Anthony Samango, Jr. v. United States ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 19-2682
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ANTHONY J. SAMANGO, JR.,
Appellant
v.
UNITED STATES OF AMERICA
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On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 2-17-cv-02484)
District Judge: Honorable Petrese B. Tucker
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Submitted Pursuant to Third Circuit L.A.R. 34.1
on April 15, 2020
Before: CHAGARES, SCIRICA, and ROTH, Circuit Judges
(Filed: October 29, 2020)
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OPINION*
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*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
SCIRICA, Circuit Judge
Anthony J. Samango, Jr., was assessed unpaid federal taxes by the Internal
Revenue Service for the 2008 tax year. The IRS determined that SS Frames
Corporation—where Samango was president and a shareholder—failed to pay its taxes
and that Samango was responsible. He challenged that assessment by suing the United
States in federal court, arguing that he was not responsible for the taxes and did not
willfully fail to pay them. The trial judge granted summary judgment to the government.
Because the IRS’s tax assessment is supported by a strong record, and Samango has not
met his burden to rebut that record, we will affirm.
I.
This case stems from a 2008 tax assessment levied against Samango by the IRS
under 26 U.S.C. § 6672. The IRS determined that Samango was responsible for SS
Frames’ failure to pay federal withholding taxes for its employees. SS Frames is a labor
contractor for which Samango was a shareholder and president during the relevant time
period.
In 2008, Samango’s primary construction company, Carson Concrete Corporation,
began subcontracting its labor from SS Frames. Samango had been the president of
Carson Concrete since 1977 and had been its sole shareholder since 2000. As president of
Carson Concrete, Samango had “oversight of everything,” signed all of Carson
Concrete’s state and federal tax returns, and he and his son were the sole signatories on
Carson Concrete’s checking accounts. Carson Concrete began using SS Frames for labor
2
to lower its workers’ compensation premiums, which had increased due to workplace
accidents involving Carson Concrete employees. As a new company without “bad
experience,” SS Frames’ premiums were half the cost.
Carson Concrete and SS Frames did not behave like separate companies. Although
SS Frames supplied Carson Concrete with labor for at least one major construction
project, no formal contract or other writing memorialized that agreement. Both
companies shared the same telephone number and business address, which SS Frames
occupied rent-free. Both companies shared employees, including Carson Concrete’s full-
time controller, who helped prepare Carson Concrete’s tax returns, and was listed as SS
Frames’ contact for state audits. The companies also shared a superintendent, who was
cited in a 2008 state report as “indicat[ing] that he does not know why there are two
separate organizations and stat[ing] that he draws no distinction” between Carson
Concrete and SS Frames employees. And importantly, both companies shared Samango
as a shareholder and—throughout 2008—as president.
Documents make clear that Samango was president of SS Frames and played a
major role in operating the company. In December 2007, Samango signed a corporate
resolution form stating that he was the president, secretary, and treasurer of SS Frames
and was authorized to open bank accounts for the company. And, in a 2008 form filed
with the Pennsylvania Department of Labor and Industry, Samango signed and stated,
under penalty of perjury, that he was the president, 100 percent owner, and the sole
officer of SS Frames who “overs[aw] [the] entire operations on a daily basis.”
3
Samango was involved in SS Frames’ finances—both directly and through Carson
Concrete. He signed and filed SS Frames’ federal tax return for all quarters of 2008, and
the state tax return for the first quarter of 2009. Carson Concrete, using the bank account
controlled by Samango, paid SS Frames’ employees’ gross wages, its state
unemployment taxes, its workers’ compensation premiums, and its union dues. Samango
did not, however, take any steps to ensure federal taxes were withheld and paid by SS
Frames.
Samango claims that there were other owners of SS Frames who were responsible
for paying federal taxes. He purportedly forgets the full names of the alleged owners, but
he does remember that they were “two minority individuals” and one was named “Jose.”
