MEMORANDUM ON UNITED STATES' MOTION FOR SUMMARY JUDGMENT

STAIR, JR., Bankruptcy Judge: On October 19, 2001 , the Plaintiffs, Kenneth and Peggy Hurley, filed the Complaint initiating this adversary proceeding in which they seek equitable relief from this court setting aside certain recorded deeds transferring the Plaintiffs' real property, which the Plaintiffs claim were fraudulendy [fraudulently] obtained by the Debtor, Ragip Sinan Mungan d/b/a Mortgage Masters, Inc. The United States of America, "by and through the Internal Revenue Service" ( IRS ) is named as a defendant due to federal tax liens levied against the real property on account of taxes assessed against the Plaintiffs and Defendant Mortgage Masters, Inc. (Mortgage Masters).

Before the court is a Motion for Summary Judgment (Motion) filed by the IRS on October 4, 2002 , asserting that regardless of which entity actually owns the real property real at issue, the Plaintiffs or Mortgage Masters, the IRS has liens encumbering the real property based on recorded federal tax liens. The Plaintiffs filed a "Plaintiffs' Response to United States ' Motion for Summary Judgment" on October 15, 2002 , stating that their tax liability has been satisfied pursuant to payment and settlement with the IRS . Neither Mortgage Masters, the Longs, nor any other defendant filed a response to the Motion. Accordingly, no defendant opposes the Motion. ¹

This is a core proceeding. 28 U.S.C.A §157(B)(2)(A), (K), and (O). (West 1993).

I

The facts, as pertinent to the Motion, are set forth in the Plaintiffs' Complaint and the Motion. Prior to December 1997, the Plaintiffs owned two parcels of real property, one located at 4220 Van Dyke Drive , Knoxville , Tennessee (collectively, the Real Property). For reasons in dispute and still to be litigated, the Plaintiffs transferred at the Van Dyke property to the Defendants Michael and Robin Hunley and transferred the Van Dyke property was subsequently transferred to Mortgage Masters. By this adversary proceeding, the Plaintiffs are seeking to set aside these conveyances as fraudulent.

The IRS filed four federal tax liens against the Plaintiffs: (1) on August 15, 1994, in the aggregate amount of $12,920.98; (2) on September 29, 1994, in the amount of $1,617.00; (3) on February 10, 1998, in the aggregate amount of $2,285.64; and (4) on March 23, 2001, in the amount of $1,083.34 (the Federal Tax Liens). ² The IRS claims that these tax liens are secured by the Real Property, regardless of whether it is owned by tho Plaintiffs, the Longs, or Mortgage Masters. The IRS argues that if the Plaintiffs still own the Real Property, the 1994 tax liens attached to it prior to any alleged fraudulent conveyances or other encumbrances. Additionally, if the court later determines that the Real Property is owned by Mortgage Masters and/or the Longs, the IRS again claims to be a secured creditor by virtue of its tax liens. ³

II

Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." FED R. CIV . P. 56(c). Rule 56(c) is made applicable to this adversary proceeding by Rule 7056 of the Federal Rules of Bankruptcy Procedure.

The IRS , as the moving party, bears the initial burden of proving both that there is no issue of material and that it is entitled to judgment as a matter of law. Owens Corning v. Nat'l Union Fire Ftre Ins. Co., 257 F.3d 484, 491 (6th Cir. 2001), The burden then shifts to the nonmoving party, in this case, the Plaintiffs, to produce specific facts showing that there is, in fact, a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 106 S.Ct. 1348, 1356 (1986) (citing FED . R. CIV . P. 56(e)). In doing so, the nonmoving party must cite specific evidence and may not merely rely upon allegations contained in the pleadings. Harris v. Gen. Motors Corp, 201 F.3d 800, 802 (6th Cir. 2000). The facts, and all resulting inferences must be viewed in the light most favorable to the nonmovant. Matsushita, 106 S.Ct. at 1356. The court must then decide whether "the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505, 2512 (1986).

III

In support of its Motion for Summary Judgment, the IRS attached copies of the Federal Tax Liens recorded against both the Plaintiffs and Mortgage Masters. The Federal Tax Liens concerning the Plaintiffs are itemized as follows:

(1) Lien filed August 15, 1994 , which includes taxes in the amount of $12,920.98 for the periods ending December 31, 1989 , and December 31, 1992 . These taxes were assessed on May 28, 1990 , and October 4, 1993 , respectively.

