United States District Court, D. Montana, Missoula Division
OPINION & ORDER
W. MOLLOY, DISTRICT JUDGE
United States sued Malcolm Birdsong to reduce an alleged
$438, 146.94 in unpaid taxes and statutory accruals to
judgment, to determine that Birdsong owns two properties in
Lolo, Montana, and to foreclose the federal tax liens on
those properties. The parties filed cross-motions for summary
judgment. (Doc. 27; Doc. 29.) Birdsong argues that the action
is barred because the United States failed to send the notice
of deficiency in the form required by law. He has moved under
Federal Rule of Civil Procedure 37(c) to exclude evidence
that the notice of deficiency was sent by certified mail.
(Doc. 35.) The United States argues that it is entitled to
judgment as a matter of law because there are no genuine
issues of material fact. A hearing was held on December 3,
2018. Birdsong's motion to exclude evidence and his
motion for summary judgment are denied; the United
States' motion for summary judgment is granted.
Birdsong, also known as M. W. Birdsong, failed to file
federal income tax returns from 2003 to 2008, resulting in a
$438, 146.94 tax assessment against him. Under 26 U.S.C.
§ 6321, the tax assessment automatically gave rise to a
tax lien on Birdsong's real and personal property. On May
23, 2017, the United States sued to reduce the tax assessment
to judgment and to enforce the tax lien against two
properties in Lolo, Montana, legally described as:
Subdiv.-LAV LAKE VIEW ADD Lot-001, Block-00A 12N 20W 26 LAKE
VIEW-PARCEL A LOT 1 BLK A, SUID #2050301
Subdiv.-LAV LAKE VIEW ADD Lot-002 Block-00A 12N 20W 26 LAKE
VIEW ADD, LKVW LOT 2 OF LAKE VIEW ADD, LKVW LOT 2 OF LAKE
VIEW ADDITION BLK A 26-12-20, SUID #1026859.
Missoula County claims an interest in these properties for
unpaid property taxes, it has been named a party, along with
its assignee Enoch Investments, LLC. See 26 U.S.C.
§ 7403(b). Missoula County, Enoch Investments, and the
United States have stipulated to the priority of their
respective interests in the properties. (Doc. 10; Doc. 26.)
conveyed his interest in the properties to Defendant
Waynes' Group through a quitclaim deed on September 4,
2004. Waynes' Group was incorporated in Nevada in 2005 as
an unincorporated Religious Scriptural Society. Birdsong is
the sole officer, manager, and owner of Waynes' Group.
The United States seeks to have Birdsong's conveyance to
Waynes' Group set aside as fraudulent. Alternatively, the
United States seeks a determination that Waynes' Group
holds title to the properties as either Birdsong's
nominee or alter ego, such that Birdsong is the true owner.
part, Birdsong argues that this suit is barred because the
United States cannot establish that it properly sent the
notice of deficiency under 26 U.S.C. § 6212, which is a
prerequisite to a valid tax assessment. Section 6212 requires
notices of deficiency to be sent by certified or registered
mail or, if sent by other means, that they are actually
received by the taxpayer.
has been a challenge, particularly regarding the notice of
deficiency. Birdsong invoked his Fifth Amendment privilege
against self-incrimination in response to the United
States' discovery requests and to many substantive
deposition questions. On August 24, 2018, one week after
discovery closed, Birdsong filed a motion for summary
judgment and a declaration. In the declaration, Birdsong
claimed that he unnecessarily invoked the Fifth Amendment in
response to deposition questions about whether he recognized
and received the notice of deficiency. For those questions,
Birdsong retracted his Fifth Amendment invocation and amended
his answers to state "I do not recognize [the notice of
deficiency] and do not believe I ever received [it]."
(Doc. 31-4 at 3-4.)
31, 2018, the United States produced copies of the envelope
in which the notice of deficiency was mailed with the Bates
numbers U.S. APROD2-001263 to USAPROD2-001264. (Doc. 32-3 at
22-23.) The United States claims that the envelope showed
part of a certified mail label. Birdsong denies that any of
the documents produced on July 31, 2018, included a certified
August 24, 2018, one week after discovery closed, the United
States filed a motion for summary judgment with an attached
Declaration of Jennifer Graham, a technical services advisor
with the Internal Revenue Service. Graham's declaration
states that the notice of deficiency was sent to Birdsong by
certified mail. On August 30, 2018, 13 days after discovery
closed and six days after the parties filed cross-motions for
summary judgment, the United States produced a supplemental
response with copies of the envelope that clearly showed a
certified mail label with the Bates numbers
USAPROD3-000050-51. (Doc. 32-2 at 6-7.) The United States
claimed that the copy produced on July 31, 2018, was
incomplete due to an internal scanning error. (Doc. 44-1 at
on the August 30 disclosure, Birdsong requested, and was
granted, an extension to file his response to the United
States' motion for summary judgment. (Doc. 33; Doc. 34.)
In the meantime, Birdsong was able to view the original
envelopes. (Doc. 44 at 7-8.) He then filed a motion to
exclude evidence that the notice of deficiency was sent by
certified mail, including the envelopes produced in the
supplemental disclosure and Jennifer Graham's
"court shall 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). The movant has the initial burden to show
the absence of any genuine dispute of material fact.
Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos.,
Inc., 210 F.3d 1099, 1102-03 (9th Cir. 2000). The burden
then shifts to the nonmoving party to produce specific facts
that show a material issue remains to be tried. Id.
at 1103. The court must view all evidence and draw all
inferences in favor of the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
are two evidentiary issues to consider before reaching the
merits of the cross-motions for summary judgment: (1)
Birdsong's motion to exclude evidence that the notice of
deficiency was sent by certified mail and (2) Birdsong's
invocation and partial retraction of the Fifth Amendment
privilege against self-incrimination.
Birdsong's Motion ...