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Susan Rose, Utah Bar. No. 7985 ATTORNEY FOR THE PLAINTIFFS 9553 South Indian Ridge Drive Sandy, Utah 84092 Phone/fax (801) 545-0441 UNITED STATES COURT OF FEDERAL CLAIMS Danny C. Simons and Sally J. Simons Plaintiffs, vs. UNITED STATES OF AMERICA, Defendant. Case No. 06-115 Judge Susan Braden
PLAINTIFFS' RCFC RULE 56 MOTION FOR PARTIAL SUMMARY JUDGMENT _____________________________________________________________________ NOW COME THE PLAINTIFFS, by and through undersigned counsel, under RCFC Rule 56, to move this Court for partial summary judgment, based upon the memorandum of points and authorities attached hereto, and based upon the exhibits as attached to and incorporated into the Amended Complaint.
So Signed this 13th day of July, 2006 ______________/s/_________________ Susan Rose, Utah Bar. No. 7985 Counsel for the Plaintiffs 9553 S. Indian Ridge Drive Sandy, Utah 84092 (801) 545-0441 [email protected]
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TABLE OF CONTENTS PROPOSED FINDINGS OF FACT QUESTIONS PRESENTED Separate Attached 1
1. Did the Government breach a 1983 package agreement contract for three tax years 1972, 1973 and 1974, memorialized in two Tax Court decisions, fully satisfied in accord with the agreement with the Simons' $49, 546.55? 2. Did the Government toll the statues of limitation for the Simons seeking redress in this honorable Court?
3. Was the Government's filing of a 1992 action in District Court for further collection for year 1974, outside the District Court's statutory jurisdiction, such that all its orders, decrees and judgements are void ab initio? 4. Are the Simons entitled to their full damages as requested in the original and amended complaints, as verified by the Simons, due to fraud, concealment, mistake, harassment, bad faith, and all the other Simons claims? STATEMENT OF THE CASE JURISDICTION OF THE COURT SUMMARY JUDGMENT STANDARD COLLATERAL ATTACK UPON A VOID DISTRICT COURT'S 2002 JUDGMENT THAT WAS VIOLATED IN MARCH 14, 2004 BY A FURTHER $4100 BILL FOR 1974 IS LEGALLY SOUND 1 3 5
6
Lack of Statutorily-Required written Notice of Assessment prevents further collection- except apparently for the Simons 7 Written Notices of Deficiency are to Issue for Supplemental AssessmentsExcept Apparently for the Simons A Form 872 Prevents the IRS from Assessing past a Time CertainExcept apparently for the Simons 7 7
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The Government Had a Duty to Disclose Material Information to Citizens it is Privy to Through Contract and by Federal Rules of Civil Procedure- Except apparently for the Simons Levies and Liens are Invalid without a Written Notice and Demand -Except Apparently for the Simons District Court proceedings to quiet title to a Levy or Lien Cannot Proceed without a Prior Written Notice and Demand, timely Assessment, or for amounts exceeding those settled by the Commissioner (26 USC 7121)- Except Apparently for the Simons THE 1983 AGREEMENT FOR THREE INSEPERABLE YEARS WAS A BONA FIDE CONTRACT PROOF OF FULL PAYMENT IN SATISFACTION OF AND IN ACCORD WITH THE 1983 AGREEMENT
8
8
9
9 11
Closing of the 1974 account so payment would post in only 1973's account leaving all three years closed to further collection in 1983 Intentionally Late Assessment for Year 1974 Should Have Protected the Simons From Further Collection on year 1974 A CPA Certified Calculation Accounts for Full Payment of the Entire Three Year Settlement Contract in 1983 CPA Bryan Bolander's Analysis of the 1983 Agreement Shows Consistency Throughout with no mention of interest by the IRS TOLLING OF THE STATUTES OF LIMITATION SIX CONDITIONS TOLL THE STATUTES OF LIMITATION Equitable Tolling Due to Fraud or Concealment of Documents The Analysis of the 1983 Agreement by CPA Bolander Fraudulent Claims against the Simons and Concealment of the Documents The Simons' Due Diligence in Obtaining their Records
11 12 15 16 16 19 20 20 23 25
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Continuing Claims Doctrine Equitable Estoppel is Justified to Toll the Statutes for This Court Lack of Any Fair and Impartial Hearing and Tribunal The IRS Refusal to Return the Simons the Amounts paid for year 1974 After further billing of the Simons in 2004 Duress Should Toll the Statutes DAMAGES CONCLUSION ATTACHED APPENDIX TABLE OF APPENDIX
30 33 34 35 37 38 40 PGS.1-13
TABLE OF AUTHORITIES CASES Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970) Alliance of Descendants of Texas Land Grants v. United States, 37 F.3d 1478, 1481 (Fed.Cir.1994). American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17 -18 (1951); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Anthony v. United States, 987 F.2d 670 (10th Cir. 1992) Awad v. U.S. 301 F.3d 1367, 1372 (Fed. Cir. 2002) Bennett v. Coors Brewing Co. 189 F.3d 1221,1229-1230 (10th Cir. 1999) Boling v. United States, 220 F.3d 1365, 1373 (Fed. Cir. 2000) Bowen v. City of New York, 476 U.S. 467, 481-482 (1986) Capron v. Van Noorden, 2 Cranch 126, 127 (1804) 6
