U.S. v. Tucker
| Decision Date | 15 March 2006 |
| Docket Number | No. 1:03 CV 548 WJG-JMR.,1:03 CV 548 WJG-JMR. |
| Citation | 430 F.Supp.2d 609 |
| Parties | UNITED STATES of America Plaintiff v. Marion TUCKER; City of Ocean Springs, Mississippi; Mississippi State Tax Commission and Hounds, Inc. Defendants. |
| Court | U.S. District Court — Southern District of Mississippi |
Crockett Lindsey, U.S. Attorney's Office, Gulfport, MS, Laura M. Conner, U.S. Dept. of Justice, Washington, DC, for Plaintiff.
Robert W. Gambrell, Gambrell & Associates, P.A., Biloxi, MS, Jeffrey Johns Little Jeffrey Johns Little, Attorney, Stephanie R. Jones, Mississippi State Tax Commission, Jackson, MS, for Defendants.
This cause comes before the Court on the motion of the Plaintiff, United States of America [United States] for summary judgment [20-1] pursuant to Federal Rule of Civil Procedure 56. Also pending before the Court is the United States' motion for order of sale [27-1]. The Court has duly considered the record in this action and, being fully advised in the premises, concludes as follows.
The United States asserts that Marion Tucker, one of the Defendants in this case, is liable for unpaid federal income and employment taxes. (Ct. R., Doc. 20, p. 1.) Tucker previously filed for bankruptcy under Chapter 7 of the Bankruptcy Code and was granted a discharge from her personal liability for federal income tax. (Id.) Tucker concedes that the federal employment tax liens securing her income tax liability continue to attach to her exempt property, including her personal residence in spite of the bankruptcy discharge. (Id.; Ct. R., Doc. 14, p. 2.) The United States seeks to foreclose its tax liens against Tucker's residence in order to sell the property and apply the proceeds in satisfaction of Tucker's tax liability. (Id., p. 2.) The United States asserts that Tucker is personally liable for the unpaid federal employment tax liability for the fourth quarter of 1988, which was assessed after the bankruptcy case, and seeks a personal judgment against her for the amount of that debt. (Id.)
The Internal Revenue Service [IRS] made assessments against Tucker for federal income taxes in the years 1987-90. (Id, Exh. A.) The assessment, made in 1991, includes an unpaid balance of $29,966.96 for the tax period ending December 31, 1987; of $36,319.02 for the tax period ending December 31, 1988; of $54,843.65 for the tax period ending December 31, 1989; and of $57,331.04 for the tax period ending December 31, 1990. (Compl., Exh. A.) These figures do not include any statutory additions accruing from the dates of assessment. In addition, the United States concedes that any assessment made against Tucker for federal income tax liability for the year 1997 has been satisfied. (Id., Exh. C.) The United States Bankruptcy Court held that Tucker's personal federal income tax liability for the period including the years 1987-1990 was not excepted from the discharge granted her under 11 U.S.C. § 727 of the Bankruptcy Code. (Id., Exh. B.)
On March 13, 1989, the IRS made an assessment against Tucker for her unpaid employment tax liability for the quarter ending December 21, 1988. (Id., Exh. D.) The balance of the employment tax liability as of March 25, 2005, was $2,638.33, which does not include statutory additions accruing from March 25, 2005, until the date of judgment in this case. (Id., Exh. E.)
According to the United States, under 26 U.S.C. §§ 6321 and 6322 of the Internal Revenue Code of 1986, liens for unpaid federal taxes, including Tucker's federal income tax liability for the years 1987-1990, inclusive, arose on the dates of assessment in favor of the United States and attached to all property and rights to property belonging to Tucker, which included her residence located at 309 Jamaica Drive, Ocean Springs, Mississippi in Jackson County, Mississippi. (Summ. J. Mot., p. 4.) Notices of federal tax lien were filed with the Chancery Clerk of Jackson County, Mississippi. (Id., Exhs. G-L.)
The Mississippi State Tax Commission [MSTC] has a lien against Tucker, and admitted that the notice of federal tax income tax liability for the years 1987-1990, inclusive, has priority over its lien. (Ct. R., Doc. 8, MSTC Ans., ¶ 6.) The MSTC alleges that its tax lien recorded September 2, 1997, securing Tucker's 1990 state tax liability has priority over the notice of federal tax lien for Tucker's 1997 federal income tax liability, which the United States does not dispute.
