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entering judgment on the judgment of the United States Tax Court regarding Evseroff's tax liability
Summary of this case from United States v. EvseroffOpinion
Civil Action No. CV 00-6029 (DGT)
November 6, 2001
MEMORANDUM AND ORDER
The United States brought this action to: (1) reduce to judgment federal tax assessments against Jacob Evseroff, (2) establish the validity of liens on Evseroff's property, (3) foreclose on those liens, and (4) determine the interests of various parties in some of that property. The United States alleges that Evseroff owes taxes, interest, and penalties from 1978-82, 1991-92, and 1996. The assessments from 1978-82 were entered as a decision of the United States Tax Court in November 1992, and the IRS subsequently assessed Evseroff with additional tax liabilities for 1991-92 and 1996. The United States now moves for all of the assessments to be reduced to judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure ("FRCP"), or, in the alternative, for summary judgment under Rule 56. In addition, the United States moves for the assessments to be entered as final judgment pursuant to Rule 54(b) of the FRCP, leaving the claims regarding the validity and foreclosure of the liens and the determination of interests in the property pending.
Background
Evseroff, a licensed attorney and a former Assistant District Attorney in Brooklyn, purchased a series of tax shelter investment programs between 1978 and 1982 from his office suite co-tenant, John Serpico. Affidavit of Jacob Evseroff ("Evseroff Aff.") ¶ 6. Evseroff believed the tax shelters were legal and approved by the IRS. Id. After an audit, however, the IRS notified Evseroff in December 1990 that he owed approximately $900,000 in taxes, penalties, and interest relating to the tax shelters. Evseroff Aff. ¶ 8. When Evseroff confronted Serpico with the notice, Serpico told him that the IRS had disallowed the tax benefits in 1985 or 1986. Id.
Represented by Serpico, Evseroff challenged the IRS assessments in the United States Tax Court in April 1992. Evseroff Aff. Ex. A. On June 4, 1992, Evseroff transferred his interest in certain properties to his sons and grandchildren through a trust agreement. United States' Complaint ("U.S. Compl.") Ex. 4; Evseroff Ans. ¶ 22. On November 5, 1992, the Tax Court entered a decision for $209,113 in taxes and penalties on consent. Evseroff Aff. Ex. B.
In an attempt to reduce the amount of his tax liability, in 1993 Evseroff retained James Graves, a public accountant, to represent him before the IRS. Evseroff Aff. ¶ 11. Evseroff claims that Graves told him that the IRS told Graves it would accept $110,000 as full settlement of Evseroff's tax liability under its "Offer in Compromise" program. Id. Evseroff claims he authorized Graves to submit the offer to the IRS. Evseroff Aff. ¶ 12.
According to Evseroff, he received a letter from the IRS dated December 31, 1993 accepting the offer-in-compromise agreement. Evseroff Aff. Ex. C. The purported IRS letter instructed Evseroff to pay the IRS $1,600 per month for 48 months to satisfy his liability. Id. Two other purported IRS letters reflecting the offer-in-compromise exist, one allegedly sent to Graves dated July 6, 1994, and one allegedly sent to Evseroff and his wife dated August 2, 1994. United States' Reply in Support of Motion for Judgment ("U.S. Reply") Ex. 11. Between January and September 1994, Evseroff made nine $1,600 payments to the IRS. Evseroff Aff. ¶ 12. All of the checks stated they were for a tax settlement. Evseroff Aff. Ex. D. The IRS accepted the checks, deposited them, and stamped on the back, "FOR CREDIT TO THE U.S. TREASURY." Id. At the time, the IRS apparently did not inform Evseroff how the funds from the checks would be applied. United States Memorandum of Oct. 18, 2001. IRS documents indicate that the payments were applied to Evseroff's tax liability for 1978. U.S. Reply. Ex. 12.
The United States contends that the IRS never accepted any offer-in-compromise from Evseroff, and that the letters of December 31, 1993, July 6, 1994, and August 2, 1994 are counterfeit. U.S. Reply at 2-9. According to the United States, IRS paper files and computer records in the facilities that serviced the areas in which Evseroff owned homes in 1993 and currently were checked and showed no record that the IRS ever accepted an offer-in-compromise from Evseroff. U.S. Reply Ex. 7-10.
