            In the United States Court of Federal Claims
                                          No. 11-134T

                                    (Filed: August 21, 2013)

**********************************
                                              )       Claim for refund of taxes paid;
ROBERT M. HEGER,                              )       counterclaim for taxes allegedly due;
                                              )       summary judgment; RCFC 56; forfeiture
                       Plaintiff,             )       of fraudulent claims; 28 U.S.C. § 2514;
                                              )       proof of income received subject to
       v.                                     )       taxation
                                              )
UNITED STATES,                                )
                                              )
                       Defendant.             )
                                              )
**********************************

       Robert M. Heger, pro se, Bozeman, Montana.

        Gregory S. Knapp, Attorney, Court of Federal Claims Section, Tax Division, United
States Department of Justice, Washington, D.C., for defendant. With him on the briefs were
Kathryn Keneally, Assistant Attorney General, David I. Pincus, Chief, and Mary M. Abate,
Assistant Chief, Court of Federal Claims Section, Tax Division, United States Department of
Justice, Washington, D.C.

                                    OPINION AND ORDER

LETTOW, Judge.

        Plaintiff, Robert M. Heger, seeks to recover $312,116.11 in income taxes, penalties, and
interest paid for tax years 1996 through 2001. These funds were remitted to the Internal
Revenue Service (“IRS”) by a title company following the sale of an inherited property in 2008.
The United States (“the government”) has in turn filed a counterclaim for $36,025.17 in
additional taxes, penalties, and interest, alleging that Mr. Heger failed to pay required income tax
for the 2006 tax year. The court previously denied a motion for partial summary judgment filed
by the taxpayer. See Heger v. United States, 103 Fed. Cl. 261 (2012). Currently before the court
is the government’s motion for summary judgment on both Mr. Heger’s claim and its own
counter- claim. In support of its motion, the government contends that it has provided the court
with sufficient documentation to establish Mr. Heger’s liability for the taxes, penalties, and
interest at issue in both instances. Additionally, as a further ground for summary judgment on
Mr. Heger’s claim, the government argues that Mr. Heger has forfeited his claim for refund
through the operation of 28 U.S.C. § 2514 by making false representations at a level which
constitutes fraud. The government’s motion has been briefed and argued, and is now ready for
disposition.
                                       BACKGROUND1

        Mr. Heger generally objects to the assessment of federal income tax. See Pl.’s Opp’n to
Def.’s Mot. for Summary Judgment and Mem. in Support (“Pl.’s Opp’n”) at 4-5 (“[Mr.] Heger’s
core claim that his income, i.e., wages and salary, is not taxable income is his sincerely held
personal belief.”), ECF No. 55. From 1996 to 2001, Mr. Heger omitted to file tax returns with
the IRS. See Compl. ¶¶ 6-8; Def.’s Proposed Findings of Uncontroverted Fact in Support of its
Mot. for Summary Judgment (“Def.’s Proposed Findings”) ¶¶ 6, 11-12, ECF No. 50. In March
2008, Cornerstone Title Company (“Cornerstone”) issued two checks to the IRS in the amounts
of $311,640.36 and $475.75, which amounts had been assessed by the IRS for taxes, penalties,
and interest allegedly owed by Mr. Heger for the period of 1996 to 2001. Compl. ¶ 5;
Addendum to Pl.’s Mot. for Partial Summary Judgment (“Pl.’s Addendum”), Exs. B-1, B-2
(photocopy of checks issued by Cornerstone to IRS), ECF No. 21.2 These payments were made
from the proceeds of a sale of property belonging to Mr. Heger, to which the IRS had attached
liens. Compl. ¶ 5.

