124 F.3d 205
80 A.F.T.R.2d 97-5148, 97-2 USTC P 50,565
NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.
UNITED STATES of America, Plaintiff-Appellant,
v.
James C. DUNKEL, Defendant-Appellee.
No. 96-3478.
United States Court of Appeals, Seventh Circuit.
Submitted June 25, 1997.
Decided July 1, 1997.
Rehearing and Suggestion for Rehearing En Banc Denied Aug. 15, 1997.
Appeal from the United States District Court for the Northern District of Illinois, Western Division, No. 95 C 50296; Philip G. Reinhard, Judge.
Before CUMMINGS, BAUER, and WOOD, Circuit Judges.
ORDER
In 1995, the United States filed a civil complaint to reduce to a judgment James Dunkel's assessed tax liabilities (allegedly totaling more that $750,000) for 1981 through 1983, and for 1985 through 1993. See 26 U.S.C. § 7401. Dunkel filed a motion to dismiss, to which the United States responded. The government then filed a motion for summary judgment, to which Dunkel responded. The district court denied Dunkel's motion to dismiss and granted summary judgment in favor of the United States in the amount of $787,381.20, plus statutory additions. This appeal followed.
Dunkel raises numerous issues on appeal. First, he raises an argument entitled "Subject Matter Jurisdiction." However, we do not understand Dunkel's appellate brief to deny that the federal government's authority to impose income taxes under the Internal Revenue Code arises under the laws of the United States, or to deny that the district court had jurisdiction over this case pursuant to 26 U.S.C. § 7402 and 28 U.S.C. §§ 1340, 1345. Thus, Dunkel's claim is not one of subject matter jurisdiction. See O'Conner v. Commonwealth Edison Co., 13 F.3d 1090, 1099 (7th Cir.), cert. denied, 512 U.S. 1222 (1994)
Rather, it appears that Dunkel is challenging the district court's personal jurisdiction over him. He submitted an "Affidavit in Regard [to] Special Appearance" to the district court, in which he contendedthat the service of process on him was somehow defective. Nonetheless, Dunkel's own affidavit acknowledges that he was served with process personally, and he admitted as much in a hearing before the district court. Dunkel resides in Rockford, Illinois in the Northern District of Illinois, where this action was commenced. Accordingly, the district court validly exercised personal jurisdiction over him. See Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987); United States v. De Ortiz, 910 F.2d 376, 382-83 (7th Cir.1990). Dunkel contends that he filed a "special appearance" in this case solely to challenge the district court's personal jurisdiction over him, and that he never filed a "general appearance." Whether he appeared "specially" or "generally" is irrelevant, however: This is a federal question case, and the district court acquired valid personal jurisdiction over Dunkel when he properly was served with process. See 28 U.S.C. § 1331; Fed.R.Civ.P. 4(e)(2), 4(k). Dunkel could not thereafter defeat that personal jurisdiction.
Dunkel next argues that the district court improperly granted summary judgment in favor of the government because he has already resolved his tax obligation to the government. Dunkel claims that he entered into an installment agreement with the government, whereby he agreed to pay $200.00 per month toward his tax debt. The only evidence of this agreement that Dunkel submitted to the district court was an IRS Form 433-D (Installment Agreement) signed by Dunkel alone; the form is not counter-signed by any IRS agent or official. Dunkel's motions and affidavits to the district court, as well as his brief to this court, contain absolutely no explanation of how or when the government agreed to the terms in the Form 433-D. Without some explanation of why the government should be bound by an agreement it apparently never signed, Dunkel's argument fails to raise a genuine question of material fact adequate to preclude summary judgment. See Slowiak v. Land O'Lakes. Inc., 987 F.2d 1293, 1297 (7th Cir.1993); Harbor House Condominium Ass'n v. Massachusetts Bay Ins. Co., 915 F.2d 316, 320 (7th Cir.1990); Valley Liquors Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir), cert. denied, 484 U.S. 977 (1987).
