United States v. Anthony Jackson

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 12-2284
___________
UNITED STATES OF AMERICA
v.
ANTHONY DENNIS JACKSON; GROSSIE SMITH-JACKSON;
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF LABOR &
INDUSTRY; PHILADELPHIA GAS WORKS; CITY OF PHILADELPHIA
ANTHONY DENNIS JACKSON,
Appellant
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2:09-cv-01745)
District Judge: Honorable Thomas N. O’Neill, Jr.
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
January 25, 2013
Before: FUENTES, VANASKIE and VAN ANTWERPEN, Circuit Judges
(Opinion filed: January 25, 2013)
___________
OPINION
___________
PER CURIAM
Anthony Dennis Jackson, proceeding pro se, appeals from an order of the United
States District Court for the Eastern District of Pennsylvania denying his motion for
reconsideration and motion for relief from final judgment pursuant to Fed. R. Civ. P.
60(b). For the following reasons, we will affirm.
I.
Because we write primarily for the parties, we need only recite the facts necessary
for our discussion. In 1988, Jackson and his now ex-wife purchased real property located
at 617 South Cobbs Creek Parkway in Philadelphia, Pennsylvania. In 1998, the Internal
Revenue Service (“IRS”) assessed tax liabilities for years 1992 through 1994 after
Jackson did not file federal income tax returns for those years. Jackson filed untimely
returns for the years 1995 through 1998, and the IRS assessed the taxes due. By April
2009, Jackson’s outstanding tax liability for the years 1992 through 1998, including
penalties and interest, totaled $465,876.15. In April 2009, the IRS referred Jackson’s
case to the Department of Justice (“DOJ”) and requested that it file suit to reduce
Jackson’s liability to judgment and to foreclose the federal tax liens on his property.
On April 24, 2009, the Government filed a complaint against Jackson, seeking to
reduce to judgment the tax assessments for years 1992 through 1998, to foreclose the
federal tax liens against Jackson’s property, and to have the property sold. The
Government also named Jackson’s ex-wife, the Commonwealth of Pennsylvania’s
Department of Labor and Industry, Philadelphia Gas Works, and the City of Philadelphia
as defendants who may have claimed an interest in or a lien on the property. Jackson
failed to appear, and the Government moved for default judgment. On February 17,
2010, the District Court granted the Government’s motion for default judgment, entered
judgment in favor of the Government for $469,323.11 plus statutory additions, and
2
foreclosed the federal tax liens on Jackson’s property. The District Court also entered an
order of sale for Jackson’s property. Jackson did not appeal this judgment.
In November 2011, almost two years after the District Court entered judgment,
Jackson filed a motion to compel the Government to satisfy the judgment, alleging that
he had paid all his tax liabilities with interest and penalties. In opposition, the
Government stated that after judgment was entered, Jackson had submitted tax returns for
years 1992 through 1994. Based on those forms, and without DOJ’s consent, the IRS
erroneously made unauthorized abatements of Jackson’s liabilities for those years.
Around the same time, Jackson paid $22,921.58 towards his liability for 1992, $2,781.65
towards his liability for 1993, and $16,026.53 towards his liability for 1994. However,
the IRS reversed the unauthorized abatements around the time when Jackson filed his
motion. On December 12, 2011, the District Court denied Jackson’s motion to compel,
noting that he had failed to establish that he had paid his taxes, penalties, and interest in
full.
Jackson filed a combined motion for reconsideration and motion for relief from
final judgment pursuant to Fed. R. Civ. P. 60(b) on December 22, 2011, asserting that his
tax debt had been covered by the abatement and that the IRS had agreed to accept a lesser
amount to settle his balance owed. On April 2, 2012, the District Court denied Jackson’s
motions. Jackson then timely filed his notice of appeal.
II.
We exercise jurisdiction pursuant to 28 U.S.C. § 1291. We review both the denial
of a motion for reconsideration and a motion for relief from judgment under Fed. R. Civ.
3
P. 60(b) for abuse of discretion. See Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir.
2010) (per curiam); Budget Blinds, Inc. v. White, 536 F.3d 244, 251 (3d Cir. 2008).
III.
On appeal, Jackson asserts that he was entitled to an evidentiary hearing and that
the District Court denied him due process by not holding one. He also alleges that the
IRS abated his tax liabilities and that his resulting liabilities have already been satisfied.
Furthermore, Jackson argues that the District Court ignored applicable case law.
A. Motion for Relief from Judgment
Jackson asserts that he was entitled to relief under Fed. R. Civ. P. 60(b)(5)
because, according to him, all his tax liabilities were paid. Rule 60(b)(5) allows a district
court to relieve a party from a final judgment if “the judgment has been satisfied, released
or discharged.” Here, Jackson neither disputes the amount of the judgment entered
against him nor argues that he has paid the full amount of the judgment. Instead, Jackson
alleges that the three payments totaling $41,729.76 made towards his tax liability for
1992 through 1994 satisfied his total liability. Accordingly, the District Court properly
determined that Jackson had not satisfied the outstanding judgment.
