U.S. v. Renfrow, 5:07-CV-117-FL.
| Decision Date | 09 March 2009 |
| Docket Number | No. 5:07-CV-117-FL.,5:07-CV-117-FL. |
| Citation | 612 F.Supp.2d 677 |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | UNITED STATES of America, Plaintiff, v. Raymond A. RENFROW, individually and d/b/a Ideal Tax Services and First Class Limousine, Defendant. |
Frederick Nicholas Noyes, Shana M. Starnes, U.S. Dept. of Justice—Tax Division, Washington, DC, for Plaintiff.
Raymond A. Renfrow, Elm City, NC, pro se.
ORDER AND PERMANENT INJUNCTION
This matter is before the court on plaintiffs motion for summary judgment (DE # 25). This court referred the motion to Magistrate Judge James E. Gates for review and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B). Through memorandum and recommendation ("M & R") issued January 26, 2009 (DE # 36), the magistrate judge recommends that plaintiffs motion be allowed. No objections to the M & R have been filed, and the time within which to make any objection has expired. This matter is ripe for ruling.
A full and careful review of the M & R and other documents of record convinces the court that the recommendation of the magistrate judge is, in all respects, in accordance with the law and should be approved. Accordingly, the court hereby adopts the findings and recommendation of the magistrate judge as its own, and for the reasons stated in the M & R, plaintiffs motion for summary judgment is GRANTED.
It is therefore ORDERED, pursuant to 26 U.S.C. §§ 7402, 7407, and 7408, that defendant Renfrow, Ideal Tax Services, and First Class Limousine, and their agents, representatives, employees, successors, and all other persons or entities in active concert or participation with defendant Renfrow, Ideal Tax Services, First Class Limousine, or any of them, are permanently enjoined from:
(a) preparing, assisting in the preparation of, or directing the preparation or filing of federal tax returns or forms on behalf of any person or entity other than defendant;
(b) giving any tax advice to any other person or entity for pay;
(c) appearing as a representative on behalf of any person or entity before the Internal Revenue Service;
(d) engaging in conduct subject to penalty under I.R.C. § 6701, including preparing or assisting in the preparation of a document related to a matter material to the internal revenue laws that includes a position that defendant knows would, if used, result in an understatement of another person's tax liability;
(e) organizing, promoting, marketing, or selling any tax shelter, entity, plan, or arrangement that advises or assists customers to attempt to violate the internal revenue laws or unlawfully evade the assessment or collection of their federal tax liabilities, including by means of complex trust programs;
(f) engaging in conduct subject to penalty under I.R.C. § 6700, including making, furnishing, or causing another person to make or furnish statements about the allowability of any deduction, credit, or the securing of any tax benefit by reason of participating in a tax shelter, entity, plan, or arrangement, that defendant knows or has reason to know is false or fraudulent;
(g) telling customers that they may continue to control and receive beneficial enjoyment from assets irrevocably transferred to a trust without regard to the grantor trust rules of I.R.C. §§ 673 through 677;
(h) telling customers that personal residences can be transferred to a trust for the purpose of claiming tax deductions for personal expenses in order to reduce federal tax liability;
(i) telling customers that the purchase of American Silver Eagle coins is a deductible business expense;
(j) engaging in any other conduct subject to any penalty under the Internal Revenue Code or any other conduct that interferes with the administration and/or enforcement of the internal revenue laws; and
(k) engaging in any of the activities listed in paragraphs (a) through (j) above through the use of any other individual or entity.
IT IS FURTHER ORDERED that:
(l) within thirty (30) days of entry of this order, defendant must file with the court and provide to plaintiffs counsel a complete list of customers (including names, addresses, phone numbers, e-mail addresses, and social security numbers or employer identification numbers) for whom defendant has prepared individual or trust federal income tax returns or whom defendant has assisted in the creation of any trust entity;
(m) within thirty (30) days of entry of this order, defendant must, at his own expense, provide a copy of the complaint and this injunction to each of his customers, employees, and associates, both current and former;
(n) within forty-five (45) days of entry of this order, defendant must provide evidence of his compliance with the foregoing paragraph by filing a declaration with this court setting out a complete list of names and addresses of individuals or entities to whom he has mailed a copy of the complaint and injunction in this action; and
(o) the United States shall be permitted to engage in post-injunction discovery to monitor defendant's compliance with this and any other order entered by this court.