Relying on Cheek v. United States, 498 U.S. 192 (1991), Dunkel next submits that the district court improperly granted summary judgment in favor of the government because his "sincerely held beliefs" regarding his obligation to pay taxes are at issue in this case. This argument confuses a taxpayer's tax obligations-which exist independent of his beliefs regarding the tax code-with his criminal liability for willfully refusing to pay taxes-which does not. In Cheek, the defendant was convicted of violating 26 U.S.C. § 7201, which prohibits "willful" attempts to evade taxes, and 26 U.S.C. § 7203, which prohibits "willful" failures to file tax returns. Cheek, 498 U.S. at 193-94. The Court in Cheek held that a defendant's sincerely held beliefs-even if irrational-could defeat the "willful" element of § 7201 and § 7203. Id. at 203-04. There is no corresponding intent element to a taxpayer's legal obligation to pay taxes, however; Congress simply imposed that duty. See 26 U.S.C. § 1. Thus, regardless of Dunkel's "sincerely held beliefs" regarding his duty to pay taxes, that duty exists, and the district court need not have considered evidence of Dunkel's beliefs before granting summary judgment. See Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986, 990 (7th Cir.1993) (fact is material, so as to preclude summary judgment, only if it might affect the outcome of a case under governing law).
Next, we come to an argument Dunkel entitles "Collateral Estoppel." In fact, this section of his brief raises arguments of double jeopardy, res judicata, collateral estoppel and the statute of limitations. Addressing first Dunkel's statute of limitations claim: Dunkel argues that 18 U.S.C.
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124 F.3d 205
80 A.F.T.R.2d 97-5148, 97-2 USTC P 50,565
NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.
UNITED STATES of America, Plaintiff-Appellant,
v.
James C. DUNKEL, Defendant-Appellee.
No. 96-3478.
United States Court of Appeals, Seventh Circuit.
Submitted June 25, 1997.
Decided July 1, 1997.
Rehearing and Suggestion for Rehearing En Banc Denied Aug. 15, 1997.
Appeal from the United States District Court for the Northern District of Illinois, Western Division, No. 95 C 50296; Philip G. Reinhard, Judge.
Before CUMMINGS, BAUER, and WOOD, Circuit Judges.
ORDER
In 1995, the United States filed a civil complaint to reduce to a judgment James Dunkel's assessed tax liabilities (allegedly totaling more that $750,000) for 1981 through 1983, and for 1985 through 1993. See 26 U.S.C. § 7401. Dunkel filed a motion to dismiss, to which the United States responded. The government then filed a motion for summary judgment, to which Dunkel responded. The district court denied Dunkel's motion to dismiss and granted summary judgment in favor of the United States in the amount of $787,381.20, plus statutory additions. This appeal followed.
Dunkel raises numerous issues on appeal. First, he raises an argument entitled "Subject Matter Jurisdiction." However, we do not understand Dunkel's appellate brief to deny that the federal government's authority to impose income taxes under the Internal Revenue Code arises under the laws of the United States, or to deny that the district court had jurisdiction over this case pursuant to 26 U.S.C. § 7402 and 28 U.S.C. §§ 1340, 1345. Thus, Dunkel's claim is not one of subject matter jurisdiction. See O'Conner v. Commonwealth Edison Co., 13 F.3d 1090, 1099 (7th Cir.), cert. denied, 512 U.S. 1222 (1994)
Rather, it appears that Dunkel is challenging the district court's personal jurisdiction over him. He submitted an "Affidavit in Regard [to] Special Appearance" to the district court, in which he contendedthat the service of process on him was somehow defective. Nonetheless, Dunkel's own affidavit acknowledges that he was served with process personally, and he admitted as much in a hearing before the district court. Dunkel resides in Rockford, Illinois in the Northern District of Illinois, where this action was commenced. Accordingly, the district court validly exercised personal jurisdiction over him. See Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987); United States v. De Ortiz, 910 F.2d 376, 382-83 (7th Cir.1990). Dunkel contends that he filed a "special appearance" in this case solely to challenge the district court's personal jurisdiction over him, and that he never filed a "general appearance." Whether he appeared "specially" or "generally" is irrelevant, however: This is a federal question case, and the district court acquired valid personal jurisdiction over Dunkel when he properly was served with process. See 28 U.S.C. § 1331; Fed.R.Civ.P. 4(e)(2), 4(k). Dunkel could not thereafter defeat that personal jurisdiction.
