United States v. Goldberg
| Decision Date | 09 March 2018 |
| Docket Number | Case No. 15-CV-5746 |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. RONALD M. GOLDBERG, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
OPINION AND ORDER
The United States of America (the "United States" or "Government") brings this action against Defendant Ronald M. Goldberg ("Goldberg") pursuant to 26 U.S.C. § 7405(b), seeking to recover what it claims was an erroneous tax refund issued to Goldberg in the amount of $276,658.39. Before the Court is the United States' motion for summary judgment. For the reasons that follow, the motion is granted.
On September 29, 2004, the Internal Revenue Service ("TRS") assessed a deficiency in tax against Goldberg in the amount of $507,342.00 for the 1994 income tax year. The IRS also assessed $522,020.09 in interest against Goldberg, representing the amount of interest accrued on the additional tax since April 15, 1995, the original due date of the 1994 return. In 2006, Goldberg filed a petition in the United States Tax Court (the "Tax Court") seeking abatement of the interest that had accrued since April 15, 1995. On June 19, 2013, the Tax Court entered a final order granting Goldberg an abatement of interest under Internal Revenue Code ("I.R.C.") § 6404 for the ninety-day period between December 12, 2000 and March 12, 2001, totaling $18,489.26. See Plaintiff's Statement of Material Facts ("Pl.'s SOMF"), Ex. 5, Goldberg v. Commissioner of Internal Revenue, Case No. 23259-06 [hereinafter "Tax Court Decision"]; see also Pl.'s SOMF, Ex. 1 ¶ 21(a). Goldberg did not appeal or otherwise challenge the Tax Court Decision.
On September 13, 2013, the United States Treasury issued a tax refund check to Goldberg in the amount of $276,658.39 (the "Check") for the 1994 tax year. On September 23, 2013, Goldberg cashed or deposited the Check into his bank account. At the time that Goldberg cashed or deposited the Check he had an unpaid balance due for the 1994 tax year in the amount of $288,568.75 for taxes, penalties, and interest. The Declaration of IRS Revenue Officer Alex Porrata ("Porrata") states that the entire amount of the Check issued to Goldberg was the result of erroneous adjustments made to Goldberg's account by an IRS employee who was attempting to implement the Tax Court Decision. Pl.'s SOMF, Ex. 1 ¶ 18.
On October 15, 2014, the IRS sent Goldberg a letter stating that he had received Pl.'s SOMF, Ex. 3 ¶ 21. On December 10, 2014, the IRS sent Goldberg a letter stating that Id. ¶ 23. On March 30, 2015, the IRS sent Goldberg a letter stating that "the amount owed back to the government for [the] erroneous refund is $263,821.23." Id. ¶ 26. Goldberg received these letters but did not comply with the IRS's demand.
On June 29, 2015, the United States commenced this suit to recover monies it claims were erroneously refunded to Goldberg. The United States claimed in its original Complaint that the amount erroneously refunded to Goldberg was $251,726.24. On September 15, 2016, theUnited States filed its First Amended Complaint, claiming that the amount erroneously refunded was the full amount of the Check, $276,658.39.
On June 2, 2017, the United States filed its motion for summary judgment presently before the Court. On June 26, 2017, Goldberg filed a motion to extend the briefing schedule for the United States motion for summary judgment. On June 28, 2017, Goldberg filed a motion to stay proceedings until the resolution of the appeal in a related case. Goldberg v. United States of America, Case No. 16-3032 (7th Cir). The Court's June 29, 2017 Order granted Goldberg's motion to stay and extended the briefing schedule, such that Goldberg's response was due on or before July 5, 2017. Goldberg failed to comply with briefing schedule set forth in the Court's June 29, 2017 Order, and as of the date of this Order, he has failed to file his response.
