1

 The Commissioner also moves for summary judgment on the ground that the IRS did not abuse its discretion

by refusing to settle over $1.3 million of outstanding tax liabilities for $200,000 as proposed by DDC at the collection

due process hearing. However, the court does not read DDC's complaint to challenge the rejection of this in-office

compromise. Nor does DDC mention the settlement offer in its summary judgment response. Because DDC does not

pursue its claim under this theory, the court need not address this aspect of the summary judgment motion. See Anderson

v. Park Place Motorcars, Ltd., 159 F.Supp.2d 391, 397 n.11 (N.D. Tex. 2001).

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

DUNCANVILLE DERMATOLOGY §

CLINIC, P.A. §

§

Plaintiff, §

§

VS. § NO. 3-05-CV-1364-BD

§

COMMISSIONER OF INTERNAL §

REVENUE §

§

Defendant. §

MEMORANDUM ORDER

Defendant Commissioner of Internal Revenue ("the Commissioner") has filed a motion for

summary judgment in this collection due process appeal brought by Plaintiff Duncanville

Dermatology Clinic, P.A. ("DDC") challenging the assessment and collection of delinquent

employment taxes, penalties, and interest for all or part of the 1999, 2000, 2001, and 2002 tax years.

In its complaint, DDC alleges that: (1) the tax assessments reflected in the IRS transcripts "do not

appear to be correct;" (2) certain payments have not been credited to its account; and (3) the

calculation of penalties and interest are erroneous. (See Plf. Compl. at 2, ¶ IV). The Commissioner

now moves for summary judgment on the ground that DDC has failed to overcome the presumption

that the Form 4340 Certificates of Assessment are correct.1

 The issues have been briefed by the

parties and the motion is ripe for determination.

 

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2

 A Form 4340 Certificate of Assessment is a document signed by an IRS assessment officer identifying: (1)

the taxpayer; (2) the date of the assessment; (3) the character of the liabilities assessed; (4) the applicable tax periods;

and (5) the amount of the assessment. See 26 C.F.R. 301.6203-1, Treas. Reg. § 301.6203-1 (1967). In addition to the

amounts shown in the Form 4340 certificates, the Commissioner has adduced evidence that DDC has incurred penalties

and interest totaling $507,055.45. (See Def. MSJ App., Exh. 2 at 012-34). 

Summary judgment is proper when there is no genuine issue as to any material fact and the

movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). The moving party has the

initial burden of demonstrating that there is no genuine fact issue for trial. See Duffy v. Leading

Edge Products, Inc., 44 F.3d 308, 312 (5th Cir. 1995). The burden then shifts to the non-movant

to show that summary judgment is not proper. See Duckett v. City of Cedar Park, 950 F.2d 272, 276

(5th Cir. 1992). The parties may satisfy their respective burdens by tendering depositions, affidavits,

and other competent evidence. See Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert.

denied, 113 S.Ct. 82 (1992). All evidence must be viewed in the light most favorable to the party

opposing the motion. See Rosado v. Deters, 5 F.3d 119, 122 (5th Cir. 1993). 

In an attempt to satisfy its initial burden on summary judgment, the Commissioner relies on

the Form 4340 Certificates of Assessment for each of the tax periods at issue, which collectively

show that DDC has an outstanding tax liability of $390,769.37. (See Def. MSJ App., Exh. 3 at 035-

110).2 These forms are "presumptive proof of a valid assessment where the taxpayer has produced

no evidence to counter that presumption." United States v. McCallum, 970 F.2d 66, 71 (5th Cir.

1992); see also United States v. Estabrook, 78 F.Supp.2d 558, 561-62 (N.D. Tex. 1999) (Kaplan,

J.). DDC counters with the affidavits of Bill V. Way, its president, and Milton Padgett, a certified

public account. Way states:

I have reviewed the various documentation provided by the Internal

Revenue Service ("IRS") of the computations. The information

provided by the IRS appears to be incomplete.

 

 Case 3:05-cv-01364-BD Document 22 Filed 10/23/06 Page 2 of 4 PageID 303
The IRS' records do not appear to accurately reflect each and every

tax deposit that was made. Tax deposits were made that are not

recorded in the IRS' accountings.

The factual evidence provided by the IRS does not appear to be

complete and or accurate as the amounts it is basing its case on have

been derived from assessments that were improperly imposed and as

such are erroneous.

(Plf. MSJ App., Exh. 1 at 1, ¶¶ 3-5). However, Way fails to identify any of the deposits that

allegedly were made by DDC but not accounted for by the IRS. Indeed, Way admits that "I have

made numerous attempts to retrieve the records from the banking institution utilized at the time;

however, to date, the information has not been provided to me." (Id., Exh. 1 at 1, ¶ 6). Such

conclusory, self-serving assertions regarding the accuracy of IRS records are not competent

summary judgment evidence and are insufficient to create a fact issue for trial. See United States

v. Key, 308 F.Supp.2d 727, 729 (N.D. Tex. 2004) (self-serving affidavits held insufficient to rebut

presumption of validity attached to Form 4340 Certificate of Assessment).

Padgett states that the IRS improperly calculated the amount of penalties and interest "for

many of the quarters at issue in the pending lawsuit[.]" (Plf. MSJ App., Exh. 2 at 3, ¶¶ 6-7).

Although he attaches 64 pages of calculations to his affidavit, Padgett does not explain how the

calculations were performed and offers no discussion of how he arrived at his ultimate conclusion.

In addition, the Commissioner argues that Padgett has understated the amount of penalties due by

failing to include an extra 5% penalty for deposits that were more than 15 days late, see 26 U.S.C.

§ 6656(b)(1)(B), and by erroneously treating all deposits as due at the end of the quarter rather than

on a semi-weekly basis, see IRS Pub. 15 (Circular E) at 19-20, available at

http://www.irs.gov/formspubs/index.html?portlet=3. DDC offers no evidence in its sur-reply to

rebut this point. 

 

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CONCLUSION

DDC has failed to adduce competent evidence to overcome the presumptive validity of the

Form 4340 Certificates of Assessment or to create a genuine issue of material fact for trial.

Accordingly, the Commissioner's motion for summary judgment [Doc. #13] is granted. The court

will dismiss this case with prejudice by separate judgment filed today.

SO ORDERED.

DATED: October 23, 2006.

 

 

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