Shafmaster v. United States

United States Court of Appeals
For the First Circuit
No. 12-1726
JONATHAN SHAFMASTER AND CAROL SHAFMASTER,
Plaintiffs, Appellants,
v.
UNITED STATES,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Lynch, Chief Judge,
Selya and Howard, Circuit Judges.
James E. Higgins for appellants.
Joan I. Oppenheimer, Tax Division, Department of Justice, with
whom Kathryn Keneally, Assistant Attorney General, Ivan C. Dale,
Tax Division, Department of Justice, and John P. Kacavas, United
States Attorney, were on brief, for appellee.
February 11, 2013
LYNCH, Chief Judge. Plaintiffs Jonathan and Carol
Shafmaster, once a married couple and now divorced, appeal from the
United States District Court for the District of New Hampshire's
grant of summary judgment to the United States on the plaintiffs'
claim for refund of a failure-to-pay penalty imposed on them by the
Internal Revenue Service (IRS).
The Shafmasters argue that there was at least a dispute
of material fact as to whether the IRS was equitably estopped from
assessing this fee, whether they had reasonable cause not to pay
the relevant taxes within the time provided by statute, and whether
the IRS had ever provided them with proper notice and demand for
payment. We affirm, and reject the attempt to get us to recognize
the doctrine of equitable estoppel against the IRS by tax-owing
taxpayers who do not come close to satisfying equitable principles.
I.
A. Factual Background
This dispute about the payment of penalties arises out of
the Shafmasters' underlying joint personal income tax liability for
the tax year 1994. The IRS audited the Shafmasters for 1994, as
well as for tax years 1993 and 1995-1998, eventually calculating
deficiencies and penalties totaling $14,367,234.1 In 1998 and
1999, the Shafmasters brought petitions in Tax Court challenging
1
This total also included adjustments to the tax liability of
various entities owned by the Shafmasters and to a personal tax
return for Jonathan Shafmaster's daughter.
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the adjustments for 1993, 1994, and 1995. The IRS referred those
years to its office in Portsmouth, New Hampshire, where the case
was assigned to an agent named Robert Hamilton.
On March 19, 2001, the Shafmasters and the IRS entered
into three limited stipulations of settlement for the years 1993-
1995, which were entered by the Tax Court on April 25, 2001. The
Tax Court order for 1994 stated that the Shafmasters owed a penalty
for failing to timely file a return, but it was silent on the
separate penalty provision that would have addressed whether the
Shafmasters would owe a penalty if they did not pay the required
amounts within the prescribed statutory period of time after notice
and demand for payment (a "failure-to-pay" penalty, see 26 U.S.C.
§ 6651(a)(3)).
Meanwhile, the Shafmasters had also filed an
administrative appeal relating to the adjustments for tax years
1996, 1997, and 1998. Those years were also referred to Hamilton
and had not yet been resolved at the time of the 2001 stipulations.
The Shafmasters took the position that net operating loss
carrybacks from 1996-1998 would offset much, if not all, of their
1993 and 1994 tax liabilities.
In the summer and fall of 2001, the Shafmasters' attorney
had discussions with Hamilton and another IRS agent about obtaining
a stay of collection. This stay would suppress the accrual of a
failure-to-pay penalty for six months. In the district court and
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in this appeal, the Shafmasters have represented that these
discussions also included an offer by Hamilton to waive the
failure-to-pay penalty permanently; the government denies that the
evidence supports the claim that Hamilton said any such thing or
that he had any authority to do so. On September 6, 2001, the
parties agreed to a six-month stay of collection.
On September 10, 2001, the IRS created a Form 3552 for
the Shafmasters' account, which included a "Statutory Notice of
Balance Due" reflecting the 1994 tax liability. The parties
dispute whether this form ever reached the taxpayers or whether it
was re-routed to the Boston IRS appeals office. The Shafmasters
argue that, in any event, the agreed-upon six-month stay of
collection should have prevented the issuance of any Notice of
Balance Due.
