United States v. Estelle Stein

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-10914
________________________
D.C. Docket No. 1:15-cv-20884-UU
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ESTELLE STEIN,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 31, 2018)
Before ED CARNES, Chief Judge, TJOFLAT, MARCUS, WILSON, WILLIAM
PRYOR, MARTIN, JORDAN, ROSENBAUM, JULIE CARNES, NEWSOM, and
HULL, Circuit Judges. *
*
Judge Jill Pryor is recused from this case and did not participate in this decision. Judge Frank
Hull continued to participate in this decision after she assumed senior status pursuant to 28
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JORDAN, Circuit Judge:
We hold that an affidavit which satisfies Rule 56 of the Federal Rules of
Civil Procedure may create an issue of material fact and preclude summary
judgment even if it is self-serving and uncorroborated. And because this principle
applies in all civil cases, including those in the realm of tax law, we overrule that
portion of Mays v. United States, 763 F.2d 1295, 1297 (11th Cir. 1985), which is
(or may be interpreted to be) to the contrary.
I
This case concerns IRS assessments, so we begin with some basic tax
concepts. An assessment “amounts to an IRS determination that a taxpayer owes
the [f]ederal [g]overnment a certain amount of unpaid taxes,” and is “entitled to a
legal presumption of correctness—a presumption that can help the [g]overnment
prove its case against a taxpayer in court.” United States v. Fior D’Italia, Inc., 536
U.S. 238, 242 (2002). “In reducing an assessment to judgment, the [g]overnment
must first prove that the assessment was properly made. . . . [If it does so,] the
taxpayer must then prove that the assessment is erroneous in order to prevail.”
United States v. White, 466 F.3d 1241, 1248 (11th Cir. 2006). As far as we can
tell, there are no reported federal cases addressing what evidence a taxpayer needs
to present to show that an IRS assessment has been paid or satisfied.
U.S.C. § 46(c).
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A
In 2015, the government sued Estelle Stein for outstanding tax assessments,
late penalties, and interest owed for tax years 1996, 1999, 2000, 2001, and 2002.
See 26 U.S.C. § 7402. Its complaint alleged that Ms. Stein owed approximately
$220,000 plus fees and statutory additions.
When it moved for summary judgment, the government sought to
demonstrate that Ms. Stein had outstanding tax assessments by submitting copies
of her federal tax returns, transcripts of her accounts for the tax years in question,
and an affidavit from an IRS officer. The government acknowledged that
Ms. Stein had paid the taxes due for 1996, 1999, and 2000 (as well as some
additional small amounts), but claimed she had not satisfied the accrued penalties
and interest for those years. As for 2001 and 2002, the government asserted that
Ms. Stein had not paid any taxes, penalties, or interest. The government did not
depose Ms. Stein.
In response to the government’s summary judgment motion, Ms. Stein
submitted an affidavit of her own stating that, “to the best of [her] recollection,”
she had paid the taxes and penalties owed for the years in question. Her affidavit
specified that she had retained an accounting firm to file the tax returns after the
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death of her husband, who had been solely responsible for filing the couple’s tax
returns and paying their taxes; that she recalled paying the taxes due, including
penalties, for each of those tax returns; that she no longer had bank statements to
establish her payments to the IRS; that she could not obtain statements from her
bank to prove her payments; and that the IRS had acknowledged misapplying her
tax payment for 1996 to tax year 1979. The relevant paragraphs of Ms. Stein’s
affidavit stated as follows:
8. For 1996, this tax return was filed on November 15, 2004. The
IRS had no record of receiving any payment and is claiming the full
amount of the tax is due, along with interest and penalties.
***
10. For the year 1999, I filed the return as surviving spouse on
February 11, 2005. The return showed an amount due of $33,612. I
paid $35,226, which included the late penalty. The IRS has a record
of that payment.
11. For the year 2000, I filed my return as surviving spouse on
January 11, 2005. The amount due on the return was $4,127. I paid
$4,349.00, which amount included the late penalty. The IRS has a
record of having received that payment.
