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Stein v. United States

January 28, 2009


The opinion of the court was delivered by: Lawrence M. McKENNA, D.J.


Plaintiff brought this action to recover a tax penalty assessed by the Internal Revenue Service ("IRS" or "Defendant") in the amount of $52,369. Defendant moves for summary judgment. For the reasons set forth below, Defendant's motion is GRANTED.

I. Background

A. Procedural History

Plaintiff Gabor Stein ("Plaintiff") filed pro se a Complaint in this court on April 2, 2007. In the Complaint, Plaintiff claims that he is entitled to a refund of $19,116 levied by the IRS and to prevent further collection of the remaining penalty amount on the basis that the IRS' assessment of the penalty was untimely. On November 9, 2007, Defendant filed its Answer, denying certain allegations and asserting various affirmative defenses. On October 15, 2008, Defendant filed the instant motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

B. Factual Background

The following recitation reflects an undisputed or otherwise uncontested version of the facts and draws all attendant inferences in Plaintiff's favor. At the time of the events giving rise to this controversy, Plaintiff was a 50% shareholder in C&H Knitwear, Inc. ("C&H"). (Complaint ¶ 1.) For the quarters ending September 30, 1995, December 31, 1995, and December 31, 1996, C&H failed to remit employee federal tax withholdings in the amounts of $29,701, $19,116, and $3,552, respectively. (Complaint ¶ 3; Defendant's Statement Pursuant to Local Rule 56.1 ("Def.'s 56.1 Stmt.") ¶ 1.) Plaintiff, as co-owner of C&H at the time the tax liability accrued, is responsible for payment of the Trust Fund Recovery Penalty ("TFRP"), which the IRS may assess in the amount of the unremitted employee withholding taxes. (Deposition of Gabor Stein ("Stein Dep.") 28:19-30:10; Declaration of Francine Kaufman ("Kaufman Decl.") ¶ 4.)

The statute of limitations for assessing the TFRP for at least two quarters for which C&H had failed to remit taxes was to expire on April 15, 1999. (Kaufman Decl. ¶ 5.) Therefore, Revenue Officer Francine Kaufman ("Kaufman" or "Revenue Officer Kaufman"), who was assigned to manage the collection of C&H's taxes, was required either to assess the TFRP before April 15, 1999 or to secure a waiver of the statute of limitations, also known as a Form 2750 waiver, which would extend the statute of limitations for assessment of the TFRP to a date specified in the form. (Id.)

At the same time, Plaintiff, through his power of attorney and accountant, Bernard Katz ("Katz") was working with Kaufman on an installment agreement whereby Stein, Horbst Clobes ("Clobes"), co-owner of C&H, and C&H would pay the delinquent employee withholding taxes. (Id. at ¶ 6.) Accordingly, in lieu of asserting the TFRP immediately, Kaufman sought to secure Form 2750 waivers from Plaintiff and Clobes, which would extend the limitations period for all C&H's unremitted taxes to December 31, 2002 and allow the TFRP to be assessed at a later date, should C&H, Stein, and Clobes fail to pay according to the terms of the installment agreement. (Id. at ¶¶ 5,6.) When they failed to pay the delinquent taxes according to the agreement, (Kaufman Decl. ¶ 13,) the IRS assessed the TFRP against Plaintiff on June 14, 2002 in the amount of $52,369. (Affirmation of Gabor Stein in Opposition to Defendant's Motion for Summary Judgment ("Stein Aff.") ¶¶ 1, 5; Def.'s 56.1 Stmt. ¶ 1.) The IRS then levied $19,116 of Plaintiff's assets, (Complaint p. 1; Ex. 1, Declaration of John Clopper ("Clopper Decl.")) and seeks further collection of the remaining TFRP from Plaintiff. (Complaint p. 1.)

II. Discussion

A. Summary Judgment

Standard Federal Rule of Civil Procedure 56(c) provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "A dispute is not 'genuine' unless 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). "A fact is 'material' for these purposes if it 'might affect the outcome of the suit under the governing law.'" Overton v. N.Y. State Div. of Military & Naval Affairs, 373 F.3d 83, 89 (2d Cir. 2004) (quoting Anderson, 477 U.S. at 248).

In weighing a motion for summary judgment, ambiguities or inferences to be drawn from the facts must be viewed in the light most favorable to the party opposing the summary judgment motion. See Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir. 1990). "Moreover, we read the pleadings of a pro se plaintiff liberally and interpret them to raise the strongest arguments that they suggest." McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (citations and quotations omitted). However, "the non-moving party must come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing Fed. R. Civ. P. 56) (emphasis omitted). ...

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