Opinion
No. 07J-09-025 WLW.
Submitted: November 2, 2007.
Decided: February 26, 2008.
Upon Defendant's Motion to Set Aside Judgment. Denied.
Stuart B. Drowos, Esquire of Department of Justice, Wilmington, Delaware; attorneys for the State of Delaware, Division of Revenue.
Amy M. Kaminski, pro se.
ORDER
Defendant Amy Kaminski ("Defendant") requests that the Court set aside her judgment of tax evasion. The State has submitted a response and oral arguments were heard on November 2, 2007. After a review of the evidence and transcript, the Court finds that Defendant has not met the standards of Rule 60(b) and therefore denies her motion.
BACKGROUND
On January 2, 2007, the Delaware Division of Revenue ("the DOR") issued a notice to Defendant indicating that she faced an impending judgment for failing to pay her 2004 and 2006 taxes and that she had ten days to protest. An actual judgment was not entered until August 30, 2007 — nearly eight months later — after the DOR sent her a combination of fourteen bills, notices and phone calls.
Defendant alleges that she thought she had successfully e-filed her taxes but admitted that she knew that she owed money. She showed the Court an undated, unsigned Turbo Tax return that indicated the return must be sent by mail and not electronically. She alleges that she waited for a bill to arrive to tell her the amount she owed. A bill never arrived so she called the DOR in October of 2005 asking about her taxes. She was told that they had not been received and that she had not applied for a forfeiture. She stated that when she checked her records, that indeed, she had been required to mail her taxes in that year. So she mailed them without payment and awaited a bill. She said that it was not her intention to evade her taxes and that she has paid them properly in the surrounding years.
The DOR first sent Defendant notice of the consequences of her delinquent filing of her 2004 taxes on October 23, 2006. This advisory notice gave her sixty-days to protest. At the November 2, 2007 oral argument the Court learned that Defendant first called the DOR on January 4, 2007 and requested to speak with an auditor. She was told that she had missed the protest period by a few days but that she should send a fax indicating her protest to the DOR. She argued conflicting facts: both that she received no response and that she was told that her bill had been sent in a timely fashion and therefore the penalties and interest would stand. She believes it is unfair to have to pay interest for the time it took the DOR to send her a bill. She had yet to pay her 2004 taxes.
Defendant argues that she never received any notice prior to the entry of the judgment that her credit would be affected. She complains that she is being charged with interest and penalties for the one-year period that the DOR took to issue her a bill. She claims that she called several times attempting to have her penalties and interests lowered to no avail. Finally, she complains that the judgment on her credit record precludes her from acquiring a mortgage to purchase a new home.
According to the State's records, on October 7, 2005, Defendant filed her tax return for the 2004 tax year (it was due five months earlier on April 30, 2005). Her return indicated that she owed $937.00 but she did not remit any payment. Because the return was late, Defendant was charged with late filing fees and penalized for failing to pay her estimated taxes.
The chain of events listed below were derived from Defendant's tax file and assembled by Thomas H. Wolfe, DOR Collections manager, and reviewed by Supervisor/Manager Tosha Martin. They both agree that the judgment was issued correctly and cannot be reserved. Mr. Wolfe stated as such in an affidavit taken on October 29, 2007.
The State's records also indicate that on October 23, 2006, the DOR sent a tax advisory notice to Defendant advising of the additional fees associated with the 2004 filing and provided a 60-day protest period. The Advisory Notice showed that Defendant owed a balance of $846.00 in taxes (not $937.00 as her return allegedly indicated), plus an overdue penalty of $152.28 and a variety of interests totaling $548.21, resulting in a total payment amount due of $1,394.21.
Defendant did not provide the Court a copy of her 2004 tax return.
According to the State's records, Defendant did not respond to the advisory notice. On November 6, 2006, December 4, 2006, and January 2, 2007 bills were sent to Defendant advising of the liability. The January 2nd bill also provided notice that a judgment would be issued in 10 days if the Defendant did not respond. No judgment was actually entered after this 10-day period.
Following Defendant's January 4th phone call discussed above, the State's records show that the DOR sent bills on February 5 and March 5 advising again of her liability and that Defendant did not respond. On March 28, 2007 the DOR called and left a message with Defendant but she never returned the call.
On April 2, 2007 the DOR received Defendant's 2006 tax return stating that she owed $320.00. There was no payment enclosed and so this liability was added to the existing liability. On April 2, 2007 a bill was sent to the taxpayer again advising her of her liability. Again, there was no response from Defendant.
On May 2, 2007 the State intercepted Defendant's federal refund in the amount of $806.00 and applied this money to her liability. The DOR still received no response from Defendant. On May 7, June 4 and July 2, 2007, the State's records indicate that bills were sent to the taxpayer advising of her liability, with no resulting response from Defendant. Nearly seven months after its first warning, the DOR had not yet issued a judgment on her credit.
On July 18, 2007 the DOR called and left a message with Defendant. Defendant never returned the call. On August 6, 2007, the DOR issued another bill restating both her liability and warning that a judgment would be imposed if there was no response within 10 days. Again, no judgment was entered after the 10-day time frame.
On August 30, 2007 a judgment was issued against Defendant for payment default for her 2004 and 2006 tax liabilities. On September 13, 2007 Defendant called responding to the judgment and wanted the judgment removed from her credit report. She was advised that the judgment was issued correctly and will not be removed but verbally committed to a future payment arrangement. She threatened not to pay her bill unless the judgment is removed. The DOR still had not received any payment from Defendant. Defendant filed this Complaint against the State on September 17, 2007.