33 9 6 4,6,8,10,16,29,34 40 32 19,30 19 9
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Catawba Indian Tribe of South Carolina v. United States, 982 F.2d 1564, 1571 (Fed. Cir. 1993) Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 407-08 (1994). Chevron U.S.A., Inc. v. United States, 923 F.2d 830, 834 (Fed. Cir. 1991) Creppel v. United States, 41 F.3d 627, 630-31 (Fed. Cir. 1994) Curtis v. United States, 144 Ct. Cl. 194, 199, 168 F. Supp. 213, 216 (1958), cert. denied, 361 U.S. 843 (1959), reh'g denied, 361 U.S. 941 (1960). Entines v. United States, 39 Fed. Cl. 673, 680 (1997) Fafel v. DiPaola, 399 F.3d 403, 410 (1st Cir. 2005) Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947) Friedman v. United States, 159 Ct. Cl. 1, 310 F.2d 381 (1963) Hatter v. United States, 203 F.3d 795, 797-98 (Fed. Cir. 2000) ( en banc )); Hector v. United States [58-1 USTC ¶9372], 255 F.2d 84, 85-86 (1958) (per curiam) Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946) Hurt v. U. S. 70 F.3d 1261 (4th Cir. 1995) Inter-State Detective Bureau, Inc., v. Denver Post, Inc., 29 Colo. App. 313, 316, 484 P.2d 131, 133 (1971) Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 96 (1990) Japanese War Notes Claimants Assoc. of the Phillippines, Inc. v. United States, 178 Ct. Cl. 630, 634, 373 F.2d 356, 358-59 (1967) Keohane v. Stewart, 882 P.2d 1293, 1297 (Colo. 1994) Kurio v. U. S., 429 F. Supp. 42, 1970.STX.0000028http://www.versuslaw.com Lininger v. Knight, 123 Colo. 213, 221, 226 P.2d 809, 813 (1951). Lins v. United States, 231 Ct. Cl. 579, 582, 688 F.2d 784, 786 (1982), cert. denied, 459 U.S. 1147 (1983)
30 30 17 6
6 30 7 33 31 31 16 19
4,6,8,10,16,29,34
39 30
30 39
4,6,8,10,19,20,21 39
17
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Lubben v. Selective Serv. Sys. Local Bd. No. 27, 453 F.2d 645, 649 (1st Cir. 1972) Mansfield, C. & L. M. R. Co. v. Swan, 111 U.S. 379, 382 (1884) Marbury v. Madison, 5 U.S. 137, 163 (1803) Mitchell v. United States, 10 Cl. Ct. 63, 75, as modified, 10 Cl. Ct. 787 (1986) Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d 1253, 1257 (Fed. Cir. 2001)
6 9 38 31 6
Nager Elec. Co. v. United States, 177 Ct. Cl. 234, 240, 368 F.2d 847, 751 (1966), reh'g denied, 184 Ct. Cl. 390, 396 F.2d 977 (1968) 16,17 Oceanic Steamship Co. v. United States, 165 Ct. Cl. 217, 225 (1964) Portmann v. United States, 674 F.2d 1155, 1159 (7th Cir.1982). Ripley v. Comm'r Ripley v. Commissioner, 103 F.3d 332 (4th Cir.) 1996.C04.43538
14 37
14 7 39 2
5
U.S. v. Simons, http://www.kscourts.org/ca10/cases/2003/12/02-4201.htm 29
United States v. Lane, 303 F.2d 1, 4 (5th Cir. 1962). STATUTES 26 U.S.C. §108. 26 U.S.C. §§1311-1314 26 U.S.C. 6212, 6213 3, 38 1 6,7,11 4
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26 U.S.C. §6215 26 U.S.C. §6303 26 U.S.C. §6321. 26 U.S.C. 6330 26 U.S.C. 6331 26 U.S.C. §6404 26 U.S.C. §6501 26 U.S.C. §6501(b)(4). 26 U.S.C. §6503 26 U.S.C. §6601(a) 26 U.S.C. §6601(e) 26 U.S.C. §6653 26 U.S.C. §7121. 26 U. S. C.§7122. 26 USC §7452 28 U.S.C. § 1346(a)(2)) 28 U.S.C. § 1491 28 U.S.C. §2201(a). 28 U.S.C. §2401(a). 28 U.S.C. §2415 (a) 28 U.S.C. §2501 Freedom of Information Act FOIA Privacy Act
6,11 7 6,8 8 8 10 1,7,8,11 7 11 2,11 16 22 9 5 7,11 3 4 4,5 16 17 16 6,20,25,26,39 6,20,25,26, 39
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Federal Rule of Civil Procedure 26 Federal Rule of Appellate Procedure at Rule 4
6 18
U.S. Con. 5th Amend. Delegation Orders No. 150-25 dated March 8, 1951; No. 60 ¶ 1 effective Nov. 26, 1979 No. 190 effective March 21, 1982 ¶ 2, Internal Revenue Service Regulations, Policies and Procedures 26 CFR 301.7701-9 for 1983 IRM 35.10.1.1.2.2 Rev. Proc. 83-7 IRS HANDBOOK 5.1 4.11 RCFC 56 Tax Court Rule Tax Court Rule 155 Treatises Netting of Interest on Tax Overpayments and Underpayments Attached app. pg.7 1 Corbin §86; 1 Williston §72. 2,7 15 16 5,6
16
2,7,11 2,7,11
2
4
3
5,18,19
note 15: 28 Am Jur 2d Estoppel and Waiver § 123, p. 785 27 ALR Fed, p. 719. and 722
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Susan Rose, Utah Bar. No. 7985 ATTORNEY FOR THE PLAINTIFFS 9553 South Indian Ridge Drive Sandy, Utah 84092 Phone/fax (801) 545-0441 UNITED STATES COURT OF FEDERAL CLAIMS Danny C. Simons and Sally J. Simons Plaintiffs, vs. UNITED STATES OF AMERICA, Defendant. Case No. 06-115 Judge Susan Braden
MEMORANDUM OF LAW PLAINTIFFS' RCFC RULE 56 MOTION FOR PARTIAL SUMMARY JUDGMENT _____________________________________________________________________
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NOW COME THE PLAINTIFFS, by and through undersigned counsel, under RCFC Rule 56, to move this Court for partial summary judgment, based upon the attached proposed findings of fact and this memorandum of law as follows: QUESTIONS PRESENTED 5. Did the Government breach a 1983 package agreement contract for three tax years 1972, 1973 and 1974, memorialized in two Tax Court decisions, fully satisfied in accord with the agreement with the Simons' $49, 546.55? 6. Did the Government toll the statues of limitation for the Simons seeking redress in this honorable Court?
