United States District Court, D. Nebraska
MEMORANDUM AND ORDER
F. Rossiter, Jr. United States District Judge.
matter is before the Court on the government's Motion for
Summary Judgment (Filing No. 36) against defendant James
Widtfeldt (“Widtfeldt”) with
jurisdiction under 26 U.S.C. § 7402(a) and 28 U.S.C.
§ 1340. Widtfeldt opposes the government's motion
and moves to dismiss (Filing No. 41) this case. For the
reasons stated below, the government's motion is granted
and Widtfeldt's motion is denied.
2004, Gusteva Widtfeldt (“Gusteva”),
Widtfeldt's mother, gifted Widtfeldt two parcels of real
property-River Place and O'Neill Rental Houses-worth $1,
041, 987 (“gifted properties”). On February 8,
2006, Gusteva died. Widtfeldt, the executor of Gusteva's
estate (“estate”), received or became titleholder
to property included in the estate. Among that property were
two parcels of real property referred to as Fink Place and
Rock Falls Place, valued $896, 180 and $912, 128,
respectively, at the time of Gusteva's death.
Internal Revenue Service (“IRS”) examined the
estate and determined the estate owed both federal gift and
estate taxes. The IRS discovered neither Gusteva nor the
estate filed a federal gift-tax return for the gifted
properties. Nor did the estate file a federal estate-tax
return on Gusteva's death. For the gifted properties, the
IRS determined the estate owed $305, 141 in gift tax, $68,
659.73 in late-filing penalties, and $76, 285.25 in
late-payment penalties. See 26 U.S.C. §
6651(a)(1) and (2). Further, the IRS found the estate owed
$170, 954 in estate tax and $34, 191 for an inaccuracy
penalty, see Id. § 6662(a).
5, 2010, the IRS notified (Filing No. 38-2) Widtfeldt, as the
estate's executor, of the tax deficiencies. Widtfeldt
challenged the deficiencies in the United States tax court
(“tax court”). When Widtfeldt filed (like here)
several frivolous pleadings and raised numerous nonsensical
arguments, the tax court warned him it would entertain a
motion to dismiss from the IRS if he did not make a relevant
April 26, 2011, the IRS filed a Motion to Dismiss for Failure
to Properly Prosecute, which the tax court granted (Filing
No. 38-6) on May 16, 2011 (“tax-court decision”).
The tax court upheld the IRS's determinations of
deficiencies, and the Eighth Circuit affirmed. See
Widtfeldt v. Comm'r, 449 Fed.Appx. 561 (8th Cir.
2012) (unpublished per curiam).
on the tax-court decision, on July 13, 2012, the IRS made
assessments against the estate for the deficiencies. Despite
the IRS issuing notice and demand for payment on Widtfeldt,
as the estate's executor, the liabilities have not been
paid. The record in this case shows the IRS attached a lien
to the estate's property on March 19, 2013. As of May 15,
2019, the estate owed $813, 699.28 in gift tax and $394,
493.28 in estate tax.
government now seeks (1) a money judgment against Widtfeldt
holding him personally liable for the unpaid federal gift and
estate taxes, see 26 U.S.C. § 6324, and (2)
enforcement of that judgment against real property owned by
Widtfeldt, see Id. § 7403.
Standard of Review
Court must “grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). If the movant informs the Court of the
basis for its motion and identifies the portions of the
record showing the absence of a genuine dispute of material
fact, the nonmovant must respond with evidence establishing
“specific facts showing there is a genuine issue for
trial.” Torgerson v. City of Rochester, 643
F.3d 1031, 1042 (8th Cir. 2011) (en banc) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).
estate tax is not paid, a lien attaches to the gross estate.
26 U.S.C. § 6342(a)(1). The recipient of the property
included in the gross estate then becomes “personally
liable for such [unpaid] tax” up to the value of the
property at the time of the decedent's death.
Id. § 6324(a)(2). Similarly, a lien attaches to
a gift if gift tax is not paid. Id. § 6324(b).
The donee of the gift then is “personally liable for
such tax to the extent of the value of the gift.”
Widtfeldt received numerous parcels of real property included
in the estate as well as the gifted properties from Gusteva.
The government argues Widtfeldt is personally liable for the
estate's tax deficiencies confirmed in the tax-court
decision. See Id. § 6324(a) and (b).
resists, insisting, without support, that he completely
purchased Gusteva's property by 1994. In other words,
Widtfeldt seeks to rehash the tax-court decision that the
estate owes any taxes at all. The government, however,
contends claim preclusion bars Widtfeldt from relitigating
the tax-court decision. The Court agrees.
claim preclusion, “a final judgment on the merits of an
action precludes the parties . . . from relitigating issues
that were or could have been raised in that action.”
Magee v. Hamline Univ., 775 F.3d 1057, 1059 (8th
Cir. 2015) (quoting Knutson v. City of Fargo, 600
F.3d 992, 996 (8th Cir. 2010)). Claim preclusion applies if
“(1) the first suit resulted in a final judgment on the
merits; (2) the first suit was based on proper jurisdiction;
(3) both suits involve the same parties (or those in privity
with them); and (4) both suits are based upon the same claims
or causes of action.” Id. (quoting Yankton
Sioux Tribe v. U.S. Dep't of Health & Human
Servs., 533 F.3d 634, 639 (8th Cir. 2008)). ...