Perez v. United States

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-50377

Summary Calendar

JOSE A. PEREZ,

Plaintiff-Appellant,

versus

UNITED STATES OF AMERICA,

Defendant-Appellee.

--------------------

Appeal from the United States District Court

for the Western District of Texas

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November 27, 2002

Before DAVIS, WIENER, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:

Pro se plaintiff-appellant Jose A. Perez appeals from the

district court’s order granting summary judgment to the United

States of America (“government”) in Perez’s quiet-title action

against the government to remove a federal tax lien placed on his

property by the Internal Revenue Service (“IRS”). In concluding

that Perez’s arguments on appeal are without merit, we affirm the

judgment of the district court.

I.

FACTS AND PROCEEDINGS

In April 1988, Perez filed four federal income tax returns

with the IRS, covering tax years 1984, 1985, 1986, and 1987. In

these returns, Perez identified the following tax liabilities:

1984: $ 5,867

1985: $ 7,780

1986: $ 5,526

1987: $ 1,312

He did not, however, pay anything toward the amounts listed on his

tax returns. In June 1988, the IRS assessed Perez’s taxes for the

years 1984 through 1987.

Following an audit in July 1988, Perez agreed to tax

deficiencies in the amounts of $1,452 and $1,442, plus penalties,

for tax years 1983 and 1984, respectively. Later in that month,

Perez executed IRS Form 4549, consenting to the immediate

assessment and collection of the deficiencies for 1983 and 1984, as

well as to the immediate collection of his 1985 tax liability of

$7,780. In April 1989, the IRS also identified deficiencies of

$1,367 for tax year 1986, which consisted entirely of assessed

penalties and interest on Perez’s $5,526 unpaid tax liability for

that year. The IRS assessed all of these deficiencies in September

1989. In March 1990, Perez executed IRS Form CP-2000, consenting

to the immediate assessment and collection of a $303 deficiency for

his 1987 tax year. The IRS assessed this deficiency in June of

that year.

In April 1989, the IRS placed a federal tax lien on Perez’s

property. In March 1997, the IRS notified Perez’s employer that it

intended to levy Perez’s wages for his outstanding tax liabilities.

In March 2000, the IRS sent Perez a final notice of intent to levy.

Perez subsequently requested a collection due process hearing

before the IRS’s Office of Appeals. In early September of that

year, the Office of Appeals rejected his request.

2

The following month, Perez filed suit against Charles

Rossotti, the Commissioner of Internal Revenue. In his complaint,

Perez alleged (1) procedural irregularities by the IRS in

executing the tax lien against his property, and (2) violation of

his administrative due process rights resulting from the IRS’s

rejection of his administrative appeal concerning the levy on his

income from his (now former) employer. In April 2001, the district

court dismissed Perez’s administrative appeal for lack of

jurisdiction, and ordered Perez to amend his complaint to comply

with the pleading requirements under 28 U.S.C. § 2410(b) for his

federal tax lien claims.

In May 2001, Perez filed an amended complaint seeking to quiet

title to his property encumbered by the federal tax lien. In his

amended complaint, Perez alleged a litany of procedural

irregularities committed by the IRS in placing the tax lien on his

property in 1989, viz., (1) the IRS did not properly assess his

taxes for the years 1984, 1985, 1986, and 1987; (2) even if the IRS

properly assessed the taxes, it did not properly notify him of this

assessment; (3) the IRS failed to issue notices of deficiency prior

to placing the lien on his property; and (4) the IRS is now barred

by the statute of limitations from the collection of these taxes.

Perez also alleged that the IRS failed to notify him properly of

the levy on his wages. The government filed a counterclaim in May

2001, seeking to reduce Perez’s tax liabilities to judgment.

Both parties then moved for summary judgment. Relying on

records proffered by the government in support of its motion——in

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particular, IRS Forms 4340, showing Perez’s relevant tax

liabilities and the notices issued by the IRS, the IRS RACS Report-

006 (Summary Record of Assessments), and the aforementioned IRS

Form 4549——the district court granted summary judgment to the

government and denied summary judgment to Perez. Perez timely

filed a notice of appeal in April 2002.

II.

ANALYSIS

Three issues are presented in this appeal: (1) Perez’s

challenge to the district court’s decision that the IRS Forms 4340

and 4549 are proper evidence of his assessed taxes and the IRS’s

notifications thereof; (2) his challenge to the district court’s

ruling that the IRS did not need to issue deficiency notices

because Perez’s tax arrears were not a “deficiency,” as defined by

the relevant statutes;1 and (3) the government’s argument that

Perez’s complaint should be dismissed outright for lack of

jurisdiction under § 2410(b). Although we disagree with the

government and conclude that the federal courts have jurisdiction

over Perez’s complaint, we hold that the district court’s order

granting summary judgment to the government was proper.

