Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:07-cv-00350-CCM

Document 31-2

Filed 04/16/2008

Page 1 of 5

______________________________________________________________________________ ______________________________________________________________________________ IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________ Nos. 07-350 T & 07-351 T (Judge Christine O.C. Miller) J. CARDENAS & SONS FARMING, INC., JUAN CARDENAS AND GRACIELA CARDENAS, AND RIO VISTA CORPORATION, JUAN CARDENAS AND GRACIELA CARDENAS, Plaintiffs, v. THE UNITED STATES, Defendant. __________ REPLY OF THE UNITED STATES IN SUPPORT OF ITS MOTION TO DISMISS IN PART PLAINTIFFS' SECOND AMENDED COMPLAINT __________ NATHAN J. HOCHMAN Assistant Attorney General DAVID GUSTAFSON JENNIFER DOVER SPRIGGS Attorneys Justice Department (Tax) Court of Federal Claims Section P.O. Box 26 Ben Franklin Post Office Washington, D.C. 20044 (202) 307-0840 (202) 514-9440 (facsimile)

Case 1:07-cv-00350-CCM

Document 31-2

Filed 04/16/2008

Page 2 of 5

INDEX Page Reply of the United States in support of its motion to dismiss in part plaintiffs' second amended complaint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Argument: Plaintiffs failed to meet their burden of establishing jurisdiction . . . . . . . . . . . . . . . . . . . 6 A. Plaintiffs have not shown that they made the payments on which their jurisdictional argument depends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Undesignated tax payments may be applied by the Internal Revenue Service to the Government's best interest . . . . . . . . . . . . . . . . . . . . . . . . . 7 Plaintiffs do not dispute that the amount sought by Rio Vista in its claim for refund for the 1993 tax year was previously abated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The civil penalty imposed on the Cardenases under I.R.C. § 6672 is separate and distinct from the employment tax liability imposed on Rio Vista and Cardenas & Sons pursuant to I.R.C. §§ 3101-3102 & 3401-3403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

B.

C.

D.

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

-i-

Case 1:07-cv-00350-CCM

Document 31-2

Filed 04/16/2008

Page 3 of 5

Page

CITATIONS Cases:

Bolding v. United States, 215 Ct. Cl. 148, 565 F.2d 663 (1977) . . . . . . . . . . . . . . . . . . . 10 Buffalow v. United States, 109 F.3d 570 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Burack v. United States, 198 Ct. Cl. 855, 461 F.2d 1282 (1972) . . . . . . . . . . . . . . . . . . 10 Dallin ex rel. Estate of Young v. United States, 62 Fed. Cl. 589 (2004) . . . . . . . . . . . 7, 11 Donahue v. United States, 33 Fed. Cl. 600 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Farris v. United States, 4 Cl. Ct. 633 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Feist v. United States, 221 Ct. Cl. 531, 607 F.2d 954 (1979) . . . . . . . . . . . . . . . . . . . . . 10 Forestry Surveys v. United States, 44 Fed. Cl. 485 (1999) . . . . . . . . . . . . . . . . . . . . . . . . 6 Gens v. United States, 222 Ct. Cl. 407 (1980), cert. denied, 459 U.S. 906 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Godfrey v. United States, 748 F.2d 1568 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . 10 Hewitt v. United States, 377 F.2d 921 (5th Cir. 1967) . . . . . . . . . . . . . . . . . . . . . . . . . 7,8 Holland v. United States, 57 Fed. Cl. 540 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Howard v. United States, 711 F.2d 729 (5th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . 11 McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936) . . . . . . . . . . . . . . . . . 6 Muntwyler v. United States, 703 F.2d 1030 (7th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . 7 Otte v. United States, 419 U.S. 43 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Raymark Industries, Inc. v. United States, 15 Cl. Ct. 334 (1988) . . . . . . . . . . . . . . . . . . . 6 Page - ii -

Case 1:07-cv-00350-CCM

Document 31-2

Filed 04/16/2008

Page 4 of 5

Cases (continued):

Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746 (Fed. Cir. 1988) . . . . . . . . . . . 6 RHI Holdings, Inc. v. United States, 142 F.3d 1459 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . 6 Rocovich v. United States, 933 F.2d 991 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . 6,7 Scott v. United States, 173 Ct. Cl. 650, 354 F.2d 292 (1965) . . . . . . . . . . . . . . . . . . . . . 10 Skillo v. United States, 68 Fed. Cl. 734 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Slodov v. United States, 436 U.S. 238 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 United States v. Huckabee Automobile Co., 783 F.2d 1546 (11th Cir. 1986) . . . . . . . . . 11 United States v. Newport News Shipbuilding & Dry Dock Co., 933 F.2d 996 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 United States v. Schroeder, 900 F.2d 1144 (7th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . 8 White v. United States, 178 Ct. Cl. 765, 372 F.2d 513 (1967) . . . . . . . . . . . . . . . . . . . . 10

Statutes: Internal Revenue Code of 1986 (26 U.S.C.): §§ 3101-3102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 §§ 3401-3403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 10 § 6532 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 § 6672 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 9-12

- iii -

Case 1:07-cv-00350-CCM

Document 31-2

Filed 04/16/2008

Page 5 of 5

Page Miscellaneous: RCFC 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Rev. Proc. 2002-26, § 2, 2002-1 C.B. 746 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

- iv -