Free Order on Motion to Dismiss Case - District Court of Arizona - Arizona

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IN THE UNITED S TATES DIS TRICT COURT FOR THE DIS TRICT OF ARIZONA

) ) Plaintiff, ) ) ) vs. ) Internal Revenue Service, United States) ) of America, ) Defendant. ) ) James A. Hiner,

No. CV-04-671-PHX-DGC

ORDER

Pending before the Court are Defendant's motion to dismis s and alternative motion for summary judgment. Doc. #9. For the reasons set forth below, the Court will grant the motion for summary judgment and deny the motion to dismiss as moot. Background Plaintiff commenced t his action by filing a complaint against Defendant United States of America on April 2, 2004. Doc. #1. Plaintiff seeks judicial review of the

determination an IRS A p p eals Officer made following a Collection Due Process ("CDP") hearing regarding a penalty the IRS had assessed against Plaintiff. Id. at 1. Defendant filed the present motions, a support ing memorandum, and a statement of facts on F ebruary 24, 2005. Docs. ##9-11. Plaintiff failed to respond to the motions. In an April 19, 2005 order, the Court advised P laintiff that his failure to respond could result in the granting of the motions. Doc. #16 at 1-2. The Court gave Plaintiff until M ay 20, 2005 to file a response. Id. at 2.

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On M ay 19, 2005, Plaint iff filed a document that the Court construed as a motion for extension of time to file response. D oc. #17. T he Court granted the motion. Doc. #18.

Plaintiff timely filed a response to Defendant's motions on June 20, 2005. Doc. #19. Discussion S ummary Judgment S tandard. Summary judgment is appropriate if the evidence, viewed in t he light most favorable to the nonmoving party, "show[s] that there is no genuine is sue as to any material fact and t hat t he moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A principal purpose of summary judgment is "to isolate and dispos e of factually unsupported claims." Celotex Corp. v. Catrett, 477 U .S. 317, 323-24 (1986). The moving party need not disprove matters on which the opponent has the burden of proof at trial. Id. at 323. The non-moving party "may not rest upon the mere allegations or denials of [t he party's] pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial." F ed. R. Civ. P. 56(e); see LRCiv 56.1(a), Rules of Practice of the U.S. Dist. Ct. for the Dist. of Ariz. ("Any party opposing a motion for summary judgment must . . . set[] forth the specific facts, which the opposing party asserts, including those fact s which establish a genuine issue of material fact precluding summary judgment in favor of the moving party."); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U .S. 574, 586-87 (1986). II. Analysis. The following facts are undisputed: T he IRS assessed a penalty under 26 U.S.C.

§ 6672 against Plaintiff for the first quarter of 1998. Doc. #11 ¶ 1. On February 11, 2003, the IRS sent Plaintiff a Notice of Intent to Levy under 26 U.S.C. § 6330(a). Id. ¶ 2. Plaintiff subsequently requested a CDP hearing pursuant to § 6330(b). Id. A CD P hearing was held before an IRS Settlement Officer on January 28, 2004. Id. ¶ 3. Plaintiff did not disput e t hat he owed the assessed penalty. Id. Rather, Plaintiff contended that the penalty should have been included as a debt in a Chapter 13 bankruptcy plan and that he should not have to pay interest on the penalty. Id. Plaintiff
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proposed a payment p lan under which he would make monthly payments, without interest, until the penalty was paid in full. Id. ¶ 4. On January 29, 2004, the Settlement Officer informed Plaintiff that w hile t he interest from the time the penalt y w as assessed to the time the proposed payment plan was accepted could be abated, new int erest would accrue until the penalty was paid in full. Id. ¶ 5. Plaintiff rejected the proposed payment plan on February 17, 2004. Id. On M arch 4, 2004, an IRS Appeals Officer sent Plaintiff a Notice of Determination under 26 U.S.C. § 6330(c)(3) indicating that the IRS's proposed levy action had been sustained. Id. ¶ 6, Ex. A; Doc. #1 Ex. A. The Notice provided a s ummary of the

determination as follows: The taxpayer and the Settlement Officer were unable to reach a mutual resolution to the issues raised. Subsequently, Compliance is sustained in their proposal to is s ue a notice of levy. These actions will balance the need for efficient collection with the taxpayer's legitimate concern that any collection action be no more intrusive than necessary. Id. In an attachment to the Notice, t he A p p eals Officer verified the existence and propriety of the penalty assessment and concluded that the IRS had provided sufficient verification that it had complied with all applicable laws and administrative procedures. Id. Defendant argues that the Appeals Officer did not abuse her dis cretion in determining that the IRS could p roceed with collection of the penalty because the determination "was both support ed by evidence and based on a proper understanding of t he law." Doc. #10 at 8-9. In his one-page response, Plaintiff contends that the motion for summary judgment should be denied because the penalty was discharged in his

bankruptcy proceedings. Doc. #19. The only evidence Plaintiff presents in support of his contention is a letter from his bankruptcy attorney to the IRS. Id. Ex. A. Plaintiff has not presented any documents from his bankruptcy proceedings. Nor has Plaintiff filed a

motion or affidavit requesting additional time to conduct discovery before responding to the motion for summary judgment. See Fed. R. Civ. P. 56(f). The Court finds that Plaintiff has failed t o raise a genuine issue of material fact as to whether the IRS Appeals Officer abus ed her discretion in determining the existence and
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propriety of the penalt y assessed against Plaintiff and concluding that the IRS had complied with all applicable law s and administrative procedures. See 26 U.S.C. § 6330(c)(1); Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993) (affirming summary judgment for the defendant where the plaintiffs failed to present "specific facts" showing that the IRS did not send them a notice of assessment and a demand for payment) (citing Fed. R. Civ. P. 56(e)). The Court will accordingly grant Defendant's motion for summary judgment.1 IT IS ORDERED that Defendant's motion t o dismiss is denied as moot and its alternative motion for summary judgment (Doc. #9) is granted. IT IS FURTHER ORDERED that the Clerk of Court shall terminate this action. Dated this 13th day of September, 2005.

In its motion to dismiss, Defendant argues that Plaintiff has failed to properly serve Defendant with process and that the complaint fails to state a claim for relief. Doc. #9 at 3-5. The Court will deny the motion as moot given the ruling above.
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