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

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Susan Rose, Utah Bar. No. 7985 ATTORNEY FOR THE PLAINTIFFS 9553 South Indian Ridge Drive Sandy, Utah 84092 Phone/fax (801) 545-0441 UNITED STATES COURT OF FEDERAL CLAIMS Danny C. Simons and Sally J. Simons Plaintiffs, vs. UNITED STATES OF AMERICA, Defendant. Case No. 06-115 Judge Susan Braden

REPLY TO THE U.S. RESPONSES TO PLAINTIFFS' MOTIONS TO DISQUALIFY AND TO USE RULE 56 AS A STANDARD FOR DISMISSAL

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The Plaintiffs reply to both U.S. responses, because the facts and law, will pertain to both, and judicial economy will be served. Plaintiffs are not waiving their motion for disqualification by doing so. It is Plaintiffs position that the U.S. responses provide no challenge to the Plaintiffs' case law and facts in support of disqualification and the use of a RCFC 56 summary judgment standard, as will be found below. The U.S. invites the Court to error regarding dismissal and denial of these motions, when it says res judicata is just a final ruling that this Court has no duty, right, or entitlement to examine for jurisdiction, when this Court's own jurisdiction is at stake, as found in Crnkovich and Christopher Village, among others. [1] Particularly, in light of the Supreme Court ruling giving these Plaintiffs and entitlement to relief. [ ] As an initial matter, In this case, Plaintiffs peacefully sought finality for the 1974 tax year, due to ongoing potential collection under IRC. 61, 108[ ] for a `forgiven debt [never owed] under an invalid 2001 alleged contract that never existed, from a 1992 U.S.Christopher Village L.P. v. United States, 360 F.3d 1319 (Fed. Cir. 03/08/2004)( citing to the Restatements of judgments, recognizing a collateral attack on judgments, when "[a]llowing the judgment to stand would substantially infringe the authority of another tribunal or agency of government." Id. 12(2) [citations omitted]" holding the District Court and Fifth Circuit Court had no subject matter jurisdiction over the Appellants claims, so as to prevent the Appellant from having access to the Court of Federal Claims.); United States v. United States Fidelity & Guaranty Co., 309 U.S. 506 (1940); Crnkovich v. United States, 202 F.3d 1325 (Fed. Cir. 02/01/2000) Dynes v. Hoover, 61 U.S. 65, 81, 82 (1857)( " civil courts have never failed, upon a proper suit, to give a party redress, who has been injured by a void process or void judgment .'"Id. emphasis added. "Where there is no jurisdiction over the subject matter, there is..no discretion to ignore ...lack of jurisdiction.") F.R.Civ.P.12(h)(3). Joyce v. U.S.,474 F.2d 215, 219 (3rd Cir. 1973). 3 "COD income," refers to income arising from a "discharge of indebtedness." See Alpert v. United States, 430 F. Supp. 2d 682, 685 n.1 (N.D. Ohio 2006). For tax purposes, a discharge of indebtedness is defined as "gross income." See 26 U.S.C. § 61(a)(12). "Forgiveness of debt is income because it frees up assets that the taxpayer previously had to dedicate toward repaying its obligations." Pugh v. Comm'r, 213 F.3d 1324, 1326-27 (11th Cir. 2000) (citations omitted). 1
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initiated (U.S. v. Simons 92cv1071) District Court having no jurisdiction whatsoever, to which the parties could not consent. [ ] Like, the Crnkoviches and Christopher Village, these Plaintiffs only humbly and respectfully requested one thing from this Court-- A fair and impartial hearing before a completely objective Court, as to their breach of a Tenth Circuit Court ratifified -1983 breach of a final closing agreement contract claims, that make the tax years 1972, 1973 and 1974 inseparable. [5] The government can not dispute that it has already argued a 1983 contract involving 1974 is binding on all parties.[6] Simons v. CIR,185 F.3d 875,84 A.F.T.R.2d 99, 1999.C10.42905 http://www.versuslaw.com. [7] Damages exceed $10,000 [8] involving specific facts as to
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Freytag v. Commissioner, 1991 U.S. LEXIS 3818,*49-50 ;501 U.S. 868 (J. Scalia, concurrence); Anderson v. Liberty Lobby, Inc., 477 U.S. at 247-48; Curtis v. United States, 144 Ct. Cl. 194, 199, 168 F. Supp. 213, 216 (1958), cert. denied, 361 U.S. 843 (1959), reh'g denied, 361 U.S. 941 (1960); Lubben v. Selective Serv. Sys. Local Bd. No. 27, 453 F.2d 645, 649 (1st Cir. 1972))( "A void judgment is to be distinguished from an erroneous one, in that the latter is subject only to direct attack. A void judgment is one which, from its inception, was a complete nullity and without legal effect. . . ..".). Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984). 5 The offer references a `package' settlement inseparable by year (Plt. App. 25-26), the District Counsel's decision says that all three years will be treated `together for purposes of settlement', (Plt. App. 28) and the IRS-drafted and Plaintiff approved Tax Court 155 computations (Plt. Ap. 16-21) represent an offer from the IRS approved by the Plaintiffs, or they could not be stipulated for both Tax Court decisions, as they were, and the U.S. never disputes in any Court. The mutually agreed stipulated computations are the agreement as to financial adjustments. Nothing mentioning interest. 6 The U.S. has never disputed that in their brief to the Tenth Circuit Court on Oct. 1, 1998, they successfully argued, "The long and short of the matter before this Court is that the stipulated decision is binding on the parties without regard to whether it is correct on the merits." Accord Stamm International Corp. v. Commissioner, 90 TC. 315, 321-322 (1988). " and argued that that stipulated decision was final. Simons v. CIR finds all the necessary components of a final closing agreement. "....the IRS issued a notice of deficiency relating to taxpayers' 1974 income taxes. The taxpayers filed a petition for redetermination with the Tax Court on July 13, 1979, disputing the notice of deficiency (Tax Ct. No. 79-10312). In 1980, the IRS issued another notice of deficiency, this time relating to taxpayers' 1972 and 1973 income taxes. Again, the 2
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fraud and mistake, as per RCFC at 9, with evidence incorporated into the Complaint, within the exclusive jurisdiction of the Federal Circuit Court (28 U.S.C. 1292) and the Court of Federal Claims (28 U.S.C. §§1346, 1491). The U.S. must agree. [9] Tax Court