The United States contends that the information contained in the letter proves that it was not issued by the IRS. The letter indicates it was sent from the IRS Brookhaven Service Center, but the United States contends that in 1993 and 1994 the Brookhaven Service Center had no offer-in-compromise function other than rerouting to other IRS facilities offer-in-compromise materials erroneously sent there. U.S. Reply Ex. 8. In addition, the United States claims that its correspondence records do not contain an entry indicating that a letter was issued. Id.
According to the United States, the language of. the letter does not accurately reflect IRS correspondence and procedures regarding an offer-in-compromise. The letter has a notation that it is a "LTR 105C," which the United States asserts is used to indicate a letter the IRS sends to notify a taxpayer that his administrative claim for a tax refund has been denied, and that such a letter is not used in connection with an offer-in-compromise. Id. The United States also contends that contrary to IRS procedures regarding an offer-in-compromise, the letter: (1) does not contain specific payment terms or discuss actions available to the IRS in case the taxpayer defaults, (2) claims to close the case before all payments were received, and (3) appears to contain contradictory language about when Evseroff should pay his 1992 taxes. Id.
The United States also contends that the July 6, 1994 and August 2, 1994 letters are counterfeit. The United States alleges that Graves admitted to an IRS criminal investigator in April 1996 that he counterfeited them. Evseroff Aff. Ex. F; U.S. Reply Ex. 11. The investigator, James Martin, interviewed Graves twice in April 1996. Evseroff Aff. Ex. F. According to an arrest warrant affidavit prepared by Martin, in the first interview Graves denied any knowledge that the letters might be fraudulent. Id. In the second interview, however, Graves stated that he had fraudulently prepared both letters, doing a "cut and paste" job to create the false impression that they were issued by the IRS. Id.
Furthermore, the United States claims that, as with the December 31, 1993 letter, the other two letters do not accurately reflect IRS correspondence and procedures regarding an offer-in-compromise. Like the December 31, 1993 letter, the other two letters indicate they were sent from the IRS Brookhaven Service Center, which the United States contends had no offer-in-compromise function in 1993 and 1994. U.S. Reply Ex. 8. The signature block of these two letters indicates they were written by "D. Lewis" in the "Special Procedures" section, but Martin found in his investigation that no person with that name worked at the Brookhaven Service Center in 1994 and that there was no Special Procedures function at the Brookhaven Service Center that year. U.S Reply Ex. 11. Finally, Martin also found that the letters contain bar codes that refer to employment tax numbers of a taxpayer other than Evseroff or his wife.Id.
In the late summer of 1994, the IRS placed a lien on Evseroff's home in Florida and ordered his checking account seized. Evseroff Aff. ¶ 13. Evseroff claims this was when he learned that the IRS contended it had no record of accepting his offer-in-compromise. Evseroff Aff. ¶ 13.
In 1997, Evseroff filed suit against the IRS alleging it had improperly attempted to collect taxes from him. The action was subsequently dismissed. Evseroff v. Internal Revenue Service, 86 A.F.T.R.2d 2000-6711 (E.D.N.Y. 2000), aff'd, Evseroff v. Internal Revenue Service, No. 00-6331, 2001 WL 668528 (2d Cir. June 12, 2001). In that case, Evseroff relied on the purported IRS letters, and the court stated that Graves had forged them. Id. at *1.
From 1992 to 1997, the IRS assessed Evseroff additional tax liabilities based on his 1991, 1992, and 1996 tax returns. U.S. Compl. ¶ 10. These assessments were not part of the Tax Court decision and apparently are not alleged to be covered by the offer-in-compromise Evseroff claims was accepted by the IRS.
Including all payments, credits, and additional interest and penalties, the United States claims that Evseroff owed $1,546,682.08 as of May 31, 2000, plus additional statutory interest. U.S. Compl. ¶ 12.
The United States brought this action on October 5, 2000, to: (1) reduce the federal tax assessments from 1978-82, 1991-92, and 1996 against Evseroff to judgment; (2) establish the validity of liens of the United States on all of Evseroff's property; (3) foreclose on the lien on a piece of real estate in Brooklyn, N Y and the other assets of the 1992 trust agreement; and (4) determine the interests and priority of the United States and several defendants in proceeds from a court-ordered sale or liquidation of the Brooklyn property and the trust agreement.