7. Was the Government's filing of a 1992 action in District Court for further collection for year 1974, outside the District Court's statutory jurisdiction, such that all its orders, decrees and judgements are void ab initio? 8. Are the Simons entitled to their full damages as requested in the original and amended complaints, as verified by the Simons, due to fraud, concealment, mistake, harassment, bad faith, and all the other Simons claims? STATEMENT OF THE CASE 1. This case involves a package settlement for three years, 1972, 1973, 1974 memorialized in 1983 in two Tax Court decisions, signed by representatives of the United States and the U.S. taxpayer citizens, the Simons, with delegated authority to sign the stipulated decisions entered on April 22, 1983, with identical IRS drafted underlying work documents, showing all three years were interconnected legally and mathematically by income averaging and reaching into a statutorily closed year, 1972, using mitigation statute provisions 26 U.S.C. 1311-1314. (The only tax code provisions allowing the government to reach into a closed year). The Simons assert that as good citizens, they paid in 1983, $49,546.55 for a `settlement' of a dispute, and not `taxes' per se, for all three years. The District Counsel's decision shows the Simons consenting to payment when they could show the amounts were not owed or were reported correctly in later
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years, and that delay in settlement was the IRS' fault for not relinquishing `fraud' claims that lacked evidence to support them criminally or civilly. P. App. pg. 28-29. Baseless criminal claims delayed payment to settle these years civilly at least for years 72 and 73. 2. The Simons assert that the IRS (a) fully closed the 1974 account, (b) they can show how they fully paid for all three years as income averaged to within .07 cents or .001% error of the $49,546.55 paid in 1983; (c) tried to prevent further collections on year 1974, in 1983, and suspended their 1974 account from collections with computer codes that hold notices, that were reversed at the time a national computer policy was implemented directing reversal of litigation suspension codes; (d) concealed their key documents from them until about Feb. 15, 2000, while threatening them administratively in 1988, numerous times with seizure, levies and liens if they did not produce their records, falsely claiming they owed for year 1974, and sign an offer in compromise to extend the statutes of limitation under threats of enforced collection and seizure; (e) issued levies and liens without the statutory prerequisites; (f) usurped the District Court's authority without meeting the statutory prerequisites for District Court jurisdiction, resulting in another payment of $55,000 ; (f) depriving them of TIMELY showing how by concealed papers; (g) billing them again in 2004 for an additional $4100 and then (h) refusing to return all the money they paid and fees and interest by contract and Court order, breached, violated in innumerable ways over 20 yrs. Except for $23.17 based on the Simons refund request. 3. The Simons state that there was no handwritten 2001 Court-declared `agreement' or `settlement' for further payment of $55,000, that they paid as ordered in 2002. The District Court records show the Department of Justice "DOJ" reworded a key term`worldwide'- in rewriting the hand written offer greatly narrowing its scope over that
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intended by the Simons, objected to a judgment based on it, it was never signed by a person with delegated authority, and then, (after the Simons failed in appealing it after their full payment), the government once again billed the Simons for an additional $4100 in March, 2004, and then offered $23.17 in a refund to the Simons for violating the 1983 contract. Offering the Simons any money from their form 843 request, acknowledges the government should reimburse them for all the government breaches of its contract with them, and their full expectation damages associated with a continuous chain of breaches. 4. The Simons legal theory is very simple. If they fully paid in 1983 for all three years 1972, 1973 and 1974, then all the collection efforts against them resulted in all their claimed damages, of continual breaches, they document fact by fact. 5. The Simons seek money damages and declaratory relief for continuous breaches, full expectation damages. The Simons claim that further collections may arise for a forgiven presumptively legitimate, but false-claimed debt, upon which they may have to pay more taxes under 26 U.S.C. §108. It never ends. 6. The Simons recognize the government agency is presumed to act correctly. The government logically can't be right in 1983 and again in 2001. Either their acts in 1983 was correct and a fully satisfied contract resulted, OR, 2001 later collections based on concealed documents, and not disclosing to them or District Court the government's lack of meeting Court jurisdictional prerequisites is correct. JURISDICTION OF THE COURT 7. Under the "Little Tucker Act," 28 U.S.C. § 1346(a)(2)), this Court exclusive
jurisdiction over claims against the United States for amounts exceeding $10,000 "founded either upon the Constitution, or any Act of Congress, or any regulation of an
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executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages not sounding in tort." Id. And "the district courts shall not have jurisdiction of any civil action or claim against the United States founded upon any express or implied contract with the United States." Id. Congress also expressly bars District Courts from using their Declaratory Judgment powers "with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code of 1986." 28 U.S.C. 2201(a). 8. When more than $10,000 in damages is claimed, in a contract dispute, the Court
of Federal Claims possesses exclusive jurisdiction in these cases. 28 U.S.C. § 1491. 9. Agreements comprising tax litigation are `contracts' and contract rules apply.
Here, there are two in question, one in 1983 (P. App. pg. 12-21) and in 2001, (P. App. pg. 130) United States v. Lane, 303 F.2d 1, 4 (5th Cir. 1962). The Simons claim they had a 1983 contract involving $49,546.55 with the United States. Stipulated Tax Court judgments are `contracts' according to at least the 10th and 4th Circuit Courts. See, Hurt v. U. S. 70 F.3d 1261 (4th Cir. 1995) and Anthony v. United States, 987 F.2d 670 (10th Cir. 1992), with any ambiguities in the IRS drafted boiler language to be construed against the drafter. Id. Kurio infra. Therefore, the 1983 multiple year agreement memorialized in two Tax Court decisions, involving all three tax years, 1972, 1973 and 1974 for an amount of $49, 546.55, is a `contract' that falls within this Court's exclusive jurisdiction. 10. The Simons also raise another `contract' issue by claiming they paid $55,000 for a District Court's order, in 2002, not for a settlement with the Department of Justice nor IRS. There was no mutual meeting of the minds or agreement with the Department of Justice or IRS. An acceptance which attempts to restate the terms of an offer [ here the
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term `worldwide' was significantly narrowed by the Department of Justice] must be accurate in every material respect, or no contract will result--an inaccurate restatement can constitute no more than a counteroffer. 1 Corbin §86; 1 Williston §72. The Government is bound to a contract compromising a tax controversy only if the contract was expressly approved by the appropriate Government officials precisely in the manner required by statute, 26 U. S. C. §7122. See, generally, United States v. Feinberg [67-1 USTC ¶9176], 372 F. 2d 352 (3d Cir. 1965), aff'd on rehearing en banc, 372 F. 2d 352, 359 (1967). No one with delegated authority signed the 2001 handwritten offer. (P. App. pg. 222). The District Court record shows the Court was aware of a lack of a meeting of the minds, when the District Court declared the handwritten document, an agreement, and proclaimed, "it is not what the Department of Justice wanted. " P. App. pg. 228-229, in violation of the Declaratory judgment restrictions for tax matters. 28 U.S.C. 2201. 11. After the Simons full payment, then failed appeal to the Tenth Circuit, the statutes of limitation ran for the Simons to appeal to the Supreme Court, in February, 2004. In March, 2004 they once again billed the Simons after their 2002 payment of $55,000, for an additional about $4100. When Simons asked file their form 843, asking for a refund of all amounts paid on the 1983 multiple year contract, not taxes, but amounts to satisfy a dispute, and then Court order, the government refused, but for $23.17 that the Simons refused to cash and sent back as in error. Both issues regard alleged contracts by either the Simons or District Court, in 1983 and 2001, involving claims over $10,000. SUMMARY JUDGMENT STANDARD 13. RCFC 56 provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with
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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." [1] Irrelevant, unsupported factual disputes do not preclude the entry of summary judgment. [2] COLLATERAL ATTACK UPON A VOID DISTRICT COURT'S 2002 JUDGMENT THAT WAS VIOLATED IN MARCH 14, 2004 BY A FURTHER $4100 BILL FOR 1974 IS LEGALLY SOUND 14. This Court has authority to vacate another Court's judgment if it was void. "A void judgment is to be distinguished from an erroneous one, in that the latter is subject only to direct attack. A void judgment is one which, from its inception, was a complete nullity and without legal effect. . . ..". Id. (internal marks omitted) (quoting Lubben v. Selective Serv. Sys. Local Bd. No. 27, 453 F.2d 645, 649 (1st Cir. 1972)). After the Simons received the Feb. 15, 2000 IRS
disgorgement of their documents, and had time to review them with tax experts, the government's failed to meet Federal Court prerequisites; (1) a lack of a 26 U.S.C. §6215 written Notice of Assessment; (2) lack of 26 U.S.C. 6212, 6213 Notices of Deficiency for supplemental assessments after 1983; (3) lack of a 26 U.S.C. §6215 timely assessment, lack of prior notices; (4) violation of the government's fiduciary duty and FRCP rule 26, and Freedom of Information Act (FOIA) and Privacy Act duty to disclose to the Simons the whereabouts of and all their records administratively and judicially (Anthony, Hurt, Kurio, infra); (5) liens and levies invalid for lack of 26 U.S.C. §6321 prior written notice and demand; and (6) The 1992 filing of the Court complaint, with the untrue statements
1
RCFC 56(c); Fed. R. Civ. P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970); Creppel v. United States, 41 F.3d 627, 630-31 (Fed. Cir. 1994). 2 Anderson v. Liberty Lobby, Inc., 477 U.S. at 247-48; see also Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Curtis v. United States, 144 Ct. Cl. 194, 199, 168 F. Supp. 213, 216 (1958), cert. denied, 361 U.S. 843 (1959), reh'g denied, 361 U.S. 941 (1960).