The Shafmasters and Hamilton continued to negotiate the
assessments for 1996-1998 during the rest of 2001 and 2002. On
October 7, 2002, the IRS sent the Shafmasters a Notice of Tax Lien
based on the 1993 and 1994 taxes. The lien notice stated, in
relevant part: "[W]e are giving a notice that taxes (including
interest and penalties) have been assessed against the
following-named taxpayer. We have made a demand for payment of
this liability, but it remains unpaid." It also stated that the
"IRS will continue to charge penalty and interest until you satisfy
the amount you owe." The Shafmasters did not make any payments in
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response to this notice. They say they did not because they
believed that the amounts owed for 1993 and 1994 would be reduced
due to the carryback issue and thus that the amount reflected in
the lien notice was overstated.
The Shafmasters' amended returns for 1993 and 1994 were
processed in December 2003, at which point the IRS determined that
the 1994 liability should be reduced by $177,769 due to the
carryback losses. The scope of that determination was reduced to
writing, and in December 2003 and January 2004, the Shafmasters and
Kathleen Brown, a supervising agent in the Portsmouth IRS office,
executed a Form 870-AD that reflected the downward carryback loss
adjustments to tax years 1992, 1993, and 1994. The Form 870-AD is,
however, notably silent as to the imposition or waiver of any
failure-to-pay penalty.
In August 2004, Jonathan Shafmaster signed an installment
payment plan agreement pursuant to the Form 870-AD for the 1993 and
1994 tax liabilities, which at that point totaled over $2.6
million. Significantly, the installment plan document, Form 433-D,
provided that the taxpayers "agree to pay the federal taxes shown
above, plus penalties and interest provided by law" (emphasis
omitted).
In March 2005, after the Shafmasters objected to certain
penalties that appeared on their IRS account transcript, Brown sent
Jonathan Shafmaster a letter in which she agreed to abate a
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failure-to-pay penalty that had been assessed on the 1993 taxes,
concluding that it had been a "calculation error." Brown's letter
went on to state explicitly: "However, the failure to pay tax
penalty will continue to accrue on any unpaid tax balance until
either the penalty reaches 25% or the account is full [sic] paid"
(emphasis omitted).2
On April 17, 2006, the IRS assessed the failure-to-pay
penalty at issue in this case, in the amount of $261,189.50.
According to the IRS's calculations, the maximum statutory penalty
for 1994 had accrued by that date. That same day, the IRS sent the
Shafmasters an updated Statutory Notice of Balance Due.
The Shafmasters completed payment of their agreed 1994
tax liability under the payment plan on November 16, 2007. On
September 18, 2008, they filed an administrative claim for, inter
alia, refund of the 1994 failure-to-pay penalty and the interest
they had paid on that penalty. The IRS denied the claim on
November 28, 2008.
B. District Court Proceedings
The Shafmasters filed suit in the district court on July
15, 2009. They argued that Hamilton had orally agreed that the IRS
2
The 25% figure is a reference to 26 U.S.C. § 6651(a)(3),
which provides that a failure-to-pay penalty accrues at the rate of
"0.5 percent of the amount of such tax if the failure is for not
more than 1 month, with an additional 0.5 percent for each
additional month or fraction thereof during which such failure
continues, not exceeding 25 percent in the aggregate."
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would permanently waive any failure-to-pay penalties, and that this
agreement was implicitly incorporated into the Tax Court
stipulations, the Form 870-AD, and the installment plan. They
contended that this agreement equitably estopped the IRS from
assessing the penalty. They further argued that, under the penalty
statute, they had "reasonable cause" to not make timely payment,
see 26 U.S.C. § 6651(a)(3), because they had relied on the alleged
agreement.3
The government moved for summary judgment, arguing that
in the absence of a written agreement to waive the penalty, made
using the statutory closing mechanisms of 26 U.S.C. §§ 7121-7122,
the IRS could not be held to any alleged promise. In response to
this motion, the Shafmasters introduced an argument not made in
their complaint: that they had never received proper notice and
demand to trigger accrual of the penalty.
On September 30, 2011, the district court granted the
government summary judgment on the equitable estoppel and
reasonable cause claims. It held that because none of the
statements cited by the Shafmasters conformed to the statutory
closing procedures, the Shafmasters could not have reasonably
relied on those statements, thus negating an essential element of
3
In addition to the claim for refund of the failure-to-pay
penalty, the Shafmasters' complaint in the district court also
sought refund of certain interest payments. The plaintiffs have
not appealed the portion of the district court's decision that
dismissed the interest claim for lack of jurisdiction.
