failure to notify him under which law and regulations he is being sued and the government's failure to identify the type of tax being assessed against him amount to a violation of Due Process and strip this court of subject matter jurisdiction. Defendant further argues that, in bringing its suit, the government failed to follow the necessary procedures mandated by the Constitution, statute and regulations. Additionally, defendant alleges that because he is neither an employee of the federal government nor a resident of the District of Columbia, his income is not subject to federal taxation.
All of the defendant's arguments have been previously addressed and rejected by the court. See court's Order dated Sept. 27, 1993 denying defendant's motion to dismiss for lack of venue and jurisdiction and unlawful standing; court's Order dated Jan. 13, 1994 denying defendant's motion for reconsideration of the court's Sept. 27, 1993 order; court's opinion dated Feb. 6, 1995 addressing defendant's three motions to dismiss as beyond the statute of limitations and for failure to state a claim for which relief can be granted. This court has jurisdiction over the present action pursuant to 28 U.S.C. §§ 1340 and 1345, in conjunction with 26 U.S.C. §§ 7402(a) and 7403.
Furthermore, courts have routinely rejected arguments such as those made by defendant Jones with regard to being exempt from federal taxation, and held that the federal government has the power to tax the income of all United States citizens. United States v. Connor, 898 F.2d 942, 943-44 (3d Cir.) (Congress properly exercised its power to tax income, wages are income within the meaning of the Sixteenth Amendment, and arguments that wages are not taxable income have been unequivocally rejected), cert. denied, 497 U.S. 1029, 111 L. Ed. 2d 793, 110 S. Ct. 3284 (1990); United States v. Freeman, 71 A.F.T.R.2d 93-1272, 1275 (D.N.J.) (federal courts routinely reject tax protester arguments; the government has power to tax the income of all its citizens) (citing Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19 [3 A.F.T.R. 2926, 60 L. Ed. 493, 36 S. Ct. 236] (1916) (federal income tax imposed on citizens throughout nation) and United States v. Sloan, 939 F.2d 499, 501 [68 A.F.T.R.2d 5351] (7th Cir. 1991) (all individuals, freeborn and nonfreeborn, natural and unnatural alike, must pay federal income tax on their wages, regardless of whether they have requested, obtained or exercised any privilege from federal Government), cert. denied, 502 U.S. 1060, 112 S. Ct. 940, 117 L. Ed. 2d 110 (1992)), aff'd, 16 F.3d 406 (3d Cir. 1993), cert. denied, 114 S. Ct. 2150 (1994). See also Wilcox v. Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988) (rejecting claims that wages are not income and that paying taxes is voluntary); Coleman v. Commissioner, 791 F.2d 68, 70 (7th Cir. 1986) (rejecting arguments that wages are not taxable, that wages may not be taxed pursuant to the Sixteenth Amendment, and that the income tax is a "taking" in violation of the Fifth Amendment); Capps v. Eggers, 782 F.2d 1341 (5th Cir. 1986) (rejecting claim that wages are not taxable as income) (citations omitted); Connor v. Commissioner, 770 F.2d 17, 20 (2d Cir. 1985) (argument that wages are not taxable income is so frivolous that it is sanctionable).
The present action to reduce to judgment federal tax assessments made by the government involves defendant's income tax liability for the tax year of 1982. In paragraph 10 of the Amended Complaint, the government lists the dates on which the alleged assessments were made and the unpaid balances due on those dates. In support of its motion for summary judgment, the government has submitted a certified Form 4340, Certificate of Assessments and Payments. See Brief in Support of United States' Motion for Summary Judgment, Exhibit C to the Declaration of Charles M. Flesch. This Form identifies all relevant assessments made by the Internal Revenue Service against the defendant and any credits made to such assessments.