1

Perez does not challenge on appeal the district court’s

grant of summary judgment to the government on the issues of (1)

the IRS’s actions being time-barred by the statute of limitations

and (2) the validity of the IRS’s levy on his wages. Therefore,

Perez has waived these two issues. Ruiz v. United States, 160

F.3d 273, 275 (5th Cir. 1998) (noting that “issues not briefed on

appeal are waived”).

4

A. Standard of Review

We review a grant of summary judgment de novo, applying the

same standard as the district court.2 A motion for summary

judgment is properly granted only if there is no genuine issue as

to any material fact.3 An issue is material if its resolution

could affect the outcome of the action.4 In deciding whether a

fact issue has been created, we must view the facts and the

inferences to be drawn therefrom in the light most favorable to the

nonmoving party.5

The standard for summary judgment mirrors that for judgment as

a matter of law.6 Thus, the court must review all of the evidence

in the record, but make no credibility determinations or weigh any

evidence.7 In reviewing all the evidence, the court must disregard

all evidence favorable to the moving party that the jury is not

required to believe, and should give credence to the evidence

favoring the nonmoving party as well as that evidence supporting

the moving party that is uncontradicted and unimpeached.8 The

2

Morris v. Covan Worldwide Moving, Inc., 144 F.3d 377, 380

(5th Cir. 1998).

3

Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.

317, 322 (1986).

4

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

5

See Olabisiomotosho v. City of Houston, 185 F.3d 521, 525

(5th Cir. 1999).

6

Celotex Corp., 477 U.S. at 323.

7

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,

150 (2000).

8

Id. at 151.

5

nonmoving party, however, cannot satisfy his summary judgment

burden with conclusional allegations, unsubstantiated assertions,

or only a scintilla of evidence.9

B. Federal Jurisdiction Under § 2410

We must first address the government’s argument concerning

jurisdiction because this is a threshold issue that must be

resolved before any federal court reaches the merits of the case

before it. The law is well established that the government or any

of its instrumentalities may not be sued by a citizen without the

government’s express consent.10 In this case, Perez has brought

suit under § 2410, which is clearly a waiver of sovereign immunity.

This statute provides, in part, that the government may be named as

a party in any civil suit to quiet title to property on which the

government has a mortgage or lien.11 As the IRS has placed a lien

on Perez’s real property, there appears to be federal jurisdiction

to hear Perez’s complaint.

The government maintains, however, that Perez has failed to

meet the requirements of § 2410(b), which states that a complaint

to quiet title “shall set forth with particularity . . . the name

and address of the taxpayer whose liability created the lien and,

if a notice of the tax lien was filed, the identity of the internal

revenue office which filed the notice, and the date and place such

9

Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.

1994) (en banc).

10

Rodriguez v. Tex. Comm’n on the Arts, 199 F.3d 279, 280

(5th Cir. 2000).

11

28 U.S.C. § 2410(a).

6

notice of lien was filed.”12 Strictly speaking, Perez failed to

specify any of this information in his amended complaint. Thus,

the government urges, we must dismiss Perez’s complaint for failure

to state a claim under § 2410.

In considering this complaint, filed as it is by a pro se

plaintiff, we decline the government’s invitation to adopt a strict

application of § 2410. To do so would be inequitable; we would, in

effect, be punishing Perez for lacking the linguistic and

analytical skills of a trained lawyer in deciphering the

requirements of the United States Code. It is precisely to avoid

such a result that courts have adopted the rule that a pro se

plaintiff’s pleadings are liberally construed.13 In this case, the

information required of Perez is obvious from the relatively sparse

record, including from the documents and forms submitted by the

government in its motion for summary judgment; the court is not

unduly required to scour a voluminous record to determine the

essentials of the statute. Accordingly, we construe Perez’s pro se

complaint liberally and hold that he has met the jurisdictional

requirement for bringing a quiet-title action against the

government under § 2410.

12

§ 2410(b).

13

Haines v. Kerner, 404 U.S. 519, 520 (1972) (holding that

allegations in a pro se complaint are to be held “to less

stringent standards than formal pleadings drafted by lawyers”).

See also SEC v. AMX, Int’l, Inc., 7 F.3d 71, 75 (5th Cir. 1993)

(recognizing the established rule that this court “must construe

[a pro se plaintiff’s] allegations and briefs more

permissively”).

7

C. The Evidentiary Status of IRS Forms 4340 and 4549

On appeal, Perez contends that it is settled precedent that

the IRS forms submitted by the government——the computer-generated

IRS Form 4340 (Certificates of Assessments and Payments) and the

duly-executed IRS Form 4549 (Income Tax Examination Changes)——are

not valid evidence of either the IRS’s assessed taxes or the IRS’s

notice to the taxpayer of these taxes. This assertion is spurious.