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that the government had provided timely written notices and demand, and a certificate or list of assessments, lacking the ZERO assessments on the computer closing the 1974 account on 10-25-83 (P. App. pg. 104), all usurped the District Court's authority against the Simons. P. App. pg. 182-183. "A court without subject-matter jurisdiction may not acquire it by consent of the parties." Fafel v. DiPaola, 399 F.3d 403, 410 (1st Cir. 2005). Lack of Statutorily-Required written Notice of Assessment prevents further collection- except apparently for the Simons 15. After a Tax Court stipulated decision, a timely assessment is to be made prior to
further collection, 26 U.S.C. 6215, with a written notice of assessment within 60 days thereafter. 26 U.S.C. 6303, 6501. The Simons never received one, the IRS never produced one. Without the form 872, one could not understand the ZERO 1983 assessment closing the Simons account. They did not get that until 2000. Written Notices of Deficiency are to Issue for Supplemental AssessmentsExcept Apparently for the Simons 16. Supplemental assessments after 1983 provided the Simons with no required 26 U.S.C. 6213 Notices of Deficiency making the assessments invalid. Singleton v. U. S., (4th Cir. 1997) http://laws.findlaw.com/4th/961924p.html. A Form 872 Prevents the IRS from Assessing past a Time CertainExcept apparently for the Simons 17. A form 872 limits the IRS to doing an assessment within a time certain, thereby barring any further assessments and collections after the time certain has run. 26 U.S.C. 6501(b)(4). The 7-25-83 `assessment' on the Simons computer was `late' by manager directive, with all the money paid in 1983 placed into 1973's account, leaving both closed. P. App. pg. 5, and 58. By the government not giving the Simons their form 872 (P. App. pg. 58) or acknowledging their manager ordered a late assessment for year 1974,
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(P. App. pg. 5), the Simons were not protected from further collection on year 1974 after their 1983 payment of $49,546.55 as per a one time 1983 oral collection by Rev. Officer Dal Lawsen on Oct. 21, 1984, without a written notice and demand. 26 U.S.C. §§6330, 6331. Once the time runs on assessments, further collections are barred. 26 U.S.C. §6501. Yet, by carefully denying the existence of any consents for extensions (P. app. pg. 137-138) and not giving the Simons their form 872 or the internal assessment request (id. pg. 5), the government could simply rely on the Court's reliance on the presumption of the agency's correctness in basing claims on the 7-25-83 `assessment' and disregard the 10-24-1983 ZERO assessment, and usurp the District Court's authority. The Government Had a Duty to Disclose Material Information to Citizens it is Privy to Through Contract and by Federal Rules of Civil ProcedureExcept apparently for the Simons 18. The government has a fiduciary contractual obligation to deal honestly and forthrightly with those citizens with whom it contracts and Federal Rule of Civil Procedure Rule 26 duty to disclose. See, Hurt v. U. S. 70 F.3d 1261 (4th Cir. 1995) and Anthony v. United States, 987 F.2d 670 (10th Cir. 1992), Kurio, infra. The Simons were unable to meet their 26 U.S.C. 7421 burden, by the government not disclosing the CPAlisted essential documents and form 872 (P. App. pg. 58) until Feb. 2000. P. App. pg. 9. Levies and Liens are Invalid without a Written Notice and Demand -Except Apparently for the Simons 19. Levies and liens are supposed to issue after a citizen has a chance to challenge them in a hearing upon PRIOR notice. [3] Here there was no prior notice of the initial levies in 1988 (P. App. pg. 81-83, 80). There was no prior notice to the 1988 lien. (P. App. pg. 85).
3
26 U.S.C. 6321. "If any person liable to pay any tax neglects or refuses to pay 8
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District Court proceedings to quiet title to a Levy or Lien Cannot Proceed without a Prior Written Notice and Demand, timely Assessment, or for amounts exceeding those settled by the Commissioner (26 USC 7121)- Except Apparently for the Simons 20. Subject matter jurisdiction can be challenged at any time, even the first time on appeal and is non waivable. [4] Yet, the District Court when faced with a lack of jurisdictional argument after the Simons obtained their records, avoided this argument by DEMANDING a settlement and threatening the Simons with summary judgment against them and huge costs as would be associated with a frivolous or merit less claim. (P. App. pg. 229-230). In 2002 the only reason there was a debt showing on the IRS computer for the Simons was that the DOJ attorney Jeffery Snow had ordered the IRS to put it there. (P. App. pg. 110-111). 23. For the Simons- Congressional legal protections- all legal prerequisites to suit by the government -apparently do not exist, or - if they do exist, the District Court's acts from their inception are void. There is no in between ground. THE 1983 AGREEMENT FOR THREE INSEPARABLE YEARS WAS A BONA FIDE CONTRACT 24. According to Mr. Bryan Bolander, CPA and current president of the Utah
Association of CPA's, there was a single `package' agreement in 1983 that encompassed three tax years, 1972, 1973 and 1974. (P. App. pg. 6-10). The amounts offered by the Simons in letters offering settlement equate to about $49,588 (P. App. pg. 22-27 at pg.
the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person." Emphasis added. 4 Lack of jurisdiction may be raised by a party, and must be noticed sua sponte by a court, at all points in the litigation, see, e. g., American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17 -18 (1951); Mansfield, C. & L. M. R. Co. v. Swan, 111 U.S. 379, 382 (1884); Capron v. Van Noorden, 2 Cranch 126, 127 (1804).