        Mr. Heger sought a refund of the amount disbursed by Cornerstone by submitting a letter
to the IRS Commissioner in Washington, D.C. on November 24, 2008. See Pl.’s Addendum, Ex.
A (letter from Mr. Heger to IRS Commissioner).3 In this letter, Mr. Heger claimed that he was
entitled to a full refund because he “did not have any taxable income” during the relevant period.
Id. After a year and a half passed with no response from the IRS, Mr. Heger made a request for
records from an IRS office in Chamblee, Georgia, invoking the Freedom of Information Act.
Notice of Errata, Ex. A (Letter from Mr. Heger to IRS District Director (Sept. 27, 2010)), ECF
No. 31. Mr. Heger sought in this letter to receive copies of notices of deficiency and proof of
mailing of these notices, related to the income taxes assessed by the IRS for 1996 through 2001.
Id. Again, the IRS did not respond. Heger, 103 Fed. Cl. at 262. At some point during the
interim between the 1996 through 2001 tax years and the present day, the IRS either lost or
destroyed most of its files relating to Mr. Heger’s tax assessments for those years. See Def.’s
Mot. for Summary Judgment (“Def.’s Mot.”) at 1-2, ECF No. 49.


       1
        The recitation of background information does not constitute findings of facts by the
court and is given solely to provide a context for deciding the current motions. Unless otherwise
noted, however, the circumstances appear to be undisputed.
       2
         Plaintiff’s Addendum was filed in connection with his motion for partial summary
judgment which was previously denied. See Heger, 103 Fed. Cl. at 266-68. At the time of the
earlier decision, “although the court strongly disfavors seriatim motions for summary judgment,”
the court invited “either party [to] move for summary judgment in the future if the party can
demonstrate, after adequate time for discovery, a record free of genuine disputes of material
fact.” Id. at 267 (citing Metropolitan Life Ins. Co. v. Bancorp Servs., L.L.C., 527 F.3d 1330,
1336-37 & n.3 (Fed. Cir. 2008)).
       3
        While many of Mr. Heger’s initial documents submitted to the IRS and, subsequently, to
the court, identify the amount of $311,640.36, Mr. Heger has since revised his request to
encompass the additional amount of $475.75 also remitted to the IRS by Cornerstone. See Pl.’s
Answer to Counterclaim ¶ 1, ECF No. 8.


                                                2
         On March 2, 2011, Mr. Heger filed the present action in this court, seeking to recover the
amount paid by Cornerstone to the IRS in discharge of the lien. The government answered
Mr. Heger’s claims and asserted a counterclaim of $36,025.17 for taxes allegedly left unpaid by
Mr. Heger in the 2006 tax year. See Def.’s Answer and Counterclaim, ECF No. 6. The
government alleges that Mr. Heger received income in 2006 derived from two distributions from
a life insurance annuity, which Mr. Heger failed to report to the IRS but which were reported by
the insurance company making the disbursements. Def.’s Mot. at 3.

        On August 23, 2011, Mr. Heger moved for partial summary judgment on his own refund
claims for the 1996 through 2001 period, presenting a two-pronged argument: first, that he had
no taxable income during those years, and second, that the IRS failed to provide notice of the
alleged deficiencies as is required prior to collection. Pl.’s Mot. for Partial Summary Judgment
at 1-2, ECF No. 9. On October 26, 2011, the government moved to dismiss Mr. Heger’s
complaint in part, pointing to Mr. Heger’s 2008 letter to the IRS Commissioner to show that he
raised only the no-taxable-income argument at the administrative level, and thus the court lacked
jurisdiction to address the lack-of-notice claim under the “substantial variance” doctrine. See
Def.’s Mot. to Dismiss Compl. in Part at 1, 4-5, ECF No. 23.

