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United States v. Wallis

United States District Court, W.D. Virginia, Lynchburg Division

March 8, 2017

United States of America, Plaintiff,
v.
William Wallis, Defendant.

          MEMORANDUM OPINION

          NORMAN K. MOON UNITED STATES DISTRICT JUDGE

         Defendant William Wallis has filed objections to a Report and Recommendation (“R&R”) issued by United States Magistrate Judge Robert S. Ballou, which recommended that I grant Plaintiff's motion for entry of final judgment and dismissal of claims related to Nitti Family Enterprises. The R&R recommends that I enter judgment against Wallis for unpaid personal income taxes and trust fund taxes. (Dkts. 198, 228). Having reviewed the R&R and the record, I will overrule all objections and adopt the R&R in full. Accordingly, Plaintiff's Motion for Entry of Judgment, (dkt. 198), will be granted, the remaining claims related to Nitti Family Enterprises, Inc. will be dismissed, and judgment will be entered in favor of the Government against Wallis as set forth below:

         Personal income tax (Form 1040):

Tax Period

Final Judgment Amount

1998

$17, 341.60

1999

$15, 098.88

2000

$13.700.36

2002

$10.445.64

Total:

$56, 586.48

         United American Holding, Inc. quarterly employee withholding tax:

Tax Period

Final Judgment Amount

03/31/1999

$19, 443.81

06/30/1999

$21, 448.24

09/30/1999

$21, 298.73

03/31/2000

$18, 096.06

06/30/2000

$52, 887.56

09/30/2000

$39, 858.94

12/31/2000

$47, 047.05

03/31/2001

$37, 047.05

06/30/2001

$44, 453.55

09/30/2001

$41, 120.10

Total:

$342, 701.09

         Boss Management Group, Inc. quarterly withholding tax:

Tax Period Final

Judgment Amount

12/31/2000

$5, 442.64

03/31/2001

$10, 843.29

09/30/2001

$10, 843.29

06/30/2002

$3, 884.34

09/30/2002

$1, 091.29

12/31/2002

$3, 325.98

Total:

$35, 430.83

         I. Factual and Procedural History

         I previously set forth the underlying facts of this case in my memorandum opinion of February 1, 2016, granting the Government's motion for summary judgment in part. See United States v. Wallis, 2016 WL 411020 (W.D. Va. Feb. 1, 2016); (dkt. 185). As most of the facts are not relevant at this stage of the case, they will not be repeated here. The main thrust is that the Government alleges Defendant failed to pay trust fund taxes for three closely held companies that he owned and operated: United America Holdings, Inc. (“United”), Boss Management Group, Inc. (“Boss”), and Nitti Family Enterprises, Inc. (“Planet Pizza”). In addition, the Government is seeking payment of unpaid personal income taxes from the taxable years 1998, 1999, 2000, and 2002.

         On February 1, 2016, the Court granted partial summary judgment, finding Defendant liable for the unpaid personal taxes as well as the unpaid trust fund taxes of United and Boss, but the Court did not make a determination as to the amount of tax liability, nor did the Court grant summary judgment regarding the claims related to Planet Pizza. Wallis, 2016 WL 411020 at *11; (dkt. 185 at 22). The Government then moved for entry of final judgment under Rule 54(b).[1] (Dkt. 198). The motion asked the Court to dismiss the claims related to Planet Pizza and enter final judgment in the following amounts: $56, 586.48 related to personal income taxes, $35, 430.83 related to Boss, and $342, 701.09 related to United, plus statutory interest, penalties, and costs. (Id. at 4-6). The parties then filed briefs, and a hearing was held before Magistrate Judge Robert S. Ballou. (Dkts. 198, 205, 206, 209). Judge Ballou's R&R recommended that I grant the Government's motion in its entirety. (Dkt. 228). Plaintiff objected to portions of Judge Ballou's R&R on the grounds that the IRS inaccurately calculated the amount of unpaid taxes and should not enjoy a presumption of correctness. (Dkt. 229).

         II. Standard of Review

         A district court may “designate a magistrate judge to conduct hearings, including evidentiary hearings, and to submit . . . proposed findings of fact and recommendations.” 28 U.S.C. § 636(b)(1)(B). “[A]ny party may serve and file written objections to such proposed findings and recommendations” within fourteen days after service. Id. at § 636(b)(1). The district court is then required to “make a de novo review of those portions of the report . . . to which objection is made.” Id.; see also Fed. R. Civ. P. 72(b). For those portions of the R&R to which a party does not object, a district court “must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 Advisory Committee's Note).

         III. ...


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