Nothing else in the record suggests the existence of the “two minority individuals” nor
lists them as owners or officers of SS Frames. Samango also claims that while he “may
have been an officer [of SS Frames] for a week,” it was only for the limited purpose of
applying for insurance and dealing with an issue that impacted Carson Concrete. But
Samango does not deny he signed multiple documents as president of SS Frames—
including tax returns—spanning from 2007 through 2009.
In 2014, the IRS assessed SS Frames’ unpaid taxes for 2008 against Samango—an
amount totaling $878,298.1 Prior to the assessment, an IRS revenue officer traveled to the
office shared by Carson Concrete and SS Frames to discuss the unpaid taxes. Samango
1
The IRS also assessed $254,924 for the 2009 tax year. During a claim for a refund,
Samango told an IRS officer that he had no knowledge of SS Frames. The IRS officer
abated the 2009 assessment, and though the officer tried to reverse that action when he
discovered it was an error, it was too late. Only the 2008 assessment remains at issue.
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refused to speak with the officer other than to say he had heard of SS Frames but was not
sure if he was an officer. The IRS officer followed up by sending an interview summons
to Samango and the controller of Carson Concrete, who also worked for SS Frames.
Neither came in for an interview.
Without a response to the summons, the IRS provided Samango with a proposed
assessment for SS Frames’ unpaid 2008 taxes. Again, Samango did not respond. The IRS
then formally imposed the assessment. At that point, Samango filed a claim with the IRS
contesting the assessment. The claim was denied.
Eventually, Samango sued the United States in the Eastern District of
Pennsylvania, seeking a refund of the 2008 assessment and damages. The government
counter-claimed with a request to reduce the 2008 tax assessment to a judgment with
interest. Both parties filed motions for summary judgment. The trial court denied
Samango’s motion and granted the government’s motion—entering judgment against
Samango for the taxes owed plus interest and penalties. Samango now appeals.
II.2
2
The trial court had jurisdiction under 28 U.S.C. § 1346(a)(1) and 28 U.S.C. § 1331. We
have jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over a grant of
summary judgment. Coolspring Stone Supply, Inc. v. Am. States Life Ins. Co., 10 F.3d
144, 146 (3d Cir. 1993). We apply the same standard as the trial court did. Blair v. Scott
Specialty Gases, 283 F.3d 595, 602–03 (3d Cir. 2002). Summary judgment is appropriate
when the moving party demonstrates that there is no genuine dispute of material fact and
the evidence establishes its entitlement to judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322–23 (1986). “In determining the existence of a disputed issue
of material fact on a motion for summary judgment, all inferences, doubts, and issues of
credibility should be resolved against the moving party.” Meyer v. Riegel Prods. Corp.,
720 F.2d 303, 307 n.2 (3d Cir. 1983).
5
On appeal, Samango contends the trial court wrongly determined that he did not
meet his burden of rebutting the IRS’s assessment. He argues his deposition testimony
sufficiently rebuts the evidence supporting the IRS’s assessment. His deposition
testimony, however, is conclusory and unsubstantiated. We will affirm the trial court.
Employers are required by law to withhold federal social security and income
taxes from the wages of their employees and pay those taxes to the government. 26
U.S.C. §§ 3102(a), 3402(a). Under 26 U.S.C. § 6672(a), “[a]ny person” required to pay
federal taxes who “willfully” fails to collect and pay or who “willfully” evades those
taxes is liable for the unpaid amount. The two conditions of § 6672 liability are (1) that
“the individual must be a ‘responsible person,’” and (2) that the “failure to pay the tax
must be ‘willful.’” Greenberg v. United States, 46 F.3d 239, 242 (3d Cir. 1994) (quoting
United States v. Carrigan, 31 F.3d 130, 133 (3d Cir. 1994)).
When the IRS assesses liability under § 6672, that assessment is granted a
“rebuttable presumption” of being correct. Brounstein v. United States, 979 F.2d 953, 954
(3d Cir. 1992) (citing Psaty v. United States, 442 F.2d 1154, 1160 (3rd Cir. 1971)); see
also United States v. Fior D’Italia, Inc., 536 U.S. 238, 242 (2002) (“It is well established
in the tax law that an assessment is entitled to a legal presumption of correctness . . . .”).