Dunkel next argues that the district court improperly granted summary judgment in favor of the government because he has already resolved his tax obligation to the government. Dunkel claims that he entered into an installment agreement with the government, whereby he agreed to pay $200.00 per month toward his tax debt. The only evidence of this agreement that Dunkel submitted to the district court was an IRS Form 433-D (Installment Agreement) signed by Dunkel alone; the form is not counter-signed by any IRS agent or official. Dunkel's motions and affidavits to the district court, as well as his brief to this court, contain absolutely no explanation of how or when the government agreed to the terms in the Form 433-D. Without some explanation of why the government should be bound by an agreement it apparently never signed, Dunkel's argument fails to raise a genuine question of material fact adequate to preclude summary judgment. See Slowiak v. Land O'Lakes. Inc., 987 F.2d 1293, 1297 (7th Cir.1993); Harbor House Condominium Ass'n v. Massachusetts Bay Ins. Co., 915 F.2d 316, 320 (7th Cir.1990); Valley Liquors Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir), cert. denied, 484 U.S. 977 (1987).
Relying on Cheek v. United States, 498 U.S. 192 (1991), Dunkel next submits that the district court improperly granted summary judgment in favor of the government because his "sincerely held beliefs" regarding his obligation to pay taxes are at issue in this case. This argument confuses a taxpayer's tax obligations-which exist independent of his beliefs regarding the tax code-with his criminal liability for willfully refusing to pay taxes-which does not. In Cheek, the defendant was convicted of violating 26 U.S.C. § 7201, which prohibits "willful" attempts to evade taxes, and 26 U.S.C. § 7203, which prohibits "willful" failures to file tax returns. Cheek, 498 U.S. at 193-94. The Court in Cheek held that a defendant's sincerely held beliefs-even if irrational-could defeat the "willful" element of § 7201 and § 7203. Id. at 203-04. There is no corresponding intent element to a taxpayer's legal obligation to pay taxes, however; Congress simply imposed that duty. See 26 U.S.C. § 1. Thus, regardless of Dunkel's "sincerely held beliefs" regarding his duty to pay taxes, that duty exists, and the district court need not have considered evidence of Dunkel's beliefs before granting summary judgment. See Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986, 990 (7th Cir.1993) (fact is material, so as to preclude summary judgment, only if it might affect the outcome of a case under governing law).
Next, we come to an argument Dunkel entitles "Collateral Estoppel." In fact, this section of his brief raises arguments of double jeopardy, res judicata, collateral estoppel and the statute of limitations. Addressing first Dunkel's statute of limitations claim: Dunkel argues that 18 U.S.C. § 3282 imposes a five-year statute of limitations on the criminal prosecution of all non-capital offenses, and that the government commenced this action outside that period. Section 3282 is irrelevant to this case, however. That section applies only to criminal prosecutions; this case is a civil action to recover back taxes, interest and penalties. The correct statute of limitations period for this case is ten years after the assessment of a tax liability. See 26 U.S.C. §§ 6501, 6502. In this case, the IRS first assessed Dunkel's tax liability on October 28, 1985. It commenced this action on October 25, 1995-three days before the applicable statute of limitations expired. Accordingly, Dunkel's statute of limitations argument fails.
