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UNITED STATES v. TINGHINO

June 12, 1975

UNITED STATES OF AMERICA, Plaintiff,
v.
DOMINICK J. TINGHINO and ANNA TINGHINO, Defendants



The opinion of the court was delivered by: PLATT

MEMORANDUM AND ORDER

 PLATT, D.J. Plaintiff brought this action against the defendants, and makes this motion pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment, in order to reduce to judgment income tax assessments previously made against the taxpayers, as follows: DOMINICK J. TINGHINO Taxable Date of Amounts of Dates of Period Assessment Assessments Notice & Demand 1962 10/24/69 $ 3,163.32 10/24/69 81.31 1,238.37 1962 5/4/70 19,020.10 5/4/70 11,091.71 8,047.85 1963 10/24/69 5,186.71 10/24/69 137.99 1,719.29 1963 5/4/70 47,657.17 5/4/70 26,421.94 17,305.42 1965 10/24/69 155.12 10/24/69 1965 5/4/70 2,945.59 5/4/70 437.23 736.40 716.14 1965 5/26/67 5,798.92 5/26/67 1, 449.73 387.37 1969 8/26/71 847.00 8/26/71 5/29/72 107.82 5/29/72 1970 7/9/71 33.00 7/9/71 .49 .46 1972 6/4/73 424.00 6/4/73 4.24 3.51 DOMINIC K J. & ANNA TINGHINO 1967 8/2/68 $ 3,159.70 8/2/68 101.11 56.74 1967 6/9/70 356.40 6/9/70 1968 2/13/70 659.80 2/13/70 65.98 32.84

 Based on the above assessments, the taxpayers allegedly owe to the United States the sum of $159,550.77 plus accrued interest and failure to pay penalties in the amount of $34,822.79, to and including August 27, 1974, plus lien fees of $30.00 for a total amount due (inclusive of fraud penalties) of $194,403.56.

 As indicated in the above schedule, the government imposed fraud penalties pursuant to 26 U.S.C. § 6653(b) for the years 1962 and 1963 in respective amounts of $11,091.71 and $26,421.94. Since such fraud penalties were imposed and assessed, the penalties for late filing of the tax returns in the amounts of $81.31 in 1962 and $157.99 in 1963, concededly should not have been imposed (see 26 U.S.C. § 6653(d)).

 As also shown in the above schedule, the earliest date of assessment was May 26, 1967 and this action was commenced within six years thereafter by plaintiff's filing of a complaint on May 22, 1973. (See, 28 U.S.C. § 6502(a)).

 The government says that it was compelled to commence this action because the defendants have not paid the assessments and the Internal Revenue Service has been unable to discover any assets or property owned by the taxpayers who maintain that they have no assets.

 With its notice of motion the plaintiff filed a statement pursuant to Rule 9(g) of the General Rules of this Court setting forth the above assessments and a statement that the defendant Dominick J. Tinghino was convicted in this Court by a jury on March 12, 1971 of two counts of wilfully failing to file income tax returns for the calendar years 1962 and 1963 (U.S. v. Tinghino, 69 CR 123). On January 27, 1975 the government filed, without objection, a supplemental statement pursuant to General Rule 9(g).

 Defendants filed no counter statement pursuant to General Rule 9(g) and, accordingly, all of the statements set forth in the government's statement and supplemental statement must be taken and accepted as admitted facts for the purposes of this motion.

 Defendant Dominick J. Tinghino filed two affidavits in opposition to the government's affidavits filed in support of plaintiff's motion for summary judgment, and said defendant also filed a number of copies of deeds and mortgages and a large batch of copies of unidentified checks. In and by these papers said defendant attempts to raise issues and questions with respect to the underlying bases for the government's assessments for the years 1962 and 1963. No challenge, however, is made with respect to the government's assessments for the years 1965, 1967, 1968, 1969, 1970 or 1972. Even though the government made no assessments with respect to the year 1964, the defendants also submitted cancelled checks which they claimed to be "relative to expenses" claimed on their 1964 income tax return.

 The law is clear that federal tax assessments are deemed presumptively correct and establish a prima facie case of liability. United States v. Rindskopf, 105 U.S. 418, 26 L. Ed. 1131 (1881); United States v. Molitor, 337 F.2d 917 (9th Cir. 1964); United States v. Strebler, 313 F.2d 402 (8th Cir. 1963); United States v. Lease, 346 F.2d 696 (2d Cir. 1965).

 The burden of proving that federal tax assessments are erroneous rests upon the taxpayers. Lesser v. United States, 368 F.2d 306 (2d Cir. 1966); United States v. Lease, supra ; Paschal v. Blieden, 127 F.2d 398 (8th Cir. 1942); United States v. Abrahams, 312 F. Supp. 1035 (S.D.N.Y. 1970).

 To sustain this burden the defendants must show that there are genuine issues of fact which are issues which can be supported by substantial evidence. Riss & Co. v. Association of American Railroads, 190 F. Supp. 10 (D.D.C. 1960). This the defendants have completely failed to do in the case at bar.

 As to a number of the adjustments made by the government to the tax returns for 1962 and 1963, the defendants have merely submitted some documents from which they ask the Court to infer that their contention or explanation must follow. In each case the proof is insufficient.

 For example, the government in these years relied upon the so-called "bank deposit method" and in analyzing the taxpayers' bank deposits with the taxpayers' accountant, there were some $5,000 of unidentifiable excess bank deposits in 1962 which the government charged to the taxpayers as income. The defendant Dominick Tinghino has maintained that he received a "mortgage Loan" from individuals by the name of DeChellis in 1962 and in ...


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