The opinion of the court was delivered by: A. SIMON CHREIN
By stipulation of the parties, this case is to be tried before the undersigned on April 6, 1992. At this juncture, plaintiff has moved to dismiss the tax assessment levied against her as invalid and void ab initio; or, in the alternative, to shift the burden of proof at trial to the United States.
Plaintiff, Margaret Curley, is the seventy year old widow of Arthur Curley, Sr., who died on February 25, 1979. In the mid-1970's, Mr. Curley founded ARCO Advertising Service, Inc. (ARCO). ARCO was in the business of printing commercial advertising.
Upon her husband's death, Mrs. Curley became the majority shareholder in ARCO. Margaret Curley obtained 86% of the shares of ARCO stock. The remaining 14% of the shares was split evenly among the couple's seven children. The plaintiff alleges that both prior and subsequent to her husband's death, she played no active role in the operations and business of ARCO. However, Mrs. Curley was at one point designated as the president of the company. She later was replaced by her son, William Curley.
Pursuant to the requirements of § 6203 of the Internal Revenue Code an Internal Revenue Service ("IRS") assessment officer signed and filed a Summary Record of Assessments (Form 23-C) on April 9, 1986. This summary was based on ARCO's alleged failure to pay certain taxes. The plaintiff was also informed that she was being assessed a so-called "100% penalty" under Code § 6672 for the willful failure to collect, account for, and pay over to the United States, the withholding taxes or trust fund taxes of the employees of ARCO. This form identified: 1) the plaintiff by name 2) the plaintiff's social security number; 3) the plaintiff's address; 4) the name of the corporation; 5) the type of tax; 6) the amount of tax; and 7) the taxable period involved.
Plaintiff received a form letter from the IRS dated April 14, 1986. The letter was captioned "Final Notice" and stated that Mrs. Curley was being assessed $ 130,430.59 for the tax period ending September 30, 1985. Apparently, though, this figure actually represented an assessment for fourteen tax periods previous to and including the period ending on September 30, 1985. These periods included: the first, third, and fourth taxable quarters of 1981; the four quarters of 1982; the first, second, and fourth quarter of 1983; the first and second quarter of 1984; and the second and third quarters of 1985. This notice sent by the IRS, though, did not provide a period by period breakdown of the assessment.
The plaintiff asserts that prior to this "Final Notice" she had received no notice of the IRS's intention to assert a penalty against her.
On May 5, 1986, the IRS sent the plaintiff another letter stating that it proposed to assess a penalty against her for unpaid withholding taxes due from ARCO for the fourteen quarterly periods detailed in an attachment to the letter. In that attachment, the IRS provided plaintiff with the specified amounts due for the fourteen periods. The May 5, 1986 letter also advised the plaintiff of her right to appeal the proposed assessment. Mrs. Curley was informed that if no such appeal was filed within 30 days, the assessment would be made.
Seventeen days later, on May 22, 1986, the IRS issued levies and on May 23, 1986 served plaintiff with notices of seizure for her properties at 645 and 659 Metropolitan Avenue.
Plaintiff filed an appeal of the proposed assessment on or about June 3, 1986. The IRS did not go forward with the sale of the properties at that time. The Appeals Office sustained the assessment on May 11, 1988.
Plaintiff requested a further hearing; however, on October 4, 1988, before any decision was rendered on the plaintiff's request, the IRS issued Mrs. Curley a final notice stating that it would levy her property unless the money allegedly due for the tax period ending September 30, 1985 was paid within 10 days.
This notice indicated that the balance of tax due was $ 103,439.59 (as opposed to the $ 130,439.59 mentioned in the IRS's initial letter) and there was an accumulated interest and penalty of $ 28,940.40 resulting in a total due and owing of $ 132,379.99. On November 21, 1988, the IRS, after receiving no payment from the plaintiff, seized the property at 659 ...