United States v. Urioste

• Decision Date: 12 January 2017
• Docket Number: Case No.: 4:15-CV-1787-VEH
• Citation: United States v. Urioste, Case No.: 4:15-CV-1787-VEH (N.D. Ala. Jan 12, 2017)
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. FELIX URIOSTE, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

UNITED STATES OF AMERICA, Plaintiff, v. FELIX URIOSTE, et al., Defendants.

Case No.: 4:15-CV-1787-VEH

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA MIDDLE DIVISION

January 12, 2017

MEMORANDUM OPINION AND ORDER

I.Procedural Background

Plaintiff United States filed this federal tax lien enforcement action against numerous Defendants¹ on October 13, 2015, pursuant to 26 U.S.C. § 7403.²(Doc. 1).The suit pertains to the outstanding tax liability of the deceased taxpayer-Michael A. Urioste(the "Taxpayer")-and his single-member limited liability company-Salrecon LLC ("Salrecon").

Pending before the court are Plaintiff's Motion for Summary Judgment(Doc. 35)(the "Motion") and attached evidentiary materials, all of which were filed on July 13, 2016.The Motion seeks summary judgment against the Urioste Defendants-Felix Urioste, Michael A. Urioste, Jr., Mary D. Urioste, and Alabama Scrap and Salvage, LLC("Alabama Scrap").(Id. at 1-2).More specifically, Plaintiff seeks an order authorizing it to foreclose upon certain property owned by the Taxpayer to satisfy "unpaid federal income tax liabilities for 2002 through 2006, as well as [Salrecon's] unpaid federal employment and unemployment tax liabilities . . . incurred . . . between 2002 and 2007[.]"(Doc. 35at 3).Plaintiff also asks the court to issue an order requiring the Taxpayer's personal representatives to provide an inventory of the deceased's estate.

The Urioste Defendants opposed the Motion on August 8, 2016(Docs. 41, 42), and Plaintiff followed with its reply (Doc. 43) on August 22, 2016.For the reasons discussed below, the Motion is GRANTED.

II.Summary Judgment Standard

Summary judgment is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.FED. R . CIV. P. 56(a).All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant.SeeFitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115(11th Cir.1993)(instructing that "district court should resolve all reasonable doubts about the facts in favor of the non-movant, and draw all justifiable inferences in his [or its] favor"(internal quotation marks omitted)(quotingUnited States v. Four Parcels of Real Property, 941 F.2d 1428, 1438(11th Cir.2006)(en banc))).A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d. 202(1986).When, such as here, the moving party is the plaintiff, satisfying this initial Rule 56 burden means "affirmatively . . . support[ing] its motion with credible evidence ....[and] show[ing] that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party."Fitzpatrick, 2 F.3d at 1115(citations and internal quotation marks omitted)(emphasis in original)(quotingFour Parcels, 941 F.2d at 1438).Only "[o]nce the moving party has properly supported its motion for summary judgment, [does] the burden shift[] to the nonmoving party to'come forward with specific facts showing that there is a genuine issue for trial.'"International Stamp Art, Inc. v. U.S. Postal Serv., 456 F.3d 1270, 1274(11th Cir.2006)(quotingMatsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538(1986)).

III.Factual Background³

Felix Urioste is the Taxpayer's father and a duly appointed personal representative of the Taxpayer's estate.AFNo. 1.⁴Michael A. Urioste, Jr. is the Taxpayer's son and also a duly appointed personal representative of the Taxpayer's estate.AFNo. 2.The Taxpayer's Last Will and Testament names Felix Urioste, Michael A. Urioste, Jr., and Mary D. Urioste as heirs to the deceased's estate.AFNo.3.

Alabama Scrap is a limited liability company organized under the laws of Alabama.AF No 4.Alabama Scrap is a salvaging and recycling business located in Gadsden, Alabama.(Doc. 42at 5).⁵Michael A. Urioste, Jr.-the Taxpayer's son-formed Alabama Scrap on April 25, 2006, and is its sole member.AFNo. 5;(Doc. 42at 5).Alabama Scrap's articles of organization were recorded in the public records of Etowah County, Alabama, on April 26, 2006.AFNo. 6.

Taxpayer's Individual Income Tax Assessments

For tax years 2002 through 2006, the Taxpayer filed Forms 1040-individual income tax returns-reporting the individual income taxes he owed (AFNo. 7) but did not remit payment of the individual income tax liabilities reported on his federal income tax returns.AFNo. 8.A delegate of the Secretary of the Treasury issued assessments against the Taxpayer on various dates for these delinquent individual tax payments, plus interest and applicable penalties.