(2) Lien filed September 29, 1994 , which includes taxes in the amount of $1,617.00 for the period ending December 31, 1993 , which were assessed on September 5, 1994 .

(3) Lien filed February 10, 1998 , which includes taxes in the amount of $2,285.64 for the periods ending December 31, 1994 , December 31, 1995 , and December 31, 1996 . These taxes were assessed on October 2, 1995 , September 9, 1996 , and September 29, 1997 , respectively.

(4) Lien filed March 23, 2001 , which includes taxes in the amount of $1,083.34 for the period ending December 31, 1997 , and assessed on November 16, 1998 .

In response, the Plaintiffs rely upon the Affidavit of the Plaintiff, Kenneth Hunley, together with a payment receipt showing payment to the IRS in the amount of $359.84 on October 9, 2001 , and a second copy of the payment receipt with a handwritten "Paid in full. D. Sester ID 62-11031" and marked "Received October 10, 2001 Internal Revenue Service, W & I Area 3, Territory 4, Knoxville , Tennessee ." In his Affidavit, the Plaintiff states that Ms. Sester, an employee of the IRS in Knoxville, Tennessee, told him that payment of the $359.84 would clear the Plaintiffs' debt with the IRS because "the rest of the debt was in a `non-collectable [sic] status."' The Plaintiff also avers that Ms. Sester told the Plaintiffs that "the uncollectable [sic] debt liens would be gone or expire by the end of 2003." The Plaintiffs therefore contend that their debt to the IRS has been "fully satisfied and paid in full."

IV

Federal Tax Liens are governed by the Internal Revenue Code (I.R.C.), located at title 26 of the United States Code. The statutes pertinent to this action are, as follows:

§6321. Lien for taxes.

 

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.

I.R.C. §6321 (West 2002).

§6322. Period of lien.

 

Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied or becomes unenforceable by reason of lapse of time.

I.R.C. §6322 (West 2002).

§6325. Release of lien or discharge of property.

 

(a) Release of lien. --Subject to such regulations as the Secretary may prescribe, the Secretary shall issue a certificate of release of any lien imposed with respect to any internal revenue tax not later than 30 days after the day on which --

 

(1) Liability satisfied or unenforceable. --The Secretary finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable; ...

 

....

 

(f) Effect of certificate. --

 

(1) Conclusiveness. --... [I]f a certificate is issued pursuant to this section by the Secretary and is filed in the same office as the notice of lien to which it relates (if such notice of lien has been filed) such certificate shall have the following effect:

 

(A) in the case of a certificate of release, such certificate shall be conclusive that the lien referred to in such certificate is extinguished;

 

(B) in the case of a certificate of discharge, such certificate shall be conclusive that the property covered by such certificate is discharged from the lien[.]

I.R.C. §6325(a)(1) (West 2002).

§7122. Compromises.

 

(a) Authorization. --The Secretary may compromise any civil or criminal case arising under the internal revenue laws prior to reference to the Department of Justice for prosecution or defense; ...

 

(b) Record. --Whenever a compromise is made by the Secretary in any case, there shall be placed on file in the office of the Secretary the opinion of the General Counsel for the Department of the Treasury or his delegate, with his reasons therefor, with a statement of --

 

(1) The amount of tax assessed,

 

(2) The amount of interest, additional amount, addition to the tax, or assessable penalty, imposed by law on the person against whom the tax is assessed, and

 

(3) The amount actually paid in accordance with the terms of the compromise.

 

Notwithstanding the foregoing provisions of this subsection, no such opinion shall be required with respect to the compromise of any civil case in which the unpaid amount of tax assessed (including any interest, additional amount, addition to the tax, or assessable penalty) is less than $50,000. However, such compromise shall be subject to continuing quality review by the Secretary.

I.R.C. §7122 (West 2002).