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27), was eventually accepted by the IRS, about a year later, in a nearly identical amount for $49,546.55, as memorialized in two IRS Tax Court decisions, one for 1972 and 1973, dkt. no. 13016-80, (P. App. pg. 12) and the other for year 1974, dkt. no. 10312-79 (Id. pg. 14). All three years were inseparably interlinked legally and mathematically by the IRS drafted Tax Court rule 155 identical computations showing income averaging between all three years, and reaching into a closed year, 1972, as is allowed by the Mitigation Statute provisions 26 U.S.C. 1311-1314. P. App. pg. 6-10. The CPA notes the IRS drafted documents do not mention interest, not likely an oversight, and a possible result of IRS delay that allows for abatement of interest under 26 U.S.C. 6404. Id. pg. 910. Additionally, while the Simons were allowing a 25% omission for year 1973, and increased taxes for $23, 573.00 (P. App. pg. 12), the IRS was also giving up claims on $29,500 worth of Commissions in year 1973, due to later reporting of the income. (P. App. pg. 29). Logically, the interest on the claims given up could be counterbalanced with interest on the claims added, a netting situation impossible to post on the IRS computer. (Attachment pg. 7-8, P. App. pg. 120). The IRS can negotiate any interest it wishes if there has been ministerial error or delay due to the government, or to achieve settlement. P. App. pg. 112 [notes by counsel]. If interest is an ambiguity it is to be construed against the IRS drafter of the documents. Anthony, Hurt, supra. 25. Both Tax Court decisions were signed by authorized representatives of the parties,
Mr. Jones, being District Counsel and having delegated authority, signed and filed on the same day, while the Tax Court was on circuit in Utah, regarding the same parties, same
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issues and amounts as found in the District Counsel's decision and Simons letters. [5] None of the IRS documents mention interest, and none mention any changes in the District Counsel's terms and conditions as approved by IRS Appeals, and signed by District Counsel who had delegated authority to sign his own office's decision. PROOF OF FULL PAYMENT IN SATISFACTION OF AND IN ACCORD WITH THE 1983 AGREEMENT 26. The Simons offered four forms of proof of full payment of both Tax Court decisions that were one package 1983 settlement: (1) The closing of years 1972 and 1974 on the computer, leaving only the year 1973 for the check to post to, due to the Computer's inability to net or post `restricted interest'; (2) A late assessment for year 1974 to close the account and prevent further collections; (3) a CPA-certified by affidavit calculation accounting for full payment to within .07 cents of what was actually paid, for all three years, tax, penalties, and `restricted interest'; (4) Bryan Bolander, CPA, assessment of the entire 1983 package settlement contract for all three years. (P. App. pg. 6-10) noting no indication of the word `interest' found anywhere in the IRS drafted documents. Closing of the 1974 account so payment would post in only 1973's accoun leaving all three years closed to further collection in 1983 27. For both Tax Court decisions, the Tax sum total was $40,644. The Penalty total was $2033. This is a sum total of 42, 677.00 . On October 21, 1983, the Simons were told to pay a total of $49, 546.55 (P. App. pg. 141) as Mr. Simons noted on Mr. Lawsen's business card left at his office the day before. Id. Within one working day after Mr. Simons agreement to pay the $49, 546.55, on 10-24-1983, the 1974 computer file was
5
Delegation Orders No. 150-25 dated March 8, 1951; No. 60 ¶ 1 effective Nov. 26, 1979; 26 CFR 301.7701-9 for 1983; and No. 190 effective March 21, 1982 ¶ 2, also as per 26 USC 7452, IRM 35.10.1.1.2.2 among other grants of authority statutory and regulatory and policy grants of authority.
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closed out with a TC 300 audit exam (Attachment pg. 4) and ZERO balance, and a disposal code 01 (Attachment pg. 1b) showing no changes to be made to this tax year, and `hold code 2 and 3' that holds notices (Attachment pg. 1), and a `restricted interest' code of TC 340 (Attachment pg. 4), that also holds notices. (Attachment pg. 10[notes by counsel]. See. P. App. pg. 104 for ZERO audit 10-24-83. This closing remained on the 1974 account until at least July 1989 as shown on the computer readout. P. App. pg. 62a. The 1974 read `one open case' in 1991, years after the 1983 closure. P. App. pg. 62b. 1972 was closed as past the statutes of limitation. P. App. pg. 12. Intentionally Late Assessment for Year 1974 Should Have Protected the Simons From Further Collection on year 1974 28. The IRS computer can not `net' or input `restricted interest' or interest that is not
6601(a) full interest all the way back to the date the return was due. (Attachment pg. 7-8), P. App. pg. 120. "Tax Settlements involving statutes not popularly used, or that may conflict with those programmed into the computer, or involving `restricted' interest, posting of the settlement to the computer is a complete impossibility" (Affidavit of 23 year IRS veteran appeals officer Gail Anger). With 1972's and 1974's account `closed' with ZERO owing, the master file would automatically credit the only open remaining year, 1973. Attachment pg. 8. One way to ensure no further collections for 1974, and a ZERO balance for 1974. is to do a statutorily required post-Tax Court 26 U.S.C. 6215 assessment [6], required as a prerequisite for further collection, after the statutes of
26 U.S.C. 6215: " a) General rule If the taxpayer files a petition with the Tax Court, the entire amount redetermined as the deficiency by the decision of the Tax Court which has become final shall be assessed and shall be paid upon notice and demand from the Secretary. No part of the amount determined as a deficiency by the Secretary but disallowed as such by the decision of the
6
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limitation have run. 26 U.S.C. 6501. An assessment statute expiration date may be extended by a form 872, until a date certain, as was the case here. P. App. pg. 58. 29. Here the Simons offer three forms of proof of the 7-25-83 assessments being late, and thus barring all future assessments, and collections under 26 U.S.C. §6501- a IRS 1983 protection of the Simons from further future collections. One form is an internal IRS form showing the IRS shows the `statutory period for assessment expires 7-19-83. The form is a request for a `quick assessment'. Manager of the requester signed it. It orders the `assessment' to take place `07-25-83' after the IRS designated 7-19-83 statutory deadline. (P. App. pg. 5) 30. The second form of proof of a late assessment, on 7-25-83, is the form 872 that allowed the IRS an extension of the assessment statute expiration date until April 15, 1979 plus 60 days. (P. App. pg. 58). The Notice of Deficiency was filed April 16, 1979, a Monday after the 15th the last day it could issue. (P. App. 60-62). The Notice of Deficiency freezes collections for 90 days whereby the Simons could file a Tax Court petition to contest the amount. 26 U.S.C. 6503, 6212, 6213. This left 60 days on the form 872. No one has ever disputed that the Simons filed their Tax Court petition within about 3 days left on the 90 day suspension of the Notice of Deficiency. The 3 days plus the 60 days leaves 63 days from the date of the filing in the Tax Court of the stipulated decisions on April 22, 1983 to do an assessment. The Simons affirmatively waived any restrictions on assessment in both Tax Court decisions, P. App. pg. 13, 15, so the government could have assessed immediately. Using a Julian Calendar, 63 days after April 22, 1983 brings the assessment statute expiration date to be about, June 21, 1983. Tax Court which has become final shall be assessed or be collected by levy or by proceeding in court with or without assessment." Emphasis Added.