        On January 20, 2012, the court held that it lacked jurisdiction over the notice-of-
deficiency aspect of Mr. Heger’s claim and granted the government’s motion to dismiss the
complaint in part. Heger, 103 Fed. Cl. at 265. The court ruled that it had jurisdiction under the
Tucker Act, 28 U.S.C. § 1491(a)(1), over the surviving claims. See id. at 263-65. Regarding
Mr. Heger’s motion for partial summary judgment, the court concluded that Mr. Heger had failed
to bring forward “credible evidence” as required by 26 U.S.C. (“I.R.C.”) § 7491(a)(1) to support
his claim, but instead he had rested on bare assertions made in his pleadings and declarations,
many of which posited facts strenuously disputed by the government. Id. at 266. Accordingly,
the court denied Mr. Heger’s motion for summary judgment and urged the parties to pursue
discovery with an eye to possible motions for summary judgment going forward. Id. at 267-68.

      On December 7, 2012, the government filed a motion for summary judgment on both
Mr. Heger’s original claim and its own counterclaim.4 Briefing and a hearing on the motion has

       4
         On that same day, the government also filed a motion to amend its pleadings pursuant to
Rule 15(a)(2) of the Rules of the Court of Federal Claims (“RCFC”), to incorporate an
affirmative defense under the Forfeiture of Fraudulent Claims statute, 28 U.S.C. § 2514. Def.’s
Mot. for Leave to File . . . First Am. Answer and Counterclaim, ECF No. 51. This motion is
premised on discovery that took place following the court’s prior decision, which discovery the
government contends revealed documentation allegedly demonstrating Mr. Heger’s fraud in
statements to the IRS and to the court. Id. at 2.
        The court is not always inclined to grant such motions if the moving party has unduly
delayed action to amend its pleadings after gaining knowledge of the need for amendment. See
Rockwell Automation, Inc. v. United States, 70 Fed. Cl. 114, 124 (2006) (denying a similar
motion because the government delayed eight years in amending its filing). However, short of
such circumstances, the court “should freely give leave when justice so requires.” RCFC
15(a)(2); see Foman v. Davis, 371 U.S. 178, 182 (1962); Te-Moak Bands of W. Shoshone Indians
of Nev. v. United States, 948 F.2d 1258, 1260-61 (Fed. Cir. 1991); System Fuels, Inc. v. United


                                                 3
taken place, and accordingly the government’s motion for summary judgment is ready for
disposition.

                                 STANDARDS FOR DECISION

         Summary judgment can be granted only in the absence of a “genuine dispute as to any
material fact.” RCFC 56(a). Material facts are those which “might affect the outcome of the suit
under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For a
dispute to be genuine, it must be capable of being “reasonably . . . resolved in favor of either
party.” Id. at 250. If inferences must be drawn, the court must view them “in the light most
favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587-88 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962));
see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The proponent of the motion may
cite to “particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations . . . , admissions,
interrogatory answers, or other materials” in support. RCFC 56(c)(1)(A). “Where the record
taken as a whole could not lead a rational trier of fact to find for the non-moving party,” the court
will grant summary judgment. Matsushita, 475 U.S. at 587.

        In a suit for tax refund, generally “‘the taxpayer bears the burden of establishing the right
to a refund.’” Stobie Creek Invs., LLC v. United States, 82 Fed. Cl. 636, 663 (2008) (quoting
Abrahamsen v. United States, 228 F.3d 1360, 1364 (Fed. Cir. 2000)), aff’d, 608 F.3d 1366 (Fed.
Cir. 2010). In its prior opinion, this court noted both that Mr. Heger bears that burden but also
that the government is required first to make a prima facie case for its assessment of the pertinent
penalty. See Heger, 103 Fed. Cl. at 267 (“Mr. Heger bears the burden of proof. . . . This is so
even though the government faces a major obstacle of its own, i.e., that it reportedly has lost or
destroyed the administrative file for Mr. Heger’s tax years prior to 2001. . . . [W]hile the loss of
a taxpayer-plaintiff’s IRS administrative file ‘d[oes] not shift the burden of proof . . . , it d[oes]
require [the government] to show that a prima facie case for the assessment of the penalty
exist[s], i.e., that the assessment was not naked.’” (quoting Jenkins v. United States, 101 Fed. Cl.
122, 130 (2011))).

