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Greene v. United States

United States District Court, D. Arizona

March 31, 2015

Michael Don Greene, Plaintiff,
United States of America, Defendant.


JAMES A. TEILBORG, District Judge.

Pending before the Court is Defendant United States of America's ("the United States") Motion for Reconsideration (Doc. 22) of the Court's November 24, 2014 Order (Doc. 19) denying the United States' Motion to Dismiss (Doc. 13). Also pending before the Court is the United States' Motion to Dismiss Plaintiff's Amended Complaint (Doc. 30). Although the Court did not request that Plaintiff respond to the United States' Motion for Reconsideration, Plaintiff filed a response. (Doc. 20). Plaintiff also filed a response to the United States' Motion to Dismiss Plaintiff's Amended Complaint. (Doc. 31). The United States then filed a Reply in Support of United States' Motion to Dismiss Plaintiff's Amended Complaint. (Doc. 32). The Court now rules on the motions.


In its previous Order, the Court summarized the background of this dispute as follows:

Mr. Greene and his former wife ("the Greenes") filed a joint 1990 tax return on or about March of 1991. (Doc. 1 at 2). The joint return was a 1040 tax return which reflected an adjusted gross income ("AGI") of $74, 714.42, a taxable income of $44, 968.00, and withholding credits of $9, 803.76. ( Id. ) The Greenes reported a tax liability of $8, 450.00 in the 1040 return, and received a refund of $934.00. (Doc. 13-1 at 3). Mr. Greene also filed a corporate return for the 1990 taxes of his 100% personally-owned corporation, MDG Inc. (Doc. 1 at 2).
In 1992, the Internal Revenue Service ("IRS") opened an examination of the Greenes' 1990 tax returns. (Doc. 1 at 2). The IRS completed its examination of the 1990 tax returns in 1997. ( Id. ) After the examination, IRS account records reflected the Greenes' 1990 AGI as -$493, 879.58 with a taxable income of $0.00. ( Id. ) The 1990 IRS examination work-papers also alleged unreported income of $888, 496.75 to MDG Inc. ( Id. at 3). The IRS issued a Statutory Notice of Deficiency reflecting a deficiency of $269, 830.00, a fraud penalty of $191, 939.00, and an accuracy penalty of $2, 782.00. (Doc. 13-1 at 4).
The IRS determined that Mrs. Greene was not liable for the entire tax liability resulting from the 1990 Notice of Deficiency. (Doc. 13-1 at 4). Thus, the IRS assessed taxes on two separate accounts: one Joint Master File account, and one separate Non-Master File account ("NMF 1") for Mr. Greene individually. ( Id. at 4-5). An amount of approximately $202, 000.00 was assessed to the Joint Master File account of Mr. and Mrs. Greene. ( Id. at 5). The remaining portion of the deficiency, approximately $350, 000.00, was assessed to the separate NMF 1 account under Mr. Greene's name only. ( Id. ) After the IRS applied the assessment to the Joint Master File account, the IRS granted Mrs. Greene innocent spouse relief from the joint and several liability. ( Id. ) The full liability of the Joint Master File was then transferred to a second separate Non-Master File account ("NMF 2") against Mr. Greene only. ( Id. ) Thus, the liability shown on the Joint Master File account was reduced to $0.00. ( Id. ) After Mrs. Greene received innocent spouse relief, "Mr. Greene's liability was tracked in the two separate assessment files, NMF 1 and NMF 2." ( Id. )
In 2012, the United States and Mr. Greene settled a refund suit for Mr. Greene's 1995 tax year. (Doc. 13-1 at 6). "The liability tracked in NMF 2 was paid in full" when $170, 124.00 of the settlement amount was offset against Mr. Greene's 1990 tax liability. (Doc. 17 at 5). Meanwhile, NMF 1 has an outstanding balance of $761, 101.46 with more interest accruing daily. (Doc. 13-1 at 6).
Mr. Greene filed the instant suit seeking a refund for the $170, 124.00 offset against NMF 2. (Doc. 1 at 5).

Greene v. United States, 2014 WL 6666996, at *1-2 (D. Ariz. Nov. 24, 2014).


A. Legal Standard

Generally, motions for reconsideration are disfavored and are appropriate only if: (1) the movant presents newly discovered evidence; (2) the Court committed clear error or the initial decision was manifestly unjust; or (3) an intervening change in controlling law has occurred. See Sch. Dist. No. 1J, Multnomah Cnty., Or. v. AC & S, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). A party should not file a motion to reconsider to ask a court "to rethink what the court had already thought through-rightly or wrongly." Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983). "No motion for reconsideration shall repeat in any manner any oral or written argument made in support of or in opposition to the original motion." Motorola, Inc. v. J.B. Rodgers Mech. Contractors, Inc., 215 F.R.D. 581, 586 (D. Ariz. 2003). Therefore, "[t]he Court will ordinarily deny a motion for reconsideration of an Order absent a showing of manifest error or a showing of new facts or legal authority that could not have been brought to its attention earlier with reasonable diligence." LRCiv 7.2(g)(1).

B. Analysis

In its motion for reconsideration, the United States does not contend that there is newly discovered previously unavailable evidence or that there has been an intervening change in controlling law. Rather, the United States argues that "the interpretation of the word assessment' was misapprehended by the Court with respect to application of the full payment rule." (Doc. 22 at 2). More specifically, the United States contends that the Court committed manifest error because "[t]he fact that the total tax liabilities for 1990 owed by the Plaintiff... are tracked in two separate accounts is not sufficient to allow him to pursue a refund [for one account] in district court." ( Id. at 5).

The United States argues that because Plaintiff paid only one Non-Master File (NMF) account in full, the Court does not have subject matter jurisdiction over this case. ( Id. ) In a previous motion, the United States expressly argued this point by representing to the Court that because the two NMF accounts together constitute Plaintiff's total tax liability for 1990, both accounts must be paid in full for the Court to have jurisdiction:

• "[Plaintiff's] total liability for tax year 1990 is thus computed by combining the balance of both NMF 1 and NMF 2." ...

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