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Over a month earlier than the 7-25-83 assessment date. There is no disagreement within the circuits that under the 872 agreement, contract principles apply and the date certain supercedes the statute limits. Ripley v. Comm'r Ripley v. Commissioner, 103 F.3d 332 (4th Cir.) 1996.C04.43538
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Simons records, could they understand the Notice of Deficiency was timely, but the 7-2583 assessment was not, and intentionally so, by the IRS to protect the Simons from further independent collections on only year 1974. A CPA Certified Calculation Accounts for Full Payment of the Entire Three Year Settlement Contract in 1983 33. As for proof of full payment of this 1983 single `package' agreement, the Simons produced a CPA certified calculation, by CPA Henry Van Tiendren, showing how the taxes (as per both Tax Court decisions), penalties (from both tax court decisions) added to a year and one month's `restricted interest' comes to within .07 cents of the $49,546.55 verbally collected by Rev. Officer Dal Lawsen Oct. 21, 1983 (P. App. pg. 141), using Rev. Proc. 83-7 and its eight place factoring table for calculating interest. 34. See. P. App. pg. 53- 56a. The total of Taxes and Penalties was $42, 677.00. The Amount collected one time in 1983 by Revenue Officer Dal Lawsen was $49, 546.55 (P. App. pg. 141). The difference is $6869.55 to be collected for `restricted interest'. The date of the Simons `offer' was Jan. 15, 1982. The Date of the IRS work documents was about Feb. 1, 1983. This is about a year and one month difference in time. The Simons are paying interest for the year and a month it took for them to negotiate an agreement, when the IRS admits they could not negotiate with baseless fraud penalties pending (P. App. pg. 28). Using Rev. Proc. 83-7 and its rules and eight place factoring tables (P. App. pg. 54-56a), the Simons come to within .07 cents or are within .001% error between what they paid in interest, 6869.55, and what they calculate they should have paid in interest, $6869.62 cents. P. App. pg. 53. .07 cents or .001% difference. CPA Henry Van Tiendren, by affidavit, verifies the correctness of this calculation and testifies that this error is within acceptable tolerances. (P. App. 52) 23 year veteran ex IRS
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Appeal officer Gail Anger attests by affidavit that it would be `astronomically rare' for the Simons to be able to recalculate and account for how their payment, paid all three years, unless the IRS did it so. (P. App. pg. 121). CPA Bryan Bolander's Analysis of the 1983 Agreement Shows Consistency Throughout with No Mention of Interest by the IRS 36. CPA Bryan Bolander shows that the 1983 agreement tracks through the original returns, District Counsel's decision, IRS drafted Tax Court rule 155 computations and the two Tax Court decision, smoothly. P. App. pg. 6-10. Further, it is his experience that if the IRS wished to collect full interest all the way back to the date of all the returns for all years 1972, 1973 and 1974, the IRS with multiple people preparing the work documents would not have omitted a reference to the statute applying to any interest. (P. App. 16). If interest is an ambiguity, it is construed against the drafter. Anthony, Hurt. TOLLING OF THE STATUTES OF LIMITATION 37. The statute of limitations on Tucker Act express or implied contract claims is six years. 28 U.S.C. s 2401(a). For U.S. Con. 5th Amend.Takings claims it is six years by 28 U.S.C. 2501. When the Government filed suit in 1992, the period of limitation for collecting taxes was tolled. See, Hector v. United States [58-1 USTC ¶9372], 255 F.2d 84, 85-86 (1958) (per curiam) . Equity should apply to the Simons such that until the District Court case that the government relied upon to suspend the statutes for collection ended in 2004, the statutes were equally tolled, until all events occurred fixing the government's liability, that being the governments refusal to refund all money paid for the 1983 agreement and thereafter with interest. Nager , infra. The Simons' Complaint was filed on February 15, 2006.
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38. However, 28 U.S.C. 2415 (a) mandates that any government claims "founded upon any contract express or implied in law or fact, shall [also] be barred unless the complaint is filed within six years after the right of action accrues. or within one year after final decisions have been rendered in applicable administrative proceedings required by contract or by law, whichever is later:..." Id. The time is tolled beginning when the citizen `KNOWS' there has been a legal injury. It is more than mere `notice' of an injury that is required to start the statutes running if the citizen is unable to articulate the basis for the injury. The statute of limitations for a claim against the United States `arises' or begins to run when 'all events have occurred to fix the Government's alleged liability, entitling the claimant to demand payment . . . .'" 7Moreover, "[u]nder federal law governing statutes of limitation, a cause of action accrues when all events necessary to state a claim have occurred." Chevron U.S.A., Inc. v. United States, 923 F.2d 830, 834 (Fed. Cir. 1991). The final acts occurring necessitating a full statement of claim occurred when the IRS once again billed the Plaintiffs in March, 2004 for year 1974 in violation of the 2002 District Court ordered decree ( P. App. 215-216 ), for about $4100 dollars (P. App. 139-139a), and then attempted to refund about $23.17 (P. App. 139-139a ), March, 2004 that Plaintiffs returned due to gross error for what was owed to them. 39. Here, `all events necessary to fix the Government's liability' occurred when the
District Court denied the Simons challenge to its jurisdiction on July 31, 2002 (P. App. pg. 215-216), relying on the government's assertions, and denying the Simons' late discovered new evidence, and the Dec. 2003 Tenth Cir. ruling denying relief.
7
Nager Elec. Co. v. United States, 177 Ct. Cl. 234, 240, 368 F.2d 847, 751 (1966), reh'g denied, 184 Ct. Cl. 390, 396 F.2d 977 (1968)); Lins v. United States, 231 Ct. Cl. 579, 582, 688 F.2d 784, 786 (1982), cert. denied, 459 U.S. 1147 (1983); Oceanic Steamship Co. v. United States, 165 Ct. Cl. 217, 225 (1964).
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40.