taxpayers filed a petition for redetermination in Tax Court disputing the notice of deficiency (Tax Ct. No. 80-13016). During the course of the Tax Court proceedings, the taxpayers' counsel negotiated with the IRS to settle the disputed taxes. The record before us does not contain a copy of the settlement agreement ultimately reached between the taxpayers and the IRS, but it does contain some correspondence from the taxpayers' counsel concerning proposed terms of the settlement. On April 22, 1983, the Tax Court entered decisions in both cases, each of which purported to be "[p]ursuant to agreement of the parties." Tax Ct. Rec. No. 79-10312, Doc. 13 at 1; Tax Ct. Rec. No. 80-13016, Doc. 10 at 1. In No. 79-10312, the Tax Court found that the taxpayers owed additional taxes of $17,071 and a negligence penalty of $854 for tax year 1974. In No. 80-13016, the Tax Court found that the taxpayers owed no additional taxes or penalties for tax year 1972, but that they owed additional taxes of $23,573 and a negligence penalty of $1,179 for tax year 1973. The taxpayers allege that they sent the IRS a check for what they believed to be the total obligation due under their settlement agreement with the IRS for tax years 1973 and 1974. They further allege that the IRS erroneously applied the entire payment toward their 1973 tax obligations, plus interest. The IRS has since commenced proceedings in federal district court to collect the allegedly unpaid 1974taxobligation."
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For eight years the Appellant Mrs. Simons and her eight children were fearful of answering the door for fear armed treasury agents were coming to seize their home, and property, based on the numerous threats of such seizures, ECA, enforced collection action, by Rev. Officer Don Thurman (plt. Ap. 68-74). They had no ability to freely use bank accounts, real estate licenses, and develop and capitalize property holdings, from 1988 through at least 1995,with only IRS bad credit. One piece of property is valued at about $140 million dollars, not completely developed. 9 See, Tucker Acts 28 U.S.C. 28 U.S.C. § 1346(a)(2)), 28 U.S.C. § 1491, Department of Justice U.S. Attorney's manual "4-4.220 Federal Circuit Commercial Litigation Branch attorneys handle the majority of cases in the United States Court of Appeals for the Federal Circuit. The Federal Circuit possesses exclusive jurisdiction to entertain an appeal from a final decision of a district court if the jurisdiction of the district court is based "in whole or in part" on the Little Tucker Act. See 28 U.S.C. § 1295(a)(2); United States v. Hohri, 482 U.S. 64 (1987)." 47 Court of Federal Claims Litigation "Under the "Little Tucker Act," 28 U.S.C. § 1346, the district courts possess concurrent jurisdiction with the Court of Federal Claims to entertain any monetary claim against the United States for an amount not exceeding $10,000 .... When more than $10,000 is 3