                                            ANALYSIS

                          A. Summary Judgment on Plaintiff’s Claim

        In moving for summary judgment in its favor on the original claim filed by Mr. Heger for
a refund of income taxes for the years 1996 through 2001, the government contends that its
assessments are far from “naked,” and that Mr. Heger has failed to meet his own burden of
establishing his right to a refund of the assessed and collected amounts. Def.’s Mot. at 7-11.
The court agrees.


States, 65 Fed. Cl. 163, 173 n.9 (2005). The government filed its motion within months of
obtaining the documents which form the basis of this affirmative defense; accordingly, the court
GRANTS the government’s motion to amend its pleadings to incorporate the affirmative defense
of forfeiture.


                                                  4
        In support of its motion, the government points to third-party payer information which
forms the basis of its assessment of income tax for those periods. Def.’s Mot. at 8. Although the
original IRS files have been lost or destroyed, the court will consider the submission of third-
party payer information as evidence of the basis for the income tax assessments for the purposes
of the summary judgment motion. See Jenkins, 101 Fed. Cl. at 130 (permitting the government
to present evidence demonstrating the existence of income and tax liability at trial, even though
the original IRS files had been lost).5 This documentation, supplied to the IRS by Mr. Heger’s
former employers, allows the IRS to calculate and show Mr. Heger’s income and thus income
tax liability, even though he did not himself report the income. See, e.g., Def.’s Mot., App., Ex.
8 (Decl. of Irene S. Tse, IRS Revenue Agent) ¶¶ 9-10; Ex. 9 at A-188 to -89 (Letter from IRS to
Mr. Heger (May 25, 2004) (explaining method of assessment for 2001 income tax)). Unlike the
proverbial emperor, the government in this case has clothed its assessments in substantial
raiment, consisting of documentation of Mr. Heger’s employment and receipt of taxable income
for each of the years encompassed in Mr. Heger’s original complaint. See Def.’s Mot., App., Ex.
1 (certificates of assessments of Mr. Heger’s income tax); Ex. 3 (NetApp, Inc. documentation of
Mr. Heger’s employment and income); Ex. 5 (Molecular Dynamics, Inc. documentation of Mr.
Heger’s employment and income).

        Mr. Heger has not refuted the documentation provided by the government of his
employment and income during the tax years 1996 through 2001. His response to the
government’s motion for summary judgment has instead focused on attacking the government’s
alternate ground for summary judgment, forfeiture (discussed infra). See Pl.’s Opp’n, passim.
Mr. Heger’s other submissions have objected to the admissibility of the government’s
documentation, discussed supra n.5, without addressing the veracity of the documentary
contents. See Pl.’s Second Opp’n, passim. In short, Mr. Heger has pointed to no material fact
which remains in dispute after the government’s demonstration of his employment and income
during the relevant time period. No rational trier of fact could find that Mr. Heger is entitled to a
refund. Accordingly, summary judgment in the government’s favor on the plaintiff’s original
claim is appropriate.

                                   B. Forfeiture of Plaintiff’s Claim

      In the alternative to its merits arguments, the government contends that it is also entitled
to summary judgment on Mr. Heger’s original claim pursuant to the Forfeiture of Fraudulent

       5
        Mr. Heger has objected to the government’s submission of many documents obtained by
the government during discovery, characterizing declarations as mere hearsay and
documentation as unverifiable and thus inadmissible. Pl.’s Second Opp’n to Def.’s Mot. for
Summary Judgment (“Pl.’s Second Opp’n”) at 3-7, ECF No. 63. Mr. Heger’s objection is
premised on a misapprehension of the pertinent rules. As noted supra, motions for summary
judgment may be supported by such things as “depositions, documents, electronically stored
information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or
other materials.” RCFC 56(c)(1)(A). Those materials need not necessarily meet the
requirements of the Federal Rules of Evidence for admissibility, but here, in actuality, all of the
materials supplied by the government could be admissible at trial, provided proper foundational
requirements were satisfied.


