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Mirando v. United States

United States District Court, Sixth Circuit

September 21, 2013

MICHAEL A. MIRANDO, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

OPINION & ORDER [Resolving Docs. 20, 21, and 24]

JAMES S. GWIN, District Judge.

Plaintiff Mirando brought this action seeking a refund of taxes paid to the Internal Revenue Service ("IRS"). For the reasons that follow, the Court GRANTS Defendant's United States motion to amend their answer. The Court also GRANTS Defendant United States' motion for summary judgment and DENIES Plaintiff Mirando's motion for summary judgment.

I. Background

On July 25, 2001 Plaintiff Mirando pled guilty to mail fraud, money laundering, and income tax evasion for the 1995 and 1996 tax years.[1] Mirando was incarcerated until July 2003.[2] Following Mirando's release, the IRS assessed tax, penalties, and interests with respect to Mirando's unpaid federal income taxes for the years 1995, 1996, 2000, and 2004.[3]

On May 22, 2007, Mirando paid $141, 735.31 towards his 1995 federal income tax liability.[4] The same day Mirando also paid $155, 566.12 towards his 1996 federal income tax liability.[5] On June 29, 2007, Mirando paid $57, 732.48 towards his 2000 federal income tax liability.[6]

On July 18, 2007, the United States indicted Mirando for conspiracy to defraud the United States and tax evasion in connection to unpaid income tax assessments for 1995, 1996, 2000, and 2004.[7] On August 21, 2007, Mirando entered a plea agreement with the United States. With that agreement, Mirando pled guilty to all five counts in the indictment.[8] The plea agreement states that the parties:

agree and stipulate that the following facts would have been established beyond a reasonable doubt at a trial in this matter:... after Mirando's release from the custody of the Bureau of Prisons, the IRS assessed tax, interest and penalties for Mirando's taxes due for the 1995 and 1996 tax years as well as for unpaid liabilities for the 2000 and 2004 tax years. As of June 29, 2007, the total tax liability, including interest and penalties, amounted to $448, 776.13.[9]

On or about April 7, 2008, Mirando and his ex-wife, Sharon Smigel, filed an Amended U.S. Individual Income Tax Return, Form 1040X, for 1996, claiming an overpayment of $54, 122.00.[10] The same day, Mirando and Smigel also filed an amended tax return for 2000, claiming an overpayment of $32, 332.00.[11] On or about August 22, 2008, Mirando and Smigel filed an amended tax return for 1995, claiming an overpayment of $38, 871.00.[12]

On October 7, 2008, the IRS disallowed Mirando and Smigel's claim for a $38, 871.00 refund for the 1995 tax year.[13] On March 12, 2012, the IRS disallowed Mirando and Smigel's claim for a $54, 122.00 refund for the 1996 tax year.[14] On August 1, 2011 the IRS disallowed Mirando's claim for a $32, 332.00 refund for the 2000 tax year.[15]

On January 31, 2013, Plaintiff Mirando filed this action against the United States seeking a refund for the taxes he paid in 1995, 1996, and 2000.[16]

II. Defendant United States' Motion to Amend Answer

Before turning to the Defendant United States' motion for summary judgment, the Court first decides whether the United States waived the affirmative defense of estoppel. Plaintiff Mirando says that the United States waived the affirmative defense of estoppel under Civil Rule 8(c).[17] Rule 8(c) requires a party responding to a pleading to "affirmatively state any avoidance or affirmative defense, including... estoppel, ... [or] res judicata...."[18] The United States failed to raise the estoppel affirmative defense under Rule 8(c) by failing to raise the defense in its answer.[19]

However Rule 15(a)(2) of the Federal Rules of Civil Procedure allows a party to amend a complaint with "the court's leave" and directs the court to "freely give leave [to amend] when justice so requires."[6] Rule 15(a)(2) ensures that a case is tried on its merits "rather than [on] the technicalities of the pleadings."[7] The grant or denial of a request to amend a complaint is left to the broad discretion of the trial court.[8] A grant of leave to amend is appropriate, except for the reasons of "undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, [or] undue prejudice to the opposing party by virtue of allowance of amendment."[9]

On September 6, 2013, Defendant United States moved for leave to amend its answer to Plaintiff Mirando's complaint.[10] The United States sought an amendment to set out ...


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