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United States v. Gershon

United States District Court, D. Connecticut

December 6, 2016

UNITED STATES OF AMERICA Plaintiff,
v.
LORI GERSHON Defendant.

          RULING ON MOTION TO DISMISS

          CHARLES S. HAIGHT, JR. Senior United States District Judge.

         The United States of America ("Plaintiff" or "the Government") brings this action pursuant to 26 U.S.C. § 7401 to reduce to judgment several unpaid federal tax liabilities of Defendant Lori Gershon. Specifically, the Government seeks to recover the total amount of $276, 509.77, plus statutory interest and related costs.

         Defendant, represented by out-of-state counsel appearing pro hac vice, has filed a Motion [Doc. 17] to dismiss the Complaint, which the Government opposes. This Ruling resolves that motion.

         I. Facts

         Plaintiff brings suit pursuant to 26 U.S.C. § 7401, to reduce to judgment unpaid federal tax liabilities from the years 1992 through 1995, 1998, and 2002 owed by the Defendant, Lori Gershon. A delegate of the Secretary of the Treasury made assessments against the Defendant for federal income taxes, penalties, and interests, as of September 9, 2015, in the following amounts:

Tax Period

Assessment Date

Assessment Type

Amount

1992

04/14/2003

04/14/2003

04/14/2003

04/14/2003

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$10, 797.00

$2, 6999.25

$2, 429.33

$15, 863.33

$34, 846.02

1993

04/14/2003

04/14/2003

04/14/2003

04/14/2003

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$33, 407.00

$8, 351.75

$7, 516.57

$43, 159.33

$162, 320.65

1994

04/21/2003

04/21/2003

04/21/2003

06/23/2014

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$16, 530.00

$25, 735.16

$4, 132.50

$40, 926.03

$60, 220.29

1995

04/21/2003

04/21/2003

06/25/2007

06/23/2014

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$925.00

$669.53

$194.22

$1, 219.07

$3, 119.35

1998

09/16/2002

09/16/2002

09/16/2002

12/06/2010

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$6, 903.00

$1, 373.00

$1, 590.29

$1, 725.74

$14, 730.81

2002

09/16/2002

09/16/2002

09/16/2002

12/06/2010

Tax Assessed

Late Payment Penalty

Late Filing Penalty

Late Payment Interest

Unpaid Balance With Interest as of 09/09/2015

$3, 301.00

$13.86

$7.81

$152.64

$1, 272.65

         Plaintiff further alleges that Gershon has failed to pay the amounts listed above.

         The Government says that while the statute of limitations for the collection of taxes under 26 U.S.C. § 6502 is ten years, Gershon submitted several offers in compromise to the Internal Revenue Service ("IRS") which had the effect of suspending and extending the statute of limitations pursuant to 26 U.S.C. § 6330(k)(3). Plaintiff alleges that the statute of limitations for the income tax periods ending December 31, 1992, December 31, 1993, December 31, 1994, December 31, 1995, December 31, 1998, and December 31, 2002 were thus suspended and extended.

         Specifically, the Government alleges that Gershon submitted an offer in compromise on August 28, 2003, which was rejected on September 29, 2004: in consequence, the statue of limitations was extended 398 days under 26 U.S.C. § 6331(k)(1). Plaintiff also alleges that Gershon submitted a second offer in compromise on July 7, 2005, which was rejected on November 7, 2006, extending the statute of limitations 489 days. Plaintiff further alleges that on June 17, 2014, Gershon submitted a third offer in compromise to the IRS, which was rejected on December 19, 2014, extending the statute of limitations period 185 days. Lastly, the Government alleges that on December 20, 2014, Lori Gershon proposed an installment agreement to the IRS which the IRS rejected on January 8, 2015, extending the period for an additional 19 days. The facts recited in this paragraph do not appear to be disputed.

         II. Motion to Dismiss Standard

         Federal Rule of Civil Procedure 12(b)(6) allows parties to assert by motion the defense that the other party "fail[ed] to state a claim upon which relief can be granted." Fed. R. Civ. Pro. 12(b)(6). In analyzing whether a plaintiff has stated a claim upon which relief can be granted, the court must accept as true all facts alleged in the complaint. Hill v. Curcione, 657 F.3d 116, 122 (2d Cir. 2011). Additionally, claims set forth by the plaintiff in the complaint must be facially plausible. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Aschcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint does not need to put forth "detailed factual allegations" to survive a 12(b)(6) motion, but must involve more than "unadorned, the-defendant-unlawfully-harmed-me accusation[s]" Id. (quoting Twombly, 550 U.S. at 555).

         III. Analysis

         A. Statute of Limitations

         Plaintiff United States filed its complaint in the case on September 11, 2015 [Doc. 1]. Defendant Lori Gershon argues that the statute of limitations has expired for the years 1993, 1994, 1995, and 1998 because it has been more than ten years since the assessment of those taxes.

         To place this contention by Defendant in context, it is necessary to review some aspects f the case's history. Gershon is represented by Jared J. Scharf, Esq., an attorney whose practice is in White Plains, N.Y., within the Southern District of New York. Mr. Scharf received approval from this Court to appear pro hac vice on Ms. Gershon's behalf in this District. On December 1, 2015, less than three months after the Government filed this action, Scharf wrote a letter to Bradley A. Sarnell, Esq., a trial attorney in the Tax Division of the Department of Justice, whose office is in Washington, D.C. Scharf asked Sarnell for particulars with respect to Plaintiff's tax claims against Defendant. Sarnell replied in a letter to Scharf dated December 1, 2015, which reads in part:

I am enclosing copies of IRS Forms 4340 for Lori Gershon's liabilties for the tax years. . . . The Forms 4340 reflect the dates on which Ms. Gershon proposed offers in compromise and installment agreements to the Internal Revenue Service, ...

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