A taxpayer must rebut the presumption by a “preponderance of the evidence.” Psaty, 442
F.2d at 1160 (citation omitted). Therefore, if a taxpayer challenges a § 6672 assessment
in federal court, he bears the burden of providing sufficient evidence to show that the
assessment was incorrect because either he was not a responsible person or he did not
willfully fail to pay the tax. See Brounstein, 979 F.2d at 954.
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Here, Samango acknowledges that he has the burden to show the IRS’s assessment
was incorrect, but he provides only his own conclusory and unsubstantiated deposition
testimony in an effort to rebut clearly documented evidence. Typically, “conclusory, self-
serving affidavits are insufficient to withstand a motion for summary judgment.” See
Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 161 (3d Cir. 2009) (quoting
Blair v. Scott Specialty Gases, 283 F.3d 595, 608 (3d Cir. 2002)). That is especially true
in this case because Samango bears the burden—by a preponderance of the evidence—of
rebutting the IRS’s assessment that he was a responsible person and willfully failed to
pay taxes. See Brounstein, 979 F.2d at 954. As explained further, the record supporting
the assessment is strong, and the evidence Samango provides is inadequate to meet his
burden of rebuttal.
A.
A “responsible person” is someone who is “required to collect, truthfully account
for or pay over any tax due to the United States.” Greenberg, 46 F.3d at 242–43 (quoting
Carrigan, 31 F.3d at 133). “Responsibility is a matter of status, duty or authority, not
knowledge.” Quattrone Accountants, Inc. v. I.R.S., 895 F.2d 921, 927 (3d Cir. 1990).
And “[w]hile a responsible person must have significant control over the corporation’s
finances, exclusive control is not necessary.” Brounstein, 979 F.2d at 954. “A person has
significant control if he has the final or significant word over which bills or creditors get
paid.” Quattrone, 895 F.2d at 927. Additionally, more than one person can be
“responsible” for a particular employer. Id. at 926.
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 To determine whether an individual is a responsible person, we consider a
nonexclusive list of factors, which include:
(1) contents of the corporate bylaws, (2) ability to sign checks on the
company’s bank account, (3) signature on the employer’s federal quarterly
and other tax returns, (4) payment of other creditors in lieu of the United
States, (5) identity of officers, directors, and principal stockholders in the
firm, (6) identity of individuals in charge of hiring and discharging
employees, and (7) identity of individuals in charge of the firm’s financial
affairs.
Greenberg, 46 F.3d at 243 (quoting Brounstein, 979 F.2d at 954–55).
We perceive no error in the trial court’s analysis based on these factors or in its
conclusion that Samango failed to rebut the presumption that he was a responsible
person. In 2008, Samango was the president and a shareholder of SS Frames. He signed,
under penalty of law, a form stating that he had oversight over SS Frames’ “entire
operations on a daily basis.”3 Samango signed state and federal tax returns on behalf of
SS Frames. He was also president of Carson Concrete with “oversight of everything.”
Money paid by Carson Concrete on behalf of SS Frames was controlled by Samango, and
Carson Concrete paid SS Frames’ gross wages, workers’ compensation premiums,
unemployment taxes, and union dues. In fact, Carson Concrete and SS Frames were
practically indistinguishable, sharing office space and employees—including Carson
Concrete’s twenty-year controller who served in a similar role for SS Frames. When
3
In his brief, Samango incorrectly asserts that the record does not support that he had
oversight of SS Frames’ “entire operations.” In January 2008, Samango signed an
Application for Workers’ Compensation Coverage on behalf of SS Frames and as its
president. Item ten of the form asks for a “complete, detailed job description” of the
“corporate officers and/or owners.” The only job description states that the
“[p]resident”—meaning Samango—“oversees entire operations on a daily basis.”