Discussion (1)
The United States now moves for entry of judgment on the pleadings pursuant to Rule 12(c) of the FRCP, or, in the alternative, for summary judgment under Rule 56, to reduce to judgment the federal tax assessments made by the United States Tax Court and the IRS. This court has jurisdiction to reduce to judgment federal tax assessments under 26 U.S.C. § 7402 (a). See United States v. Scherping, 187 F.3d 796 (8th Cir. 1999); United States v. Kyser, 78 A.F.T.R.2d 96-6737 (W.D.N.Y. 1996)
The United States seeks to reduce the assessments to judgment to take advantage of judicial collection remedies. United States' Letter of April 16, 2001 at 3.
The standard for granting a Rule 12(c) motion for judgment on the pleadings is the same as that for a Rule 12(b)(6) motion for failure to state a claim. Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). For both motions, the court must accept the non-movant's allegations as true, viewing the facts in the light most favorable to the non-moving party. Sheppard v. Beerman, 18 F.3d 147, 150 (2d Cir. 1994). A Rule 12(c) motion should be granted if the movant is entitled to judgment as a matter of law. Burns Int'l Sec. Servs. v. Int'l Union, 47 F.3d 14, 16 (2d Cir. 1994)
In its initial motion, the United States sought entry of judgment on the pleadings because Evseroff's answer did not deny the complaint's allegations that: (1) the United States Tax Court entered a decision against him on November 5, 1992; (2) the IRS made assessments against him in 1978, 1979, 1980, 1981, 1982, 1991, 1992, and 1996; and (3) the total amount owed by Evseroff as of May 31, 2000 was $1,546,682.08 plus additional statutory interest. United States' Memorandum of Law in Support of Motion ("U.S. Mem.") at 1-4.
Clearly, however, Evseroff's answers were not intended to admit the United States' allegations. Instead, Evseroff only agreed that the complaint correctly stated the Tax Court decision and the IRS assessments. Evseroff Answer ("Evseroff Ans.") ¶¶ 10, 12. For example, responding to the complaint's chart of taxes owed and subsequent penalties, fees, and interest, Evseroff answered: "In response to the allegations contained in paragraph 10 of the Complaint, refers to the IRS transcripts for their true and complete contents." Evseroff Ans. ¶ 10. Evseroff's other answers are substantially the same, and are far from admissions that he, in fact, owes the amount listed above to the IRS. The United States' motion for judgment on the pleadings is therefore denied.
(2)
In the alternative, the United States moves for summary judgment pursuant to Rule 56 of the FRCP. Summary judgment is granted when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). On a motion for summary judgment, the court must consider "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512 (1986). In making this determination, all factual inferences must be drawn in favor of the party against whom summary judgment is sought, viewing the factual assertions in materials such as affidavits, exhibits, and depositions in the light most favorable to the party opposing the motion. Id. at 255, 106 S.Ct. at 2513; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552 (1986). However, "conclusory statements, conjecture, or speculation" by the non-moving party will not defeat the motion. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996)
a. Proper Notice and Demand
Evseroff argues that judgment should not be entered because the United States has not proven that it took the proper steps to issue notice and demand to assess the unpaid taxes and penalties. Evseroff does not offer any evidence that the proper steps were not taken. Instead, he argues that the United States has the burden of proving it took those steps, and that he is entitled to discovery on the issue.
An IRS assessment is made "by recording the liability of the taxpayer in the office of the Secretary in accordance with rules or regulations proscribed by the Secretary." 26 U.S.C. § 6203. The IRS satisfies its obligations under this statute when an assessment officer signs a summary record of assessment describing: (1) the taxpayer's name and address; (2) the character of the assessed liability; (3) the taxable period (if any); and (4) the amount of the assessment. Treas. Reg. § 301.6203-1. These steps are reflected in Certificates of Assessments and Payments, known as Forms 4340, issued by the IRS. "Courts consistently regard such certificates as presumptively correct and as being sufficient proof, in the absence of evidence to the contrary, of the adequacy and propriety of the notices and assessments listed therein." United States v. Kyser, 78 A.F.T.R.2d 96-6737 (W.D.N.Y. 1996) (citing Hefti v. I.R.S., 8 F.3d 1169, 1172-73 (7th Cir. 1993)).