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stipulated decisions are closing agreements, under contract law, with the finality of res judicata. [10] just like other contracts. [11] The damages exceed $10,000, with Appellants paying $300,000 as of about 1999, in legal fees/costs.[12] The failure of the U.S. to rebut the Plaintiffs' factual and legal assertions are material and significant, because the U.S. gives this Court no legally viable facts or law upon which to deny the motions for disqualification, reconsideration, or in the alternative for using a rule 56 motion for dismissal. (1) There is no U.S. rebuttal to the evidentiary unchallenged fact of full payment of the 1983 contract and untimely assessment, such that the U.S. had no standing, and thus, the District Court and Tenth Circuit court, no type of jurisdiction over the 1992 U.S.-initiated action, based on false claims of a debt, invalid assessment, and untimely notice and demand, among other statute violations by the U.S., [ ]
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claimed, the Court of Federal Claims possesses exclusive jurisdiction in these cases. 28 U.S.C. § 1491. Although the general rule is that jurisdiction is established at the time of filing, there is precedent that a claim which is for less than $10,000 when filed but is accruing so that it will be for more than $10,000 at the time of judgment is within the exclusive jurisdiction of the Court of Federal Claims. Goble v. Marsh, 684 F.2d 12 (D.C. Cir. 1982)...... E.g., Stone v. United States, 683 F.2d 449, 451 (D.C. Cir. 1982)." emphasis added 10 Anthony v. United States,987 F.2d 670(10th cir.1993), Hurt v. United States, 70 F.3d 1261(4th Cir.1995); Kurio v. U. S., 429 F. Supp. 42, 1970.STX.0000028 http://www.versuslaw.com 11 Rink v. Commissioner, 47 F.3d 168, 171 (6th Cir. 1995); Alexander v. United States, 44 F.3d 328, 332 (5th Cir. 1995). 12 For eight years the Appellant Mrs. Simons and her eight children were fearful of answering the door for fear armed treasury agents were coming to seize their home, and property, based on the numerous threats of such seizures, ECA, enforced collection action, by Rev. Officer Don Thurman (Aplt. Ap. 68-74). They had no ability to freely use bank accounts, real estate licenses, and develop and capitalize property holdings, from 1988 through at least 1995,with only IRS bad credit. One piece of property is valued at about $140 million dollars, not completely developed. 13 There exists (1) no I.R.C.§§ 6501, 6503, required timely assessment; 4

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from the beginning. [14] Nowhere is there any contradiction of these facts in the responses, representing a change in the government's position in this case, possibly due to the necessity of candor to the court, after more precise file review. (2) The U.S. is completely silent and fails to rebut the fact that the Plaintiffs' evidence shows the 2001 falls within the exception of the rule that an agreement will not be disturbed if there is "lack of actual consent, fraud in obtaining consent, lack of federal jurisdiction, or mistake are shown," U.S. v. Simons, Tenth Cir. 024201, Jan. 22, 2004 [unpublished] , and likewise, factually fails [ ]to meet the requirements of the Federal Circuit for government contract standards. [ ] The
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(2) no identification of the `statutory' interest to apply to their Tax Court decisions in the IRS drafted documents(Aplt. Ap. 12-21, 28-30), as required by policy and two Circuit Courts (IRM 8.7/1.1.2 and 35.10.7 and Anthony v. United States, 987 F.2d 670 (10th Cir. 1992) Hurt v. U. S. 70 F.3d 1261 (4th Cir. 1995))(ambiguities construed against the drafter); also, Kurio v. U. S., 429 F. Supp. 42, 1970.STX.0000028http://www.versuslaw.com ; (3) no timely written notice and demand for payment(Aplt. Ap. 100, 109, 110) (26 U.S.C. §6215, with no written notice of assessment (Aplt. Ap. 100) within 60 days thereafter. 26 U.S.C. §§6303, 6501, 6503); (4) no 26 U.S.C. §6321 prior written notice and demand (Aplt. Ap. 80) PRIOR notice of levy and liens, PRIOR to the levies and initial lien (Aplt. Ap. 81-84) (depriving them of any administrative appeal prior to the 1992 Court action); (5) no 26 U.S.C. §§6212, 6213 Notices of Deficiency for supplemental assessments Singleton v. U. S., (4th Cir. 1997) http://laws.findlaw.com/4th/961924p.html. 14 Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984) 15 Botany Worsted Mills v. United States, 278 U.S. 282, 289, 49 S.Ct. 129 (1929) ("it is stated that-`... The authority of officers of the United States to compromise claims on behalf of or against the United States is strictly limited. ... The statutes which authorize conclusive agreements and settlements to be made in particular ways and with the approval of designated officers raise the inference that adjustments or settlements made in other ways are not binding.') 16 City of Cincinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir. 1998))(' A binding implied-in-fact contract arises between a private party and the government upon proof by the person of: (1) mutuality of intent to contract; (2) consideration; (3) an unambiguous offer and acceptance, and (4) "actual authority" on the part of the government's representative to bind the government.") 5