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an estoppel claim. It also rejected the "reasonable cause"
argument as merely an "attempt to repackage" the equitable estoppel
argument. However, the district court concluded that there was a
genuine issue of material fact with regard to the notice and demand
question, because the Shafmasters had produced a document from the
Boston IRS appeals office indicating that notice may not have been
delivered to the Shafmasters' last known address, as required by
statute.
The government again moved for summary judgment on
November 23, 2011, producing another part of the Form 3552 that it
argued could show proper notice and demand. The district court
denied this motion, finding that the document did not explicitly
demand payment and did not show that it was sent to the
Shafmasters. But the court noted in its memorandum denying the
motion that the Notice of Tax Lien dated October 7, 2002, which was
undisputedly sent to the Shafmasters, "may well satisfy the notice
and demand requirement," if the government could make a developed
argument on that point.
Accordingly, the government filed a third summary
judgment motion on February 16, 2012, arguing that the Notice of
Tax Lien provided satisfactory notice and demand. On May 7, 2012,
the district court allowed this motion, resulting in judgment for
the government on all claims. The Shafmasters timely appealed.
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II.
Our review of the district court's grant of summary
judgment is de novo, "drawing all reasonable inferences in favor of
the non-moving party while ignoring 'conclusory allegations,
improbable inferences, and unsupported speculation.'" Sutliffe v.
Epping Sch. Dist., 584 F.3d 314, 325 (1st Cir. 2009) (quoting
Sullivan v. City of Springfield, 561 F.3d 7, 14 (1st Cir. 2009)).
We may affirm on any basis apparent in the record. Id.In tax refund suits, the decision of the IRS Commissioner
enjoys a presumption of correctness, so the taxpayer bears the
burden of proving that an assessment was erroneous. Hostar Marine
Transp. Sys., Inc. v. United States, 592 F.3d 202, 208 (1st Cir.
2010).
The Internal Revenue Code's failure-to-pay penalty
provision, at issue here, provides that if a taxpayer fails
to pay any amount in respect of any tax
required to be shown on a return . . . which
is not so shown . . . within 21 calendar days
from the date of notice and demand therefor
(10 business days if the amount for which such
notice and demand is made equals or exceeds
$100,000), unless it is shown that such
failure is due to reasonable cause and not due
to willful neglect, there shall be added to
the amount of tax stated in such notice and
demand 0.5 percent of the amount of such tax
if the failure is for not more than 1 month,
with an additional 0.5 percent for each
additional month or fraction thereof during
which such failure continues, not exceeding 25
percent in the aggregate.
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26 U.S.C. § 6651(a)(3). Because the Shafmasters' 1994 tax
liability exceeded $100,000, they were subject to the ten-day
period for payment.
A. Equitable Estoppel
The Shafmasters argue that the IRS was equitably estopped
from assessing the failure-to-pay penalty because the agency had,
through Hamilton and through the various documents that the
Shafmasters signed, agreed not to assess such a penalty, and the
Shafmasters had relied on that promise. The argument fails, for a
number of reasons. We need not reach the question of whether
equitable estoppel can ever bind the IRS in informal settlements
reached apart from the §§ 7121-7122 procedures.
In Botany Worsted Mills v. United States, 278 U.S. 282(1929), the Supreme Court interpreted the predecessor of 26 U.S.C.
§§ 7121-7122 as providing the "exclusive method" for compromising
tax liability, holding that Congress "did not intend to intrust the
final settlement of such matters to the informal action of
subordinate officials in the [IRS]." Id. at 288-89. As a result,
the Court concluded, informal settlements are not binding on either
the taxpayer or the government. Id. at 288. However, the Court
went on to note that it was not "determining whether such an
agreement, though not binding in itself, may when executed become,
under some circumstances, binding on the parties by estoppel." Id.
at 289. The Court thus left the door open for the argument that
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some informal agreements between taxpayers and the IRS might give
rise to claims of estoppel -- at least when, as in Botany Worsted,
the government asserts estoppel against a taxpayer.