In summary, a valid tax lien, once recorded, remains as long as the underlying tax liability is enforceable. I.R.C. §6322; United States v. Hodes [ 66-1 USTC ¶9232], 355 F.2d 746, 748 (2d Cir. 1966). There are only three methods for releasing an IRS tax lien: "1) the tax lien becomes unenforceable by operation of time, (2) the debt which is the basis of the lien is paid in full or (3) an Offer in Compromise is accepted by the IRS which would settle the debt and any tax lien associated with the debt would be no longer enforceable and have to be released." United States v. Alfano [ 99-1 USTC ¶50,303], 34 F.Supp.2d 827, 840 ( E.D. N.Y. 1999) (quoting In re Robert Turner Optical, Inc. [ 94-2 USTC ¶50,555], Bankr. No. 93-01004, 1994 WL 779352, at *4 (Bankr. N.D. Ala. Sept. 8, 1994 )). To be unenforceable under I.R.C. §6322, "all of the [ IRS 's] remedies ... must be extinguished." Id. at 839 (quoting Dillard v. United States (In re Dillard), 118 B.R. 89, 93 (Bankr. N.D. Ill. 1990)).

V

In the present case, there is no question that the Federal Tax Liens have not become unenforceable by operation of time. As noted on the Federal Tax Liens, with the exception of the 1989 assessments, the re-file deadlines have not yet expired. As such, the Liens would still be enforceable. ⁴ Additionally, there is no question that the Plaintiffs have not paid in full the total amounts assessed and covered by the Federal Tax Liens.

The first issue is whether the Plaintiffs' $359.84 payment to the IRS constituted a compromise for the entire amount of tax liability owed by the Plaintiffs, such that it would release the Federal Tax Liens on the Real Property.

"An offer to compromise a tax liability must be made in writing, must be signed by the taxpayer under penalty of perjury, and must contain all of the information prescribed or requested by the Secretary." 26 C.F.R. §301.7122-1(d)(1). The offer must also be accepted by an IRS delegate authorized to accept such compromises. See Foulds v. Comm'r [ CCH Dec. 45,433(M)], 56 T.C.M. (CCH) 1112 (1989). "An offer to compromise has not been accepted until the IRS issues a written notification of acceptance to the taxpayer or the taxpayer's representative." 26 C.F.R. §301.7122-1(e)(1). These regulations are strictly construed and compliance therewith is mandatory. Delohery v. Internal Revenue Serv. [ 94-1 USTC ¶50,144], 843 F.Supp. 666, 669 (D. Colo. 1994) (citing Boulez v. Comm'r [ 87-1 USTC ¶9177], 810 F.2d 209, 215 (D.C. Cir. 1987)). These regulations provide the only means by which a compromise with the IRS may be effectuated. Id. (citing Klein v. Comm'r [ 90-1 USTC ¶50,251], 899 F.2d 1149, 1152 (11th Cir. 1990); Laurins v. Comm'r [ 89-2 USTC ¶9636], 889 F.2d 910, 912 (9th Cir. 1989); Brooks v. United States [ 87-2 USTC ¶9626], 833 F.2d 1136, 1145 (4th Cir. 1987)).

An informal "agreement" does not constitute a compromise under the I.R.C. and does not bind the government. See Botany Worsted Mills v. United States [1 USTC ¶348], 49 S.Ct. 129, 132 (1929). Therefore, "even if subordinate revenue officials at a conference informally [agree] to accept the taxpayer's payment of a lien in full satisfaction of [his] liability, that agreement would not bind [the IRS]." Foulds [ CCH Dec. 45,433(M)], 56 T.C.M. 1112 (citing Parks v. Comm'r [ CCH Dec. 23,848], 33 T.C. 298, 301 (1959)).

The Plaintiffs have the burden of proving that their payment of $359.84 was a compromise of their entire tax liability of $17,906.96. Id. (citing Welch v. Helvering [3 USTC ¶1164], 290 U.S. 111 (1933)). The Plaintiffs must likewise prove that D. Sester, as the government official who allegedly formed a compromise with them, had the actual authority to bind the IRS to such agreement. See Brubaker v. United States [ 65-1 USTC ¶9274], 342 F.2d 655, 662 (7th Cir. 1965); Buesing v. United States [ 99-1 USTC ¶50,246], 42 Fed.Cl. 679, 688 (Fed. Cl. 1999) (citing, among others, City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990)).

The documents provided by the Plaintiffs do not convince the court that the Plaintiffs and the IRS entered into a compromise whereby the Plaintiffs were released from their total $17,906.96 tax liability by the payment of $359.84. First, there was no offer to compromise in writing, as required by 26 C.F.R. 301.7122-1(d)(1), nor was there a written acceptance by the IRS of an offer of compromise, as required by 26 C.F.R. §301.7122-1(e)(1). The receipt of payment evidencing the handwritten "Paid in full. D. Sester ID 62-11031" and marked "Received October 10, 2001 Internal Revenue Service, W&I Area 3, Territory 4, Knoxville, Tennessee" does not satisfy this requirement.

