United States District Court, W.D. New York
MICHAEL A. TELESCA, District Judge.
Plaintiff United States of America ("the government" or "United States") brings this action to recover alleged debts owed by defendant James Rulison ("Rulison"). According to the plaintiff, at the time the Complaint was filed, Rulison owed income taxes, penalties, and fees in the amount of $962, 417.22 which includes amounts of $895, 493.46 for tax year 2000, and $66, 923.76 for tax year 2001. Plaintiff now moves for summary judgment against Rulison in the amount of $1, 013, 781.27 plus interest and fees, claiming that there are no issues of fact in dispute, and that as a matter of law, it is entitled to judgment in its favor. Specifically, the United States contends that it has established that Rulison owes the amounts sought, and that he has failed controvert the plaintiff's evidence, or establish any valid defense to plaintiff's claim.
Rulison, proceeding pro se, opposes plaintiff's motion, and contends that the United States is barred by the statute of limitations from attempting to collect the taxes allegedly owed. Specifically, he claims that more than 10 years has passed since the debts were assessed, and as a result, the government is prohibited under the applicable statute of limitations from bringing this action against him. He further alleges that at a minimum, there is a question of fact as to whether or not the statute of limitations prohibits the government from attempting to collect the alleged debt.
For the reasons set forth below, I find that the government is not barred by the statute of limitations from attempting to collect the debt owed by the defendant; that the government has established that the debt is valid; and that the government is entitled to summary judgment. I therefore grant plaintiff's motion for summary judgment.
The Complaint in this action alleges that on November 16, 2001, and June 10, 2002, a delegate of the Secretary of the Treasury issued tax assessments against the defendant for tax years 2000 and 2001, respectively. Although the initial amount of the assessments is not disclosed in the Complaint, plaintiff alleges that as of August 13, 2012, Rulison owed $895, 493.46 in taxes, penalties, and interest for tax year 2000, and $66, 923.76 for tax year 2001.
Plaintiff alleges that on August 15, 2002, Rulison offered to compromise the debts at issue. According to the government, the offer of compromise remained pending until May 22, 2003, when the government acknowledged in writing defendant's withdrawal of his offer. Rulison contends that he withdrew his offer in April, 2003, and that the limitations period began to run once he withdrew his offer, or in the alternative, when an agent of the government informed him that his offer would be rejected if not withdrawn. He contends that if the court determines that the offer was withdrawn in April, 2003, then the pending action is untimely.
I. Summary Judgment Standard
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall be granted if the moving party demonstrates "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." When considering a motion for summary judgment, all genuinely disputed facts must be resolved in favor of the party against whom summary judgment is sought. Tolan v. Cotton, ___, U.S. ___, 134 S.Ct. 1861, 1863 (2014). If, after considering the evidence in the light most favorable to the nonmoving party, the court finds that no rational jury could find in favor of that party, a grant of summary judgment is appropriate. Scott v. Harris, 550 U.S. 372, 380 (2007)(citing Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587 (1986)).
II. The Instant Action is Timely
Defendant contends that the instant action is untimely because it was brought by the government more than ten years after the alleged tax debts were originally assessed. I find, however, that because the limitations period for bringing the instant action was stayed while defendant's offer to compromise the debts was pending before the government, the Complaint in this action is timely.
Pursuant to 26 U.S.C. § 6502(a)(1), a proceeding to collect a delinquent tax debt must generally be brought "within 10 years after the assessment of the tax." Where there is an offer of compromise of the debt, however, the 10 year limitations period is stayed during the pendency of the offer. See 26 U.S.C. § 6503(a)(1)(staying limitations period during any period in which the government is prohibited from making an assessment or levy against a taxpayer); 26 U.S.C. § 6331(k)(1)(prohibiting government from making ...