In the years since Botany Worsted, a number of courts of
appeals have determined that informal settlements such as the Form
870-AD can in fact trigger estoppel against taxpayers, although
there is disagreement as to when, if ever, estoppel may apply. See
Whitney v. United States, 826 F.2d 896, 897-98 (9th Cir. 1987)
(collecting cases). It does not appear that any circuit has used
an informal tax settlement to bind the government under estoppel
principles, although it also appears that the question simply may
never have been addressed.4
The First Circuit has not decided whether informal tax
settlements can be binding by estoppel even on taxpayers, and we
need not do so now in order to resolve this case. Nor do we need
to determine the relationship between claims of estoppel and the
statutory closing mechanisms of 26 U.S.C. §§ 7121-7122. Even
assuming arguendo that an informal IRS settlement such as the Form
870-AD could ever have estoppel effects against the government --
a proposition of which we are skeptical -- the Shafmasters'
4
One unpublished table decision from the Seventh Circuit did
mention the issue, and it rejected estoppel against the government
based on reasoning similar to that used by the district court in
this case. See Meyers v. Comm'r of Internal Revenue, No. 95-1542,
1996 WL 116818, at *2 (7th Cir. Mar. 13, 1996).
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argument would fail. There is no viable claim here in any event
under general principles of equitable estoppel.
Generally, in order to make out a claim for equitable
estoppel, a party must show that "(1) the party to be estopped made
a 'definite misrepresentation of fact to another person having
reason to believe that the other [would] rely upon it'; (2) the
party seeking estoppel relied on the misrepresentations to its
detriment; and (3) the 'reliance [was] reasonable in that the party
claiming the estoppel did not know nor should it have known that
its adversary's conduct was misleading.'" Ramírez-Carlo v. United
States, 496 F.3d 41, 49 (1st Cir. 2007) (alterations in original)
(quoting Heckler v. Cmty. Health Servs., 467 U.S. 51, 59 (1984)).
Additionally, when a party seeks to equitably estop the government,
it "must show that the government engaged in affirmative
misconduct." Id. Although "there is no settled test for what
constitutes" affirmative misconduct, it must at least include "an
affirmative misrepresentation or affirmative concealment of a
material fact by the government." Id. (quoting Watkins v. U.S.
Army, 875 F.2d 699, 707 (9th Cir. 1989)).
Here, the Shafmasters did not present a genuine issue of
material fact as to whether a government actor engaged in
affirmative misconduct. In fact, the Shafmasters do not even
allege that Hamilton, Brown, or any other representative of the IRS
did engage in misconduct during the Shafmasters' negotiations or
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when executing the various documents. Instead they argue,
erroneously, that this circuit's case law should be read to excuse
the misconduct requirement and instead to apply a "balancing
approach" that would weigh the interests of the party asserting
estoppel against the public interest represented by the underlying
policy at issue. This is a misunderstanding of our precedent.
Indeed, we recently reaffirmed the principle that the affirmative
misconduct requirement applies in this context. See Dickow v.
United States, 654 F.3d 144, 152 (1st Cir. 2011) ("The argument of
estoppel by silence on the part of the busy IRS is, on these facts,
simply a non-starter."). The Shafmasters also conflate affirmative
misconduct with the separate element of misrepresentation of fact.
Further, none of the documents on which the Shafmasters
rely -- the Tax Court stipulation for 1994, the Form 870-AD, or the
installment payment agreement -- mention the 1994 failure-to-pay
penalty at all, let alone demonstrate that the penalty was waived.
To the contrary, the installment plan specifically states that the
taxpayer will pay the amount shown "plus penalties and interest
provided by law" (emphasis omitted). Brown's letter to Jonathan
Shafmaster in March 2005 reminded him that failure-to-pay penalties
were accruing on the unpaid balance. Because none of the documents
promised to waive the penalty -- and some explicitly warned of the
penalty -- there was no definite misrepresentation of fact
contained therein as to whether the penalty would be assessed.
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This disposes of any dispute over what Hamilton did or
did not say. The written settlement documents made it unreasonable
for the Shafmasters to continue to rely on any alleged oral promise
from Hamilton.
B. Reasonable Cause
The IRS will not impose a failure-to-pay penalty if "it
is shown that such failure is due to reasonable cause and not due
to willful neglect." 26 U.S.C. § 6651(a)(3). The taxpayer bears
the burden of proving both reasonable cause and the absence of
willful neglect. United States v. Boyle, 469 U.S. 241, 245 (1985).
