportedly extended the statute of limitations. (See Defendants' Exhibit B.) The Andersons withdrew the offer of compromise on June 18, 1990. (See Defendants' Exhibit D.) The Government filed its complaint to recover the unpaid taxes on June 19, 1998.
The Government has presented tax transcripts for the Andersons' income tax liability for the tax years 1984, 1985 and 1986 showing an entry of an offer of compromise on October 13, 1987. In addition, the Government presented the 1983 tax transcript for Gary Anderson as the individual responsible for the Garstan Corp., which, also indicated that Mr. Anderson entered into an offer of compromise on October 13 1987 to pay tax for the years 1982 and 1983. The Government seeks to prove the existence of the offer of compromise entered into by the Defendants through the production of these tax transcripts for the respective tax years in question.
The Andersons admit to submitting an offer in compromise. However, they do not recall what years the offer compromised nor do they recall whether they agreed to suspend the running of the statute of limitations. (See Defendant's Brief in Response at 5). The Andersons contend that the transcripts are inadmissible as evidence to show that a valid offer of compromise was entered into for the tax years in question.
Additionally, the Andersons allege that the Government has violated the statute of limitations with respect to the assessment of tax against them. The Andersons claim that the Government failed to make a second assessment for the 1986 tax year within three years of the extended time for assessment Also, the Andersons contend that the Government failed to make a second assessment for the 1987 tax year within three years of the filing of the return.
With respect to the 1986 tax year, the Andersons signed a consent, which extended the time to assess tax to December 31, 1991. (D's Exhibit A). The Government then issued a statutory notice of deficiency regarding the 1986 taxes on September 12, 1991. (Decl. Gary and Gail Anderson at ¶ 4). Finally, the Government made an additional assessment of tax on March 30, 1992.
With respect to the 1987 tax year, the Andersons filed their joint return on November 7, 1989. (Decl. Gary and Gail Anderson at ¶ 9). The Government issued a statutory notice of deficiency for the 1987 tax year on October 15, 1992. (Decl. Gary and Gail Anderson at ¶ 10). The Government made an assessment for unpaid taxes on March 22, 1993.
The Court will first address whether the statute of limitations provision of § 6502 prohibits the Government from bringing an action for collection of the alleged unpaid taxes by the Andersons. The Government cites U.S. v. McGaughey 977 F.2d 1067, 1071 (7th Cir.1992) for the proposition that certain computer generated documents may be proffered to show that an offer in compromise was submitted and in turn suspended the running of the statute of limitations. Here the Government has offered several computer generated transcripts that purport to show that an offer of compromise was entered on October 13, 1987 and withdrawn on June 11, 1990. However, as the Defendants correctly point out, these documents are neither certified nor has a service center director where the transcripts have been generated represented that these documents are authentic pursuant to Rule 902 of the Rules of Evidence.
The Government enjoys the presumption of procedural regularity in administering its tasks, in the absence of clear evidence to the contrary, however, this does not excuse them from complying with the very simple requirements of showing that these documents are true and accurate. Borg-Warner Corp. v. Commissioner, 660 F.2d 324, 330 (7th Cir.1981). Specifically, Fed.R.Evid. 902(4) provides that "[a] copy of an official record ... including data compilations ... certified as correct ... [by a] person authorized to make the certification ..." is self-authenticating and the proponent of the evidence need not lay a foundation for the evidence to be admissible. Rossi v. U.S., 755 F.Supp. 314, 316 (D.C.Or.1990) aff'd by unpublished order 983 F.2d 1077 (9th Cir. 1993) ( ). Here the Government has failed to provide such a certification. While this point may seem a minor detail, compliance with the rule is essential to maintain the integrity of the judicial process.
Consequently, neither side has proven to the court's satisfaction that the statute of limitations has or has not expired with respect to the collection of taxes before the ten year period for the income tax assessments of 1984, 1985, the first assessment for 1986 and the liability assessed against Gary Anderson as the responsible person for the Garstan Corporation. The court is quite confident that the Government will be prepared to offer the relevant documents in accordance with the applicable rules of evidence should the Defendants raise the statute of limitations defense for the collection of income tax during the years in question at a later date.
B. Suspension of Statute of limitations for Assessment under § 6503
Absent an agreement to extend time for assessment, the time for assessment after the IRS has sent a notice of deficiency begins with a 90 day period in which the taxpayer may seek a decision from the tax court. Ripley v. Comr. 103 F.3d 332, 335-336 (4th Cir.1996) See Also: Ramirez v. United States, 210 Ct.Cl. 537, 538 F.2d 888, 893, cert. denied, 429 U.S. 1024, 97 S.Ct. 642, 50 L.Ed.2d 625 (1976). Next, the Government has an additional 60 days after the tax court has rendered a final opinion or if the taxpayer fails to petition the tax court after the conclusion of the 90 days. See 26 U.S.C. § 6503(a). Thus, at a minimum the Government has 150 days from the end of the three-year period in which it may assess additional tax or an extended period if the taxpayer has entered into an agreement to extend the period to assess...
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