United States v. LaRosa ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
No. 97-2782
DOMINICK LAROSA; CATHERINE
LAROSA,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Deborah K. Chasanow, District Judge.
(CA-96-980-DKC)
Argued: June 4, 1998
Decided: July 10, 1998
Before WILKINSON, Chief Judge, MURNAGHAN, Circuit Judge,
and SMITH, United States District Judge for the
Eastern District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Robert Gerald Nath, ODIN, FELDMAN & PITTLE-
MAN, P.C., Fairfax, Virginia, for Appellants. Annette Marie Wie-
techa, Tax Division, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Loretta C.
Argrett, Assistant Attorney General, Lynne A. Battaglia, United
States Attorney, Richard Farber, Tax Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
This case arises out of a May 1, 1991 settlement between the Inter-
nal Revenue Service, Dominick LaRosa, and other taxpayers not rele-
vant to this appeal. The taxpayers in that settlement had underpaid
their taxes for the years 1981, 1982, and 1983 but had overpaid their
taxes for the years 1984 and 1985. The parties agreed that the under-
payments plus penalties and interest totaled approximately $9.7 mil-
lion while the overpayments plus interest totaled approximately $6.1
million. In settlement of these claims, the Internal Revenue Service
received a check for approximately $3.6 million. Subsequently, the
IRS, believing it should not have charged interest on the entire
amount of the underpayments after the overpayments had occurred,
issued refunds totaling approximately $1.5 million. However, it later
concluded that these refunds should never have been issued, and the
United States filed this suit against Dominick and his wife Catherine
to recover the $1.5 million. See 26 U.S.C.§ 7405 (authorizing the
government to bring a civil action to recover an erroneous refund).
The LaRosas counterclaimed, challenging the interest assessed on
various fraud penalties and arguing that interest should not have been
charged after certain property was seized pursuant to a jeopardy
assessment.
The district court granted summary judgment to the United States
on both its claim and the LaRosas' counterclaims. With respect to the
government's claim, the district court reasoned that the LaRosas were
not entitled to the $1.5 million. This was true whether the 1991 settle-
ment was viewed as refunding the LaRosas for the 1984-85 overpay-
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ments or as crediting those overpayments against the 1981-83
underpayments. If the transaction were treated as a refund, then the
LaRosas continued to owe interest on the entire amount of the under-
payments until May 1991 and were not entitled to the $1.5 million.
If the transaction were treated as a credit, then the LaRosas were not
entitled to any interest on the overpayments, since they would be
immediately applied to the underpayments. With respect to the coun-
terclaims, the district court reasoned that the particular jeopardy
assessment did not stop the accrual of interest on the underpayments
and that it lacked jurisdiction to consider the LaRosas' challenge to
the interest on the fraud penalties.
Our review of the record, written, and oral submissions of the par-
ties, and the appropriate legal standards persuades us of the correct-
ness of the district court's grant of summary judgment to the United
States. We therefore affirm that judgment on the reasoning set forth
in the district court's memorandum opinion, United States v. LaRosa,
993 F. Supp. 907 (D. Md. 1997).
AFFIRMED
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