12. For the year 2001, I filed my return, as surviving spouse, on
March 10, 2005. The amount of the return shows $15,998 due.
Although I recall paying the tax on that return, including a late
penalty consistent with the other returns that I filed, the IRS does not
have a record of receiving such payment.
13. For the year 2002, I filed my return on March 10, 2005, as
surviving spouse. The amount of tax shown on the return was
$52,342. Although I recall writing a check for this amount, plus,
late penalties, the IRS has no record of receiving his amount.
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***
21. . . . [I]t is my unwavering contention that I paid the taxes due,
including late filing penalties, at such time as I filed the returns for
each of the tax years in question.
D.E. 32-1 at 2–3.
The district court entered summary judgment in favor of the government.
See D.E. 40. It first concluded that the evidence submitted by the government
created a presumption that its assessments were correct. Turning to Ms. Stein’s
affidavit, the district court ruled that “[a] number of the facts contained within [the]
affidavit [were] not relevant facts for . . . consideration.” Id. at 6. Although
Ms. Stein maintained that payments had been made, she “did not produce any
evidence documenting said payments,” id., and therefore did not satisfy her burden
to overcome the presumption of correctness given to the government’s
assessments. As a result, there was “no genuine dispute as to any material fact,”
id. at 7, and the government was entitled to judgment as a matter of law.
Ms. Stein appealed, and a panel of this court affirmed. The panel ruled that
her “affidavit failed to create a genuine factual dispute about the validity of the
[government’s] assessments” because, under Mays, 763 F.2d at 1297, her “general
and self-serving assertions . . . failed to rebut the presumption established by the
assessments.” United States v. Stein, 840 F.3d 1355, 1357 (11th Cir. 2016). We
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vacated the panel’s opinion and took the case en banc to determine whether Mays
should be overruled.
II
Mays, a tax refund case, came to us in a summary judgment posture. We
affirmed the district court’s grant of summary judgment in favor of the
government, holding that the taxpayer’s submissions were insufficient to create an
issue for trial. See 763 F.2d at 1297. We first noted that a taxpayer in a refund
suit has the twin burdens of showing that the government’s assessment is wrong,
and of establishing the “correct amount of the refund due.” Id. We then explained
that a taxpayer’s claim “must be substantiated by something other than tax returns,
uncorroborated oral testimony, or self-serving statements.” Id. (internal citations
omitted). Turning to the record in the case, we concluded that the taxpayer’s
computer printout of business expenses (prepared after a tax audit) and net worth
statements (which did not refer to any original records) “did not overcome the
presumption of correctness due [to] determinations” of the Commissioner of the
IRS: “[The taxpayer] has submitted only self-serving documents which do not
substantiate his claims.” Id.
We overrule Mays to the extent it holds or suggests that self-serving and
uncorroborated statements in a taxpayer’s affidavit cannot create an issue of
material fact with respect to the correctness of the government’s assessments.
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Nothing in Rule 56 prohibits an otherwise admissible affidavit from being self-
serving. And if there is any corroboration requirement for an affidavit, it must
come from a source other than Rule 56.
A
Rule 56(a) authorizes summary judgment only when “there is no genuine
dispute as to any material fact” and the moving party is “entitled to judgment as a
matter of law.” Rule 56(c), in turn, allows a nonmoving party to dispute a material
fact through an affidavit, which must be “made on personal knowledge, set out
facts that would be admissible in evidence, and show that the affiant or declarant is
competent to testify on the matters stated.” See generally Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986) (“[T]he plain language of Rule 56(c) mandates the entry
of summary judgment, after adequate time for discovery and upon motion, against
a party who fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden
of proof a trial.”).
