           RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206                        2     United States v. Donovan                     No. 02-3260
        ELECTRONIC CITATION: 2003 FED App. 0386P (6th Cir.)
                    File Name: 03a0386p.06                                DIVISION, APPELLATE SECTION, Washington, D.C., for
                                                                          Appellant. Irving Bell, Cleveland, Ohio, for Appellee.
UNITED STATES COURT OF APPEALS                                                                _________________
                  FOR THE SIXTH CIRCUIT                                                           OPINION
                    _________________                                                         _________________

 UNITED STATES OF AMERICA ,       X                                          BOGGS, Chief Circuit Judge. The United States appeals
                                   -                                      the order of summary judgment entered by the district court,
          Plaintiff-Appellant,                                            dismissing its complaint against Patrick Donovan, in which
                                   -
                                   -  No. 02-3260                         it sought to reduce to judgment certain tax assessments. For
           v.                      -                                      the following reasons, we reverse and remand to the district
                                    >                                     court so that it may enter summary judgment in favor of the
                                   ,                                      government.
 PATRICK M. DONOVAN ,              -
          Defendant-Appellee. -                                                                             I
                                 N
      Appeal from the United States District Court                           Donovan was a responsible officer at J.A. Clark
       for the Northern District of Ohio at Akron.                        Mechanical, Inc. (“Clark”) during 1985 and 1986. Clark
      No. 01-01457—James Gwin, District Judge.                            failed to pay certain employment tax liabilities that were
                                                                          withheld from employees’ wages. The IRS determined that
                    Submitted: June 17, 2003                              Donovan was a person responsible for Clark’s failure to pay
                                                                          the withheld taxes, and that he willfully allowed other
             Decided and Filed: October 31, 2003                          creditors to be paid ahead of the government. The IRS made
                                                                          an assessment against Donovan “for unpaid tax liabilities for
 Before: BOGGS, Chief Circuit Judge; GILMAN, Circuit                      trust fund related penalties,” pursuant to I.R.C. § 6672. The
         Judge; and MARBLEY, District Judge.*                             assessment was made on March 16, 1989 in the amount of
                                                                          $154,570.13.
                      _________________
                                                                             The government had ten years after assessment to bring suit
                            COUNSEL                                       to collect the tax liability, unless an exception to the ten-year
                                                                          statute of limitations existed. I.R.C. § 6502(a)(1). The statute
ON BRIEF: Robert J. Branman, David English Carmack,                       of limitations could be extended by an agreement in writing
UNITED STATES DEPARTMENT OF JUSTICE, TAX                                  by the IRS and Donovan before the expiration of the ten-year
                                                                          limit. I.R.C. § 6502(a)(2). Several months prior to March 16,
                                                                          1999, the date the statute of limitations would expire,
                                                                          Donovan made the IRS an offer in compromise on IRS Form
    *
     The Honorable Algenon L. Marbley, United States District Judge for
the Southern District of Ohio, sitting by designation.

                                  1
No. 02-3260                    United States v. Donovan        3    4    United States v. Donovan                     No. 02-3260

656. Form 656 contains an explicit agreement by which the           judgment in favor of Donovan was proper. The government
statute of limitations is extended.                                 timely appealed.
   On April 18, 2000, Donovan sent the IRS a withdrawal of                                        II
his offer in compromise. The IRS sent a return letter, dated
April 28, 2000, acknowledging the withdrawal of the offer,            Summary judgment is appropriate when the evidence
stating that “[y]our offer is considered withdrawn as of            submitted shows “that there is no genuine issue as to any
04/18/00.”                                                          material fact and that the moving party is entitled to a
                                                                    judgment as a matter of law.” Fed. R. Civ. P. 56(c). The
   On June 13, 2001, the government filed this suit. The total      district court correctly concluded that no genuine issues of
amount due as of May 18, 2001 was $466,936.21. Donovan              material fact remained, but that the sole question at issue was
filed a motion for summary judgment, arguing that the suit          a question of law: when the statute of limitations began to
was barred by the statute of limitations. The district court        run. This court reviews the grant of summary judgment de
entered summary judgment in favor of Donovan.                       novo, using the same standard as the district court. Cornist v.
                                                                    B.J.T. Auto Sales, Inc., 272 F.3d 322, 326 (6th Cir. 2001).
  The dispute centers on when the statute of limitations began
to run again: (1) on April 18, 2000, the date Donovan faxed            The offer in compromise was memorialized on IRS Form
his letter withdrawing the offer, and the date the return letter    656. Form 656 contains several provisions relevant to this
indicated that his offer was considered withdrawn; or               appeal. Item 8 outlines the conditions to which Donovan
(2) April 28, 2000, the date the IRS acknowledged the               agreed by submitting the offer. Paragraph (e) of that item
withdrawal in writing. Donovan argues that the period the           reads: “I/we waive and agree to the suspension of any
offer was pending ended on April 18, which would cause the          statutory periods of limitation (time limits provided for by
statute of limitations to expire on June 4, 2001. The               law) for IRS assessment and collection of the tax liability for
government argues that the period the offer was pending             the tax periods identified in item (5).” Paragraph (m) reads:
expired on April 28, 2000, and that the statute of limitations      “The offer is pending starting with the date an authorized IRS
ended on June 14, 2001.                                             official signs this form and accepts my/our waiver of the
                                                                    statutory periods of limitation. The offer remains pending
  The district court stated in its opinion that Form 656 was a      until an authorized IRS official accepts, rejects or
contract, and thus had to be interpreted under contract law. It     acknowledges withdrawal of the offer in writing.” The
found that the terms were clear and unambiguous, and that           immediately following paragraph, paragraph (n), reads: “The
there were no issues of fact to be determined. The court went       waiver and suspension of any statutory periods of limitation
on to state that the contract’s interpretation required the court   for assessment and collection of the amount of the tax liability
to discern the parties’ intent. It concluded that the intent of     described in item (5), continues to apply: while the offer is
the parties was to interpret the agreement terms to comport         pending (see (m) above) . . . and for one additional year
with the IRS’s standard practice, as the agreement was on an        beyond each of the time periods identified in this paragraph.”
IRS standard form. The court concluded that IRS’s standard
practice was to consider the withdrawal of a settlement offer         The government argues that the offer in compromise was
effective as of the date the taxpayer wrote his letter of           “pending” until the withdrawal was acknowledged, and the
withdrawal. Therefore the suit was untimely and summary             exact language of the acknowledgment letter does not affect
No. 02-3260                    United States v. Donovan        5    6     United States v. Donovan                     No. 02-3260