The property, purchased by Tucker and her husband, Samuel L. Tucker, on or about July 22, 1986, is described as follows:
Lot 132, MAGNOLIA PARK ESTATES, according to a map of plat thereof on file and of record in the office of the Chancery Clerk of Jackson County, Mississippi, in Plat Book 13 at Page 9.
(Ct. R., Doc. 21, Exh. M.) Sam Tucker conveyed all interest in the rights to the subject property by Quitclaim deed to Marion Tucker on August 13, 1997, and recorded on August 29, 1997. (Id., Exh. N.)
The United States seeks to enforce its federal tax liens against Tucker's residence in partial satisfaction of her 1987-1990, inclusive, federal income tax liability. (Ct. R., Doc. 21, p. 7.) Although the United States does not seek a judgment against Tucker personally for any balance remaining on the federal income tax liability, if any, after the sale of the residence because she was granted a discharge pursuant to 11 U.S.C. § 727, it seeks a judgment against Tucker personally for her unpaid 1988 federal employment tax liability, which was not discharged in bankruptcy. (Id.) The United States argues that under federal law, if a taxpayer fails to pay any assessed tax liability, the amount of the liability shall be a lien in favor of the United States on all of the taxpayer's property and rights to property, whether real or personal. (Id.) The lien arises at the time an assessment is made and continues until liability is satisfied or becomes unenforceable by reason of lapse of time. (Id.) The United States contends that once a federal tax lien attaches to a taxpayer's property, the lien is entitled to priority over all competing claims to the property, unless otherwise provided by federal law. (Id., p. 8.) The federal tax liens for Tucker's unpaid federal income tax liability are entitled to priority over the liens of the MSTC, according to the United States. (Id.)
The City of Ocean Springs, Mississippi, [City] sold the Tucker residence to Hounds, Inc., [Hounds] on August 27, 2003, to collect Tucker's unpaid ad valorem taxes for fiscal year 2000. (Ct. R., Docs.5,9, p. 2.) Hounds has not responded to the complaint in this action. (Ct. R., Doc. 22.) The United States contends that the federal tax liens also have priority over the claims of Hounds. (Id.) The federal tax liens securing Tucker's federal income tax liability were recorded in 1991, prior to the 1993 purchase of the property by Hounds. (Ct. R., Doc. 21, p. 9.)
As of the dates of assessment, the unpaid balance of Tucker's federal income tax liability, totaled $178,460.67, plus interest and statutory additions as provided by law. (Id.) The United States asserts that Tucker does not dispute the validity or amount of the tax assessments. (Id.) The United States agrees with Tucker that the federal tax liens securing Tucker's federal income tax liability constitute in rem liability only. (Id.) Tucker conceded that the federal tax liens survived her personal bankruptcy discharge and continue to encumber her residence as property exempted from her bankruptcy estate. (Id.) The United States maintains that it is entitled to foreclose its federal tax liens securing Tucker's federal income tax liability against her residence. (Id.) The United States seeks an order to sell the property at public auction, and after payment of the expenses of sale and any outstanding ad valorem taxes to Jackson County, Mississippi, if any, to pay the remaining proceeds toward Tucker's federal income tax liability for the tax years 1987-1990, inclusive. (Id., pp. 9-10.)
Regarding Tucker's federal employment tax liability for the quarter ending December 1988, the United States asserts that it is entitled to a personal judgment against Tucker. (Id., p. 10.) According to the United States, Tucker brought forward no facts to overcome the presumption raised by the tax assessment, thus entitling the United States to a judgment against her for $2,638.33, the amount of her unpaid employment tax computed through March 25, 2005, plus statutory additions accruing from that date until entry of judgment and pursuant to law. (Id.)
The MSTC answered the motion for summary judgment in agreement with the United States' position in this case in regard to the foreclosure on the Tucker property and payment of Tucker's federal income tax liability. (Ct. R., Doc. 26.) The MSTC seeks to have any remaining proceeds entered into the registry of the court for disbursement pursuant to the Court's determination of the priorities of the liens and claims of other lien holders, if any, in this case. (Id.)
The United States also filed a motion for Order of Sale of the Tucker property. (Ct. R., Doc. 27.) No response is available from any of the Defendants, other than the MSTC. (Ct. R.) In fact, the United States sought entry of default against the City and Hounds, because these two Defendants have not answered the complaint in this case, although each Defendant acknowledged service of process. (Ct. R., Doc. 22.)
Summary judgment should be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). The party moving for summary judgment bears the initial burden of informing the Court of the basis for its motion, and identifying those portions of the record, which it believes demonstrate the...
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