An affidavit cannot be conclusory, see, e.g., Lujan v. Nat’l Wildlife Fed’n,
497 U.S. 871, 888 (1990), but nothing in Rule 56 (or, for that matter, in the Federal
Rules of Civil Procedure) prohibits an affidavit from being self-serving. Indeed, as
the Seventh Circuit observed, “most affidavits submitted [in response to a
summary judgment motion] are self-serving.” Payne v. Pauley, 337 F.3d 767, 772
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(7th Cir. 2003). Not surprisingly, most of our cases correctly explain that a
litigant’s self-serving statements based on personal knowledge or observation can
defeat summary judgment. See, e.g., Feliciano v. City of Miami Beach, 707 F.3d
1244, 1253 (11th Cir. 2013) (“To be sure, Feliciano’s sworn statements are self-
serving, but that alone does not permit us to disregard them at the summary
judgment stage.”); Price v. Time, Inc., 416 F.3d 1327, 1345 (11th Cir.) (“Courts
routinely and properly deny summary judgment on the basis of a party’s sworn
testimony even though it is self-serving.”), modified on other grounds on denial of
reh’g, 425 F.3d 1292 (11th Cir. 2005).
It makes no difference that this is a tax case. We apply the same summary
judgment standard in tax cases as we do in other areas of law. See, e.g., Roberts v.
Comm’r, 329 F.3d 1224, 1227 (11th Cir. 2003) (citing Tax Ct. R. 121, which
mirrors Rule 56). See also Lewis v. United States, 336 F. App’x 535, 538 (6th Cir.
2009) (rejecting the argument that the ordinary summary judgment standard does
not apply in tax cases).
To support its statement that a taxpayer needs more than his self-serving
testimony to preclude summary judgment, Mays relied on Gibson v. United States,
360 F.2d 457 (5th Cir. 1966). But Gibson does not hold that self-serving
statements in a taxpayer’s affidavit cannot create a genuine issue of material fact.
In Gibson, which involved a claim for a refund of excise taxes, the taxpayer
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appealed certain unfavorable factual findings made by the district court following a
bench trial. The taxpayer argued primarily that the district court had erred in
disregarding his testimony and the tax liability calculations contained in his own
“excise tax journal.” See id. at 460–62. The former Fifth Circuit held that the
district court’s factual findings were not clearly erroneous and explained that the
taxpayer’s self-serving testimony did “not compel a contrary result.” Id. at 462.
Gibson does not hold that a district court can reject or ignore a taxpayer’s
affidavit at summary judgment on the ground that it is self-serving. Gibson was an
appeal from a bench trial, and in that setting a district court can certainly take into
account the self-serving nature of a litigant’s testimony. A district court is, after
all, permitted to assess credibility and weigh evidence at a bench trial, and the
same goes for the jury when it is the trier of fact. 1
Properly understood, Gibson stands only for the unremarkable proposition
that a fact-finder can choose to disregard a litigant’s self-serving (and unsupported)
trial testimony, and that its decision to do so generally will not constitute clear
error. That proposition has no place at summary judgment, where “the [court’s]
function is not . . . to weigh the evidence.” Anderson v. Liberty Lobby, Inc., 477
1
Of note, none of the cases cited in Gibson arose in a summary judgment posture. See Pinder v.
United States, 330 F.2d 119, 121 (5th Cir. 1964) (reviewing jury verdict); Mendelson v. Comm’r,
305 F.2d 519, 521 (7th Cir. 1962) (reviewing tax court’s factual findings); Urban Redevelopment
Corp. v. Comm’r, 294 F.2d 328, 332 (4th Cir. 1961) (same); Comm’r v. Smith, 285 F.2d 91, 93
(5th Cir. 1960) (same); Carter v. Comm’r, 257 F.2d 595, 596, 599 (5th Cir. 1958) (same);
Anderson v. Comm’r, 250 F.2d 242, 246–47 (5th Cir. 1957) (same); Archer v. Comm’r, 227 F.2d
270, 272 (5th Cir. 1955) (same).
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U.S. 242, 249 (1986). See also Danzer v. Norden Sys., Inc., 151 F.3d 50, 57 (2d
Cir. 1998) (rejecting the argument that a self-serving affidavit is insufficient to
defeat summary judgment because it would “thrust the courts—at an inappropriate
stage—into an adjudication of the merits”).
B
Nor does Rule 56 require that an otherwise admissible affidavit be
corroborated by independent evidence. As noted, Rule 56(c) states only that an
affidavit must be “made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to
testify on the matters stated.”