Jackson’s argument that he was entitled to an evidentiary hearing and that the
District Court denied him due process by not holding one is without merit. A district
court has “substantial discretion in determining whether to conduct an evidentiary
hearing on a Rule 60(b) motion.” United States v. 8136 S. Dobson St., 125 F.3d 1076,
1086 (7th Cir. 1997); see also Atkinson v. Prudential Prop. Co., 43 F.3d 367, 374 (8th
Cir. 1994). Here, the relevant facts were not in dispute because, again, Jackson did not
4
dispute that he had not paid the full amount of the judgment entered against him, that
abatements were entered after his case was referred to the DOJ, or that the IRS reversed
the erroneous abatements. Therefore, we find that the District Court did not abuse its
discretion in declining to hold an evidentiary hearing.
Jackson’s main contention is that the IRS abated his tax liabilities. Under 26
U.S.C. § 7122(a), the IRS “may compromise any civil or criminal case arising under the
internal revenue laws prior to reference to the [DOJ] for prosecution and defense; and the
Attorney General or his delegate may compromise any such case after reference to the
[DOJ] for prosecution or defense.” However, “[o]nce a tax matter is referred to the
[DOJ], only the Attorney General or a person to whom authority has been delegated by
the Attorney General may settle the matter.” United States v. Forma, 784 F. Supp. 1132,
1139 (S.D.N.Y. 1992); see also Slovacek v. United States, 40 Fed. Cl. 828, 833 (1998)
(agreeing with Forma); Int’l Paper Co. v. United States, 36 Fed. Cl. 313, 321 (1996)
(agreeing with Forma); Brubaker v. United States, 342 F.2d 655, 662 (7th Cir. 1965)
(determining that excess tax “liabilities cannot be compromised by the Attorney General
or the [DOJ] unless and until the Commissioner refers [the matter] to the [DOJ] for
prosecution or defense”); cf. Bergh v. Dep’t of Transp., 794 F.2d 1575, 1577 (Fed. Cir.
1986) (noting that a compromise is “within the discretion of the agency conducting the
litigation”).
The IRS lost its authority to compromise Jackson’s tax liabilities in April 2009
when it referred Jackson’s case to the DOJ for prosecution. Accordingly, the abatements
made in 2011 were void because they were made without authorization from the DOJ.
5
See IRS Chief Counsel Notice CC-2011-020, 2011 WL 4402105 (Sept. 15, 2011)
(“Abatement of tax for a tax period referred to [the DOJ] that is made without the
approval of [the DOJ] is invalid and may be reversed, because the Service lacks the
authority to take such action on the taxpayer’s account without Justice approval.”); cf. In
re Bugge, 99 F.3d 740, 745 (5th Cir. 1996) (clerical error doctrine provides authority for
reversal of abatement of original assessment in limited circumstances). Furthermore, the
DOJ retains authority to compromise even if a judgment has been obtained and the case
has been returned to the IRS for collection. See IRS Chief Counsel Notice CC-2011,
020, 2011 WL 4402105. Accordingly, the original assessments remained valid because
the abatements made by the IRS were void. See id. (reassessment not necessary because
the post-referral abatements were void).
Finally, Jackson’s assertion that the District Court ignored applicable case law is
meritless. As an initial matter, Jackson does not cite any particular authority to support
his allegation. However, it appears that he is referring to the unpublished order of the
United States District Court for the Eastern District of Oklahoma in United States v.
Pound, No. CIV-07-427-RAW, 2010 WL 2803918 (E.D. Okla. Feb. 2, 2010), which he
attached to his motions. In Pound, the district court concluded that the taxpayer was
entitled to post-judgment relief under Fed. R. Civ. P. 60(b)(5) & (6) after the IRS
erroneously abated his liabilities. However, the District Court did not err in not following
Pound because it had, at most, persuasive value. Furthermore, in 2011, after Pound was
decided, the IRS specifically disagreed with Pound and determined that a “post-referral
abatement made without approval by Justice is void and the abatement should be
6
reversed and the Service’s transcript records corrected.” IRS Chief Counsel Notice CC-
2011-020, 2011 WL 4402105. Accordingly, the District Court correctly did not follow
Pound.
B. Motion for Reconsideration
A motion for reconsideration “must rely on one of three grounds: (1) an
intervening change in controlling law; (2) the availability of new evidence; or (3) the
need to correct clear error of law or prevent manifest injustice.” Lazaridis, 591 F.3d at
669. Jackson did not identify any of these grounds in his motion; instead, his motion for
reconsideration relied upon the same arguments as his Rule 60(b) motion. As discussed
above, Jackson’s arguments have no merit, and so we discern no abuse of discretion in
the District Court’s denial of Jackson’s motion.
IV.
For the reasons stated herein, as well as those set forth by the District Court, we
will affirm the District Court’s order denying Jackson’s motions for reconsideration and
relief from judgment.
7