Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Urioste

United States District Court, N.D. Alabama, Middle Division

January 12, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
FELIX URIOSTE, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          VIRGINIA EMERSON HOPKINS United States District Judge

         I. Procedural Background

         Plaintiff United States filed this federal tax lien enforcement action against numerous Defendants[1] on October 13, 2015, pursuant to 26 U.S.C. § 7403.[2] (Doc. 1). The suit pertains to the outstanding tax liability of the deceased taxpayer-Michael A. Urioste (the “Taxpayer”)-and his single-member limited liability company-Salrecon LLC (“Salrecon”).

         Pending before the court are Plaintiff's Motion for Summary Judgment (Doc. 35) (the “Motion”) and attached evidentiary materials, all of which were filed on July 13, 2016. The Motion seeks summary judgment against the Urioste Defendants-Felix Urioste, Michael A. Urioste, Jr., Mary D. Urioste, and Alabama Scrap and Salvage, LLC (“Alabama Scrap”). (Id. at 1-2). More specifically, Plaintiff seeks an order authorizing it to foreclose upon certain property owned by the Taxpayer to satisfy “unpaid federal income tax liabilities for 2002 through 2006, as well as [Salrecon's] unpaid federal employment and unemployment tax liabilities . . . incurred . . . between 2002 and 2007[.]” (Doc. 35 at 3). Plaintiff also asks the court to issue an order requiring the Taxpayer's personal representatives to provide an inventory of the deceased's estate.

         The Urioste Defendants opposed the Motion on August 8, 2016 (Docs. 41, 42), and Plaintiff followed with its reply (Doc. 43) on August 22, 2016. For the reasons discussed below, the Motion is GRANTED.

         II. Summary Judgment Standard

         Summary judgment is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R . Civ. P. 56(a). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993) (instructing that “district court should resolve all reasonable doubts about the facts in favor of the non-movant, and draw all justifiable inferences in his [or its] favor” (internal quotation marks omitted) (quoting United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 2006) (en banc))). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d. 202 (1986). When, such as here, the moving party is the plaintiff, satisfying this initial Rule 56 burden means “affirmatively . . . support[ing] its motion with credible evidence …. [and] show[ing] that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party.” Fitzpatrick, 2 F.3d at 1115 (citations and internal quotation marks omitted) (emphasis in original) (quoting Four Parcels, 941 F.2d at 1438). Only “[o]nce the moving party has properly supported its motion for summary judgment, [does] the burden shift[] to the nonmoving party to ‘come forward with specific facts showing that there is a genuine issue for trial.'” International Stamp Art, Inc. v. U.S. Postal Serv., 456 F.3d 1270, 1274 (11th Cir. 2006) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)).

         III. Factual Background[3]

         Felix Urioste is the Taxpayer's father and a duly appointed personal representative of the Taxpayer's estate. AF No. 1.[4] Michael A. Urioste, Jr. is the Taxpayer's son and also a duly appointed personal representative of the Taxpayer's estate. AF No. 2. The Taxpayer's Last Will and Testament names Felix Urioste, Michael A. Urioste, Jr., and Mary D. Urioste as heirs to the deceased's estate. AF No.

         Alabama Scrap is a limited liability company organized under the laws of Alabama. AF No 4. Alabama Scrap is a salvaging and recycling business located in Gadsden, Alabama. (Doc. 42 at 5).[5] Michael A. Urioste, Jr.-the Taxpayer's son-formed Alabama Scrap on April 25, 2006, and is its sole member. AF No. 5; (Doc. 42 at 5). Alabama Scrap's articles of organization were recorded in the public records of Etowah County, Alabama, on April 26, 2006. AF No. 6.

         Taxpayer's Individual Income Tax Assessments

         For tax years 2002 through 2006, the Taxpayer filed Forms 1040-individual income tax returns-reporting the individual income taxes he owed (AF No. 7) but did not remit payment of the individual income tax liabilities reported on his federal income tax returns. AF No. 8. A delegate of the Secretary of the Treasury issued assessments against the Taxpayer on various dates for these delinquent individual tax payments, plus interest and applicable penalties.

Tax

Assessment

Type of Assessment

Amount

2002 8/7/2006 Tax Owed Per Return $86,164.00
Penalty for Filing Return Late $19,386.90
Penalty for Failure to Pay Tax $17,232.80
Interest $20,580.26

