United States District Court, D. Nevada
before the court is the United States of America's
(“the government”) motion for default judgment
against defendant Susan M. Hicks (“defendant”).
(ECF No. 9). Defendant has not filed a response, and the time
to do so has passed.
instant action arises from defendant's failure to file
income tax returns or pay tax on her income in 2011 and 2012.
(ECF No. 9 at 2). The IRS sent her statutory notices of
deficiency, and defendant did not petition the U.S. Tax
Court. Id. Pursuant to 26 U.S.C. § 6020(b), the
IRS made income tax assessments against defendant, which
remain unpaid. Id.
government filed the instant action against defendant on
August 20, 2018. (ECF No. 1). The government seeks to reduce
its tax assessments against defendant to a judgment and
foreclose on the federal tax liens against her home located
at 4338 Cobblehill Way, North Las Vegas, Nevada 89032.
Id. Defendant never responded, the government moved
for entry of clerk's default, and the clerk entered
default on December 10, 2019. (ECF Nos. 7; 8).
government now moves for default judgment. (ECF No. 9). . . .
a default judgment is a two-step process. Eitel v.
McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First,
“[w]hen a party against whom a judgment for affirmative
relief is sought has failed to plead or otherwise defend, and
that failure is shown by affidavit or otherwise, the clerk
must enter the party's default.” Fed.R.Civ.P.
55(a). Federal Rule of Civil Procedure 55(b)(2) provides that
“a court may enter a default judgment after the party
seeking default applies to the clerk of the court as required
by subsection (a) of this rule.”
choice whether to enter a default judgment lies within the
discretion of the court. Aldabe v. Aldabe, 616 F.3d
1089, 1092 (9th Cir. 1980). In the determination of whether
to grant a default judgment, the court should consider the
seven factors set forth in Eitel: (1) the
possibility of prejudice to plaintiff if default judgment is
not entered; (2) the merits of the claims; (3) the
sufficiency of the complaint; (4) the amount of money at
stake; (5) the possibility of a dispute concerning material
facts; (6) whether default was due to excusable neglect; and
(7) the policy favoring a decision on the merits. 782 F.2d at
1471-72. In applying the Eitel factors, “the
factual allegations of the complaint, except those relating
to the amount of damages, will be taken as true.”
Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th
Cir. 1977); see also Fed. R. Civ. P. 8(d).
considering the Eitel factors, the court finds good
cause to grant plaintiff's motion for default judgment.
Plaintiff will be prejudiced if default judgment is not
entered, as plaintiff will be left without any legal remedy
to recover defendant's tax assessments. See
Eitel, 782 F.2d at 1471-72. Further, there is no
possibility of a dispute concerning the material facts of
this case, as the record clearly indicated that defendant
failed to file a tax return or otherwise pay taxes in 2011
and 2012, she remains liable for the income tax assessments
for those years, and she has failed to file an answer
contesting the government's claims. See Id.
There is no indication in the record that defendant's
continued default is due to excusable neglect. See
all that remains is to determine what amount to award. Under
26 U.S.C. § 7402(a), the government is entitled to
reduce federal tax assessments to judgment. Although the
government bears the burden of proof in a tax-collection
action, evidence of tax assessments “establish a
prima facie case.” Oliver v. United States,
921 F.2d 916, 919 (9th Cir. 1990).
the government certifies its assessments against defendant by
providing two Form 4340s. (ECF Nos. 9-2; 9-3). These forms
lay the necessary foundation and give the assessments a
“presumption of correctness.” See United
States v. Janis, 428 U.S. 433, 440 (1976). Accordingly,
the court accepts the government's representation that
“[t]he current balance of these assessments, for all of
the tax types and tax periods at issue, is $74, 564.56 as of
December 31, 2019.” (ECF No. 9 at 8). Further, the
government is entitled by statute to collect statutory
additions, including interest and certain penalties. 26
U.S.C. §§ 6601(a), 6621, 6622(a), 6651, 6654.
light of the foregoing, the court will enter default judgment
in the amount of $74, 564.56 in favor of the government and
against defendant. The court will also assess the interest,
penalties, and statutory additions against defendant.
government also asks the court to order the judicial
foreclosure of defendant's home. The government notes
that “[b]y operation of law, federal tax liens arose in
favor of the United States at the time of assessment and
attached to all property of [defendant] pursuant to 26 U.S.C.
§§ 6321 and 6322.” (ECF No. 9 at 9). The
government perfected these liens when it recorded a notice of