Walcott v. United States

          OPINION AND ORDER ON MOTION FOR SUMMARY JUDGMENT

          Marcia S. Krieger Chief Judge

         THIS MATTER comes before the Court on the Defendant's Motion for Summary Judgment (# 67), the Plaintiff's response (# 71), and the Defendant's reply (# 73). For the reasons that follow, the motion is granted.

         I. JURISDICTION

         The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.

         II. BACKGROUND

         The Court recounts the undisputed facts and the disputed facts in the light most favorable to Ms. Walcott, the nonmoving party, supplementing them as necessary in its analysis. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).

         Ms. Walcott did not voluntarily pay her income taxes for the tax years 2002 to 2011. As a result, she accrued both tax liabilities and penalties. In addition, the IRS assessed four civil penalties pursuant to 26 U.S.C. § 6702 for repeated filing frivolous income tax returns.

         For the tax years 2002 to 2004, IRS made assessments based on returns filed by Ms. Walcott. For years 2005 to 2011, the IRS examined her returns and found that they understated her income and proposed to assess her additional tax and penalties. Ms. Walcott claims that the IRS did not comply with Internal Revenue Code because it did not send her a Notice of Deficiency before making its assessment for these years.

         In 2012 and again in 2014, the IRS levied on payments made to Ms. Walcott from her retirement account with the Colorado Public Employees' Retirement Association (PERA). Each time, the levy directed that 100% of the payment that Ms. Walcott was entitled to receive from PERA be paid against her tax obligations. As a result of the 2012 Levy, the IRS fully collected Ms. Walcott's taxes for 2002, 2003, 2004 and 2005. The levy improperly attached Ms. Walcott's payments for her 2006 taxes, but the IRS corrected the error and released the levy. The 2014 Levy sought to collect sums owed for tax years 2006 and 2009 to 2011. It referred only to initial assessments but inadvertently collected funds based on both initial and revised assessments. It was released after the duplication was noted. As a result, there has been not collection of sums owed for 2011.

         III. LEGAL STANDARD

         Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if no trial is necessary. See White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary adjudication is authorized when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive law governs what facts are material and what issues must be determined. It also specifies the elements that must be proved for a given claim or defense, sets the standard of proof, and identifies the party with the burden of proof. See Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986); Kaiser-Francis Oil Co. v.Producer's Gas Co., 870 F.2d 563, 565 (10th Cir. 1989). A factual dispute is “genuine” and summary judgment is precluded if the evidence presented in support of and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter for either party. See Anderson, 477 U.S. at 248. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).

         If the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. See Fed. R. Civ. P. 56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus. Inc. v. Arvin Indus. Inc., 939 F.2d 887, 891 (10th Cir. 1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir. 1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.

         IV. DISCUSSION

         In this lawsuit, Ms. Walcott has only one claim.^[1] She claims that the funds that the IRS seized by levy were overpayments for which she is entitled to a refund because prior to levy the IRS failed to provide her with Notices of Deficiency as required by 26 U.S.C. § 6213. On this claim, Ms. Walcott bears the burden of establishing that she was entitled to a Notice of Deficiency. If she establishes such entitlement, the IRS must then establish that the Notice of Deficiency existed and was mailed, creating a presumption. Koerner v. C.I.R., T.C. Memo. 1997-144, 73 T.C.M. (CCH) ...