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combining his actions and responsibilities as president of both SS Frames and Carson
Concrete, it is clear that Samango had significant control over SS Frames’ financial
affairs, making him a responsible person. Compare Greenberg, 46 F.3d at 243–44
(affirming a taxpayer had significant control of finances when taxpayer completed tax
forms, was an officer and minority shareholder, and signed checks), with Carrigan, 31
F.3d at 134 (reversing trial court’s determination that a taxpayer was a responsible person
because he never signed tax returns and had no access to corporate check books).
Samango fails to rebut the record that establishes him as a responsible person. He
contends he did not have significant control of SS Frames even though he was president.
In his deposition, he claimed that he was only president of SS Frames for the limited
purpose of working through insurance issues for the company. His theory offers no
explanation, however, for why he also signed tax documents for SS Frames or why the
relationship between Carson Concrete and SS Frames was such that the superintendent,
who worked for both companies, “dr[ew] no distinction” between them.
Samango also contends that he did not have control over SS Frames by alluding in
his deposition to “two minority individuals,” who allegedly owned SS Frames and were
the ones responsible for the failure to pay taxes. But Samango has not provided these
individuals’ full names, let alone any documentation listing them as owners and operators
of SS Frames. Even assuming these individuals were owners of SS Frames and were also
responsible persons, Samango still does not rebut the record. Companies can have more
than one responsible person, Quattrone, 895 F.2d at 926, and the existence of these two
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individuals does not rebut any of the documented evidence of responsibility, including
that Samango was president of SS Frames and signed its tax returns.
B.
Samango also contends that the trial court erred in finding that he “willfully”
failed to pay taxes. See 26 U.S.C. § 6672(a). Willfulness under § 6672 is either a
“voluntary, conscious and intentional decision” to pay other creditors rather than pay
taxes, Quattrone, 895 F.2d at 928, or a “reckless disregard” that the taxes will go unpaid,
Brounstein, 979 F.2d at 956. “Reckless disregard includes failure to investigate or correct
mismanagement after being notified that withholding taxes have not been paid.”
Greenberg, 46 F.3d at 244 (quoting Morgan v. United States, 937 F.2d 281, 286 (5th Cir.
1991) (per curiam)). Any payments to other creditors or bills, including wages, made
with knowledge that federal taxes are due establishes willfulness. See Greenberg, 46 F.3d
at 244.
Samango admits that he took no steps to ensure SS Frames withheld federal taxes.
Samango had been running Carson Concrete for over thirty years. He knew, or should
have known, that federal withholding taxes generally needed to be paid. As president and
a shareholder of SS Frames, Samango had oversight over the “entire operation.” He
signed tax forms for SS Frames, thereby acknowledging that he was involved in assessing
the company’s tax burdens and obligations. He also knew that Carson Concrete was
paying SS Frames’ various bills—including gross wages—but was not paying SS
Frames’ federal taxes. As president of SS Frames, Samango knew, or recklessly
disregarded, the company’s financial obligations, yet he took no steps to ensure payment
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of federal taxes. Taken in full, the record shows that Samango knew, or recklessly
disregarded, that SS Frames owed withholding taxes and was not paying those taxes. See
Brounstein, 979 F.2d at 956 (finding willfulness when taxpayer knew that taxes were due
by signing tax returns but continued to pay creditors other than the government).
Samango contends that his conduct was not willful because he did not use SS
Frames’ checks to pay its obligations4 and because SS Frames and Carson Concrete are
unrelated. But Samango again fails to provide any evidence, other than his deposition, to
rebut the clear record establishing him as SS Frames’ president with significant control
who knew—or recklessly disregarded—that federal taxes went unpaid. He also fails to
rebut the record showing that Carson Concrete and SS Frames were practically
indistinguishable, sharing an address and important employees—including Samango
himself. Thus, Samango has not rebutted the record showing that he willfully violated his
duties as a responsible person.
III.
For the foregoing reasons, we will affirm the trial court’s entry of summary
judgment in favor of the government.
4
In his deposition, Samango stated that he “didn’t sign any SS Frames checks” but added
a caveat that “if you have checks from SS Frames with my signature, . . . I did sign
them.”
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