United States District Court, D. Maryland
TIMOTHY J. HUDAK, et ux. Plaintiffs
THE UNITED STATES OF AMERICA, INTERNAL REVENUE SERVICE Defendant
MEMORANDUM AND ORDER
J. Garbis United States District Judge
Court has before it the United States' Motion for
Installment Payment Order & Ancillary Relief [ECF No.
242] and the materials submitted relating thereto. The Court
has held an evidentiary hearing. Factual findings contained
herein are based on the evidence presented and the reasonable
inferences drawn therefrom.
case, the Court entered the Judgment Order [ECF No. 166] on
May 1, 2014 determining that Plaintiff Timothy Hudak
(“Hudak”) had a liability to the Government for
the taxable periods 3Q07 through 4Q09, 1Q10, and 4Q10 as of
April 7, 2014, in the amount of $2, 358, 144.85. Hudak did
not pay the amount owed the Government causing the I.R.S. to
commence collection efforts.
regretfully, has engaged in actions to frustrate the
collection efforts. On June 18, 2017, Hudak submittead an
I.R.S. Collection Information Statement stating that he and
his wife were both employed by Old Dominion Insulation, Inc.
(“Old Dominion”). Hudak, a manager, was paid $12,
917.00 per month and Mrs. Hudak, a secretary, was paid $2,
917.00 per month. In December 2017, the I.R.S. levied on
Hudak's wages, obtaining four payments of $1, 814.00 per
week in December 2017 and January 2018, constituting part of
his take home pay. Hudak purportedly resigned from Old
Dominion employment effective January 5, 2018 stating in his
As you know in light of my tax issue I am losing about 95% of
my pay check each week to this problem. It does not make
financial sense for me to continue to work until this tax
issue is resolved. . . . I am offering my resignation. I will
contact you once my lawyers have reached a resolution in my
case and I have a clear picture of what needs to be done to
have my tax issue resolved. Only at this point does it make
sense for me to resume working.
Ltr., Dec. 29, 2017, ECF No. 242-5 at 6.
however, continued working for Old Dominion, nominally as a
“consultant” employed by a newly created company
formed by Mrs. Hudak. Old Dominion, no longer paying wages to
Hudak, ceased honoring the levy on Hudak's wages. Old
Dominion continued to pay Mrs. Hudak's firm for
Hudak's services a weekly amount of $3, 198.00, an amount
equal to that which had been Hudak's wages plus Old
Dominion's share of the Social Security FICA tax on that
Requirement to Pay
Government seeks an Order based upon 28 U.S.C. § 3204(a)
that provides that
if it is shown that the judgment debtor -
(1) is receiving or will receive substantial nonexempt
disposable earnings from self employment that are not subject
to garnishment; or
(2) is diverting or concealing substantial earnings from any
source, or property received in lieu of earnings; then . . .
the court may, if appropriate, order that the judgment debtor