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United States v. Ott

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

August 7, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
DENNIS R. OTT & TRACEY R. OTT, Defendants.

          United States Magistrate Judge Elizabeth A. Stafford

          OPINION AND ORDER GRANTING THE GOVERNMENT'S MOTION FOR PARTIAL SUMMARY JUDGMENT[#18]

          GERSHWIN A. DRAIN UNITED STATES DISTRICT COURT JUDGE

         I. Introduction

         The Government filed this civil action against Defendants Dennis and Tracey Ott for a failure to disclose two foreign financial accounts that they held during the 2007, 2008, and 2009 calendar years. Dkt. No. 1. The Government has moved for summary judgment against Ms. Ott, asserting there is no dispute that her failure to report was a violation of 31 U.S.C. § 5314.

         Present before the Court is the Government's Motion for Partial Summary Judgment. Dkt. No. 18. The Motion is fully briefed, and the Court will resolve the matter without a hearing. See E.D. Mich. LR 7.1(f)(2). For the reasons set forth below, the Court will GRANT the Motion [#18].

         II. Background

         Defendant Tracy Ott (hereinafter, “Ms. Ott”) is a United States citizen, and was so during the 2007, 2008, and 2009 calendar years. Dkt. No. 18, p. 6 (Pg. ID 74). During this period, she and her husband, Dennis Ott, jointly owned two financial accounts with a Canadian entity known as Octagon Capital: one account ending in 589-F and another ending in 589-E. Id.

         Ms. Ott has admitted that for the years 2007 through 2009, her accounts at Octagon Capital had the following high balances:

Year

Account No.

High Balance

2007

589-F

$1, 061, 405

2007

589-E

$842, 072

2008

589-F

$400, 456

2008

589-E

$516, 672

2009

589-F

$714, 523

2009

589-E

$1, 051, 606

Id. at p. 7 (Pg. ID 75). Ms. Ott did not timely report her financial interest in, or authority over, the above accounts to the Treasury Department. Id. Hence, on August 26, 2016, the IRS assessed penalties against her pursuant to 31 U.S.C. § 5321(a)(5) in the amount of $10, 000 for each account and for each year she failed to report. Id. at p. 8 (Pg. ID 76). She thus faces $60, 000 in penalties, and additionally, $10, 129.31 in late payment penalties and $1, 688.21 in interest payments. Id. The Government has brought the instant action against Ms. Ott to collect on this debt.

         III. Legal Standard

         Federal Rule of Civil Procedure 56(c) empowers a court to grant summary judgment if “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Cehrs v. Ne. Ohio Alzheimer's Research Ctr., 155 F.3d 775, 779 (6th Cir. 1998). The evidence and all reasonable inferences must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1968). There is a genuine issue of material fact “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Mere allegations or denials in the non-movant's pleadings will not suffice, nor will a mere scintilla of evidence supporting the non-moving party. Id. at 248, 252. Rather, there must be evidence on which a jury could reasonably find for the non-movant. Id. at 252.

         IV. Discussion

         The Government moves for summary judgment against Ms. Ott, asserting there is no dispute that she violated 31 U.S.C. § 5314 when she failed to report her financial interest in, or authority over, her foreign financial accounts. Ms. Ott opposes the Motion, arguing there is a genuine dispute of material fact as to whether ...


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