                                                  5
Claims statute, 28 U.S.C. § 2514. Def.’s Mot. at 11-14. Under the statute, a plaintiff forfeits his
or her entire claim against the United States if he or she “corruptly practices or attempts to
practice any fraud against the United States in the proof, statement, establishment, or allowance
thereof.” 28 U.S.C. § 2514. In the context of tax refund suits, this court has referred to this
statute as a “silver bullet,” holding that even any “attempted fraud against the United States” is
sufficient to cause forfeiture of the entire suit. Farkas v. United States, 57 Fed. Cl. 134, 146
(2003) (emphasis in original). Fraud perpetrated on behalf of one portion of the claim cannot be
severed from the remainder of the claim; fraud in one aspect of the case forfeits the whole. See
DeRochemont v. United States, 23 Cl. Ct. 87, 89-90 (1991) (citing Little v. United States, 152
F. Supp. 84, 87-88 (Ct. Cl. 1957)). Fraud must be shown by clear and convincing evidence,
which can be demonstrated by “placing the questioned documents and statements alongside well-
known and established facts.” Kamen Soap Prods. Co. v. United States, 124 F. Supp. 608, 620
(Ct. Cl. 1954).

        In the instant case, Mr. Heger has made misrepresentations to the court and to the
government in pursuit of his desired refund. Indeed, the central premise of his suit is one which
has proven to be patently false: that “any income [Mr.] Heger received for the years in question
was not taxable.” Compl. ¶ 7. Although Mr. Heger may genuinely object to assessment of
income tax, see Pl.’s Opp’n at 4-5, a conscientious objection to income tax does not excuse use
of false legal assertions to evade such taxes, see Cheek v. United States, 498 U.S. 192, 204-05
(1991). Mr. Heger’s protestations of no taxable income are plainly contradicted by the
documentation produced by the government, derived from multiple sources, of Mr. Heger’s
taxable income. Mr. Heger has contended that because he claims his no-taxation belief is
“sincerely held,” the question of whether he intended to commit fraud by denying receipt of
taxable income is one for trial. Pl.’s Opp’n at 4-6. The court need not delve into Mr. Heger’s
motivation because his misrepresentations extend into a number of other factual areas.

        In addition to claiming that he had no taxable income, Mr. Heger has steadfastly
contended that he had no income whatsoever, and furthermore that he was unemployed during
the relevant time periods. See, e.g., Def.’s Mot., App., Ex. 12 at A-245 (Mr. Heger’s responses
to Special Interrogatories). As discussed supra, Mr. Heger was in actuality employed by at least
two different companies during that time. See id., App., Ex. 3 (NetApp, Inc. documentation of
Mr. Heger’s employment and income); Ex. 5 (Molecular Dynamics, Inc. documentation of
Mr. Heger’s employment and income). Mr. Heger has held to this fiction even to the point of
propounding it directly to the court. Hr’g Tr. 20:15-18; 21:15-22 (Jan. 10, 2012). Placing
Mr. Heger’s statements side by side with the documentation produced by the government shows
explicitly and convincingly that Mr. Heger has attempted to mislead the court to further his quest
to avoid paying taxes. By doing so, Mr. Heger has forfeited the entirety of his original claim,
and the government correspondingly prevails on its alternative ground for summary judgment.