The United States has submitted properly certified Forms 4340 for all eight of the years in question. U.S. Reply Ex. 12. Evseroff has offered no evidence to contradict their validity, only a conclusory claim that the United States has not proven that it took the proper steps to issue notice and demand. "Conclusory allegations will not suffice to create a genuine issue. There must be more than a `scintilla of evidence' and more than `some metaphysical doubt as to the material facts.'" Delaware Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252, 106 S.Ct. at 2512, andMatsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356 (1986)). Accordingly, the court presumes that proper notice and demand was made for the assessments.
b. Offer-in-Compromise
Evseroff argues that the IRS accepted his offer-in-compromise, superseding its right to collect any other amount now. Evseroff Aff. ¶ 16. The United States responds that the IRS never accepted any offer-in-compromise from Evseroff, and that letters of December 31, 1993, July 6, 1994, and August 2, 1994 are counterfeit. U.S. Reply at 2-9.
This argument only applies to the tax liabilities related to the years 1978 through 1982. The purported offer-in-compromise did not cover tax liabilities from 1991, 1992, and 1996.
Evseroff does not offer any evidence that the letters are authentic. Instead, he argues that he needs further discovery to demonstrate that the IRS accepted his offer-in-compromise. Evseroff contends that he needs discovery of Evseroff's accountant Graves, Martin, who conducted the IRS investigation into Graves' alleged forgery, an unnamed IRS employee who assisted Martin, and the IRS personnel who processed his 1993 offer-in-compromise to determine if someone with IRS did, in fact, accept the offer. Evseroff Aff. ¶¶ 13, 18. Evseroff seeks depositions of the individuals and document discovery from the IRS.
Rule 56(f) of the FRCP governs situations in which a party may need more discovery in order to oppose a summary judgment motion. The rule states:
Should it appear from the affidavits of a party opposing the motion [for summary judgment] that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.
In the Second Circuit, a party opposing summary judgment on the ground that it needs more discovery under Rule 56(f) must present his contention by affidavit. Paddington Partners v. Bouchard, 34 F.3d 1132, 1137 (2d Cir. 1994). "A reference to Rule 56(f) and to the need for additional discovery in a memorandum of law in opposition to a motion for summary judgment is not an adequate substitute for a Rule 56(f) affidavit." Id. The failure to file a Rule 56(f) affidavit alone is sufficient grounds to reject a claim that the opportunity for discovery was inadequate. Id.
Evseroff's request for further discovery does not mention Rule 56(f) and is not styled as a Rule 56(f) affidavit. His only reply to the United States' motion was an "affidavit" in which he made both factual assertions and legal arguments. In some cases, courts have denied a request for additional discovery because the party's affidavit did not reference Rule 56(f). See, e.g., AAI Recoveries, Inc. v. Pijuan, 13 F. Supp.2d 448, 452 (S.D.N Y 1998). Other courts have construed an affidavit to "function" as a Rule 56(f) affidavit. See Lukas v. Triborough Bridge and Tunnel Auth., No. CV-92-3680, 1993 WL 597132, at *8, 11 and n. 3 (E.D.N.Y. Aug. 18, 1993). Again, Evseroff's request for further discovery could be denied on this basis alone.
Even if Evseroff's "affidavit" is liberally construed to allow it to be treated as a Rule 56(f) affidavit, the Second Circuit requires such an affidavit to include: "(1) what facts are sought and how they are to be obtained, (2) how those facts are reasonably expected to create a genuine issue of material fact, (3) what effort affiant has made to obtain them, and (4) why the affiant was unsuccessful in those efforts." Meloff v. New York Life Ins. Co., 51 F.3d 372, 375 (2d Cir. 1995).
Evseroff's affidavit only partially satisfies these requirements. He does specify that he seeks to determine whether anyone at the IRS accepted his offer-in-compromise and that this will be obtained through "discovery" of Graves, Martin, and unnamed IRS employees. Evseroff also states that he hopes to obtain documents from the IRS establishing that it accepted his offer in December 1993. However, he does not fully state how this discovery would reasonably be expected to generate a genuine issue of material fact. Regarding Graves, Evseroff argues that since Graves at first denied to Martin any knowledge that the letters were fraudulent, a deposition is needed to clear up this inconsistency. In theory, Graves could recant his admission that he forged the letters and direct Evseroff to the IRS personnel that accepted the offer-in-compromise. Considering that it is unchallenged that Graves subsequently admitted to Martin that he forged the July 6, 1994 and August 2, 1994 letters, this is, at best, a highly speculative theory about what could be discovered. Taking Graves' deposition therefore cannot reasonably be expected to generate a genuine issue of material fact.