the form waiving the statute of limitations. It cites the           terms of Form 656. We find persuasive the government’s
language of paragraph (m), which reads: “The offer remains          argument that the date of the effective withdrawal of the offer
pending until an authorized IRS official . . . acknowledges         is a different matter from that of the date when the offer is no
withdrawal of the offer in writing.” It argues that some            longer “pending” pursuant to paragraph (m). It may indeed
affirmative action by the government, accepting the offer,          be true, as the district court states, that “the withdrawal of an
rejecting the offer, or acknowledging its withdrawal, is            offer in compromise is effective as of the date the taxpayer
required in order to set the statue of limitations running again.   writes his letter of withdrawal.” That judgment, however,
The government argues that the form letter sent to Donovan          would be true as a matter of substantive contract law. See
contains the effective withdrawal date merely to indicate that      Restatement (Second) of Contracts § 42 (1981). However,
the government can no longer accept the offer in compromise,        the statute of limitations question turns on when the offer
and that this has nothing to do with when the statute of            ceases to be “pending” under paragraph (m) of Form 656.
limitations begins to run again.                                    The latter controls when the statute of limitations begins to
                                                                    run again.
  The question of whether the language of an agreement is
ambiguous is a question of law. Parret v. Am. Ship Bldg. Co.,         An objection could be made that the government could
990 F.2d 854, 858 (6th Cir. 1993). Once the language of a           control and manipulate the statute of limitations simply by
contract has been held to be ambiguous, the interpretation of       failing to acknowledge the withdrawal of an offer. That
such language is a question of fact that turns on the intent of     argument, which we do not address here, could arise in a
the parties. Ibid. A court, however, may not use extrinsic          future case if there appeared to be a factual basis for it. Here,
evidence to create an ambiguity; the ambiguity must be              however, the government cannot possibly be charged with
“apparent on the face of the contract.” Schachner v. Blue           unreasonable delay in sending an acknowledgment of the
Cross and Blue Shield of Ohio, 77 F.3d 889, 893 (6th Cir.           withdrawal seven business days after receiving a letter
1996).                                                              withdrawing the offer in compromise.
   The district court first found that the terms of the contract      The district court erred in granting summary judgment to
were clear and unambiguous. Having done so, it was error for        Donovan. The statute of limitations began to run again on
it to go on and attempt to discern the intent of the parties.       April 28, 2000, the date of the acknowledgment in writing of
The intent of the parties is best determined by the plain           the withdrawal of the offer in compromise. The suit is not
language of the contract. United States v. Hodgekins, 28 F.3d       untimely.
610, 614 (7th Cir. 1994) (holding that extension of the statute
of limitations on IRS Form 2750 is given effect in accordance                                     III
with its plain meaning).
                                                                      For all of the reasons set forth above, we REVERSE and
  While we recognize that Form 656 could have been more             REMAND to the district court with instructions to enter
clearly drafted, and perhaps should be, the key language of         summary judgment in favor of the government.
Form 656 – that the “offer remains pending until an
authorized IRS official . . . acknowledges the withdrawal of
the offer in writing” – is unambiguous on its face. The IRS
acknowledgment letter itself does not contradict the plain