Moreover, after reviewing these documents, it is obvious to the court that the $359.84 payment made by the Plaintiffs was in satisfaction of their past due 1999 taxes, for which the IRS has not recorded or asserted a lien. The taxes covered by the Federal Tax Liens are for the years 1989, 1992, 1993, 1994, 1995, 1996, and 1997.

Second, the IRS did not file a certificate of release pertaining to the Federal Tax Liens with the Knox County Register of Deeds, as it is required to do in the event of a party's satisfaction. See I.R.C. §6325. A certificate of release of the lien must be filed, otherwise, the tax lien is not released. United States v. Waite, Inc. [ 80-1 USTC ¶9128], 480 F.Supp. 1235, 1239-40 (W.D. Pa. 1979). Clearly, the IRS did not intend for the Plaintiffs' $359.84 payment to satisfy the entire $17,906.96 balance owed by the Plaintiffs and secured by the Federal Tax Liens. ⁵

VI

The next issue before the court is whether the Federal Tax Liens which attached to the Real Property prior to any alleged conveyances or transfers would still attach regardless of the current owner of the Real Property.

Federal tax liens attach to the property and property rights of the delinquent taxpayer. Pronto Enters., Inc. v. United States, 188 B.R. 590 (W.D. Mo. 1995). This includes real and personal property owned at the time of assessment and after-acquired. United States v. Gen. Motors Corp. [ 91-2 USTC ¶50,158], 929 F.2d 249, 251 (6th Cir. 1991). Once a federal tax lien has attached, the delinquent taxpayer "cannot avoid or defeat liability by disclaiming or renouncing interest in the property or transferring or conveying the interest." United States v. Jepsen [ 2000-2 USTC ¶50,608], 131 F.Supp.2d 1076, 1085 (W.D. Ark. 2000) (citing United States v. Rodgers [ 83-1 USTC ¶9374], 103 S.Ct. 2132, 2141 n.6 (1983)). Likewise, once the lien has attached, any subsequent purchaser of the property takes subject to the IRS lien. See United States v. Bess [ 58-2 USTC ¶9595], 78 S.Ct. 1054, 1058 (1958) ("The transfer of property subsequent to the attachment of the lien...."); United States v. Donahue [ 90-2 USTC ¶50,343], 905 F.2d 1325, 1331 (9th Cir. 1990) ("[A] lien continues to attach to a taxpayer's property regardless of any subsequent transfer of the property.").

It does not matter whether the Real Property is presently owned by the Plaintiffs, by the Longs, or by Mortgage Masters. In either event, the IRS maintains a security interest in the Real Property pursuant to its Federal Tax Liens filed prior to any sort of transfer. Accordingly, if the Plaintiffs still own the Real Property, it is encumbered by the Federal Tax Lies filed in their names. However, if Mortgage Masters is the owner of the Van Dyke property, that property is encumbered not only by the Federal Tax Liens in Mortgage Masters' name, but also by the Federal Tax Liens filed in the Plaintiffs' names prior to the first date of transfer, i.e., all Federal Tax Liens filed prior to August 1, 1999. Likewise, the Jade Road property allegedly transferred to the Longs is encumbered with the Federal Tax Liens in the Plaintiffs' names prior to and at the time of the transfer.

VII

Taking all facts and inferences in the light most favorable to the Plaintiffs, the court finds that there is no genuine issue of material fact. There was no compromise of the total tax liability evidenced by the Federal Tax Liens. Additionally, pursuant to the Internal Revenue Code, the Federal Tax Liens attaching the Real Property remain until either released or satisfied. As such, the IRS is entitled to summary as a matter of law.

An order consistent with this Memorandum will be entered.

ORDER

Pursuant to the Memorandum on United States ' Motion for Summary Judgment filed this date, the court directs the following:

1. The United States' Motion for Summary Judgment filed October 4, 2002, by the Defendant United States of America, on behalf of its agency, the Internal Revenue Service, is GRANTED.

2. The Federal Tax Liens filed against the Plaintiffs by the Internal Revenue Service on August 15, 1994, September 29, 1994, February 10, 1998, and March 23, 2001, unless otherwise released by the Internal Revenue Service, continue to encumber the real property known as 4220 Van Dyke Drive, Knoxville, Tennessee, and 610 Jade Road, Knoxville, Tennessee, and the interest of the Defendant United States in these properties is superior to all subsequently filed interests in the properties.

