United States v. Vacante (717 F. Supp. 2d 992, 2010)

MEMORANDUM DECISION RE DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT (Doc. 105) AND MOTION TO DISMISS (DOC. 124); PLAINTIFF UNITED STATES OF AMERICA’S MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 119)

OLIVER W. WANGER, District Judge.

I. INTRODUCTION.

Plaintiff United States filed this action to reduce federal tax assessments to judgment and foreclose federal tax liens on real property on June 10, 2008. The tax assessments at issue are against husband and wife Frank and Ute Vacante and their alleged alter egos, Central Valley Insurance Services, Inc. (“CVIS”), and Instant Services, Inc.

Before the Court for decision are several motions. The United States moves for summary judgment against Defendants Frank Vacante and Ute Vacante, proceeding pro se, seeking to reduce to judgment individual tax liabilities for tax years 2000 and 2004. In addition to reducing to judgment the individual tax liabilities assessed against Frank and Ute Vacante, Plaintiff moves to reduce to judgment Frank Vacante’s Form 941 Employment Tax Liabilities for the tax periods ending June 30, 1993, September 30, 1993, December 31, 1993, March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994; Plaintiff also seeks to reduce to judgment Frank Vacante’s Form 940 Federal Unemployment Tax (“FUTA”) liabilities for the tax periods ending December 31, 1993 and December 31,1994.

Pro se Defendants’ first motion, filed on November 30, 2009, seeks entry of summary judgment on each cause of action contained in the Second Amended Complaint (“SAC”). Defendants argue that summary judgment is appropriate because they did not have the ability to pay CVIS’s taxes, did not have knowledge of the past due amounts, and did not take part in the financial decisions of CVIS.

Defendants’ second motion, filed on December 16, 2009, also seeks to dismiss the entire SAC on grounds that: (1) Defendants were denied their due process rights during an unidentified appeals proceeding; (2) Defendants have a binding pre-nuptial agreement; (3) Revenue Officers Randy Reese and John Certini made material misrepresentations and false statements during their investigations; and (4) IRS manager Martha Rodriguez failed to properly supervise Revenue Officers Reese and Certini.

Oral argument on these motions was held on February 26, 2010, during which Mr. Vacante requested an extension of time to file a supplemental opposition to the United States’ motion. Mr. Vacante’s request was granted and the Court set a supplemental briefing schedule on the United States’ summary judgment motion only. Although the parties’ arguments in the original and supplemental briefing are largely the same, there is one important distinction: Based on the employment tax figures provided by Mr. Vacante in his supplemental opposition, the United States reduced his Form 941 tax liabilities for the seven tax quarters in 1993 and 1994. The government also recalculated Mr. Vacante’s Form 940 tax liabilities for the 1993 and 1994 tax years. However, the tax adjustments were limited to Mr. Vacante’s employment tax liabilities, i.e., the figures did not impact or reduce the Vacantes’ individual income tax liabilities for tax years 2000 and 2004.

II. FACTUAL BACKGROUND.

This case arises out of the government’s attempt to reduce to judgment certain federal tax assessments made against Frank Vacante, Ute Vacante, CVIS and Instant Services, Inc., and to foreclose federal tax liens arising from federal tax liabilities against five parcels of property owned by the Vacantes.

A. The Vacante’s Insurance Businesses

Frank and Ute Vacante (“the Vacantes”), husband and wife have, since 1987, owned and operated a number of insurance businesses beginning in the 1980’s. (F. Vacante Dep. at 26:20-30:9, 34:5-35:24.) In 1993 and 1994, Frank Vacante’s insurance business operated as a sole proprietorship — VIF Insurance — and employed several individuals, including Ute Vacante, Cynthia Burris and Dan Belew III. (PSUF 15, 29-33; Doc. 145, 11:2-11:3.) In 1995, the Vacante’s incorporated the insurance business as Central Valley Insurance Services, Inc. (F. Vacante Dep. at 68:5-68:10.) The California Department of Insurance closed Central Valley Insurance Services, Inc. in 2001, at which time it was absorbed by Instant Services, Inc., an existing real estate company owned by the Vacantes. (Id. at 70:5-70:12, 255:3-257:12.) The Vacantes operated Instant Services, Inc. from 2001 through 2005, issuing a number of insurance policies and engaging in other financially-related transactions.