Likewise, deposing Martin or the unnamed IRS employee who assisted him cannot reasonably be expected to uncover evidence of the material issue of whether the IRS accepted Evseroff's offer in-compromise. According to his affidavit, Martin only investigated whether the letters were forged. There is no evidence that he conducted an investigation within the IRS to determine if the IRS did, in fact, accept Evseroff's offer-in-compromise. Therefore, deposing him or his unnamed assistant cannot reasonably be expected to generate a genuine issue of material fact.
Evseroff did correctly specify that discovery of other, unnamed IRS personnel and document requests could possibly lead to evidence that the IRS accepted the offer-in-compromise. However, aside from the fact that the United States has already searched its records and failed to find any evidence that it accepted Evseroff's offer-in-compromise, Evseroff has not explained what efforts, if any, he has made to obtain these facts, and why he was unsuccessful in those efforts. This failure is magnified by the opportunities for discovery previously available to Evseroff which he did not utilize. From the outset of this action, Eversoff knew that his defense would be that the IRS accepted his offer-in-compromise. The complaint against Evseroff was filed October 5, 2000 and Evseroff filed his answer on January 2, 2001, but the docket sheet does not show any steps he took to obtain discovery. It was only in his May 30, 2001 response to the United States' motion for judgment on the pleadings or summary judgment that he raised the need for discovery.
Moreover, Evseroff either was or should have been aware from even before the beginning of this case that he would likely need discovery regarding the authenticity of the purported IRS letters because the issue was raised in his previous suit against the IRS. See Evseroff v. Internal Revenue Service, 86 A.F.T.R.2d 2000-6711, at *1 (E.D.N.Y. 2000). In that case, Evseroff relied on the purported IRS letters, and Graves' forgery was reported. Id. While the failure to comply with the third and fourth requirements is not automatically fatal to a Rule 56(f) affidavit, the total absence of reference to efforts to obtain the needed facts can result in defeat of the request for additional discovery. See Paddington Partners, 34 F.3d at 1139; Bonnie Co. Fashions, Inc. v. Bankers Trust Co., 945 F. Supp. 693, 706-07 (S.D.N.Y. 1996). Evseroff thus had a fully adequate opportunity for discovery and did not take it.
As the party opposing the motion for summary judgment, Evseroff is usually entitled to "the opportunity to discover information that is essential to his opposition." Berger v. United States, 87 F.3d 60, 65 (2d Cir. 1996) (internal quotation marks omitted). "But the trial court may properly deny further discovery if the nonmoving party has had a fully adequate opportunity for discovery." Trebor Sportswear Co. v. The Limited Stores, Inc., 865 F.2d 506, 511 (2d Cir. 1989). Moreover, a court may deny a request for further discovery "if it deems the request to be based on speculation as to what potentially could be discovered." Paddington Partners, 34 F.3d at 1138. The "bare assertion" that the evidence supporting a party's allegation is in the hands of his opponent is "insufficient to justify a denial of a motion for summary judgment under Rule 56(f)." Id. (quoting Contemporary Mission, Inc. v. U.S. Postal Serv., 648 F.2d 97, 107 (2d Cir. 1981)) (internal quotation marks omitted).
As noted, Evseroff had an opportunity to discover the information he seeks. In addition, Evseroff's request is only slightly more than a bare assertion that the IRS has evidence to support his claim. Indeed, Evseroff states in his affidavit that "[e]vidence may exist to indicate that the IRS accepted my Offer in Compromise in December 1993." Evseroff Aff. ¶ 18. The existence of the purported IRS letters makes Evseroff's argument more than speculation about what potentially might be discovered, but not much more. As noted above, depositions of Martin, Graves, and the unnamed IRS employee who assisted Martin's investigation will not uncover evidence that the IRS accepted Evseroff's offer-in-compromise. Evseroff's vague request for discovery of unnamed IRS personnel is based on speculation about what might be discovered. Nor will document discovery of the IRS aid Evseroff. The United States has already searched its records and failed to find any evidence that it accepted Evseroff's offer-in-compromise. Additional discovery is therefore futile.