5/14/2007

Penalty for Failure to Pay Tax

$4,308.20

10/27/2014

Interest

$33,523.08

2003

9/4/2006

Tax Owed Per Return

$104,370.00

Estimated Tax Penalty

$2,692.88

Penalty for Filing Return Late

$23,483.25



Penalty for Failure to Pay Tax $15,133.65
Interest $19,540.76
5/14/2007 Penalty for Failure to Pay Tax $6,784.05
10/27/2014 Interest $49,925.67
2004 11/13/2006 Tax Owed Per Return $133,394.00
Estimated Tax Penalty $3,655.00
Penalty for Filing Return Late $30,013.65
Penalty for Failure to Pay Tax $12,672.43
Interest $18,958.82
5/14/2007 Penalty for Failure to Pay Tax $6,669.70
10/27/2014 Interest $59,455.72
2005 2/4/2008 Tax Owed Per Return $52,892.00
Estimated Tax Penalty $2,121.58
Penalty for Filing Return Late $11,900.70
Penalty for Failure to Pay Tax $5,818.12
Interest $9,343.16
10/24/2011 Penalty for Failure to Pay Tax $3,491.46
10/27/2014 Interest $12,820.75
2006 2/9/2009 Tax Owed Per Return $23,644.00
Estimated Tax Penalty $1,119.00
Penalty for Filing Return Late $5,319.90
Penalty for Failure to Pay Tax $1,655.08
Interest $3,772.15
10/24/2011 Penalty for Failure to Pay Tax $4,255.92
10/27/2014 Interest $8,118.84

AF No. 9.

         A delegate of the Secretary of Treasury properly gave the Taxpayer notice of the unpaid tax described in AF No. 9 and demanded payment. AF No. 10. Despite notice and demand for payment, the individual income taxes, penalties, and interest assessed against the Taxpayer for tax years 2002 through 2006 remain unpaid. AF No. 11.

         Salrecon's Employment and Unemployment Tax Assessments

         Salrecon is a limited liability company organized under the laws of Delaware. AF No. 12. The Taxpayer was the sole member of Salrecon and elected to treat Salrecon as a sole proprietorship for tax purposes. AF No. 13. Salrecon filed Forms 941-quarterly federal employment tax returns-reporting employment taxes it incurred during the quarterly tax periods ending on September 30, 2002; March 31, 2003; June 30, 2003; September 30, 2003; December 31, 2003; June 30, 2004; September 30, 2004; December 31, 2004; March 31, 2005; June 30, 2005; September 30, 2005; December 31, 2005; March 31, 2006; June 30, 2006; December 31, 2006; March 31, 2007; March 31, 2008; June 30, 2008; and September 30, 2008. AF No. 14. Salrecon did not remit payment of the reported employment tax liabilities for any of the foregoing quarterly periods. AF No. 15.

         On the dates and in the amounts described in the table below, a delegate of the Secretary of the Treasury assessed against Salrecon the employment taxes reported on its returns, plus interest and applicable penalties.

Tax Period

Assessment Date

Type of Assessment

Amount

9/30/2002 2/24/2003 Tax Owed Per Return $64,568.60
Penalty for Filing Return Late $2,905.59
Federal Tax Deposit Penalty $6,456.86
Penalty for Failure to Pay Tax $1,291.37


Interest $1,195.33
3/31/2003 Federal Tax Deposit Penalty $3,228.43
3/31/2003 7/7/2003 Tax Owed Per Return $35,238.62
Federal Tax Deposit Penalty $2,095.21
Penalty for Failure to Pay Tax $15.00
Interest $9.36
8/11/2003 Federal Tax Deposit Penalty $50.00
6/30/2003 10/20/2003 Tax Owed Per Return $34,689.90
Penalty for Filing Return Late $1,181.01
Federal Tax Deposit Penalty $2,694.86
Penalty for Failure to Pay Tax $393.67
Interest $290.80
11/24/2003 Federal Tax Deposit Penalty $1,312.24
9/30/2003 11/05/2007 Tax Owed Per Return $53,290.67
Penalty for Filing Return Late $11,990.40
Federal Tax Deposit Penalty $5,329.07
Penalty for Failure to Pay Tax $13,056.21

Tax Period

Assessment Date

Type of Assessment

Amount



Interest $18,918.15
12/10/2007 Federal Tax Deposit Penalty $2,664.53
12/31/2003 5/10/2004 Tax Owed Per Return $40,331.75
Penalty for Filing Return Late $1,814.93
Federal Tax Deposit Penalty $4,033.17
Penalty for Failure to Pay Tax $804.60
Interest $508.42
6/14/2004 Federal Tax Deposit Penalty $2,009.82
6/30/2004 10/11/2004 Tax Owed Per Return $53,077.35
Federal Tax Deposit Penalty $1,806.54
Penalty for Failure to Pay Tax $225.15
Interest $123.11
11/15/2004 Federal Tax Deposit Penalty $750.50
9/30/2004 2/28/2005 Tax Owed Per Return $47,232.31
Federal Tax Deposit Penalty $4,717.10
Penalty for Failure to Pay Tax $943.42
Interest $780.68
4/4/2005 Federal Tax Deposit Penalty $2,358.56
12/31/2004 4/4/2005 Tax Owed Per Return $39,523.55
Federal Tax Deposit Penalty $3,952.34
Penalty for Failure to Pay Tax $592.85