We see no basis for imposing a corroboration gloss on Rule 56, cf.
Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S.
163, 168–69 (1993) (rejecting a judicially-imposed “heightened pleading standard”
not found in Federal Rules of Civil Procedure 8 and 9 for municipal liability
cases), and reaffirm that “even in the absence of collaborative evidence, a
plaintiff’s own testimony may be sufficient to withstand summary judgment.”
Strickland v. Norfolk S. Ry. Co., 692 F.3d 1151, 1160 (11th Cir. 2012). Accord
E.E.O.C. v. Warfield-Rohr Casket Co., 364 F.3d 160, 163–64 (4th Cir. 2004);
Jackson v. Ducksworth, 955 F.2d 21, 22 (7th Cir. 1992); Weldon v. Kraft, Inc., 896
F.2d 793, 800 (3d Cir. 1990); Becho, Inc. v. United States, 47 Fed. Cl. 595, 603–04
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& n.11 (2000); Marsh v. Hog Slat, Inc., 79 F. Supp. 2d 1068, 1076 (N.D. Iowa
2000). If corroboration is needed, then that requirement must come from a source
other than Rule 56, such as the substantive law that governs the parties’ dispute or
the Federal Rules of Evidence. See, e.g., Fed. R. Evid. 804(b)(3)(B) (requiring
corroboration to support the admission of statements against the declarant’s
interest). 2
III
A non-conclusory affidavit which complies with Rule 56 can create a
genuine dispute concerning an issue of material fact, even if it is self-serving
and/or uncorroborated. We overrule Mays to the extent that it holds or suggests
otherwise, and remand the case to the panel for consideration of Ms. Stein’s
appeal.
We do not mean to suggest that a self-serving and/or uncorroborated
affidavit will always preclude summary judgment. We hold only that the self-
serving and/or uncorroborated nature of an affidavit cannot prevent it from creating
2
In the appeal of a tax refund case that went to trial, we stated almost 40 years ago that a
taxpayer cannot meet his burden through his “uncorroborated oral testimony.” Griffin v. United
States, 588 F.2d 521, 530 (5th Cir. 1979) (concluding that, because the taxpayer’s testimony was
corroborated, the issue was for the jury). Mays, itself a tax refund case, cited Griffin for the
proposition that a taxpayer’s refund claim needs to be substantiated by “something other than . . .
uncorroborated oral testimony.” Mays, 763 F.2d at 1297. This case does not involve a refund
claim, and the appeal is from a summary judgment order. Given the posture and nature of this en
banc proceeding, we do not express any views on whether the quoted statement from Griffin is
correct as a matter of substantive federal tax law.
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an issue of material fact. And we leave to the panel the task of determining the
impact of Ms. Stein’s affidavit.
Finally, we recognize that the government, in its en banc brief, has made a
number of additional and related arguments in support of the district court’s
summary judgment order. For example, the government argues that, in a case like
this one, a taxpayer’s affidavit concerning the matter of payment must be
substantiated and corroborated (for example, by documentary evidence) pursuant
to principles of substantive federal tax law, particularly given the presumption of
correctness that attaches to its assessments. Given the narrow question presented
for en banc review, we think it is best for the panel to consider the government’s
arguments, as well as Ms. Stein’s responses to them.
REMANDED TO THE PANEL WITH INSTRUCTIONS.
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WILLIAM PRYOR, Circuit Judge, concurring:
I concur fully in the majority opinion, but I write separately to highlight the
irony of our earlier precedent when viewed in the light of the history of the
Seventh Amendment. The precedent we overrule today, Mays v. United States,
prevented juries from resolving factual disputes when a taxpayer offered only a
self-serving affidavit in support of his position. 763 F.2d 1295, 1297 (11th Cir.
1985). As the majority opinion explains, that rule had no basis in law. But it also
flouted the history of the right to a jury trial in civil cases.
In the decades before the American Revolution, Parliament developed
procedures to enforce its revenue measures by evading colonial juries. See 1 Julius
Goebel, Jr., History of the Supreme Court of the United States 85–86 (Paul A.
