UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff, Case No. 09-50701

Honorable David M. Lawson

v. Magistrate Judge Paul J. Komives

JAMES W. KERN,

Defendant,

v.

CURT ANTHONY REDINGER,

Garnishee defendant.

_______________________________________/

ORDER ADOPTING IN PART MAGISTRATE JUDGE’S REPORT AND

RECOMMENDATION REGARDING GOVERNMENT’S REQUEST

FOR WRIT OF CONTINUING GARNISHMENT

This matter is before the Court on the government’s application for a writ of periodic

garnishment and defendant James W. Kern’s objections and request for a hearing. On August 14,

2009, Magistrate Judge Paul J. Komives filed a report recommending that the Court allow the writ

to issue and order the government to provide a statement of amounts recovered from taxpayers that

would offset Kern’s restitution obligation. Kern filed timely objections to the report and

recommendation, and the government responded. The government also filed statements of amount

collected from taxpayers on September 9, 2009 and March 15, 2010.

The present dispute arises from Kern’s conviction of assisting in the preparation of false

income tax returns in violation of 26 U.S.C. § 7206(2). Kern operated a tax preparation business

and assisted taxpayers employed as state law enforcement personnel in preparing their federal

income tax returns. It was alleged that the defendant regularly inflated Schedule A deductions for

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charitable contributions and Schedule C deductions for unreimbursed travel and other work-related

expenses, thereby understating tax liability on the returns. In many of the cases, the taxpayers were

complicit in the misconduct.

As part of the sentence imposed on October 1, 2007, the Court ordered restitution in the

amount of the tax loss of $115,869. However, the Court also ordered that the defendant receive

credit against the restitution figure for the amount recovered from the taxpayers, who originally

owed the income tax. An amended judgment was entered on November 1, 2007 that was intended

to clarify that point. 

Kern had a partner in the tax preparation business, Curt Anthony Redinger, to whom he sold

his interest in the business under an agreement that provided for installment payments. Redinger

also was involved in the scheme to understate their clients’ tax obligations, and he was convicted,

sentenced, and ordered to pay restitution. Redinger filed for bankruptcy protection, but his debt to

Kern is memorialized in a nondischargeable consent judgment in favor of Kern in the amount of

$225,000. Redinger pays Kern $2,000 per month on that judgment. The government seeks to divert

that payment to itself by the writ of garnishment for which it now petitions.

Under the Federal Debt Collection Procedures Act, the government may collect the

restitution owed by means of a writ of continuing garnishment. 28 U.S.C. §§ 3001, 3205(b)(1).

Kern has argued in his papers that he is impoverished and his only income comes from Social

Security. He also contends that he is not primarily responsible for the tax loss in this case.

The latter argument is untenable. Kern facilitated the underpayment of income tax, and he

has been ordered to pay restitution. On the other hand, it was the Court’s intention to mollify the

impact of that obligation by requiring the government to look to the taxpayers — who have the

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primary obligation to pay the tax — for collection of the amounts owed. Based on the statements

filed through last year, it appears that the government’s effort to collect from the taxpayers is

anemic. 

Kern also has the opportunity to show that the amounts sought by the government are exempt

from collection under 28 U.S.C. § 3014(a). He has not filed a petition under this statute so far, and

the Court will give him an opportunity to do so before approving a writ of continuing garnishment.

The Court finds that the magistrate judge correctly identified the applicable law. The

defendant’s objections lack merit. However, the Court also has an interest in seeing that the spirit

and letter of its judgment is satisfied by all parties to the case. Therefore, the Court will adopt the

magistrate judge’s recommendation in part and enter a remedial order.

Accordingly, it is ORDERED that the magistrate judge’s report and recommendation [dkt

#11] is ADOPTED IN PART.

It is further ORDERED that the government shall submit a report to the Court and the

defendant stating the results of its effort to collect the tax owed from the taxpayers by stating the

following: (1) the number of taxpayers whose underpayment contributed to the restitution amount

ordered in the judgment of sentence; (2) the number of taxpayers from whom recovery of the tax has

been received; (3) the amount collected through the date of the report; (4) the number of taxpayers

from whom additional payment is being sought. The report should be filed on or before February

28, 2011.

It is further ORDERED that if the defendant intends to claim that any of his assets are

exempt, he must file an appropriate motion on or before February 21, 2011. If no motion is filed,

the Court will issue a writ of periodic garnishment after receipt of the government’s report.

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s/David M. Lawson 

DAVID M. LAWSON

United States District Judge

Dated: February 3, 2011

PROOF OF SERVICE

The undersigned certifies that a copy of the foregoing order was served

upon each attorney or party of record herein by electronic means or first

class U.S. mail on February 3, 2011.

s/Deborah R. Tofil 

DEBORAH R. TOFIL

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