We held over a decade ago that, under the Federal Rules of

Evidence, IRS Form 4340 constitutes valid evidence of a taxpayer’s

assessed liabilities and the IRS’s notice thereof.14 There is also

substantial precedent that IRS Forms 4340 and 4549 are appropriate

sources evidencing the IRS’s assessment and notice of tax arrears.15

As the district court explained in this case, the IRS Forms

submitted by the government show that the IRS properly assessed

Perez’s taxes and provided sufficient notice to Perez of his

federal tax liabilities. For example, the IRS Forms 4340 reflect

that the IRS assessed the taxes Perez reported on his tax returns

14

McCarty v. United States, 929 F.2d 1085, 1089 (5th Cir.

1991) (holding that Form 4340 showing “notice of assessment and

demand for payment” is admissible under the Federal Rules of

Evidence).

15

See, e.g., In re Orr, 180 F.3d 656, 658 (5th Cir. 1999)

(discussing contents of Form 4549). See also Hughs v. United

States, 953 F.2d 531, 535-36 (9th Cir. 1992) (discussing valid

evidentiary status of Form 4340 “as proof that assessments had

been made”); United States v. Chila, 871 F.2d 1015, 1017-18 (11th

Cir. 1989) (noting that Form 23-C, precursor to Form 4340, is

presumptive proof of a valid assessment); Steele v. Regan, 755

F.2d 1091, 1092-93 (4th Cir. 1985) (discussing plaintiff’s

signature of Form 4549); In re Barry, 48 B.R. 600, 603 (Bankr.

M.D. Tenn. 1985) (discussing contents of Form 4549); Kraft v.

Comm’r of Internal Revenue, 1997 WL 643365 (T.C. 1997)

(discussing contents of Form 4549).

8

for the years 1984 through 1987, and issued delinquency notices to

Perez of these tax liabilities in 1988, 1991, and 1995. Further,

Perez executed an IRS Form 4549 for tax years 1983 through 1985,

which provides expressly that he “consent[s] to the immediate

assessment and collection of any increase in tax and penalties, .

. . plus any interest as provided by law.” In sum, the IRS Forms

4340 and 4549, as well as IRS Form CP-2000, evidence the IRS’s

proper assessment and notice of all of Perez’s tax liabilities,

including deficiencies.

Against this solid evidence, Perez offered the district court

only unsubstantiated, self-serving allegations that he did not

receive notice of his assessed federal tax liabilities. And, his

legal argument that IRS Forms 4340 and 4549 are not valid evidence

of assessment and notice is totally specious. At a minimum, Perez

was on notice of his assessed tax liabilities and deficiencies for

the years 1983 through 1985, as evidenced by his signature on Form

4549.16 The district court properly granted summary judgment to the

government on the issues of whether Perez’s taxes were properly

16

Perez further argues that Form 4549 requires the explicit

approval of the IRS’s District Director in order for it to be

effective. He derives this argument from the last line of Form

4549, which states that the taxpayer understands “that this

report is subject to acceptance by the District Director.” In

this case, the Form 4549 was signed only by the IRS examiner. We

reject Perez’s contention that an IRS examiner is not a duly

authorized agent of the district director capable of accepting a

Form 4549. In re Barry, 48 B.R. at 603 (“A revenue agent is a

delegate of the district director authorized to accept waivers.

His signature is sufficient ‘acceptance’ of this [IRS Form 4549]

waiver.”). Cf. Holbrook v. United States, 284 F.2d 747 (9th Cir.

1960) (holding that it is not necessary for the IRS Commissioner

to personally consent to a taxpayer waiver in order for it to be

effective).

9

assessed and whether Perez was properly notified of these

assessments.

D. Deficiency Notices

Perez contends further that, regardless of whether his taxes

were properly assessed, the lien on his property is procedurally

defective, because, he alleges, the IRS failed to send him 30, 60,

and 90-day deficiency notices.17 In granting summary judgment to

the government, the district court determined that Perez’s tax

liabilities were not “deficiencies,” as defined by the applicable

statutes and case law; consequently, he was not entitled to these

procedural safeguards. On appeal, the government reiterates the

statutory analysis by the district court on this issue.

As a general rule, the IRS may not assess or collect a

taxpayer’s deficiency unless it sends the requisite notices of

deficiency.18 As defined by Internal Revenue Code (“IRC”), a

“deficiency” is “the amount by which the tax imposed . . . exceeds

. . . the amount shown as the tax by the taxpayer on his return .

