United States District Court, S.D. New York
VINCENT M. McCONNELL, Plaintiff,
UNITED STATES OF AMERICA, by U.S. INTERNAL REVENUE SERVICE, U.S. SOCIAL SECURITY SERVICE, U.S. OFFICE OF PERSONNEL MANAGEMENT, Defendants. UNITED STATES OF AMERICA Plaintiff,
VINCENT M. McCONNELL, Defendant.
OPINION AND ORDER
VALERIE CAPRONI United States District Judge.
case arises from the IRS's assessment of taxes against
McConnell for the years 1989, 1990, and 1991 (collectively,
the “At-Issue Years”). In McConnell v. United
States, No. 14-CV-5355 (hereafter, “McConnell
I”), McConnell seeks a refund of retirement-income
benefits that were withheld to pay taxes due for the At-Issue
Years. In United States v. McConnell, No.
15-CV-10164 (hereafter, “McConnell II”),
the Government seeks collection of McConnell's
outstanding tax liability for the At-Issue Years. McConnell
moves for summary judgment in McConnell I and
McConnell II, claiming that the statute of
limitations for the IRS to collect taxes due from those years
has expired; the Government cross-moves for summary judgment
in both cases, claiming that the limitations period has not
expired. For the following reasons, all of the motions for
summary judgment are DENIED.
to the Government, McConnell owes approximately $123, 600 in
unpaid federal taxes for the At-Issue Years. Government 56.1
¶¶ 2, 5, 8; Ward Decl. ¶¶ 10, 12,
In March 1994, McConnell and the IRS executed a Form 900 Tax
Collection Waiver (the “Form 900 Waiver”), which
extended the “statutory period” for the IRS's
collection of taxes (“Extension Date”) until
December 31, 2015. Cowart Decl., Ex. 1; McConnell 56.1
Response ¶ 12. The Form 900 Waiver states that McConnell
and the IRS agree that the taxes outstanding for the At-Issue
Years, plus interest and penalties, may be collected from
McConell by levy or a court proceeding begun on or before the
Extension Date. Cowart Decl., Ex. 1. The Form 900 Waiver
further states that the time for the IRS's collection of
taxes will be extended past the Extension Date if the
taxpayer makes an “offer in compromise” on or
before the Extension Date. Cowart Decl., Ex. 1.
assessed taxes against McConnell for the 1989, 1990, and 1991
years in May 1990, November 1991, and November 1992,
respectively. Government 56.1 Response ¶ 3; McConnell
Aff. ¶ 6. In December 2002, because McConnell still owed
taxes for the At-Issue Years, the IRS levied McConnell's
federal retirement-income benefits to pay McConnell's
outstanding tax liabilities for the At-Issue Years.
Government 56.1 Response ¶ 1; McConnell Aff. ¶ 6,
Ex. C; Compl. at 10. To date, a portion of McConnell's
retirement-income benefits, which include social security and
military benefits, continues to be withheld from him and
collected by the IRS. McConnell Aff. ¶ 9.
that the statute of limitations for the IRS's collection
of taxes had expired, McConnell filed claims with the IRS for
refund of the withheld retirement-income benefits. Compl. at
11-14; McConnell Aff. ¶ 7, McConnell Aff. ¶¶
10-11, Ex. A. The IRS denied McConnell's claim,
concluding that the Form 900 Waiver was valid and that the
statute of limitations had not expired. Compl. at 15;
McConnell Aff., Ex. E; see also McConnell Aff., Ex.
F. After the IRS denied McConnell's refund claim,
McConnell filed a lawsuit on July 16, 2014, seeking a full
refund of all amounts collected by the IRS after the
expiration of the statute of limitations. McConnell
I. On December 30, 2015, the Government filed a lawsuit
against McConnell to collect the federal taxes owed for the
At-Issue Tax Years. McConnell II. The parties'
cross-motions for summary judgment, filed in both cases, are
now pending before this Court. McConnell I (Dkts.
34, 40); McConnell II (Dkts. 18, 25).
crux of the issue in both cases is whether the statute of
limitations expired, thereby barring the IRS's collection
of taxes from McConnell, or whether McConnell waived the
statute of limitation in connection with an
“installment agreement.” McConnell moves for summary
judgment on the grounds that he is entitled to a refund
because the limitations period for the IRS's collection
of taxes for the At-Issue Years expired. The Government
cross-moves for summary judgment, arguing that McConnell
extended the limitations period and that the IRS's
collection of taxes was, therefore, not time-barred.
judgment is appropriate when “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). “Where the
record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party, there is no genuine
issue for trial.” Scott v. Harris, 550 U.S.