Interest $346.92
5/9/2005 Federal Tax Deposit Penalty $1,976.18
3/31/2005 7/4/2005 Tax Owed Per Return $34,423.08
Federal Tax Deposit Penalty $3,442.30
Penalty for Failure to Pay Tax $516.35
Interest $369.75
8/8/2005 Federal Tax Deposit Penalty $1,721.15
6/30/2005 6/4/2007 Tax Owed Per Return $34,738.28
Penalty for Filing Return Late $7,816.11
Federal Tax Deposit Penalty $3,473.81
Penalty for Failure to Pay Tax $3,693.84
Interest $5,833.76
7/9/2007 Federal Tax Deposit Penalty $1,593.55
9/30/2005 12/26/2005 Tax Owed Per Return $42,881.39
Federal Tax Deposit Penalty $2,222.62
Penalty for Failure to Pay Tax $105.94
Interest $114.38
1/30/2006 Federal Tax Deposit Penalty $529.68
12/31/2005 6/4/2007 Tax Owed Per Return $57,263.38
Federal Tax Deposit Penalty $1,168.90
3/31/2006 10/9/2006 Tax Owed Per Return $74,284.17

Tax Period

Assessment Date

Type of Assessment

Amount



Penalty for Filing Return Late $889.63
Federal Tax Deposit Penalty $1,235.88
Penalty for Failure to Pay Tax $148.27
Interest $200.68
11/13/2006 Federal Tax Deposit Penalty $247.12
6/30/2006 10/2/2006 Tax Owed Per Return $60,856.18
Federal Tax Deposit Penalty $1,499.46
Penalty for Failure to Pay Tax $0.06
Interest $0.06
12/31/2006 4/2/2007 Tax Owed Per Return $46,260.26
Federal Tax Deposit Penalty $3,120.82
Penalty for Failure to Pay Tax $364.62
Interest $327.14
5/7/2007 Federal Tax Deposit Penalty $1,215.39
3/31/2007 6/25/2007 Tax Owed Per Return $42,739.94
Federal Tax Deposit Penalty $1,343.19
Penalty for Failure to Pay Tax $64.97


Interest $80.22
7/30/2007 Federal Tax Deposit Penalty $324.83
3/31/2008 6/9/2008 Tax Owed Per Return $47,820.51
Federal Tax Deposit Penalty $4,782.02
7/6/2009 Additional Tax Assessed $2,217.84
6/30/2008 7/20/2009 Tax Owed Per Return $9,610.64
11/02/2009 Federal Tax Deposit Penalty $872.99
9/30/2008 12/1/2008 Tax Owed Per Return $13,610.81
7/6/2009 Additional Tax Assessed $5,174.96
Federal Tax Deposit Penalty $517.49
8/17/2009 Federal Tax Deposit Penalty $ 258.75

AF No. 16.

         For tax years 2005 through 2007, Salrecon filed Forms 940-annual federal unemployment tax returns-reporting the unemployment taxes it incurred during these years. AF No. 17. For tax years 2005 through 2007, Salrecon did not remit payment of the unemployment tax liabilities reported on its unemployment tax returns. AF No. 18.

         On the dates and in the amounts described in the table below, a delegate of the Secretary of the Treasury assessed against Salrecon the unemployment taxes reported on its returns, plus interest and applicable penalties.

Tax Period

Assessment Date

Type of Assessment

Amount

12/31/2005 7/17/2006 Tax Owed Per Return $2,313.88
Penalty for Failure to Pay Tax $11.38
Interest $12.53
12/31/2006 4/23/2007 Tax Owed Per Return $2,110.30
Penalty for Failure to Pay Tax $31.65
Interest $38.27
12/31/2007 9/29/2008 Tax Owed Per Return $2,693.55
Penalty for Late Filing $295.93
Penalty for Failure to Pay Tax $6.04
Interest $59.52

         AF No. 19. A delegate of the Secretary of Treasury properly gave the Taxpayer notice of the unpaid tax described in AF Nos. 16 and 19 and demanded payment. AF No. 20. Despite notice and demand for payment, the employment and unemployment taxes, penalties, and interest assessed against Salrecon, for which the Taxpayer is liable as its sole member, remain unpaid. AF No. 21.

         Taxpayer's Installment Agreement and Bankruptcy Petition

         To pay the taxes assessed against him, the Taxpayer requested an installment payment agreement from the Internal Revenue Service (the “IRS”). AF No. 22.1. The agreement was pending between November 8, 2006, and November 2, 2007. AF No. 22.2. Having failed to pay his tax debts under the installment agreement, the Taxpayer filed a petition for relief under Chapter 11 of the Bankruptcy Code on May 29, 2008 (Case No. 08-41076-JJR (Bankr. N.D. Ala.) (Robinson, J.)). AF No. 23.

         The Taxpayer received a general discharge under Section 727 of the Bankruptcy Code on August 5, 2009. AF No. 24. The Taxpayer's individual income tax returns for tax years 2002 through 2006 were either due within three years of the petition date, or filed late within two years of that date. AF No. 25. The penalties assessed against the Taxpayer for tax years 2005 and 2006 and reflected in AF No. 9 relate to his failure to timely file his returns and pay the tax he owed and accrued within three years of the petition date. AF No. 26.

         The Taxpayer's individual income tax liabilities for tax years 2002 through 2006, and the penalties assessed against him for tax years 2005 and 2006, were excepted from his 11 U.S.C. § 727(a) discharge. AF No. 27. The IRS abated the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.