Defendant spoke with Holana Pender at the DOR on her September 13th phone call. Ms. Pender allegedly explained that Defendant still owed $40.00 for her 2004 taxes and $334.37 for her 2006 taxes. According to the DOR record of this conversation, Ms. Pender did not say that these amounts were all that Defendant owed. Instead, the record indicates Defendant's statements — that she was going to pay $360.00 for her 2006 taxes and a $25.00 court fee. Ms. Pender's response was "that was fine." Ms. Pender's note states further that Defendant said she "will try for an OIC [("Offer in Compromise")] on [the] P I [("penalties and interest")]. Again, Ms. Pender stated "that was fine." On September 28, 2007, Defendant wrote two checks to the DOR, one for $40.00 and one for $334.37. She never attempted an OIC. She argues that because she has made the two payments the judgment should be removed from her credit report.
On October 1, 2007 another bill was sent to Defendant advising her of her tax liability. On October 2, 2007 the DOR received Defendant's payment in the amount of $374.47. This was applied to Defendant's file. It was the first payment received by the Defendant for the 2004 and 2006 tax years.
On October 4, 2007 the DOR received court papers indicating that Defendant was disputing the judgment because she had not received proper notice. The State alleges, in sum, that Defendant received a tax advisory notice, at least eleven bills, two phone calls, and ample notice that a judgment was impending. Defendant never explained why she seemed to receive some of the notices but not others. However, the State argues, Defendant clearly was on notice as she called the DOR and discussed the situation on two occasions, one of which was about eight months prior to the judgment.
The State additionally notes that Defendant took no action during the 60-day protest period starting on October 23, 2006 (nearly ten months before imposing the judgment), took no action for eight months from the date of the first notice of an impending judgment and her phone call, and suggests that but for Defendant's desire to sell her house and acquire a mortgage to buy a new one, she would not have taken any action at all.
With a judgment on her account, she admits to experiencing difficulties with acquiring a new mortgage.
DISCUSSION
Defendant argues that the Court should grant her Superior Court Rule 60(b) motion to set aside the DOR judgment because, she alleges, she never received any "prior notification" that a judgment would be imposed if she did not pay her taxes in a timely fashion and because the DOR did not properly assist her in her protest. She further requests that this Court lower her penalties and interests. The State requests that the Court deny the motion because (1) Defendant has no legal or factual support for her motion; (2) Defendant's motion is filed only after unreasonable delay; (3) Defendant's position that she did not receive notice is refuted by sufficient evidence; (4) the DOR followed the statutory process set for in 30 Delaware Code Chapter 5 to give her every reasonable opportunity to contest the matter prior to the entry of judgment; (5) Defendant failed to exhaust her administrative remedies before requesting assistance from this Court; (6) and the DOR has exclusive jurisdiction to determine the level and duration of interest and/or penalties to be imposed for delinquent taxpayers and judgments lawfully obtained against them as well as any abatement of the same (citing 30 Delaware Code § 533, 534, and 538). The State concedes that it is within the sound discretion of the Court to determine what relief, if any, would be granted (citing Wife B. v. Husband B., 395 A.2d 358 (Del. 1978)).The Court agrees that a "motion for relief under Rule 60(b) is addressed to the Court's sound discretion." However, the Court finds that Defendant has not met her burden. Rule 60 allows the Court to set aside a judgment for the following reasons:
Wife B. v. Husband B., 395 A.2d 358, 359 (Del., 1978).
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
Super. Ct. Civ. R. 60(b).
At best, Defendant's argument is based on inadvertence, excusable neglect or that the judgment has been satisfied.
Mainly, Defendant's claim that she did not receive notice of the impending judgment fails. The Court finds credible the State's evidence that Defendant received a tax advisory notice, eleven bills, two phone calls, and three notices that a judgment was impending. The State has provided the details of their complete business record of Defendant's file, carefully outlining the bills that were sent, the notices provided, the phone calls made, and the results of the phone conversations held.
Defendant, on the other hand, provided vague and sometimes contradicting details of the events, never explained why she seemed to receive some of the notices but not others and provided very little evidence to support her position. Her self-prepared undated and unsigned 2006 tax return print out stated that it needed to be mailed. Her versions of the telephone conversations based on her memory appear incomplete and are at odds with the DOR's notes of those same conversations. She admits to calling the DOR and to refusing to pay until the interest and penalties were removed, and it is unclear where she derived the idea that she was to await a bill in order to pay for her taxes.
See 30 Del.C. § 1161, 1168.
Second, Defendant failed to file an extension for her taxes, missed a two-month protest period and missed multiple opportunities to respond before entry of a judgment.
30 Del.C. § 511.
As noted by the State, the DOR followed 30 Delaware Code Chapter 5 subchapter III carefully but gave generous opportunities to Defendant nonetheless. For example, nowhere in the Code is the DOR required to provide the ten-day response period prior to entering a judgment once a judgment has been obtained, yet Defendant received three of these.
See 30 Del.C. § 533, 534.
CONCLUSION
Only after Defendant discovered she could not acquire a mortgage with the judgment on her credit report did she attempt abatement. She received ample notice of the impending judgment and failed to take action. Her efforts are untimely and therefore her motion is denied and her judgment will stand after adjusting it to reflect her two recent payments.
IT IS SO ORDERED.