                                                6
                       C. Summary Judgment on Government’s Counterclaim

        The government has moved for summary judgment on its counterclaim of $36,327.92 for
taxes, penalties and interest derived from the 2006 tax year. Def.’s Mot. at 14-18.6 As in
previous years, Mr. Heger declined to file any income tax returns or documents with the IRS,
and consequently the IRS eventually prepared a “substitute for return” on his behalf. See id.,
App., Ex. 1 at A-31 to -34 (2006 tax year IRS certificate of assessment) (reflecting the
assessment and the lack of payment). The IRS audited Mr. Heger for the 2006 tax year and
discovered that Hartford Life & Annuity Insurance Co. (“Hartford”) had disclosed to the IRS
two distributions from an annuity to Mr. Heger during that time period. See id., App., Ex. 8 ¶¶
4-7 (Decl. of Irene S. Tse, IRS Revenue Agent). The government has produced to the court
documents reflecting the disbursements from Hartford Life, the first for the taxable amount of
$87,149.97 and the second for the taxable amount of $13,626.64, for a total taxable amount of
$100,776.61. Id., App., Ex. 7 at A-134 to -35 (Hartford Forms 1099-R); Ex. 12 at A-241 (Letter
from Hartford to Mr. Heger (Apr. 4, 2012) (confirming disbursement of annuity funds)).7

      Mr. Heger has produced no countervailing evidence. Instead, he has rested on
unsupported denials of the government’s claims. See Pl.’s Answer to Counterclaim.8 With the

       6
         The government sought a base tax assessment of $20,183.00, plus an additional penalty
of $4,541.18 for failure to timely file, pursuant to I.R.C. § 6651(a)(1), $4,743.00 for failure to
pay the tax, pursuant to I.R.C. § 6651(a)(2), $955.14 for failure to pay estimated tax, pursuant to
I.R.C. § 6654, and interest in the amount of $5,602.85 at the time of filing of the counterclaim,
pursuant to I.R.C. § 6601. See Def.’s Supplemental Br. in Support of its Mot. for Summary
Judgment, Ex. 19 (updated 2006 tax year IRS certificate of assessment), ECF No. 69.
        Although the counterclaim as filed sought $4,743.00 for late payment, that amount must
be increased pursuant to I.R.C. § 6651(a)(2), which imposes additional monthly penalties until
payment is made. The statute provides that

               unless it is shown that such failure [to pay tax on a return specified in
               I.R.C. § 6651(a)(1)] is due to reasonable cause and not due to willful
               neglect, there shall be added to the amount shown as tax on such return
               0.5 percent of the amount of such tax if the failure is for not more than
               1 month, with an additional 0.5 percent for each additional month or
               fraction thereof during which such failure continues, not exceeding
               25 percent in the aggregate.

I.R.C. § 6651(a)(2). The penalty amount has accrued to its ceiling in the interim between filing
of the counterclaim and this disposition. The court will treat the total requested relief as
accordingly adjusted to add the further amount of $302.75.
       7
         An additional $106,000 was included in the gross distribution, but that amount was not
taxable and is not at issue here. Def.’s Mot., App., Ex. 7 at A-134 to -35 (Hartford Forms 1099-
R).
       8
         Based on Mr. Heger’s responses to the government’s interrogatories, the government
apparently anticipated some argument regarding the taxable nature of his annuity income. See


                                                 7
exception of his general evidentiary objections to the documents proffered by the government,
his briefing on the government’s motion for summary judgment entirely avoids addressing the
government’s counterclaim. In the circumstances, the court finds that the government has
adequately supported its counterclaim, there are no genuine disputes as to any of the material
facts, and the government’s motion for summary judgment on its counterclaim is GRANTED.

                                        CONCLUSION

        For the reasons stated, the government’s motion for summary judgment on the plaintiff’s
original claim and on the government’s counterclaim is GRANTED. Mr. Heger is not entitled to
a refund of the taxes assessed and collected for the tax years 1996 through 2001. Additionally,
Mr. Heger must remit to the government payment of his tax liability for the tax year 2006, in the
amount of $36,327.92 plus any additional interest accruing to the date of his payment.

       The clerk is directed to enter judgment for defendant and against plaintiff as specified.

       No costs.

       It is so ORDERED.


                                                    Charles F. Lettow
                                                    Judge




Def.’s Mot. at 15-16. However, no such argument has materialized in any filings made to the
court and consequently it will not be considered.


                                                8