Finally, we turn to Dunkel's double jeopardy argument. As we stated above, see supra note 1, Dunkel was convicted of tax evasion and has served a prison sentence for that crime. Dunkel contends that under the Double Jeopardy Clause of the Fifth Amendment, his conviction and sentence for tax evasion now precludes the government's efforts to enforce a civil judgment against him. The Double Jeopardy Clause protects against a second prosecution for the same offense after acquittal, a second prosecution for the same offense after conviction, and multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440 (1989). Dunkel contends that this civil suit constitutes a second punishment for the tax offenses for which he has already served a prison sentence.
In this case, the government seeks only civil sanctions against Dunkel, rather than criminal penalties. "It is well settled that 'Congress may impose both a criminal and a civil sanction in respect to the same act or omission.' " United States v. Ursery, 116 S.Ct. 2135, 2149 (1996) (quoting Helvering v. Mitchell, 303 U.S. 391, 399 (1938)). Nonetheless, "a civil as well as a criminal sanction constitutes punishment [for the purpose of the Double Jeopardy Clause] when the sanction as applied in the individual case serves the goals of punishment." Halper, 490 U.S. at 448. A civil sanction is punishment whenever it "cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes." Id. That is, a civil sanction serves the goal of punishment when it "is not rationally related to the goal of making the [g]overnment whole." Id. at 451. However, in determining whether a civil sanction merely makes the government whole, or instead serves a retributive or deterrent purpose, the government is entitled to "rough remedial justice, that is, it may demand compensation according to somewhat imprecise formulas, such as reasonable liquidated damages or a fixed sum plus double damages, without being deemed to have imposed a second punishment for the purpose of double jeopardy analysis." Id. at 446. Thus, to evaluate Dunkel's double jeopardy argument, we would have to determine in this case whether the penalties the government seeks are a form of "rough remedial justice," or instead, are "not rationally related to the goal of making the [g]overnment whole." To do that, we would have to compare the back taxes Dunkel owes to the civil penalties the government seeks. We cannot make that comparison because of a significant problem in this case.
As we stated earlier, the government sought summary judgment for the amount of $787,381.20. The district court granted summary judgment in that amount, apparently based on the government's representations that this was the total amount due. The government detailed Dunkel's tax, interest and penalty liabilities for the years 1981-1983 and 1985-1992 in its statement of uncontested facts ("Local Rule 12(M) Statement"). It substantiated these amounts with an affidavit from Marilyn Ganser, an advisor with the Litigation Special Procedures Branch of the IRS. We have listed these amounts in the appendix attached to the end of this order. The annual totals for tax, interest and penalties that we have calculated in the appendix correspond to the totals for each year stated in the government's Local Rule 12(M) Statement and in Ganser's affidavit. But the annual totals do not add up to $787,381; they add up to only $411,198.73.
There is no indication anywhere in the record of how the government arrived at the amount of $787,381. The government's Local Rule 12(M) Statement and Ganser's affidavit both state that the $787,381 figure is based on the data in the preceding paragraphs of those documents, respectively. But we have listed these data in the appendix, and they simply do not add up to $787,381. This figure may be accurate; perhaps it is based on some additional tax or penalty. But we cannot ascertain, based on the record before us, how the government arrived at that amount.
Because there is no factual basis anywhere in the record for judgment in the amount of $787,381.20, summary judgment for that amount cannot stand. See McClendon v. Indiana Sugars, Inc., 108 F.3d 789, 795 (7th Cir.1997) (party seeking summary judgment has initial responsibility of informing the district court of the basis for its motion); see also Logan v. Commercial Union Ins. Co., 96 F.3d 971, 979 (7th Cir.1996). Accordingly, we must remand this case to allow the district court to determine the correct amount of taxes, interest and penalties Dunkel owes, and to determine in the first instance whether those penalties are so severe as to constitute a second punishment within the meaning of Halper. Moreover, to allow the district court to make these determinations, the government should indicate for each penalty and interest charge the amount of back taxes on which the penalty or interest is being imposed, the statutory basis for that penalty or interest charge, and the calculation by which the government arrived at the amount of each penalty or interest charge.