Following an investigation into the Vacantes’ delinquent taxes, the IRS assessed employment tax liabilities and penalties against Frank Vacante relating to VIF Insurance’s outstanding payroll liabilities for seven tax periods from June 30, 1993 through December 31, 1994. The IRS determined that Frank Vacante failed to properly assess and pay his federal employment taxes — Form 940 and 941— based on his 1992 Form 1040 tax return, Ute Vacante’s 1994 W-2 and Form 1040 tax return, the business records of CPA Daniel Burke, and the deposition testimony of Cynthia Burris and Dan Belew III. The IRS’s investigation also determined that the Vacantes failed to properly pay their individual income taxes for the 2000 and 2004 tax years.

At oral argument on February 26, 2010, Mr. Vacante disputed these “estimated” amounts, and requested an extension of time to oppose the United States’ motion. On March 12, 2010, as part of his supplemental briefing, Mr. Vacante provided figures for wages paid to workers Dan Belew and Cynthia Burris by VIF Insurance in 1993 and 1994. He described the payments as “commissions.” According to Mr. Vacante, Mr. Belew and Ms. Burris were paid $26,095-$16,495 and $9,600 — in 1993. As to the 1994 tax year, Mr. Vacante contends that the two employees were paid commissions of $17,479 (Mr. Belew) and $9,600 (Ms. Burris), for a total of $27,079.

The United States accepts Mr. Vacante’s tax figures for 1993 and 1994, however, it contends that Mr. Vacante omits $75,000 in wages paid to Mrs. Vacante in 1994. The United States contends that Mrs. Vacante signed, under penalty of perjury, a bank loan document stating that she “received $75,000 in wages from VIF insurance in 1994.” The United States also submitted VIF Insurance’s W-2 for 1994, which stated that Ute Vacante received $75,000 in wages from VIF insurance in 1994. According to the United States, the operative wage figures for the 1993 and 1994 tax years are $26,095 and $102,079. The $26,095 and $102,079 paid in wages are the foundation for Mr. Vacante’s 1993 and 1994 employment tax liabilities (Form 940 and 941).

B. Form 10k0 Tax Liabilities For Tax Years 2000 & 200k

1. 2000 Tax Year

In late 2006, the IRS, pursuant to 26 U.S.C. § 6020(b), assessed income tax liabilities and penalties against Frank Vacante and Ute Vacante for the 2000 tax year. (Doc. 120, Reece Dec. ¶ 4.) The assessments were based on Frank and Ute Vacante’s failure to file Form 1040 Individual Tax Returns for the tax year ending December 31, 2000. (Id.)

On April 7, 2008, the IRS received the Vacantes’ Joint Form 1040 Individual Tax Return for the tax year ending December 31, 2000. (PSUF 1.) The IRS accepted the Vacantes’ untimely return and abated the earlier assessments to the extent they conflicted with the joint return. (Reece Dec. ¶ 4.) The only offset to the Vacantes’ 2000 tax liability was a $1.07 overpayment applied by the IRS on March 28, 2007. (Doc. 120, Reece Dec. ¶ 6.)

On November 16, 2009, the IRS determined that Frank and Ute Vacante failed to make estimated income tax payments for the 2000 tax year and issued a “Form 4340, Certificate of Assessments, Payments and Other Specified Matters for Frank A & Ute G. Vacante for U.S. Individual Income Tax Return (Form 1040), for the tax period ending December 31, 2000.” (Reece Dec. ¶ 6; Doc. 120-3.) The Certificates of Assessments (known as “Form 4340s”) detail the amount in taxes the IRS believes the Vacantes owe for the 2000 tax year, as well as any penalties, costs, and interest assessed to the Vacantes due to their failure to make timely payments. (Id.) As of December 1, 2009, the total outstanding balance of the federal income tax liabilities due from Frank and Ute Vacante for the 2000 tax year, including interest, is $7,102.58. (Reece Dec. ¶ 26; Doc. 121-3.)