This case comes before the court on the motion for summary judgment (DE # 25) of plaintiff United States ("Government") pursuant to Rule 56 of the Federal Rules of Civil Procedure. The motion was referred to the undersigned Magistrate Judge for review and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, it will be recommended that the Government's motion be allowed.
On 22 March 2007, the Government commenced this action against defendant Raymond A. Renfrow ("defendant") in his individual capacity and doing business as Ideal Tax Service and First Class Limousine alleging that defendant was engaging in conduct that was subject to penalty under the Internal Revenue Code, 26 U.S.C. ("I.R.C"), I.R.C. §§ 6694 and 6700, and conduct that substantially interferes with the proper enforcement of the internal revenue laws, see I.R.C. § 7402(a). On the basis of this alleged conduct, the Government seeks to restrain and enjoin defendant from further engaging in this activity as provided by I.R.C. §§ 7402, 7407, and 7408. On 14 March 2008, the Government filed a motion for summary judgment asserting that it was entitled to the injunction against defendant because there was no dispute of material fact.
On 19 March 2008, the Clerk advised defendant, who is pro se, of the summary judgment dismissal procedure and the possible consequences if he failed to adequately respond to the motion. (Rule 56 Letter (DE # 27)). On 11 April 2008,1 defendant filed a "Petition for Abatement" (DE # 28) in which he asserts that the complaint fails to name him as a party on the grounds that his name appears in all upper case letters. This filing by defendant does not respond in any form to the arguments raised in the Government's motion for summary judgment, and defendant has failed to otherwise respond to the motion.
An initial matter for determination by the court is whether the three sets of requests for admissions served by the Government on defendant should be deemed admitted, as the Government requests, (See Govt.'s Requests for Admissions ("RFA") (DE # 26-2) at 4-18).2 The Government bases its request on the grounds that defendant failed to respond to the requests for admissions within the period of time required by the Federal Rules of Civil Procedure or thereafter. (Noyes Decl. (DE # 26-2) at 1-2, ¶¶ 3-8).
Rule 36 of the Federal Rules provides, in relevant part, that a "matter is admitted unless, within 30 days after service of the request ... the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by the party's attorney." Fed.R.Civ.P. 36(a). Further, a "matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission." Fed.R.Civ.P. 36(b). "A party's failure to respond to a request for admissions under Federal Rule of Civil Procedure 36 may result in a material fact being deemed admitted and subject the party to an adverse grant of summary judgment." In re Savage, 303 B.R. 766, 772 (Bkrtcy.D.Md.2003)(citing Carney v. IRS, 258 F.3d 415, 417-18 (5th Cir.2001)); see also Adventis, Inc. v. Consol. Prop. Holdings, Inc., 124 Fed.Appx. 169, 173 (4th Cir.2005) () (quoting Langer v. Monarch Life Ins. Co., 966 F.2d 786, 803 (3d Cir.1992)).
Nevertheless, some courts have been reluctant to award summary judgment on the basis of a pro se party's default on requests for admissions on the grounds that such a party may not have understood the effect of failure to respond to the requests. See Jones v. Jack Henry & Assocs., Inc., Civ. No. 3:06cv428, 2007 WL 4226083, at *2 (W.D.N.C. 30 Nov. 2007) (declining to deem unanswered requests admitted where there was no evidence in the record that pro se plaintiff was ever notified of the consequences of failing to respond); United States v. Turk, 139 F.R.D. 615, 618 (D.Md.1991) (); In re Savage, 303 B.R. at 773 (). However, under the circumstances presented in this case, the court concludes that it is appropriate to deem' the unanswered requests admitted for the purpose of the motion for summary judgment.
First, defendant was...
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