United States District Court, D. Maryland
DAVID C. ROCKWELL, et al. Plaintiffs
UNITED STATES OF AMERICA Defendant
MEMORANDUM AND ORDER
J. Garbis United States District Judge.
Court has before it the United States' Motion to Dismiss
and Motion for Summary Judgment [ECF No. 9] and the materials
submitted relating thereto. The Court has held a hearing and
had the benefit of the arguments of counsel.
March 2009, Rumsey Road, LLC, a Maryland Limited Liability
Company ("Rumsey Road"), executed a promissory note
("the Note") establishing a liability to Plaintiff
David C. Rockwell in the principal amount of $450, 000.00, to
be paid on the maturity date of March 1, 2016. Interest, at
the rate of 6% per annum, was to be paid as follows:
• $27, 000.00 on execution of the note.
• $2, 250.00 on the first day of each month from April
2010 to March 2016.
May 30, 2014, Plaintiffs, David and Kathie Rockwell, had the
following unpaid principal balances of assessments outstanding
• § 6672 liabilities, 2008 and 4Q 2010 (Mr.
Rockwell only) $317, 322.18.
• Form 1040, 2005 (Mr. Rockwell only) $150, 563.22.
• Form 1041, 2007, 2010, 2011 (Mr. & Mrs. Rockwell)
30, 2014, the I.R.S. served a Form 668-W(ICS) "Notice of
Levy on Wages, Salary and Other Income" on Rumsey Road
with regard to the Rockwell's tax liabilities. The form
stated that the levy required Rumsey Road "to turn over
to us: (1) this taxpayer's wages and salary that have
been earned but not paid, as well as wages and salary earned
in the future until this levy is released, and (2) this
taxpayer's other income that you have now or for
which you are obligated. Mot. Ex. B, ECF No. 9-4 (emphasis
response, Rumsey Road paid the I.R.S. the $2, 250.00 of
interest then owed and stated that additional checks in that
amount would be sent monthly.
about November 20, 2014, Plaintiffs filed an Offer in
Compromise, Form 656, proposing to settle all their tax
liabilities for a total payment of $150, 000.00 of which $6,
250.00 was paid with the offer and the balance of $143,
750.00 was to be paid from the principal of the
when paid. The I.R.S. returned the Offer in Compromise by
letter of April 23, 2015, stating the following reasons for
• The initial payment made was less than 20% of the
• The offer was made in regard to two types of tax
liabilities whereas separate offers were required for each
• The source of the offered payment was identified as
the principal debt due on the Note, but that asset was
already subject to an outstanding levy.
Mot. Ex. C, ECF No. 9-5.
have filed the instant suit presenting claims in three
1. Violation of I.R.C. § 7122 (Compromises)
2. Violation of I.R.C. § 6331 (Levies)
3. "Improper Treatment of Levy on Fund Restricted by
Promissory Note" 4. There is no Fourth Count.
5. Attorneys' Fees and Costs
Compl., ECF No. 1.
instant motion, the Government seeks dismissal of Count One
pursuant to Rules 12(b)(1) and 12(b)(6), summary judgment on
Counts Two and Three pursuant to Rule 56, and ...