Defendants dispute the accuracy of the IRS assessments, arguing that their individual income tax issues were summarily resolved pursuant to a $52,064.67 check they sent to the IRS on October 29, 2004. According to the United States, however, the $52,064.67 was used to satisfy the Vacantes’ outstanding tax liabilities for the 1993-1999 and 2001 years. It contends that the Vacantes’ 2000 and 2004 tax liabilities were not satisfied by the October 29, 2004 payment.

2. 2001 Tax Year

On June 5, 2007, the IRS received the Vacantes’ Joint Form 1040 Individual Tax Return for the tax year ending December 31, 2004. (PSUF 9.) After reviewing the joint return, the IRS determined that Frank and Ute Vacante failed to make sufficient income tax payments for the 2004 tax year; the only payments made toward Frank and Ute Vacante’s individual income tax liabilities for the 2004 tax year were $1,134.00 in withholdings. (PSUF 10-11.)

On March 11, 2008, the IRS issued a “Form 4340, Certificate of Assessments, Payments and Other Specified Matters for Frank A & Ute G. Vacante for U.S. Individual Income Tax Return (Form 1040), for the tax period ending December 31, 2004.” (Doc. 120-5.) The Form 4340s detail the amount in taxes the IRS asserts the Vacantes owe in taxes for the 2004 tax year, as well as any penalties, costs, and interest assessed to the Vacantes due to their failure to make timely payments. (Id.) The assessments were based on Frank and Ute Vacante’s failure to timely pay their individual income tax liabilities and for late-filing their Form 1040 tax Return. (PSUF 12-13.) As of December 1, 2009, the total outstanding balance of the federal income tax liabilities due from Frank and Ute Vacante for the 2004 tax year, including interest, is $4,258.17. (Reece Dec. ¶ 27; Doc. 121-4.)

Defendants acknowledge a $2,115.00 federal tax liability for the 2004 tax year. Nevertheless, they dispute the accuracy of their liability on grounds that the IRS “levied the Vacante’s bank accounts and applied the money to items not owed by the Vacante’s.” (Doc. 145, 10:21-10-52.) The allocation and distribution of levy payments is discussed in § V(A)(3), infra.

C. Form 9kl Tax Liabilities — Frank Vacante

IRS records indicate that Frank Vacante did not file Form 941 Employment Tax Returns for his sole proprietorship for the tax periods ending June 30, 1993, September 30, 1993, December 31, 1993, March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994. According to the United States, Frank Vacante employed several individuals during this time, yet failed to make federal tax deposits of withheld income and FICA tax. Mr. Vacante, however, maintains he was not required to withhold or pay Form 941 taxes because his employees paid their own self-employment taxes during the 1993 and 1994 tax years. He claims the employees in question were treated as “independent contractors” and paid “commissions.”

Because Frank Vacante did not file Form 941 Employment Tax Returns for his sole proprietorship for the 1993 and 1994 tax years, the IRS calculated the employment taxes based on wages paid by Frank Vacante in 1992 and other third party information. However, the United States recalculated Mr. Vacante’s Form 941 employment tax liabilities for tax year 1993 based on the documentation produced by Mr. Vacante on March 12, 2010. According to the United States, the operative wage figures for the 1993 and 1994 tax years are $26,095 and $102,079.

1. 1993

On December 13, 2007, the IRS issued a “Form 4340, Certificate of Assessments, Payments and Other Specified Matters for Frank Vacante, Frank Vacante Insurance for Employer’s Quarterly Federal Tax Return (Form 941),” for the tax periods ending June 30, 1993, September 30, 1993, and December 31, 1993. (Docs. 120-8 to 120-10.) Because Frank Vacante failed to file Form 941 Employment Tax Returns or to pay withholding taxes for his sole proprietorship for the 1993 tax year, the IRS calculated the employment taxes based on the wages paid by Frank Vacante in 1992. (PSUF 17.) However, the United States recalculated Mr. Vacante’s Form 941 employment tax liabilities for tax year 1993 pursuant to the documentation produced on March 12, 2010 (i.e., wages of $26,095).