372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)
(internal quotation marks omitted)). Courts “construe
the facts in the light most favorable to the non-moving party
and resolve all ambiguities and draw all reasonable
inferences against the movant.” Delaney v. Bank of
Am. Corp., 766 F.3d 163, 167 (2d Cir. 2014) (per
curiam) (quoting Aulicino v. N.Y.C. Dep't of
Homeless Servs., 580 F.3d 73, 79-80 (2d Cir. 2009)
non-moving party, however, “must do more than simply
show that there is some metaphysical doubt as to the material
facts” and “may not rely on conclusory
allegations or unsubstantiated speculation.”
Jeffreys v. City of New York, 426 F.3d 549, 554 (2d
Cir. 2005) (citations and internal quotation marks omitted).
Rather, the nonmoving party must come forward with
“specific facts showing that there is a genuine issue
for trial.” Sista v. CDC IXIS N. Am., Inc.,
445 F.3d 161, 169 (2d Cir. 2006) (citation omitted).
“[I]f the evidence is such that a reasonable jury could
return a verdict for the nonmoving party, ” a motion
for summary judgment must be denied. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
statute of limitations for the Government to collect unpaid
tax is ten years from the date of the tax assessment. 26
U.S.C. § 6502(a)(1). This limitations period may be
extended by written agreement. See 26 U.S.C. §
6502(a)(2). The parties agree that for the Government's
attempt to collect taxes for the At-Issue Years to be timely,
McConnell must have executed the Form 900 Waiver in
connection with an installment agreement. See
Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, § 3461, 112 Stat. 685 (1998).
there is no dispute that McConnell executed the Form 900
Waiver, McConnell 56.1 Response ¶ 12, Cowart Decl. Ex.
1, there is a dispute over whether an installment agreement
ever was executed. The Government relies on the entry of a
“code 60” in McConnell's IRS account as
circumstantial evidence that McConnell executed an
installment agreement in connection with the Form 900
Waiver. According to an IRS employee, a
“code 60” in the TMF system means that “an
Installment Agreement [was] entered into by the IRS . . . and
the taxpayer.” Ward Decl. ¶¶ 23, 28. The IRS
employee stated that in her 31 years of IRS employment, she
was “aware of no instance in which [an IRS] officer
executed a Form 900 Waiver and then an installment agreement
within a few weeks later unless the waiver agreement was a
condition to [an IRS] officer agreeing to an installment
agreement” because “[w]ithout an installment
agreement, extending the collection statute of limitations
for twenty-one years (as was done [in the Form 900 Waiver])
would make little sense.” Ward Decl. ¶¶ 30,
31. The IRS employee concluded that the entry of a
“code 60” several weeks after the Form 900 Waiver
was executed means that McConnell executed an installment
agreement in connection with the Form 900 Waiver. Ward Supp.
Decl. ¶ 5.
on the other hand, submitted an affirmation in which he
stated that he “neither requested . . . nor
signed” an installment agreement in connection with the
Form 900 Waiver. McConnell Reply Aff. ¶ 5. According to
McConnell, the Form 900 Waiver was executed not in connection
with an installment agreement but in connection with an offer
in compromise that the IRS later rejected. McConnell Reply
Aff. ¶ 9. McConnell explained that he never executed an
installment agreement because the additional monthly interest
and penalties that he would have incurred through such an
agreement “would have posed an insurmountable financial
difficulty.” McConnell Reply Aff. ¶¶ 6-7.
McConnell does not offer any evidence other than his own
affirmations in support of his position that he never
executed an installment agreement.
fact that the IRS no longer has a physical copy of the
installment agreement is not fatal to its case if it has
“reliable secondary evidence” that proves the
agreement existed. See Malkin v. United States, 243
F.3d 120, 122 (2d Cir. 2001). The Malkin court
concluded that a district court did not clearly err in
finding after a bench trial that secondary evidence
consisting of IRS records and testimony regarding standard
IRS procedures was sufficient to prove that the taxpayer
signed the relevant IRS form. Id. at 124. Even
though the taxpayer disputed that he had signed the form, the
Malkin court declined to second-guess the trial
court's assessment of the credibility of the evidence
presented. Id. at 123-24 (“It is within the
province of the trier of fact to decide whose testimony
should be credited, and we are not allowed to ...