. . .”19 “In other words, an ‘income tax deficiency’ exists when

a taxpayer has failed to make an adequate return of income.”20

17

See 26 U.S.C. §§ 6212-6213.

18

McCarty, 929 F.2d at 1089.

19

26 U.S.C. § 6211(a). See Laing v. United States, 423

U.S. 161, 173-74 (1976) (“In essence, a deficiency as defined in

the Code is the amount of tax imposed less any amount that may

have been reported by the taxpayer on his return. § 6211(a).”).

20

Miles v. United States, 1999 WL 500999, at *1 (N.D. Tex.

1999) (citing Moore v. Cleveland Ry. Co., 108 F.2d 656, 659 (6th

Cir. 1940)).

10

Clearly, the IRC predicates the validity of an assessment and

collection of an asserted deficiency on the proper notification of

the taxpayer of his total tax liability. In other words, the IRS

must provide notices of the amount that it claims the taxpayer

owes, over and above the amount reported by the taxpayer on his

income tax return.21 This is a cut-and-dry notice requirement——the

stuff of basic procedural due process.

The district court in this case correctly interpreted and

applied the requirements of the IRC to Perez’s claims. It

determined that

there is no “deficiency,” in the tax code sense, where a

taxpayer reports on his return that he owes an amount, but

simply fails to remit such amount to the IRS. In this

circumstance, because there is no “deficiency,” the IRS is not

required to issue a notice of deficiency before placing a lien

on the taxpayer’s property, because, presumably, the taxpayer

is already on notice as to the amount in taxes he owes to the

government.22

Stated differently, here the IRS is not seeking to assess and

collect any amount that is greater than what Perez had already

listed on the four federal income tax returns that he filed in 1988

21

Murray v. Comm’r of Internal Revenue, 24 F.3d 901, 903

(7th Cir. 1994) (discussing deficiency notice requirements for

assessed tax deficiencies as contrasted against the collection of

assessed taxes based on a taxpayer’s return); Meyer v. Comm’r of

Internal Revenue, 97 T.C. 555, 560 (T.C. 1991) (interpreting §

6213(a) as requiring “mailing of notice of deficiency” prior to

“assessing or collecting a deficiency”).

22

Perez v. United States, 2001 WL 1836185, at *8 (W.D. Tex.

2001). Accord Koch v. Alexander, 561 F.2d 1115, 1118 (4th Cir.

1977) (holding that plaintiff-taxpayers are “not entitled to a

notice of deficiency” because they owe the government only the

amount listed on their tax return); Miles, 1999 WL 500999 at *2

(rejecting plaintiff-taxpayer’s argument that he was owed

deficiency notices because the “tax being imposed and collected

is the tax reported by Plaintiff” in his tax returns).

11

or consented to on IRS Form 4549.23 Perez was on notice of his

overdue tax liabilities as early as 1988, when he (1) late-filed

his returns, listing the taxes he owed to the government for the

years 1983 through 1987, but (2) failed to pay anything toward

these amounts. In fact, the IRS was authorized in 1988, without

providing any notice, to assess and to collect the unpaid taxes

that Perez is now claiming more than ten years later as requiring

deficiency notices.24 The IRC is sometimes criticized for being

obscure in its requirements of taxpayers, but in this instance it

is clear beyond peradventure that Perez’s long-overdue tax arrears

are not “deficiencies.” He has no claim to the procedural

protections mandated for that type of tax liability.

III.

CONCLUSION

The IRS properly assessed Perez’s tax liabilities for the

years 1983 through 1987, and, in so doing, followed the requisite

23

It is long-settled precedent in this circuit that a

taxpayer may waive the notice requirements of the IRC in

consenting to a deficiency assessment. Thomas v. Merchantile

Nat’l Bank, 204 F.2d 943, 944 (5th Cir. 1953) (interpreting a

waiver executed by a taxpayer under § 871, the precursor to §

6213, as having “waived the ninety-day notice and other

procedural requirements” of the statute). A duly executed IRS

Form 4549 is a proper waiver of the deficiency notice

requirements. In re Barry, 48 B.R. at 603 (discussing IRS Form

4549 as constituting “a proper waiver of [deficiency] notice as

provided in I.R.C. § 6213(d)”); Aguire v. Comm’r of Internal

Revenue, 117 T.C. 324 (T.C. 2001) (granting summary judgment to

the IRS on the ground that petitioners signed IRS Form 4549,

waiving their right to contest their tax liabilities, and thus

precluding the need to send them a deficiency notice).

24

26 U.S.C. § 6201(a)(1) (providing for the IRS’s immediate

assessment and collection of taxes listed on a taxpayer’s income

tax return).

12

procedures for validly placing a lien on Perez’s property. The

district court’s order granting summary judgment to the government

is, in all respects,

AFFIRMED.

13