As of December 1, 2009, the total outstanding balance of the Form 941 tax liabilities due from Frank Vacante for the June 30, 1993, September 30, 1993, and December 31, 1993 tax periods, including interest, is $24,241.28. (Doc. 153-2, ¶¶ 10-13.)

2. 199k

On December 13, 2007, the IRS issued a “Form 4340, Certificate of Assessments, Payments and Other Specified Matters for Frank Vacante, Frank Vacante Insurance for Employer’s Quarterly Federal Tax Return (Form 941),” for the tax periods ending March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994. (Docs. 120-11 to 120-14.) Initially, because Frank Vacante failed to file Form 941 Employment Tax Returns or to pay withholding taxes for his sole proprietorship for the 1994 tax year, the IRS calculated the Vacante’s employment tax liability based on third party information, including the deposition testimony of Cynthia Burris and Dan Belew III. (PSUF 30-31.) The IRS also reconstructed Vacante’s Form 941 liability using Ute Vacante’s 1994 W-2 filing, which stated she was paid $75,000 by Frank Vacante’s sole proprietorship. (PSUF 29.) However, the United States recalculated Mr. Vacante’s Form 941 employment tax liabilities for tax year 1994 pursuant to the documentation produced on March 12, 2010 (i.e., wages of $102,079).

As of December 1, 2009, the total outstanding balance of the Form 941 tax liabilities due from Frank Vacante for the March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994 tax periods, including interest, is $123,443.49. (Doc. 153-2.¶¶ 14-18.)

D. Form 94,0 FUTA Tax Liabilities— Frank Vacante

1. 1993 & 199U Tax Years

IRS records indicate that Frank Vacante did not file a Form 940, Employer’s Annual Federal Unemployment Tax Return, for the tax periods ending December 31, 1993 and December 31, 1994. (PSUF 24, 42.) According to the United States, Frank Vacante employed several individuals during 1993 and 1994, yet failed to make federal tax deposits of withheld FUTA taxes. (PSUF 43.) Mr. Vacante maintains that his employees paid their own self-employment taxes during the 1993 and 1994 tax years, therefore he did not owe Form 940 or 941 taxes.

On December 13, 2007, the IRS issued a “Form 4340, Certifícate of Assessments, Payments and Other Specified Matters for Frank Vacante, Frank Vacante Insurance, for Employer’s Annual Federal Unemployment Tax Return (Form 940),” for the tax periods ending December 31, 1993 and December 31, 1994. (Docs. 121 to 121-2.) Because Frank Vacante failed to file Form 940 FUTA Returns for either 1993 or 1994, the IRS based its FUTA calculations on two sources: (1) payments to workers by Mr. Vacante in 1992, to establish Mr. Vacante’s 1993 FUTA liability; and (2) payments of $111,912 paid to workers by Mr. Vacante in the tax year 1994-$27,987/quarter — to establish Mr. Vacante’s 1994 FUTA liability. (PSUF 25, 44.) However, the United States recalculated Mr. Vacante’s Form 940 tax liabilities for the 1993 and 1994 tax years pursuant to the documentation produced on March 12, 2010 (i.e., wages of $26,095 and $102,079).

As of December 1, 2009, the total outstanding balance of the Form 940 FUTA tax liability due from Frank Vacante for the December 31, 1993 tax period, including interest, is $832.71. (Doc. 153-2.¶ 20.) Mr. Vacante owes $3,063.85 in Form 940 FUTA taxes for the tax period ending December 31,1994. (Doc. 153-2J 22.)