The Supreme Court has defined "willful neglect" as "a conscious,
intentional failure or reckless indifference." Id. Treasury
regulations provide that "reasonable cause" exists when the
taxpayer has "exercised ordinary business care and prudence in
providing for payment of his tax liability and was nevertheless
either unable to pay the tax or would suffer an undue hardship
. . . if he paid on the due date." 26 C.F.R. § 301.6651-1(c)(1).
Undue hardship, in turn, means that "substantial financial loss,
for example, loss due to the sale of property at a sacrifice price,
will result to the taxpayer for making payment on the due date of
the amount with respect to which the extension is desired." 26
C.F.R. § 1.6161-1(b).
The Shafmasters did not argue in the district court that
they were unable to pay, or would have suffered undue hardship if
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they had attempted to pay, the 1994 tax liability within ten days
of receiving notice and demand, as required to prevent accrual of
the penalty. See 26 U.S.C. § 6651(a)(3); 26 C.F.R. § 301.6651-
1(c)(1). The Shafmasters cannot assert for the first time on
appeal that there was a triable issue as to undue hardship when
they bore the burden of presenting evidence to the district court
that would have demonstrated such hardship. The issue is waived.
See Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir.
2003). Since the Shafmasters did not show inability to pay or
undue hardship, they cannot seek refuge in the "reasonable cause"
exception.
Moreover, the Shafmasters have never argued that their
failure to pay within the statutory time frame was anything but
intentional. Instead, they argue that they had "reasonable cause"
to intentionally delay payment because they were negotiating with
the IRS at the time and anticipated that the 1994 liability would
ultimately be reduced by loss carrybacks. The district court
correctly found that this argument is essentially a "repackag[ing]"
of the equitable estoppel claim: the Shafmasters again attempt to
defeat the penalty by asserting a reliance interest in alleged
promises from the local IRS officer. Yet none of the settlement
documents reflect a commitment by the IRS to delaying assessment or
collection of the 1994 taxes until all of the loss carryback issues
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were resolved. The 1994 penalty was assessed outside the agreed-
upon six-month stay period.
C. Notice and Demand
The Shafmasters argue on appeal, as they did before the
district court, that the October 2002 Notice of Tax Lien did not
constitute sufficient notice and demand because it stated an
incorrect amount, did not explicitly "demand" payment, and was sent
too late. They also renew their argument that the April 2006
assessment did not properly "relate back" to the Notice of Tax
Lien. Like the district court, we reject these arguments.5
Under 26 U.S.C. § 6303(a), the IRS
shall, as soon as practicable, and within 60
days, after the making of an assessment of a
tax pursuant to section 6203, give notice to
each person liable for the unpaid tax, stating
the amount and demanding payment thereof.
Such notice shall be left at the dwelling or
usual place of business of such person, or
shall be sent by mail to such person's last
known address.
This provision does not require the IRS to use any specific form of
notice. See United States v. Roccio, 981 F.2d 587, 591 (1st Cir.
1992). Although the statute instructs the agency to give notice
5
The government argues on appeal that the district court
erred in finding that there was a genuine issue of material fact as
to whether the IRS gave notice and demand on September 10, 2001.
Because we can resolve the Shafmasters' notice and demand claim
based on the October 7, 2002 Notice of Tax Lien, we need not
address this point.
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and demand within sixty days of assessment, lateness alone is not
grounds to invalidate the notice. 26 C.F.R. § 301.6303-1(a).
As to the argument that the Notice of Tax Lien reflected
an inaccurate amount, the Shafmasters contend that because the
carryback losses had not yet been applied to their 1994 tax
liability as of the date of the Notice of Tax Lien, that notice
could not have been correct because it did not state the true
amount they owed the IRS.6 The Shafmasters do not offer any case
law or regulations to support the proposition that an assessment is
"inaccurate" because there is a chance that a taxpayer's liability
may change at a later date, even though the assessment is
accurately calculated as of the date it is made. Further, they
distort the record when they argue that as of October 2002, "there
was a concrete understanding between the IRS and taxpayer[s]" that
the 1994 liability was lower than the amount reflected on the lien
notice. While there were negotiations and calculations ongoing
throughout 2002 and 2003, the IRS did not make any "concrete"
determination that carryback losses would reduce the 1994 tax
liability until it prepared the Form 870-AD in December 2003.