In Case No. 16-3032, Goldberg appealed the Court's July 1, 2016 Order in Goldberg v. United States of America, Case No. 15-CV-8879, in which the Court dismissed his claims against the United States with prejudice. In Case No. 15-CV-8879, Goldberg claimed that the IRS had wrongfully assessed additional taxes against him for the 1994 tax year—the same assessment of taxes involved in the instant case. In its July 1, 2016 Order, the Court concluded that it lacked jurisdiction to hear Goldberg's claim for a refund brought under 26 U.S.C. § 7422 because he failed to exhaust the administrative process for claiming a refund before filing suit. Goldberg, Case No. 15-CV-8879, Dkt. 32. The Court also concluded that Goldberg failed to state a viable claim under § 7433 because the statute provides a remedy only for wrongful actions in connection with the collection of taxes, not the wrongful assessment of taxes as alleged by Goldberg. Id.
On January 31, 2018, the Seventh Circuit affirmed the Court's July 1, 2016 Order dismissing Goldberg's claims. Goldberg, Case No. 16-3032. On February 2, 2018, the UnitedStates filed a motion to lift the stay in the instant case. On February 21, 2018, the Court granted the United States" motion to lift the stay.
"Summary judgment is appropriate when 'the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Northfield Ins. Co. v. City of Waukegan, 701 F.3d 1124, 1128 (7th Cir. 2012) (quoting Fed. R. Civ. P. 56(a)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Wells v. Coker, 707 F.3d 756, 760 (7th Cir. 2013) (internal quotation marks and citation omitted). "On summary judgment a court may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder." Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). The Court must view "the record in the light most favorable to the nonmovant and [avoid] the temptation to decide which party's version of the facts is more likely true." Id.
As an initial matter, the Court addresses Goldberg's failure to respond to the United States' motion for summary judgment. Local Rule 56.1(a)(3) provides that a party moving for summary judgment must serve and file "a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law." Local Rule 56.1(b)(3) provides that a party opposing a motion for summary judgment must serve and file "a concise response to the movant's statement" of material facts.Local Rule 56.1(b)(3) further provides that "[a]ll material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party."
The Seventh Circuit has repeatedly upheld the provisions set forth in Local Rule 56.1(b)(3), holding that when a "party opposing summary judgment fails to respond to the facts set out by the movant, the court may assume those facts to be admitted and use them in determining whether the movant is entitled to judgment as a matter of law." LaSalle Bank Lake View v. Seguban, 54 F.3d 387, 389 (7th Cir. 1995); see also Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009) . However, an opposing party's silence—in failing to respond to the movant's statement of material facts—must "be weighed in light of other evidence rather than leading directly and without more to the conclusion of guilt or liability." Seguban, 54 F.3d at 391 (emphasis in original).
Here, the United States has filed its Local Rule 56.1 Statement of Material Facts and Goldberg has failed to file his response. Thus, the Court deems as admitted the facts set forth by the United States. Following the Seventh Circuit's direction in Seguban, the Court proceeds with its analysis as to whether these facts, in light of other evidence, entitle the United States to judgment as a matter of law.
Section 7405 of the Internal Revenue Code provides that "[a]ny portion of a tax imposed by this title which has been erroneously refunded...may be recovered by civil action brought in the name of the United States." 26 U.S.C. § 7405(b). Section 7405 codifies the common lawright of the United States to recover "money wrongfully or erroneously paid from the public treasury." U.S. v. Wurts, 303 U.S. 414, 416 (1938) (). To prevail on an erroneous refund claim, the Government must show: (1) that a refund was paid to the taxpayer, (2) the amount of the refund, (3) the Government's action is timely, and (4) the taxpayers were not entitled to the refund which the Government seeks to recover. United States v. Commercial Nat. Bank of Peoria, 874 F.2d 1165, 1169 (7th Cir. 1989). The Government's action under § 7405 is timely when "such suit is begun within 2 years after the making of such refund," but the suit may be brought at any time within five years of the making of such refund "if it appears...
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