3. The Federal Tax Liens filed against the Defendant Mortgage Masters, Inc., by the Internal Revenue Service on February 23, 2001, April 10, 2001, and October 29, 2001, continue to encumber the real property known as 4220 Van Dyke Drive, Knoxville, Tennessee, and the interest of the United States in this property is superior to all subsequently filed interests in this property.

SO ORDERED.

¹ Pursuant to E.D.Tenn. LBR 7007-1, a party opposing a motion for summary judgment "shall be respond within twenty days after the date of the filing of the motion.... A failure to respond shall be construed by the court to mean that the respondent does not oppose the relief requested by the motion."

² Additionally, the IRS filed the following three Federal Tax Liens against Mortgage Masters: (1) February 23, 2001, in the aggregate amount of $65,897.03; (2) April 10, 2001, in the amount of $1,650.00; and (3) October 29, 2001, in the amount of $7,363.61. Because Mortgage Masters and Robert and Melissa Long do not oppose the Motion, summary judgment will be granted the IRS as to them. See supra 1.

³ Summary judgment is being granted on this claim, so if Mortgage Masters and the Longs are deemed to own the Real Property, the Real Property is subject to the IRS liens.

⁴ The Federal Tax Lien notices each provide that:

With respect to each assessment below, unless notice of lien is refiled by the date in column (e), this notice shall constitute the certificate of release of lien as defined in IRC 6235(a).

The deadline for re-filing the Federal Tax Lien as to the 1989 assessment was June 27, 2000. It appears that the 1989 assessment was not re-filed, and if so, the tax liability therefor, in the amount of $11,079.25, was in fact released.

⁵ As noted earlier, however, if the IRS did not re-file its Federal Tax Lien for the 1999 assessment prior to June 27, 2000, the Notice of Tax Lien recorded on August 15, 1994, will, in fact, serve as the Certificate of Release of Lien as to $11,079.25 in tax liability, thus leaving the Plaintiffs' total tax liability as $6,827.71.

 

 

 

[2000-1 USTC ¶50,386] James R. Smith and Thelma J. Smith, Plaintiffs v. The United States , Defendant

U.S. Court of Federal Claims, 99-227T, 4/10/2000

[Code Sec. 6402 ]

Refund claims: Tax overpayment: Offset of prior years' liability.--Married taxpayers who filed suit for payment of income tax refunds allegedly due failed to raise any triable issue of fact. The government's introduction into evidence of assessments against the couple for unpaid taxes, penalties and interest from prior years established a prima facie case of liability. Although the couple alleged that the IRS had wrongfully retained refunds due them as a result of overpayments for several tax years, they did not introduce any evidence to rebut the government's prima facie case that the couple had outstanding tax liabilities to which the overpayments had been applied. BACK REFERENCES: ¶38,519.16

ORDER

MEROW, Senior Judge:

This case is currently before the court on the defendant's Motion for Summary Judgment. After a careful review of the parties' submissions, the defendant's motion is GRANTED.

FACTS

Plaintiffs James R. and Thelma J. Smith filed suit in this court seeking payment of personal income tax refunds allegedly due. Plaintiffs previously litigated personal income tax deficiencies in the United States Tax Court. In a decision filed November 26, 1990, ¹ the Tax Court determined that plaintiffs had an income tax deficiency of $5,810, a substantial understatement of liability penalty of $1,453 and a late filing penalty of $1,183 for the 1983 tax year. In addition, the Tax Court found a tax deficiency of $12,312, a substantial understatement of liability penalty of $3,078, and a late payment penalty of $3,078, for the 1984 tax year. A second Tax Court Decision, filed April 29, 1994, ² determined that plaintiffs had an income tax deficiency of $3,545 and a late filing penalty of $100 for the tax year 1986. Finally, the decision determined that plaintiffs had an income tax deficiency of $4,142 and a late filing penalty of $671 for 1987.

