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United States v. Silva

United States District Court, E.D. Michigan, Southern Division

January 20, 2017




         In this civil tax case, the government seeks to reduce to judgment the assessments made against Defendant Ambawalage Silva for the three years he failed to file tax returns. The parties have filed cross-motions for summary judgment. The primary issue disputed is whether the IRS mailed Silva a “Notice of Deficiency” for the relevant years before prosecuting the assessments, as required under 26 U.S.C. §§ 6212(a) and 6213(a).

         After careful consideration of the briefs and thorough review of the record, the Court finds that oral argument will not aid in resolving the pending motion. See E.D. Mich. LR 7.1(f)(2). Silva has failed to raise any genuine issue of material fact about whether the government mailed the deficiency notices or about his overall tax liability. Accordingly, the Court will grant the government's motion and deny Silva's.


         Defendant Ambawalage Silva did not file federal income tax returns for tax years 2001, 2002, and 2004. (R. 22-1, PID 215.) The IRS made income tax assessments against Silva for those years. The following table, based on the applicable “Certificates of Assessments, Payments, and Other Specified Matters” (IRS Form 4340), summarizes the balances of those assessments as of December 21, 2015, when the government filed its complaint in this case:


Year Assessment

Date Balance



$25, 405.74



$105, 365.43



$30, 578.25

(R. 22-2 (2002 Form 4340); R. 22-3 (2004 Form 4340); R. 22-4 (2001 Form 4340).) The government also seeks statutory additions of $20, 369.35 for 2001, $48, 224.11 for 2002, and $13, 688.85 for 2004 for the period before its complaint and unspecified amounts thereafter. (R. 1, PID 3.)

         The parties dispute whether the government mailed Silva a “Notice of Deficiency” before attempting to collect on the assessments. At the very least, the existence of the notices' is undisputed, as the record includes a notice covering each relevant year-the notice covering the 2001 tax year is dated April 21, 2004 (R. 11, PID 73), and the single notice covering the 2002 and 2004 tax years is dated July 17, 2006 (R. 11, PID 92). But in various correspondences with the IRS over the years, Silva took the position that he either did not remember receiving the notices or in fact did not receive them. For instance, in an August 2006 letter to the IRS, Silva wrote this about the 2001 deficiency notice: “I don't even recall ever receiving any notification[.]” (R. 11, PID 76.) In an October 2006 letter, he wrote, “you have not provided any information to me that proves that such a notice was even sent at all.” (R. 11, PID 81.) For the 2002 and 2004 tax years, he wrote in a November 2011 letter, “I did not receive any Notices of Deficiency for the tax years 2002 or 2004.” (R. 11, PID 95.) He reiterated that in a December 2011 letter. (R. 11, PID 98.)

         In 2011, Silva initiated a “collection due process hearing” with the IRS and later petitioned the United States Tax Court to review that proceeding. (“A CDP hearing is a specific administrative procedure, set out in I.R.C. § 6330, through which taxpayers may challenge proposed collection actions brought by the IRS.” Golden v. C.I.R., 548 F.3d 487, 492 (6th Cir. 2008).) In the Tax Court proceeding, Silva raised several claims to challenge the collection process. See Silva v. Comm'r of Internal Revenue, 2015 WL 7734277, 110 T.C.M. (CCH) 501 (T.C. 2015). Among other things, Silva asserted that he never received the deficiency notice for 2002 and 2004 (the Tax Court had previously determined that it would not hear his claims for 2001 because it found jurisdiction lacking as to that year, see Id. at *3). As the Tax Court noted:

Petitioner asserted to the [IRS Settlement Officer] that he had not received the notice of deficiency for 2002 and 2004 and asked that she provide him with documentation relating to the notice and proof he received it. The SO thereafter confirmed that the administrative file included a notice of deficiency for 2002 and 2004 dated July 17, 2006; confirmed that it was addressed to petitioner at his last known address; sent him a copy of the notice; and verified that the tax for 2002 and 2004 was properly assessed after petitioner failed to petition this Court. Petitioner contends that these steps were insufficient to constitute compliance with the verification requirement.

Id. at *5. The Tax Court ultimately did not reach the merits of the issue because Silva had mentioned it for the first time in his answering brief-after already filing a stipulation of facts and submitting the case for a decision without trial under Tax Court rules. Id. at *6.

         In a November 30, 2015 opinion, the Tax Court affirmed the IRS's proposed collection action, finding no merit to Silva's other procedural claims (which are not at issue here). Id. at *4, 7. In so doing, the Tax Court sternly disapproved of Silva's conduct throughout the proceedings:

[O]ur review of the record convinces us that petitioner has exploited the collection review procedures for the principal purpose of delaying collection of his Federal tax liabilities. He refused to participate in the CDP hearing that the IRS offered him and provided the SO with no evidence of any sort. He appears to have intentionally filed imperfect petitions, in the form of letters dated December 15, 2006, and March 29, 2012, in order to lay the predicate for a subsequent motion to enjoin IRS collection activity as violative of an ongoing Tax Court proceeding. And his briefing tactics reveal a deliberate effort to sandbag respondent. Construing petitioner's claims so liberally as to include a challenge to the timeliness of the notice of deficiency would reward these tactics and would not accomplish substantial justice.

Id. at *6 n. 5.

         After the Tax Court's ruling, the government filed this action to reduce the assessments to judgment. (R. 1.) On May 11, 2016, well before the discovery cut-off, Silva filed a motion for summary judgment, asserting that he is entitled to judgment as a matter of law because the government has no proof that it properly mailed the deficiency notices for 2001, 2002, and 2004. (R. 11.) On ...

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