Freund ed., 1st ed. 1971); Philip Hamburger, Is Administrative Law Unlawful? 150
(2014). England had struggled to enforce its trade laws in the colonies, and
colonial officials in America blamed local juries for refusing to be impartial in
customs disputes. See Carl Ubbelohde, Vice-Admiralty Courts and the American
Revolution 15 (1960). In response, Parliament expanded the jurisdiction of
admiralty courts, which sat without juries, to include trade cases that would have
been tried by a jury in England. See Ubbelohde, supra at 15–16, 21. Later, seeking
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to extract more revenue from the colonies, Parliament enacted the Sugar Act for
“the improvement of ‘the Revenue of th[e] Kingdom’” and extended the power of
customs officials, at their discretion, to “channel cases into admiralty courts, and so
to eliminate jury trial.” Goebel, supra at 85–86 (quoting 4 Geo. 3, c. 15 (Eng.
1764)); see also Caleb Nelson, The Constitutionality of Civil Forfeiture, 125 Yale
L.J. 2446, 2463 (2016). And the Stamp Act, 5 Geo. 3, c. 12 (Eng. 1765), provided
that customs officials could enforce not only the stamp tax, but also “revenue acts
in general” in the juryless admiralty courts. Goebel, supra at 86.
Colonial Americans vehemently objected to these measures, and the denial
of the right to a jury in tax cases became a chief complaint animating the American
Revolution. The “colonies formed a Congress to protest ‘the tyrannical acts of the
British Parliament.’” Hamburger, supra at 150 (quoting Resolutions of the Stamp
Act Congress (Oct. 19, 1765)). The Stamp Act Congress declared that “trial by
jury, is the inherent and invaluable right of every British subject in these colonies.”
Resolutions of the Stamp Act Congress (Oct. 19, 1765), in Select Charters and
Other Documents Illustrative of American History 1606-1775, at 315 (William
MacDonald ed., MacMillan & Co. 1906). And it denounced “extending the
jurisdiction of the courts of admiralty beyond its ancient limits” because of its
“manifest tendency to subvert the rights and liberties of the colonists.” Id. In the
Declaration of Independence, Americans cited the “depriv[ation] in many cases, of
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the benefit of Trial by Jury” as one of the “Usurpations” committed by King
George III that they would no longer tolerate. The Declaration of Independence
paras. 2, 20 (1776).
The failure to guarantee the right to a jury trial in civil cases almost
prevented the ratification of the Constitution. In attempting to persuade New York
to ratify the Constitution, Alexander Hamilton acknowledged “[t]he objection” that
had “met with most success” in his home state and “several of the other states” was
“the want of a constitutional provision for the trial by jury in civil cases.” The
Federalist No. 83, at 558 (Alexander Hamilton) (Jacob E. Cooke ed., 1961). And
he discussed the specific argument that the civil jury is a necessary “safeguard
against an oppressive exercise of the power of taxation.” Id. at 563. As Justice
Story later explained, Americans decided that it was not enough that Congress had
the authority “to provide in all cases for the trial by jury.” United States v. Wonson,
28 F. Cas. 745, 750 (C.C. Mass. 1812) (No. 16,750). The defenders of the
Constitution prevailed in the ratification debates only after promising an
amendment that guaranteed the right to trial by jury in civil cases. Stanton D.
Krauss, The Original Understanding of the Seventh Amendment Right to Jury
Trial, 33 U. Rich. L. Rev. 407, 412–13 (1999). Americans then enshrined that right
in the Seventh Amendment. U.S. Const. Amend. VII.
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Our precedent in Mays lost sight of the historical basis for the right to a civil
jury when it denied a taxpayer a jury trial if all he offered in his favor was a self-
serving affidavit to rebut official records of his delinquency. In so doing, Mays
ousted the jury from its historical role in the exact context—the enforcement of tax
laws—that prompted the founding generation to adopt the Seventh Amendment in
the first place. Today, we rectify that error.
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