And prior to the 2002 payment, was the 2000 disgorgement of the Simons' agency
file for year 1974, showing key documents had been concealed from the Simons and their tax professionals and the District Court. (P. App. pg. 117-118; 123-125; 126-127). 41. Likewise, another event, fixing the government's liability, occurred, when the DOJ replaced a debt on the IRS computer readout that expired 60 days after the March 28, 1995 final judgment, in 1995 (P. App. pg. 110, Attachment pg. 5a) when the Federal Rules of Appellate Procedure Rule 4, 60 day statute of limitations for government to file a notice of appeal of a March, 1995 judgment in favor of the Simons, ran. P. App. pg. 110-111; 193-194). It was further fixed, when DOJ attorney represented to the District Court that the DOJ had fully accepted a 2001 `handwritten' offer upon which the District Court relied. P. App. pg. 227. The record of the District Court shows the typewritten alleged `acceptance' of a `handwritten' offer (P. App. pg. 130, to pay for a `worldwide' settlement for all claims against everyone (P. app. pg. 221-222), redefined `worldwide' so as to not apply to all parties and all claims, (P. App. pg. 131, 207-208). By law, no contract could form. Corbin, Williston, supra at pg. 5. 42. The District Court stated in regards to any 2001 alleged deal, "it was not what the Department of Justice wanted" (id. pg. 228), and understood that Jeffery Snow's signature on the handwritten offer would not bind the government (P. App. pg. 222), and saw the government's objection to any order based on the `handwritten' document (P. App. pg. 205-206b), saw the Department of Justice's typewritten rewording of the handwritten offer, narrowing the term `worldwide' dramatically (P. App. pg. 207-208), the government's objection to any judgment based on a handwritten document (P. App. pg. 209), the Simons response showing they raised their jurisdictional claims and had not
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preferred settlement and were merely paying as ordered, (P. App. pg. 209-213), and then the IRS' complete disregard of any alleged `agreement' or District Court's judgment, by its March, 2004 further billing of the Plaintiffs for $4100 dollars after their obedient $55,000 payment. (P. App. 139-139a) All the foregoing shows a lack of unequivocal acceptance necessary for a ` meeting of the minds'. Kurio, infra, Corbin, Williston supra. The District Court's finding that "there is no dispute that each party to this action agreed to the settlement agreement "(P. App. pg. 203-205) is simply in error. P. App. pg. 205206b compare with 219-220, and 205. SIX CONDITIONS TOLL THE STATUTES OF LIMITATION 43. The question then arises as to what conditions `toll' the statutes of limitation such that a citizen may bring a claim against the government after the six year time frame. There are eight circumstances that will toll the statutes of limitation: (1) when there has been fraud or concealment of information (Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946)), equitable tolling occurs; (2) the continuing claims doctrine, Boling v. United States, 220 F.3d 1365, 1373 (Fed. Cir. 2000), (3) when an internal policy, unpublished, is illegal and claimants were not on notice to the policy as part of the cause for their legal injury (Bowen v. City of New York, 476 U.S. 467, 481-482 (1986)), (4) equitable estoppel, lack of finality due to the final outcome of the illegal federal litigation such that the government may continue to collect for 1974, (5) the deprivation to the Plaintiffs of any decision, order, or judgment administratively, or in District Court explaining facts and conclusions of law in an impartial tribunal as to why, how, or upon what reasoned basis the Simons ever owed any money to the government after their full payment of a
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contract with the United States in 1983, and (6) the 2004 refusal of the government to give the Simons anything other than a $23.17 refund, rejected by the Simons. 44. The Simons filed a request over six months ago for a rebate of all the money owed to them by the government under `contract', not taxes. P. App. pg. 3. The IRS gave the Simons $23.17 refund, and Simons filed here for redress. P. App. pg. 139-139a, 4. Equitable Tolling Due to Fraud or Concealment of Documents The Analysis of the 1983 Agreement by CPA Bolander 45. The Simons, (prior to about February 15, 2000, when they obtained their records),
could not prove that the government, in 1983, took steps to prevent further collection on the year 1974 by a late assessment, with management approval, to ensure no further collection on the 1974 account, that was part of a 1983 package agreement for three years, 1972, 1973, and 1974 As with the Kurios, in Kurio v. U. S., 429 F. Supp. 42, 1970.STX.0000028
"The returns sought by plaintiff from the Government were material and relevant because they were the best evidence of the facts on which this issue turned. [ P. App. pgs. 9, 123] They were immediately accessible to all participating IRS and Justice Department personnel, any of whom could have determined their location by computer search in the regional Service Center or the National Computer Center and obtained them by oral request. [P. App. pg. 63, 68]. See Treas. Reg. §§ 301.6103(a)-1(e), -1(h). They were sought by plaintiff through duly ordered, established, and well understood discovery procedures [and FOIA and Privacy Act requests]. Nevertheless, they were not furnished and this increased plaintiff's burden of proving his case beyond that contemplated by the Congress and the courts. In effect, plaintiff was deprived
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the opportunity of satisfying his burden of proof on an important part of his case." Kurio v. U. S. , ¶39 [notes by Plaintiffs]. 46. Once the government filed its 1992 complaint,
"The Government as a litigant is, of course, subject to the rules of discovery." [citations omitted]. The Government therefore had no right to ignore plaintiff's discovery demands. {P. App. pg. 123-125]. Moreover, as representatives of the Government, all personnel connected with the litigation, including counsel, had an obligation "to be frank and fair and disclose all the facts." [citations omitted]. Kurio, ¶37 47. As with Kurio, once "the mistakes were finally discovered, the Government [and
District Court] failed promptly to admit them. The resulting snarl is now before the Court for resolution." Kurio ¶ 15. 48. The Simons Tax Expert Bryan Bolander, CPA, and current president of the Utah
Association of CPAs, analyzed the Simons 1983 agreement (P. App. pg. 6-11) and found the following documents were essential for understanding the 1983 agreement: (1) the Tax Court decisions (P. App. pg. 12-16); (2) the original 1974 returns (P. App. pg. 31); (3) the District Counsel's decision (P. App. pg. 28); (4) letters from the Simons legal representative to the IRS and to them offering settlement (P. App. pg. 22,25); (5) the computer readouts for both 1973 and 1974 (P. App. pg. 97, 100); (6) the underlying work documents that were identical for both Tax Court decisions (P. App. pg. 16); (7) the Simons' cashier's check for $49, 546.55 (P. App. pg. 51). See P. App. pg. 9. The Simons also claim the form 872 extension of the Statutes of Limitation for Assessment was essential to knowing that the Simons' 1974 account was not timely assessed (P. App. pg. 58) along with the internal working form showing a late assessment was done intentionally with manager's approval . (P. App. pg. 5). Simons assert there was no timely assessment on 1974 intentionally, due to the IRS computer's inability to net
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interest and the IRS' placement of all money for all three years into only year 1973's account, while the IRS was affirmatively closing years 1972, and 1974, such that on the computer all three years would be closed and the Simons protected from future claims. 49. The following documents were never produced until after about Feb. 15, 2000:
(1) the original returns, (2) the form 872; (3) the internal late assessment document; (4) the District Counsel's decision. The District Counsel's decision is vital to understanding the Simons were not `owing taxes', but consenting to payments to settle the dispute. There is some credence to this view, as the District Counsel's decision states for 1972, ` Though the taxpayer would be able to prove that most of the $18, 460.16 in promissory notes was not received that year [1972], he is conceding the non deductibility of those notes for purposes of settlement.' (P. App. pg. 29). For 1973, the District Counsel states, " The respondent agrees to reduce the dollar amount for commissions, received by the petition in 1973 by $29, 500.00. The petition was able to show in the criminal case that $21,500.00 of this amount allegedly received in 1973 was properly reported in subsequent years. It is highly unlikely that the government could now prove that this $211,500.00 should be included in the commission income for 1973. There is also an $8000 decrease agreed to by the Appeals Officer in his Supporting Statement. In addition, the petitioner has consented to the negligence penalty under 6653(a)." (id.) For 1974, the Simons consented to a minor negligence penalty and the changes in taxes on form 886-A (P. App. pg. 17) as referenced in the District Counsel's Decision (P. App. pg. 30, is only $1647. Notably, the form 5278 as drafted by the IRS for the Tax Court's Rule 155 computation, shows it is a `settlement' computation. (P. App. pg. 17).
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50.