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U.S. does not dispute the fact that these plaintiffs have never had a Court thoroughly examine the 1983 contract, as the District Court expressly stated it was doing, [ ] without allowing the Plaintiffs to supplement their evidentiary record [ ] as to the lack of the District Court's jurisdiction. See Broughton Lumber Co. v. Yeutter, 939 F.2d 1547, 1555 (Fed. Cir. 1991) (Thus, even if the issue is not properly raised, this the Tucker Act courts may consider all bases for the trial court's jurisdiction.) To say this Court can't second guess a District Court, denies the binding precedents of Crnkovich and Christopher Village and Broughton Lumber, [ ] that did precisely that, so as to protect this Court's jurisdiction under the Tucker Act. (3) The U.S. most significantly fails to produce any case law to show how the parties could consent to the District Court's void jurisdiction, fn. 4, [ ]based on, here, Undisputed and Unchallengeable evidence of false District Court claims of "..they want to work backwards all the way back to 1973 and '74 and 1983 and the Court is having none of it." Transcript of June 18, 2002 District Court Aplt. App. pg. 230 18 "....and under the circumstances that that was an inappropriate effort to increase the factual record or supplement the factual record which was, in any event, untimely." Transcript of March 21, 2001 Aplt. App. pg. 219. 19 Christopher Village L.P. v. United States, 360 F.3d 1319 (Fed. Cir. 03/08/2004)( citing to the Restatements of judgments, recognizing a collateral attack on judgments, when "[a]llowing the judgment to stand would substantially infringe the authority of another tribunal or agency of government." Id. 12(2) [citations omitted]" holding the District Court and Fifth Circuit Court had no subject matter jurisdiction over the Appellants claims, so as to prevent the Appellant from having access to the Court of Federal Claims.); United States v. United States Fidelity & Guaranty Co., 309 U.S. 506 (1940). 20 Kokkonen v. Guardian Life Ins., 511 U.S. 375 (1994). "Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, [citations omitted] which is not to be expanded by judicial decree, American Fire & Casualty Co. v. Finn, 341 U.S. 6 (1951)." Fafel v. DiPaola, 399 F.3d 403, 410 (1st Cir. 2005). ("A court without subject-matter jurisdiction may not acquire it by consent of the parties." ). 6
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statutory prerequisite requirements being met prior to bringing the 1992, so as to allow this Court to support a District Court final judgment which no parties supported, because there was no meeting of the minds [21] due to NO U.S. unequivocal acceptance (Id.) of a offer made under the duress of 12 years of untimely undisputedly withheld evidence not allowed into the record, NO material consideration,[ ] and a final judgment, to which the U.S. (Plt. App. 206206b) and Plaintiffs (Plt. App. 209-214) objected, showing `no actual consent', `no federal jurisdiction', `fraud' or `mistake', (U.S. v. Simons, supra, fn.4 supra) (4) The U.S. fails to produce any sound case law to rebut the Plaintiffs' cases for a 28 U.S.C. 455(a), (b) disqualification when (a) the Court, as here, has promised a fair and impartial hearing with a court transcriber, and then dismissed the claims breaking that promise, (b) when the Court has relieved the U.S. of any 26 U.S.C. 7194 burden, as did the District Court and Tenth Circuit, so as to avoid this Court's jurisdiction (Crnkovich, Christopher Village), (c) when the Court dismissed Plaintiffs complaint, piecemeal, by the Court's arbitrary discarding, de facto, excluding by `cherry picking' the Plaintiffs U.S.-Unchallenged, and unchallengeable evidence... actually incorporated within the complaint, going directly to supporting this Court's jurisdiction, and to a lack of jurisdiction of the District Court, and Tenth Circuit Court's jurisdiction... without so much as a single answer to the complaint or a single motion by the U.S. challenging any of the facts and evidence in the Complaint, placing the Court in a prohibited position
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Kurio v.U. S.,429 F.Supp.42,1970.STX.0000028 http://www.versuslaw.com Alaska Packers Assn. v. Domenico, 117 F. 99 (9th Cir. 1902).

