United States District Court, W.D. Louisiana, Lake Charles Division
D. CAIN, JR. UNITED STATES DISTRICT JUDGE.
the Court is a "Renewed Motion of the United States for
Entry of Default Judgment Against Bruce C. Kees" (Doc.
18) wherein the United States moves pursuant to Federal Rule
of Civil Procedure 55(b)(2) to enter a Default Judgment
against Mr. Kees. This lawsuit was brought by the United
States to recover unpaid taxes allegedly owed by Mr. Kees and
for penalties for filing frivolous tax returns. Specifically,
the United States seeks to reduce to judgment the outstanding
federal tax liabilities assessed and to foreclose federal tax
liens against property owned by Mr. Kees. For the reasons
that follow, the motion will be granted.
United States filed the instant lawsuit against Brenda Sue
Courmier, Chester Arthur Courmier and Bruce Kees on August
16, 2016. Pursuant to a Joint Motion to Dismiss,
defendants, Brenda Sue Courmier and Chester Arthur Courmier,
were dismis 5ed with prejudice. Mr. Kees was personally served
with a summons and the Complaint on August 24, 2016,
did not file an answer.
November 10, 2016, because Mr. Kees failed to timely plead or
otherwise defend the Complaint, the United States moved for
an entry of default and the Clerk of Court noticed the entry
of default. On June 6, 2017, the United States filed a
"Motion of the United States for Entry of Default
Judgment Against Bruce C. Kees." In that motion, the United
States asserted that Mr. Kees was indebted to it for unpaid
federal income tax liabilities for tax years 2003, 2004,
2005, 2006, 2007, 2008, 2010, and 2012, plus frivolous tax
submission penalties for tax years 2003 and 2005 in the
amount of $365, 022.38 as of April 26, 2017, plus prejudgment
and post judgment interest thereon and statutory additions
there, minus any credits or payments applied thereto after
April 26, 2017, prior to judgment.
United States sought (1) a judgment that it has valid federal
tax liens to and upon all property and property rights of
Kees, (2) an order that the tax liabilities be foreclosed
upon the property, and (3) an order that the property be sold
in accordance with the law and practice of the court.
motion was referred to Magistrate Judge Kay who issued a
Report and Recommendation recommending denial of the
motion. The Magistrate Judge denied the motion
because the United States' filings were deficient in that
the United States failed to file affidavits as to whether Mr.
Kees is a military service member, minor, or incompetent, and
the United States has not shown the basis for the
Secretary's determination that Mr. Kees filed frivolous
Judgment was adopted by United States District Judge Terry A.
Doughty on September 18, 2018. Due to no activity to further
prosecute the case, a Notice of Intent to Dismiss was issued
on April 30, 2019, after which the United States responded
with a "Motion for Extension of Time to Take Appropriate
Action by Filing Renewed Motion for Entry of Default
Judgment." That motion was granted,  and the
United States filed the instant renewed motion for
default. In the meantime, the case was reassigned
to the undersigned.
Kees filed a response which was marked deficient by the
Clerk of Court. The Notice of Deficiency stated that the only
proper response to a motion for default is a motion to set
aside the default. Mr. Kees, a pro se defendant,
filed a letter which this Court will consider as a
motion to set aside the default. The Court notes that the
record reflects that Mr. Kees chose not to correct his prior
deficient response. Finally, on July 25, 2019, the United
States filed its "Opposition of the United States to
Motion to Set Aside Entry of Default" which makes
the motion for entry of default ripe for consideration.
Secretary of the Treasury has the authority to assess federal
income tax liabilities, penalties and interest under Internal
Revenue Code § § 6211-6213 [26 U.S.C. §§
6211-6213] and frivolous submission penalties under Internal
Revenue Code § 6702 [26 U.S.C. § 6702]. The
Secretary follows the deficiency procedures under
§§ 6211-6213 when an examination results in a
determination that additional tax is owed.
Revenue Code § 6020 [26 U.S.C. § 6020] permits the
Secretary to make a return "from his own knowledge and
from such information as he can obtain through testimony or
otherwise" Id. when a taxpayer fails to file a
required return or makes, willfully or otherwise, a false or
fraudulent return(s). The Secretary uses the deficiency
procedures under §§ 6211-6213 to proceed to assess
the tax liability reflected on such a return. "Any
return so made and subscribed by the Secretary shall be prima
facie good and i sufficient for all legal purposes."26
U.S.C. § 6020.
Internal Revenue Service ("IRS") is assessing a
liability reported by a taxpayer on her/her return, it can
proceed under Internal Revenue Code §§ 6201-6205
[26 U.S.C §§ 6201-6205] as opposed to the
deficiency procedures under §§ 6211-6213..
26 U.S.C. § 6321, the United States has a lien for
unpaid taxes on all property and rights to property of a
taxpayer. This lien arises when an assessment is made and
continues until the liability for the amount so assessed, or
a judgment against the taxpayer arising out of such
liability, is satisfied, or the lien becomes unenforceable by
reason of lapse of time. 26 U.S.C. § 6322.United
States v. Wilkes, 946 F.2d 1143 (5th Cir. 1991);
Texas Commerce Bank-Fort Worth v. United States, 896
F.2d 152, 161 (5th Cir. 1990]. Motion to Set Aside
Default In its renewed motion for default, the United
States asserted that Mr. Kees is indebted to it for federal
income tax liabilities for tax years 2003, 2004, 2005, 2006,
2007, 2008, 2010, and 2012. The United States also seeks
penalties for frivolous tax return filings for tax years 2003
and 2005. As of May 31, 2019, the United States submits that
Kees owes $403, 255.20.
United States asserts that federal valid tax liens arose
against all property and rights to property owned by Kees for
these unpaid taxes and the two (2) civil penalties on the
dates they were assessed. The United States seeks to (1)
reduce to judgment the unpaid federal income tax liabilities,
(2) foreclose on the Property described in paragraph 9 of the
Complaint, (3) have the Property sold in accordance with the
law and practice of this Court, (4) distribute the proceeds
to the United States, and (5) apply those proceeds to
Kees' unpaid federal tax liabilities, with any surplus to
be paid to Kees.
the Court grant the motion, the United States requests that
it be given the opportunity to submit a proposed Final
Judgment and a separate proposed Decree of Foreclosure and
Order of Sale ...