United States v. Washington

Decision Date01 March 1966
Docket NumberCiv. A. No. 3259.
Citation251 F. Supp. 359
PartiesUNITED STATES of America, Plaintiff, v. Othello WASHINGTON et al., Defendants.
CourtU.S. District Court — Eastern District of Virginia

Claude V. Spratley, Jr., U. S. Atty., Norfolk, Va., Robert A. Maloney, Dept. of Justice, Washington, D. C., for plaintiff.

Werner Strupp, Washington, D. C., Whitford W. Cheston, Fairfax, Va., of counsel, for Othello and Ellen P. Washington.

Cocke & Taylor, Norfolk, Va., for Metropolitan Life Ins. Co.

OREN R. LEWIS, District Judge.

This is a civil action brought by the United States to enforce its lien for delinquent federal wagering excise taxes (Title 26, United States Code, § 4401) and to obtain a deficiency judgment against the defendant, Othello Washington.

The Government prays that the Court determine the merits of all claims to and liens upon certain real estate owned by the defendant, Othello Washington, and to decree the sale of the said property and a distribution of the proceeds in accordance with the Court's determination respecting the priority and rights of the parties herein.

It was stipulated by the parties that the record title to the land in question, known as the Old Thrift Farm in Loudoun County, Virginia, is recorded in the name of the defendant, Othello Washington, subject to the prior lien of the Metropolitan Life Insurance Company and to the dower interest of Ellen P. Washington, the wife of the said Othello Washington, and that the wife's dower right and the Metropolitan lien are both superior to the Government's tax lien.

The matters in dispute here are the amount of the tax lien—whether the tax lien bears interest beyond the date of the recordation of the lien—whether the Government is entitled to the fifty per cent fraud penalty—and whether the subject real estate should be sold free and clear of all liens and encumbrances or whether it should be sold subject to the wife's dower.

The Government recorded a tax lien for $252,580.64 against Othello Washington in the Clerk's office of Loudoun County, Virginia, on August 11, 1961. This lien included a fifty per cent fraud penalty plus interest computed to August 10, 1961.

The evidence introduced at the hearing discloses that Internal Revenue agents raided the Old Thrift Farm located in Loudoun County, Virginia, on May 2, 1961 and there found a numbers operation then being maintained and operated by the defendant, Othello Washington, and one Charles Anderson. Numerous records were then seized covering the gambling operations for the days April 28th and 29th and May 1st and 2nd of 1961, and the keep-in bets from August of 1960 to May of 1961. These records were used by the Commissioner in determining the amount of tax due by the defendant.

These records disclosed average daily bets for the four days of $5,822.21. The keep-in bets for the period August 1960 to May 1961 totaled $13,539.55. The keep-in bets for May 1st and 2nd averaged $631.87. The keep-in bets for the month of April averaged $310.90 per day. The keep-in bets for the four-day period (April 28-29, May 1-2) averaged $471.19 per day.

The Commissioner determined the tax due by adding the average of the two-day keep-ins ($631.87) to the average ($5,822.21) of the four-day daily bets and multiplied this sum ($6,454.08) by 255, the number of days here involved.

Othello Washington admitted that he was engaged in the numbers business headquartered at his Loudoun County farm during the period in question and that he did not register,1 file any returns, or pay any tax on his gross business.

He denied the correctness of the Government's computation of his gross income, claiming that the numbers business is seasonal and that the four-day period used to compute the daily bets and the two-day period used to compute the keep-ins covered the peak period. He claimed the Government had his records disclosing the actual keep-in bets for the period in question. He estimated his average daily wagers to be $3,800.00. This figure was based solely on the best recollection of his gross business. He kept and maintained no permanent records and had none except those seized by the Government during the raid.

"It is a well established principle that in every case * * * the assessment of the Commissioner is presumed to be correct. To be sure, this presumption is not evidence in itself and may be rebutted by competent evidence. * * *" See Compton v. United States, 334 F.2d 212, 4th Cir. 19
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7 cases
  • Hamilton v. United States
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • November 14, 1969
    ...testify to the reasonableness of the projection. Similar computations have been accepted by various courts. See United States v. Washington, 251 F.Supp. 359 (E.D.Va.1966) affd., 402 F.2d 3 (4th Cir. 1968); Pinder v. United States, 330 F.2d 119 (5th Cir. 1964); Ginsberg v. United States, 67-......
  • Sciannameo v. Dath, 73 C 1842.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • April 9, 1974
    ...testify to the reasonableness of the projection. Similar computations have been accepted by various courts. See United States v. Washington, 251 F.Supp. 359 (E.D.Va.1966) affd., 402 F.2d 3 (4th Cir. 1968); Pinder v. United States, 330 F.2d 119 (5th Cir. 1964); Ginsberg v. United States, 67-......
  • Bremson v. United States, 78-0496-CV-W-2.
    • United States
    • United States District Courts. 8th Circuit. Western District of Missouri
    • August 31, 1978
    ...(S.D.N.Y.1969), aff'd 429 F.2d 427 (2d Cir. 1970), cert. den. 401 U.S. 913, 91 S.Ct. 881, 27 L.Ed.2d 812 (1971); United States v. Washington, 251 F.Supp. 359 (E.D.Va.1966), aff'd 402 F.2d 3 (4th Cir. 1968); O'Neill v. United States, 198 F.Supp. 367 ...
  • Washington v. United States
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • September 17, 1968
    ...judgment is affirmed. Affirmed in part, reversed in part, and remanded. 1 The district court's opinion is reported, United States v. Washington, 251 F.Supp. 359 (E.D.Va.1966). 2 In the instant case taxpayer, Othello Washington, did not raise the privilege against self-incrimination in the c......
  • Request a trial to view additional results

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