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of advocacy for the U.S., (d) holding a hearing on the merits-- off the record, making such an unofficial hearing `ex parte' `personal' knowledge... while refusing Plaintiffs request to reconstruct the record, supporting 28 U.S.C. 455(b) mandatory disqualification (e) and the Court's statement that would draft an order in the U.S. behalf that day or immediately after the hearing off the record in January, 2007. (5) The U.S. never provides one case upon which the Court can rely, in light of the undisputed 1983 contract, to rebut the Plaintiffs' cases showing when questions of fact go to merits and jurisdiction, RCFC 56 is the standard, not 12. Nor does the U.S. explain how res judicata, for this Court, can be applied without questioning the jurisdiction of another Court who expressly states it was ruling against the Plaintiffs by avoiding the 1983 contract issue altogether, thus attempting to circumvent this Court's jurisdiction. Here, at no time, in ANY Court has there been one scintilla of credible evidence to show these Plaintiffs ever owed anything further after full payment in 1983 or that there was evidence of a timely valid assessment or written notice and demand that would provide the U.S. with standing in the District Court. For over a decade the Plaintiffs were denied the essential documents to show this fact, that is undisputed in these responses. All any Court had to do is simply ask for the credible evidence supporting the government claims, as mandated under IRC 7491, and the U.S. has none. Depriving the Plaintiffs of having the U.S. answer their complaint, and hearings on the record, going to the merits and to this Court's jurisdiction, as undisputed by the U.S. responses, deprives them of traditionally available adversarial tools, and the

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Appellate Court of an adequate reliable record upon which to rely, likewise, for these Plaintiffs to challenge. A closing agreement, to be valid, requires high-level approval, Urso v. United States, 72 F.3d 59, 60 (7th Cir. 1995), and the requirement would be undermined if after five years of silence after payment, the U.S. could (1) claim it meant something different by separating 1974 that was NEVER intended to be separated by the 1983 parties, (2) consistently make false claims as to these NOW RECOGNIZED Plaintiffs full payment and UNDISPUTED lack of valid assessments, and other Plaintiffs' claims, (3) violate nearly every Congressional protection for these Plaintiffs, and (4) profit by its own drafted ambiguities that do not identify with particularity the interest to be applied fn. 10, computer inadequacies, (5) profit from UNDISPUTED withholding evidence for over a decade disallowed as `untimely', fn.17, supra, denying the Problems Resolution person aid, (6) profit from the UNDISPUTED affirmative misrepresentation to the Plaintiffs and their counsel that their records were destroyed (Plt. Ap. 64), not available, (P. Ap. 163179), or that no consents for statute extensions for assessments had been signed by them (Plt. App. 137-138 compare 57-59), essential for calculating the assessment statute expiration date, (7) all the while the IRS and DOJ had open access to records and the REV. Officer even documents there are `no open issues on 1974" (P. App. 68), and that `restricted interest' applied on the account, not full statutory interest as the U.S. has been maintaining. (P. Aplt. 72). Without dispute, or answer by the U.S., the U.S. intentionally never timely assessed to accommodate a computer the Treasury Department has stated to Congress is absolutely incapable of calculating `restricted interest' (P. Aplt. 72), or issued collection

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notices for `closed' tax years. (P. App. 62a). See, http://www.ustreas.gov/offices/taxpolicy/library/t0neting.pdf at page 8-10. Congress absolutely demands that any burden shift to the government. Yet here, all courts for these Plaintiffs are oblivious to 26 U.S.C. §7491, res judicata of the 1983 contract, the Tucker Act, and due process required under 28 U.S.C. 455(a),(b), the bars of I.R.C. §§7121, 6215, in reality, for these Plaintiffs to have no meaning, or equal application in light of Crnkovich ,Christopher Village, and Broughton Lumber. Fn. 16. The Plaintiffs are not litigious, not `reneggers' on the 2001 non existant `deal' supported by evidence, as excluded by every Court to date without a formal U.S. challenge.. UnderDynes, supra, the Plaintiffs have an entitlement to the Court of Federal Claims assistance. Proceedings are verified under, ATTACHMENT A, under the Court of Appeals Federal Circuit Rule 10(b)(3) and this counsel's affidavit of proceedings. A complimentary copy of documents regarding the Federal Circuit Court, very coincidently, sua sponte proceedings, were served on this Court and opposing counsel. Based on the foregoing, the motion for disqualification and transfer of the case to another court should be granted. The Court is aware of the Federal Circuit proceedings, and that they are looking at the same questions. If no Court can provide relief under this 1983 contract, given all the statutory violations, perhaps the only remedy left to these Plaintiffs for their protection, peace and finality, will have to be a private bill through a Congressional act, after a thorough investigation. February 15, 2007 /s/ Susan Rose, Utah Bar. No. 7985 ATTORNEY FOR THE PLAINTIFFS 9553 South Indian Ridge Drive Sandy, Utah 84092

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ATTACHMENT A

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