For these reasons, Evseroff's request for further discovery is denied.
(3)
In his opposition to the United States' motion, Evseroff contends that judgment should not be entered because he has asserted several affirmative defenses. However, none of these defenses are a bar to entry of judgment.
a. Failure to state a claim
First, Evseroff asserts as an affirmative defense that the United States has failed to state a claim as to which relief can be granted. This argument is without merit. The United States merely asks for the Tax Court decision and the federal tax assessments to be reduced to judgment. The United States has the authority under 26 U.S.C. § 7401, 7403 to request that the assessments be reduced to judgment, and the Court has subject matter jurisdiction to reduce the assessments to judgment under 26 U.S.C. § 7402 (a). Accepting all of the United States' factual allegations as true, the United States has not failed to state a claim.
b. Statute of Limitations
Second, Evseroff claims that the United States' action is barred by applicable statues of limitation. Evseroff raised this contention in his suit against the IRS regarding his tax assessments for 1978-82, and the court conclusively rejected it. Evseroff v. Internal Revenue Service, 86 A.F.T.R.2d 2000-6711, at *4 (E.D.N.Y. 2000), aff'd, No. 00-6331, 2001 WL 668528 (2d Cir. June 12, 2001). Under 26 U.S.C. § 6502 (a), the IRS has 10 years from the date of assessment for the collection of taxes. The court determined that the first assessment on March 10, 1993 was timely under 26 U.S.C. § 6501 (a), 6501(c)(4), 6503(a)(1), and 7481(a) (1), and thus concluded that the IRS has until March 10, 2003 to begin collection of the taxes from these years.
Nor has the statute of limitations run on Evseroff's additional tax assessments for 1991, 1992, and 1996. According to the Form 4340 for Evseroff's 1991 tax liability, he was assessed on November 9, 1992, giving the IRS until November 8, 2002 to begin collection. U.S. Reply Ex. 12. Similarly, the assessment for 1992 was made on October 10, 1993, giving the IRS until October 9, 2003 to begin collection, and the 1996 assessment was made on November 24, 1997, giving the IRS until November 23, 2007 to start.
Evseroff makes no additional allegations in his affidavit, so his argument is to no avail.
c. Laches
Similarly, Evseroff argues as an affirmative defense that the United States' claim is barred by the doctrine of laches. This argument is also without merit. "It is well settled that the United States is not . . . subject to the defense of laches in enforcing its rights." United States v. Summerlin, 310 U.S. 414, 416, 60 S.Ct. 1019, 1020 (1940). In fact, laches is especially inappropriate in the area of tax collection. See United States v. De Beradinis, 395 F. Supp. 944, 953-54 (D. Conn. 1975)
d. Estoppel
The final affirmative defense asserted by Evseroff is estoppel. The traditional elements of an estoppel claim are: "(1) the defendant made a definite misrepresentation of fact, and had reason to believe that the plaintiff would rely on it; and (2) the plaintiff reasonably relied on that misrepresentation to his detriment." Wall v. Construction General Laborers' Union, Local 230, 224 F.3d 168, 176 (2d Cir. 2000). Furthermore, the doctrine of estoppel does not generally lie against the federal government. See Office of Personnel Mgmt. v. Richmond, 496 U.S. 414, 422-24, 110 S.Ct. 2465, 2470-71 (1990). In the Second Circuit, estoppel against the government is limited to those cases in which the party can establish both the traditional elements of estoppel, and that the government engaged in affirmative misconduct. City of New York v. Shalala, 34 F.3d 1161, 1168 (2d Cir. 1994); Estate of Carberry v. C.I.R., 933 F.2d 1124, 1127 (2d Cir. 1991)
Evseroff does not elaborate on why the United States should be estopped from having judgment entered against him. The best reading of this defense is that the IRS misrepresented that it had accepted an offer-in-compromise through the three purported letters and by depositing the nine checks. Neither of these alleged misrepresentations, however, can sustain an estoppel defense as a matter of law.