Following each of the Tax Court decisions, the Internal Revenue Service (" IRS ") assessed against plaintiffs the amounts determined by the Tax Court ³ along with interest. On or about April 24, 1991, the IRS assessed $7,485.56 in interest on plaintiffs' 1983 tax return and $15,219.75 in interest on plaintiffs' 1984 tax return. On or about July 4, 1994, the IRS assessed $3,582.78 in interest for plaintiffs' 1986 tax return and $3,178.91 in interest for plaintiffs' 1987 tax return. As of May 26, 1999 , IRS records show that plaintiffs have an outstanding balance of $7,925.90 in accrued interest for tax year 1983; assessed tax, penalties, and interest of $34,509.35 for tax year 1984; assessed tax, penalties, and interest of $7,251.78 for tax year 1986; and assessed tax, penalties, and interest of $8,591.91 for tax year 1987.

Following the first Tax Court decision, plaintiffs filed their personal income tax return for the 1991 tax year, on or about April 15, 1992. ⁴ Plaintiffs overpaid $2,548 and this amount was refunded to them, along with $40.76 in interest. On or about April 15, 1993, plaintiffs filed their 1992 tax return and requested a refund of $925. On or about March 25, 1993, the IRS applied the $925 tax overpayment against plaintiffs' outstanding liability for income tax, penalties and interest assessed for their 1983 tax year. On or about April 15, 1994, plaintiffs filed their 1993 tax return and requested that their $1,102 overpayment be refunded. On or about April 4, 1994, the IRS applied plaintiffs' $1,102 refund to their outstanding assessments for the 1983 tax year. On or about April 15, 1995, plaintiffs filed their 1994 tax return and requested a refund of their overpayment of $869. On or about April 15, 1995, the IRS applied the $869 overpayment to plaintiffs' outstanding assessments for the tax year 1983. On or about April 15, 1996, plaintiffs filed their 1995 tax return and requested a refund of $2,115. On or about April 15, 1996, the IRS applied the $2,115 overpayment to plaintiffs' outstanding assessments for the tax year 1983. On or about April 15, 1997, plaintiffs filed their 1996 tax return and reported an amount owed of $1,189. Plaintiffs included payment of $1,189 with their return. The IRS determined that plaintiffs made an error in calculating their tax liability and had overpaid by $721. The IRS applied the $721 overpayment to plaintiffs' outstanding assessments for the tax year 1983.

Plaintiffs filed their first Complaint, pro se, on April 16, 1999. ⁵ On June 4, 1999, the defendant filed a Motion For a More Definite Statement Pursuant to RCFC 12(e), as the Complaint did not contain sufficient information to allow a responsive pleading. The defendant's motion was allowed on June 8, 1999 , and plaintiffs filed a First Amended Complaint on June 21, 1999 . Following defendant's Motion to Dismiss Pursuant to RCFC 12(b)(4) for Failure to State a Claim Upon Which Relief Can Be Granted, this Court held that plaintiffs:

have asserted a claim within this Court's jurisdiction pursuant to 28 U.S.C. §1491 for refunds allegedly due them for the tax years 1991-1996. To the extent plaintiffs' papers can be construed to request relief beyond refund claims for these years, the Court does not have jurisdiction to grant relief and this will be reflected in the final resolution of this litigation.

DISCUSSION

Plaintiffs maintain that the IRS has wrongfully retained money due them from income tax overpayments for the tax years 1991 to 1996. The defendant maintains that any overpayments were either refunded or properly credited against outstanding assessments for previous tax years. The defendant correctly points to 26 U.S.C. §6402(a) to demonstrate that the IRS ' application of income tax overpayments to other outstanding assessments is proper. The section provides that:

In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall, subject to subsections (c), (d) and (e), refund any balance to such person.

26 U.S.C. §6402(a) (1994).

The IRS records demonstrate that plaintiffs received a refund for the tax year 1991 and that refunds for the tax years 1992 to 1996 were applied to outstanding assessments. Plaintiffs, for their part, deny that they received any funds from the IRS . Assessments by the IRS , properly entered into evidence establish a prima facie case of liability. See e.g. Welch v. Helvering [3 USTC ¶1164], 290 U.S. 111, 15 (1933); Adams v. United States, 358 F.2d 986, 994 (Ct.Cl. 1966); Michaud v. United States [97-2 USTC ¶50,972], 40 Fed.Cl. 1, 15 (1997). As plaintiffs have not introduced any evidence to rebut the defendant's prima facie case, or to raise any triable issue of fact, the Motion for Summary Judgment must be granted. ⁶

CONCLUSION

Based on the foregoing, it is hereby ORDERED:

(1) Defendant's November 8, 1999 Motion For Summary Judgm