United States v. Aguinaldo

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 21, 2025
• Docket: 23-3841
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 21 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 23-3841 D.C. No. Plaintiff - Appellee, 1:20-cv-00434-JMS-KJM v. MEMORANDUM* IMELDA S. AGUINALDO,

Defendant - Appellant,

and

EDDIE V. AGUINALDO,

Defendant.

Appeal from the United States District Court for the District of Hawaii J. Michael Seabright, District Judge, Presiding

Submitted July 14, 2025**

Before: HAWKINS, S.R. THOMAS, and McKEOWN, Circuit Judges.

Imelda Aguinaldo appeals pro se from district court orders granting

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). summary judgment and appointing a receiver in the United States’ actions under

26 U.S.C. §§ 7401 and 7403 to reduce tax liabilities to judgment and foreclose tax

liens on her property. We have jurisdiction under 28 U.S.C. § 1291, and we review

de novo. Desire, LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1259 (9th Cir. 2021).

We affirm.

First, on its action to reduce federal tax assessments to judgment, “the

government bears the initial burden of proof.” Palmer v. IRS, 116 F.3d 1309, 1312

(9th Cir. 1997). The government can usually meet that initial burden by presenting

Certificates of Assessments and Payments, or “Forms 4340,” which are entitled to

a presumption of correctness so long as they are supported by a “minimal factual

foundation.” Id. That presumption shifts the burden to the taxpayer to show that the

determination is somehow incorrect or otherwise deficient. United States v.

Stonehill, 702 F.2d 1288, 1294 (9th Cir. 1983). Only after the taxpayer

demonstrates that the assessment is “arbitrary, excessive or without foundation”

does the burden shift back to the government. Palmer, 116 F.3d at 1312.

Here, in its actions to reduce to judgment various tax liabilities assessed

against Ms. Aguinaldo and her late husband Eddie Aguinaldo, the government

produced documentary evidence far exceeding its burden to support its

assessments with a “minimal factual foundation.” Id. The government produced

Forms 4340, declarations from IRS Officer Lim supporting their accuracy, and

2 23-3841 deemed admissions from the Aguinaldos that they owed assessed sums for: (1)

unpaid income tax and related penalties; (2) employment- and unemployment-tax

assessments and penalties against Mr. Aguinaldo as sole proprietor of Dynamic

Interiors between 2007 and 2011; and (3) unpaid trust fund recovery penalties

against Mr. Aguinaldo for his failure to collect and remit employment taxes for

Dynamic Interiors after its formation as a limited liability company. The

introduction of these presumptively correct assessments and other supporting

documents into evidence shifted the burden of proof to Ms. Aguinaldo. Stonehill,

702 F.2d at 1294.

Ms. Aguinaldo renews several matter-of-law arguments already addressed

by the district court, including: (1) that the Internal Revenue Code’s requirements

are unenforceable because they were never published in the Federal Register; and

(2) that wages are not taxable income. We have repeatedly rejected such

arguments. United States v. Hicks, 947 F.2d 1356, 1360 (9th Cir. 1991) (“It is the

tax code itself, without reference to regulations, that imposes the duty to file a tax

return.”); Gattuso v. Pecorella, 733 F.2d 709, 710 (9th Cir. 1984) (“Taxpayers’

claim that their wages are not income is frivolous.”). Otherwise, Ms. Aguinaldo

has done nothing to show that the assessments are “arbitrary, excessive or without

foundation.” Palmer, 116 F.3d at 1312.

Proceeding to the government’s lien foreclosure claim, Section 7403 of the

3 23-3841 Internal Revenue Code provides that the government may foreclose on tax liens

that arise against the Aguinaldos and attach to their property, subject to two

procedural requirements. First, “[a]ll persons having liens upon or claiming any

interest in the property involved in such action shall be made parties thereto”;

second, those parties must be “duly notified of the action.” 26 U.S.C. § 7403. Here,

the district court correctly concluded that the government cured its failure to notify

four entities with liens on Ms. Aguinaldo’s property, when it served its Third

Amended Complaint against those non-appearing defendants. Ms. Aguinaldo did

not raise then—and does not raise now—a material dispute of fact about: (1)

whether the tax assessments attach to her property pursuant to 26 U.S.C. §§ 6321,

6322; (2) the propriety of a judicial sale; or (3) the relative priority of the parties

claiming an interest in the proceeds from the property’s sale. Thus, we affirm the

district court’s grant of summary judgment on the government’s actions to collect

tax assessments against Ms. Aguinaldo and foreclose tax liens on her property.1

AFFIRMED.

1 Reviewing for abuse of discretion, we also uphold the district court order appointing a receiver and denying Ms. Aguinaldo’s motion to stay the proceedings and allow for private sale of the property through her preferred real estate agent. Canada Life Assurance Co. v. LaPeter, 563 F.3d 837, 844 (9th Cir. 2009) (reviewing for abuse of discretion a district court order appointing a receiver). That is the relief contemplated under 26 U.S.C. § 7403, and Ms. Aguinaldo offered no assurance that her proposal would allow the court to retain control over the sale and confirm distribution of its proceeds to satisfy the government’s tax liens.

4 23-3841