A Certificate of Assessments and Payments is entitled to a presumption of correctness. Freck v. Internal Revenue Service, 37 F.3d 986, 991-92 n.8 (3d Cir. 1994) ("Assessments are generally presumed valid and establish a prima facie case of liability against a taxpayer") (citations omitted); United States v. Mazzara, 530 F. Supp. 1380, 1382 (D.N.J. 1982) (affidavit by I.R.S. officer detailing defendant's tax liability is entitled to a presumption of correctness) (citing Psaty v. United States, 442 F.2d 1154, 1159 (3d Cir. 1971)), aff'd, 722 F.2d 733, 736 (3d Cir. 1983); Long v. United States, 972 F.2d 1174, 1181 (10th Cir. 1992) ("For purposes of granting summary judgment, a Certificate of Assessments and Payments is sufficient evidence that an assessment was made in the manner prescribed by § 6203 and Treas.Reg. 301.6203-1"); Geiselman v. United States, 961 F.2d 1, 6 (1st Cir.) (Certificate of Assessments and Payments is presumptive proof of a valid assessment and is frequently used to prove that an assessment has been made), cert. denied, 121 L. Ed. 2d 191, 113 S. Ct. 261 (1992); Hughes v. United States, 953 F.2d 531, 535 (9th Cir. 1992) (Certificate of Assessments and Payments can serve as proof that assessments were actually made); McCarty v. United States, 929 F.2d 1085, 1089 (5th Cir. 1991) (Certificate of Assessments and Payments is admissible evidence for purposes of summary judgment); United States v. Chila, 871 F.2d 1015, 1018 (11th Cir.) (Certificate of Assessments and Payments submitted by the government is accepted as presumptive proof of a valid assessment), cert. denied, 493 U.S. 975, 107 L. Ed. 2d 501, 110 S. Ct. 498 (1989); United States v. Nuttall, 713 F. Supp. 132, 135 (D. Del.) (assessments listed in Form 4340 are given presumptive effect), aff'd, 893 F.2d 1332 (3d Cir. 1989). Consequently, the government has established a prima facie case by providing the court with this Certificate. Psaty v. United States, 442 F.2d 1154, 1159-60 (3d Cir. 1971); Nuttall, 713 F. Supp. at 135. At trial, the burden of production and persuasion, at this point, would shift to the defendant. Psaty, 442 F.2d at 1160. However, because the case is presently before the court on a summary judgment motion, the defendant needs only to establish the existence of a genuine issue of material fact with regard to the validity or correctness of the assessments. Long, 972 F.2d at 1181 n.9 ("taxpayer has the burden of going forward with evidence and the burden of persuasion to overcome the presumption attaching to the Forms 4340") (citing Psaty v. United States, 442 F.2d 1154, 1160 (3d Cir. 1971)); United States v. Carson, 741 F. Supp. 92, 94 (E.D. Pa. 1990) (once presumption of correctness of assessments is established by Certificate of Assessments and Payments, burden of production and persuasion shifts to defendant taxpayer to show any errors) (citing Psaty, 442 F.2d at 1158-60); Nuttall, 713 F. Supp. at 135.
In his opposition papers, the defendant does not question either the correctness or the validity of the assessments. The defendant merely makes references to the statute of limitations argument raised in his Motion to Dismiss Count I as Beyond the Statute of Limitations. Defendant argues that the present collection action was brought after the statute of limitations had expired. Mr. Jones claims that letters sent to him by the government on June 9, 1983 and June 14, 1984 constitute the actual assessments from which the statute of limitations for any collection action should begin to toll. See Exhibits A and B to Defendant's Motion to Dismiss Count I Beyond Statute of Limitations. However, the June 9, 1983 letter is relevant only to a $ 500 penalty assessment, the government's claim to which has been dismissed. The June 14, 1984 letter cannot be construed as an assessment by the government. This letter neither assesses a deficiency against the defendant, nor does it demand that the defendant make payment in a specified amount to the I.R.S. The letter merely explains that the I.R.S. believes that an adjustment of Mr. Jones' tax liability is necessary, and details the procedures Mr. Jones should follow if he disagrees with the findings of the I.R.S. Additionally, the letter explains that the defendant's case will only be processed on the basis of this proposed adjustment if the I.R.S. does not hear from the defendant in 30 days. By no means can this letter be adjudged as an assessment against the defendant.
The above constitutes the only challenge made by defendant to the government's Certificate of Assessments and Payments. Because this challenge bears no merit and because defendant Jones has offered no evidence contesting the validity or correctness of the government's Certificate, there exists no issue of material fact preventing entry of judgment in favor of the government. Consequently, the court will enter judgment against defendant Jones on Count I of the government's Amended Complaint in the amount of $ 107,049.99, plus interest that has accrued and will accrue thereon from May 31, 1994, until this judgment is fully paid.
B. Count II - Fraudulent Conveyance
In Count II, the government seeks to set aside as a fraudulent conveyance a June 9, 1983 transfer of property by Mr. Jones to his wife, Janet Jones. Prior to the transfer, Mr. and Mrs. Jones owned the property located at 165 Sherman Avenue, Atco, New Jersey as tenants by the entirety. On June 9, 1983, Mr. Jones transferred his interest in the property to his wife for $ 10.00 and "love and affection." The government asserts that because this transfer was not supported by fair consideration, was intended to defraud creditors, and was made at a time when defendant Jones was insolvent, the transfer should be set aside under the New Jersey Fraudulent Conveyance Act. Defendant Jones opposes the government's motion for summary judgment and argues the following: (1) the government's claim is beyond the statute of limitations and thus fails to state a claim for relief;
(2) the government's claim is vague and thus fails to state a claim for relief;
(3) the transfer was not intended to defraud any creditors; and (4) the defendant was insolvent prior to the transfer in question. Defendant Janet Jones opposes the government's motion on the following grounds: (1) the transfer was made without any intent to defraud, hinder, delay or evade creditors; (2) the transfer was made as part of a marriage reconciliation in order to provide security to Mrs. Jones and ensure that she would not be left without a place to live; and (3) the government's claim is beyond the statute of limitations.
Because the allegedly fraudulent conveyance took place in 1983, the court must analyze the government's claim under the New Jersey Fraudulent Conveyance Act (currently repealed), and not under the more recently enacted Uniform Fraudulent Transfer Act which became prospectively effective as of January 1, 1989. Official Unsecured Creditors' Committee v. Rachles (In re S. Rachles, Inc.), 131 Bankr. 782, 787-89 (Bankr. D.N.J. 1991); Fleet v. Rhode (In re Fleet), 122 Bankr. 910, 915-16 (Bankr. E.D. Pa. 1990). Section 25:2-10 of the New Jersey Fraudulent Conveyance Act provides:
Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incurred without fair consideration.