Depositing the checks is not a misrepresentation by the government nor does it constitute affirmative misconduct. Compromise offers can only be accepted by the provisions of 26 U.S.C. § 7121, 7122, and the acceptance and cashing of checks from a taxpayer cannot be used to impute a compromise settlement. Brooks v. United States, 833 F.2d 1136, 1146 (4th Cir. 1987); Bowling v. United States, 510 F.2d 112, 113 (5th Cir. 1975); Mayer v. United States, 78 A.F.T.R.2d 96-7422 (Bankr. D. Kan. 1996).
Nor can the letters rise to the level of affirmative misconduct. As discussed above, Evseroff has offered no evidence that the letters are authentic. Any allegation of affirmative misconduct by the IRS is thus speculation inadequate to defeat the motion for summary judgment.
(4)
The United States also moves under Rule 54(b) of the FRCP to enter final judgment on the issue of whether to reduce the federal tax assessments to judgment. Rule 54(b) generally provides that when one or more claims is presented in an action, the court may direct the entry of a final judgment as to one of the claims on an express determination that there is no just reason for delay and on an express direction for entry of judgment. See Fed.R.Civ.P. 54(b). Accordingly, to permit entry of a final judgment under Rule 54(b), there must be: (1) multiple claims; (2) at least one claim finally decided within the meaning of 28 U.S.C. § 1291; and (3) the district court must make an express determination that there is no just reason for delay and expressly direct the clerk to enter judgment. See Advanced Magnetics. Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 16 (2d Cir. 1997); Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1091 (2d Cir. 1992)
The United States seeks to reduce to judgment all the federal tax assessments. The United States separately seeks to establish the validity of liens on Evseroff's property, foreclose on those liens, and determine the interests of various parties in some of that property. Therefore, there are multiple claims here.
This includes both the assessments from 1978-82 that were entered as a decision of the United States Tax Court in November 1992, and the subsequently IRS assessments of additional tax liabilities for 1991-92 and 1996.
A claim is finally decided "if the decision "ends the litigation [of that claim] on the merits and leaves nothing for the court to do but execute the judgment' entered on that claim," Ginett, 962 F.2d at 1092 (quoting Coopers Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457 (1978)). As there is nothing left for the court to do here but execute its judgment, the first claim is finally decided within the meaning of § 1291.
In general, there is no just reason to delay entry of judgment when "there exists some danger of hardship or injustice through delay which would be alleviated by immediate appeal." American Magnetics. Inc., 106 F.3d at 16 (quotations omitted). This danger exists when "a plaintiff might be prejudiced by a delay in recovering a monetary award." Id. (citing Curtiss-Wright v. General Elec. Co., 446 U.S. 1, 11-12, 100 S.Ct. 1460, 1466-67 (1980). Specifically, the concern that the government could be prejudiced by a delay in enforcing its judgment against a taxpayer pending adjudication of a lien foreclosure on the property of that taxpayer has been held to constitute no just reason to delay entry of judgment. See United States v. Julius Nasso Concrete Corp., 85 A.F.T.R.2d 2000-2157 (E.D.N.Y. 2000).
The United States argues that it will be prejudiced by delaying entry of judgment because a delay will give Evseroff an opportunity to hide his assets. In response, Evseroff argues that no urgency exists to reduce the assessments to judgment because the tax liabilities go back 23 years and nine years has passed since the Tax Court decision, and because a few more months to permit discovery on this count while discovery continues on the other counts will not prejudice the United States. Evseroff Aff. ¶ 4.
The United States has established that there is at least some danger of hardship or injustice from delay that can be alleviated by entry of judgment. It is undisputed that soon after the Tax Court proceedings began Evseroff transferred assets to a trust for the benefit of his children and grandchildren. In addition, the lengthy delay in collecting owed taxes has already caused prejudice. Therefore, there is no just reason to further delay entry of judgment, and the United States' Rule 54 (b) motion for entry of judgment is granted.
Conclusion
Evseroff has failed to demonstrate that a genuine issue of material facts exists regarding the United States' notice and demand to collect its tax assessments against him, has failed to fulfill the requirements for additional discovery, and has not offered any affirmative defenses that preclude entry of summary judgment. Accordingly, the United States' motion to reduce to judgment the United States Tax Court judgment and the federal tax assessments against Evseroff is granted, and the clerk of the court is directed to enter final judgment pursuant to Rule 54(b).