TAX

ASSESSMENT

TYPE OF ASSESSMENT

AMOUNT

2002

8/7/2006

Tax Owed Per Return

$86,164.00

Penalty for Filing Return Late

$19,386.90

Penalty for Failure to Pay Tax

$17,232.80

Interest

$20,580.26

5/14/2007

Penalty for Failure to Pay Tax

$4,308.20

10/27/2014

Interest

$33,523.08

2003

9/4/2006

Tax Owed Per Return

$104,370.00

Estimated Tax Penalty

$2,692.88

Penalty for Filing Return Late

$23,483.25

    Penalty for Failure to Pay Tax  $15,133.65  Interest  $19,540.76  5/14/2007  Penalty for Failure to Pay Tax  $6,784.05  10/27/2014  Interest  $49,925.67  2004  11/13/2006  Tax Owed Per Return  $133,394.00  Estimated Tax Penalty  $3,655.00  Penalty for Filing Return Late  $30,013.65  Penalty for Failure to Pay Tax  $12,672.43  Interest  $18,958.82  5/14/2007  Penalty for Failure to Pay Tax  $6,669.70  10/27/2014  Interest  $59,455.72  2005  2/4/2008  Tax Owed Per Return  $52,892.00  Estimated Tax Penalty  $2,121.58  Penalty for Filing Return Late  $11,900.70  Penalty for Failure to Pay Tax  $5,818.12  Interest  $9,343.16  10/24/2011  Penalty for Failure to Pay Tax  $3,491.46  10/27/2014  Interest  $12,820.75  2006  2/9/2009  Tax Owed Per Return  $23,644.00  Estimated Tax Penalty  $1,119.00  Penalty for Filing Return Late  $5,319.90  Penalty for Failure to Pay Tax  $1,655.08  Interest  $3,772.15  10/24/2011  Penalty for Failure to Pay Tax  $4,255.92  10/27/2014  Interest  $8,118.84 

AFNo. 9.

A delegate of the Secretary of Treasury properly gave the Taxpayer notice of the unpaid tax described in AFNo. 9 and demanded payment.AFNo. 10.Despite notice and demand for payment, the individual income taxes, penalties, and interest assessed against the Taxpayer for tax years 2002 through 2006 remain unpaid.AFNo. 11.

Salrecon's Employment and Unemployment Tax Assessments

Salrecon is a limited liability company organized under the laws of Delaware.AFNo. 12.The Taxpayer was the sole member of Salrecon and elected to treat Salrecon as a sole proprietorship for tax purposes.AFNo. 13.Salrecon filed Forms 941-quarterly federal employment tax returns-reporting employment taxes it incurred during the quarterly tax periods ending on September 30, 2002; March 31, 2003; June 30, 2003; September 30, 2003; December 31, 2003; June 30, 2004; September 30, 2004; December 31, 2004; March 31, 2005; June 30, 2005; September 30, 2005; December 31, 2005; March 31, 2006; June 30, 2006; December 31, 2006; March 31, 2007; March 31, 2008; June 30, 2008; and September 30, 2008.AFNo. 14.Salrecon did not remit payment of the reported employment tax liabilities for any of the foregoing quarterly periods.AFNo. 15.

On the dates and in the amounts described in the table below, a delegate of the Secretary of the Treasury assessed against Salrecon the employment taxes reported on its returns, plus interest and applicable penalties.

TAX

PERIOD

ASSESSMENT

DATE

TYPE OF ASSESSMENT

AMOUNT

9/30/2002

2/24/2003

Tax Owed Per Return

$64,568.60

Penalty for Filing Return Late

$2,905.59

Federal Tax Deposit Penalty

$6,456.86

Penalty for Failure to Pay Tax

$1,291.37

    Interest  $1,195.33  3/31/2003  Federal Tax Deposit Penalty  $3,228.43  3/31/2003  7/7/2003  Tax Owed Per Return  $35,238.62  Federal Tax Deposit Penalty  $2,095.21  Penalty for Failure to Pay Tax  $15.00  Interest  $9.36  8/11/2003  Federal Tax Deposit Penalty  $50.00  6/30/2003  10/20/2003  Tax Owed Per Return  $34,689.90  Penalty for Filing Return Late  $1,181.01  Federal Tax Deposit Penalty  $2,694.86  Penalty for Failure to Pay Tax  $393.67  Interest  $290.80  11/24/2003  Federal Tax Deposit Penalty  $1,312.24  9/30/2003  11/05/2007  Tax Owed Per Return  $53,290.67  Penalty for Filing Return Late  $11,990.40  Federal Tax Deposit Penalty  $5,329.07  Penalty for Failure to Pay Tax  $13,056.21 TAXPERIOD ASSESSMENTDATE TYPE OF ASSESSMENT AMOUNT    Interest  $18,918.15  12/10/2007  Federal Tax Deposit Penalty  $2,664.53  12/31/2003  5/10/2004  Tax Owed Per Return  $40,331.75  Penalty for Filing Return Late  $1,814.93  Federal Tax Deposit Penalty  $4,033.17  Penalty for Failure to Pay Tax  $804.60  Interest  $508.42  6/14/2004  Federal Tax Deposit Penalty  $2,009.82  6/30/2004  10/11/2004  Tax Owed Per Return  $53,077.35  Federal Tax Deposit Penalty  $1,806.54  Penalty for Failure to Pay Tax  $225.15  Interest  $123.11  11/15/2004  Federal Tax Deposit Penalty  $750.50  9/30/2004  2/28/2005  Tax Owed Per Return  $47,232.31  Federal Tax Deposit Penalty  $4,717.10  Penalty for Failure to Pay Tax  $943.42  Interest  $780.68  4/4/2005  Federal Tax Deposit Penalty  $2,358.56  12/31/2004  4/4/2005  Tax Owed Per Return  $39,523.55  Federal Tax Deposit Penalty  $3,952.34  Penalty for Failure to Pay Tax  $592.85 

    Interest  $346.92  5/9/2005  Federal Tax Deposit Penalty  $1,976.18  3/31/2005  7/4/2005  Tax Owed Per Return  $34,423.08  Federal Tax Deposit Penalty  $3,442.30  Penalty for Failure to Pay Tax  $516.35  Interest  $369.75  8/8/2005  Federal Tax Deposit Penalty  $1,721.15  6/30/2005  6/4/2007  Tax Owed Per Return  $34,738.28  Penalty for Filing Return Late  $7,816.11  Federal Tax Deposit

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