A taxpayer cannot refuse to pay an assessment following
notice and demand on the mere assertion and belief that he might be
able to apply carrybacks at a later date, and then avoid the
6
The Shafmasters argued in the district court that there was
a calculation error in addition to the loss carryback issue. They
do not press that claim on appeal.
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penalty for failing to timely pay. See, e.g., Simon v. Comm'r of
Internal Revenue, 248 F.2d 869, 877 (8th Cir. 1957) ("The carryback
provision does not relieve the taxpayer of the obligation to pay
the tax in full when it falls due, and can not be interpreted as
deferring taxpayer's duty to pay the tax promptly."); Rev. Rul. 72-
484, 1972-2 C.B. 638 ("Even though a carryback of a net operating
loss eliminates the tax for a given year, penalties incurred for
failure to file a return and pay the tax for that year within the
prescribed time are not affected by the carryback."); cf. Manning
v. Seeley Tube & Box Co. of N.J., 338 U.S. 561, 565-66 (1950)
(holding that "[t]he subsequent cancellation of the duty to pay" a
deficiency due to carryback adjustments "does not cancel in like
manner the duty to pay the interest on that deficiency," because
"[t]he fact that the statute permits the taxpayer subsequently to
avoid the payment of that debt in no way indicates that the
taxpayer is to derive the benefits of the funds for the intervening
period"). We reject the Shafmasters' argument to the contrary.
With regard to the "relation back" issue, the Shafmasters
argue that, if October 7, 2002 was the date of notice and demand,
then the full penalty would not have accrued by April 17, 2006, the
date of the penalty assessment. The district court concluded, and
the government concedes in its briefing before us, that the IRS had
based its accrual calculation on having sent notice in September
2001, not October 2002. Although the district court found that the
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government had not shown that proper notice was actually sent in
September 2001, the court ruled that the Shafmasters' argument
failed nonetheless, because the Shafmasters did not actually pay
their 1994 taxes in full until November 2007, almost a year after
the full penalty would have accrued based on a notice date of
October 2002.
Neither the plaintiffs nor the government have provided
us with circuit court or regulatory authority governing the effect
of a premature penalty assessment.7 In this particular factual
situation, however, we agree with the district court that the
Shafmasters have shown no plausible basis for invalidating the
penalty based on its timing. The full penalty would have accrued
by the time the Shafmasters finished paying their 1994 taxes, and
they have made no argument and provided no evidence that they would
have paid their taxes earlier if they had known that the full
penalty would accrue on a later date. To the contrary, the
evidence shows that the Shafmasters had ample warning that they
would be subject to a failure-to-pay penalty -- at the least, via
the 2002 Notice of Tax Lien, the installment payment plan, and the
7
The government cites several district court decisions
stating that failure-to-pay penalties do not have to be separately
assessed, but these cases all addressed the timing of penalties
vis-à-vis the statute of limitations, not the penalties' relation
to the date of notice or the date of assessment. See, e.g., United
States v. Lund, No. 6:12-CV-62-TC, 2012 WL 3779105, at *1 (D. Or.
Aug. 31, 2012); Bob Hamric Chevrolet, Inc. v. IRS, 849 F. Supp.
500, 515 (W.D. Tex. 1994); United States v. Krasnow, 548 F. Supp.
686, 688-89 (S.D.N.Y. 1982).
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2005 letter from Brown -- yet they still did not complete their
payments until November 2007.
We can dispense quickly with the remaining two arguments.
As noted above, sending notice and demand more than sixty days
after the assessment is not grounds for invalidating the notice.
26 C.F.R. § 301.6303-1(a). And the Shafmasters' contention that
the Notice of Tax Lien did not actually demand payment is belied by
the plain language of the document, which "giv[es] a notice that
taxes (including interest and penalties) have been assessed";
states that the IRS "ha[s] made a demand for payment of this
liability, but it remains unpaid"; alerts the taxpayers that a lien
has been placed on their property; and warns that the lien will not
be released until the full amount is paid or bond is posted and
that the IRS will "continue to charge penalty and interest until
you satisfy the amount you owe." Under these circumstances, it
strains credulity to argue that the Notice of Tax Lien did not
"demand" payment.
III.
The Shafmasters failed to raise a genuine issue of
material fact as to any of their claims. The district court's
grant of summary judgment to the United States on all claims is
affirmed. Costs of this appeal are awarded to the IRS.
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