The CPA reviewing the agreement could understand and track through the
amounts and numbers to verify the actual agreement agreed with offers and acceptance and finally payment only- with this District Counsel's Decision, and the Original returns, and letters of offer of settlement for a `package' agreement inseparable by year, and the IRS underlying work documents that. (P. App. pg. 8-9). All the puzzle pieces were necessary to show the agreement and how interest was abated, or intentionally not included in the deliberations, or was reduced by trade offs between the IRS claims the Simons' owed, and the IRS relinquishing about $29, 500 in claims against the Simons. Here, the CPA found all the numbers and issues track through, and the IRS never mentioned interest in any of their documents, not likely to be an oversight. P. App. pg. 29. These documents also show the Simons were consenting to amounts either reported later, or not received in the year the IRS claimed, and to allowing the government to reach into a stat closed year, and consenting to a negligence penalty, for `purposes of settlement.' P. App. pg. 27-29. No evidence showed how the Simons were paying `taxes', so much as money to resolve a dispute. P. App. pg. 9-10. Fraudulent claims against the Simons and Concealment of the Documents 51. Revenue Officer Don Thurman had minimally the original returns and District
Counsel's decision in 1988. Revenue Officer notes on 6-18-88 "Also recd Orig. of 7412 return- 1 ½ inches thick copy & return later- Sent to RO Aide to copy." (P. App. pg. 68). On 7-11-88 the Rev. Officer notes show "Return copied- Info shows case went to tax court & District Council agreed to settle by clearance of major penalties & minor tax changes. Apparently 1972 & 1973 are closed satisfied. Appears to be no open issues on 1974". (P. App. pg. 68). Rev. Officer Thurman did not give these documents to the
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Simons Tax Professionals, while affirmatively asserting the Simons owed for tax year 1974, as shown by the following: a. 8/18/88 "Warned of ECA if not resolved levy, seizure, summons". (P.
Am. Complt. Ap. 70) a. 8/17/88 "Warned of ECA ...) id.
b. 9/1/88 `Told him I will proceed with ECA, levy summons, etc." Id. at pg. 71a c. 9/8/88 "...Dennis Larsen chewed on my ear for a long time with all the reasons why I shouldn't take ECA on assets or summons... told him without any evidence bal due was in error I must proceed with ECA" . Id. d. 11/21/88 "Warned of possible suit or other enforcement..." Id. pg. 72) e. 1/12/89 ".... Otherwise I proceed with ECA" Id. pg. 73 f. The IRS had levied all the Simons' bank accounts on about 10/18/88 (P. Am. Complt. Ap. 81-84 without a PRIOR notice of levy issued 1/10/89 (P. Am. Complt. Ap. 80). 52. The Revenue Officer knew and understood that without the Simons evidence of the
IRS being in error, the Simons could not prove the IRS was in error. P. App. pg. 71a. Department of Justice Attorney Kirk Lusty who filed the 1992 complaint for collection of the year 1974, also had access to the Simons records and did not produce their original returns, any notices of assessment. P. App. pg. 63, 123, 125. And Rev. Officer Thurman notes a meeting where `Dal sd, could do easily [collections] on IMF'. (P. App. pg. 76). If the withheld documents did not show the government in error, then there would have been no harm in releasing them.
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The Simons' Due Diligence in Obtaining their Records 53. The Simons previous CPA at the time in 1983 and again in 1988, Dennis Larsen states by affidavit that he asked for the history of the account and never received it (P. App. pg. 118) and that he met with the Problems Resolution person and that he "received no information as to what code sections or regulations were being used for their collection effort, why there was a five year silence of no collections after payment for the settlement amount, or documents from the IRS. ... Every attempt was consciously made to provide Revenue Officer Don Thurman with information he needed. " P. App. pg. 118. The Simons letter to Rev. Officer Don Thurman likewise shows his belief that Mr. Thurman had no documents and he was trying to provide Mr. Thurman with what Mr. Thurman was demanding. (P. App. pg. 79) The Simons previous counsel, Patricia White, current dean of the Sandra Day O'Connor School of Law at Arizona State University, likewise attests by affidavit that she asked for the original and amended returns for 1972, 1973 and 1974, and written notices of assessment to no avail. "Throughout the period during which Affiant represented Mr. Simons, Affiant was never able to determine from any document which she examined what the underlying substantive tax issues were which led to the determination of deficiency assessed against the Taxpayer. " P. App. pg. 123, 125. Current counsel attests by affidavit that the original returns, proof of a late assessment for tax year 1974, District Counsel's decision was not received until after about Feb. 15, 2000 as a result of a FOIA/Privacy Act request to Special Procedures function of the IRS. (P. App. pg. 127, 128). After the box of documents where the IRS was disgorging the Simons' administrative file was received, tax experts reviewed the file, taking additional time to understand the meaning of the documents. Id.
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54.
Additionally, the Simons made numerous FOIA and Privacy Act requests. (P.
App. pg. 163-179). It is evident from the record they produced that they were misled in to believing (a) there were no extensions signed by them. Compare P. App. pg. 137-138, with 58. (b) their were no responsive records in either the Service Center or District Office (Id. pg. 167), (c) they requested their record under the wrong statute, (Id. pg. 169), (d) and were told that 26 U.S.C. 6404 expressly prohibits any taxpayer initiated requests for abatement and on the Computer there was no evidence of any requests for abatement pending for 1974, (Id. pg. 171), (e) and the Problems Resolution person, Revenue Officers, DOJ attorneys, IRS offices and service centers, all failed to inform the Simons to look in Special Procedure function. (P. App. pgs. 117-118, 122-129, and163-179.) Special Procedures function was not listed on public IRS organization charts. 55. Only after Feb. 15, 2000 could the Simons and Tax Professionals understand
fully what documents were withheld, and that the IMF computer readout was defective, and that the certificate of assessment (required under 26 U.S.C. 6215) provided in a 1992 District Court action, P. App. pg. 182-183, a legal gateway to the Courts, begins with a 725-1983 statutorily late assessment, due to the lack of the posting of a form 872 extension TC 560 on the computer and lack of production of the form 872 under FOIA/Privacy Act or in discovery, along with the necessary and essential original returns, and district counsel's decision explaining the deal. Attachment pg. 5, 9. 56. Administratively and in District Court, the IRS had a fiduciary duty to deal honestly with its citizens (Anthony, supra) and to produce all material documents under Federal Rules of Civil Procedure at Rule 26. Kurio, supra.
06-115 Plaintiffs' Summary Judgment Motion
26
Case 1:06-cv-00115-SGB
Document 23-3
Filed 07/14/2006
Page 36 of 73
57. The Certificate of Assessment in the District Court pleading also misrepresented ALL the assessments by deleting the ZERO assessment on 1974's account, posted one working day after the Simons were told what to pay for all three years, closing 1974. (P. App. pg. 141, 183). In all the documents produced in any manner by the IRS there has NEVER been produced a single written notice and demand for payment for any 1983 assessment and supplemental interest assessments of the three tax years. (P. App. pg. 123, 125). Mr. Thurman records "Dal sd- could do on IMF easily". In other words, the
defective computer readout could be used for collections rather than the records, that Rev. Officer Thurman had, copied, dis not disclose, along with other personnel, beginning in June of 1988.(P.App.pg. 68) 58. Concealment, purposeful or negligently, also occurred by not posting key
transactions to the Simons' computer master file,
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