E. Summary of Tax Liability — Government Figures

1. Frank Vacante

Form 941 3/31/94 $19,446.22 $28,615.09

Form 941 6/30/94 $21,800.42 $32,079.29

Form 941 9/30/94 $21,450.29 $31,729.16

Form 941 12/31/94 $21,080.49 $31,019.95

Form 940 12/31/93 $ 565.88 $ 832.71

Form 940 12/31/94 $ 2,082.11 $ 3,063.85

TOTAL DUE* 15158130

2 ute Vacante

Type of Tax Tax Period Assessment Unpaid Balance Balance Due

_Date_of Assessments_w/ Interest

Form 1040_2000_11/16/09_$6.336.38_$7.102.58

Form 1040_2004_3/11/08_$3.528.44_$4.258.17

TOTAL DUE: $11,360.75

F. Prior Federal Court Judgment Against Frank Vacante

On May 15, 2002, the United States filed an action against Frank Vacante in U.S. District Court for the Eastern District of California, Fresno Division, entitled United States v. Frank Vacante, No. 02-CV-5565-0WW-DLB. The United States initiated litigation to reduce to judgment certain outstanding Form 940 and 941 tax assessments against Defendant Frank Vacante — operating his sole proprietorship as VIF Insurance — for the 1989 and 1990 tax years. (Doc. I.) Defendant Vacante was properly served with copies of the summons and complaint, but did not respond to the complaint or otherwise appear in the action. Mr. Vacante’s default was taken on September 10, 2002. (Doc. 9.)

On November 14, 2002, the United States moved for default judgment against Frank Vacante in the amount of his outstanding tax liabilities. (Doc. 10.) Mr. Vacante did not oppose the motion, nor did he move to set aside the entry of default. The United States’ motion for default judgment against Frank Vacante was granted on March 7, 2003. (Doc. 14.) The default judgment was entered in the amount of $21,087.91, plus interest, penalties, and other statutory additions. (Doc. 128-2.) The judgment remains unpaid. (Id.)

III. PROCEDURAL BACKGROUND.

The United States filed a complaint on June 10, 2008 to reduce to judgment outstanding federal tax assessments against Frank Vacante, Ute Vacante, CVIS, and Instant Services, Inc., to foreclose federal tax liens arising from federal tax liabilities against property owned by the Vacantes, to adjudicate that Frank and Ute Vacante are alter egos of CVIS, and to establish successor-in-interest liability regarding the Vacante’s various insurance entities. (Doc. 1.)

On July 21, 2008, Defendants filed their Answer to Plaintiffs Complaint.

On September 14, 2009, Plaintiff filed the operative SAC, advancing fifteen causes of action: (1) To Reduce to Judgement Federal Tax Assessments Relating to the Vacantes’ Unincorporated Business Against Frank Vacante; (2) To Reduce to Judgement Federal Income Tax Assessments and Tax Assessments (Relating to CVIS) Made Pursuant to 26 U.S.C. § 6672 Against Frank Vacante; (3) To Reduce to Judgement Federal Tax Assessments (Relating to CVIS) Made Pursuant to 26 U.S.C. § 6672 Against Ute Vacante; (4) To Reduce to Judgement Federal Tax Assessments Against CVIS; (5) To Reduce to Judgement Federal Tax Assessments Against Instant Services, Inc.; (6) To Determine that CVIS is a Successor in Interest to the Vacantes’ Unincorporated Business; (7) To Determine that Instant Services, Inc. is a Successor in Interest to CVIS; (8) To Determine that Ute Vacante is an Alter Ego of CVIS; (9) To Determine that Ute Vacante is an Alter Ego of Instant Services, Inc.; (10) To Determine that Frank Vacante is an Alter Ego of CVIS; (11) To Determine that Frank Vacante is an Alter Ego of Instant Services, Inc.; (12) To Foreclose Federal Tax Liens Against Ute Vacante on the Lander Avenue Property; (13) To Foreclose Federal Tax Liens Against Ute Vacante on the Minaret Avenue Property; (14) To Foreclose Federal Tax Liens Against Frank Vacante on the Lupin Lane Property; (15) To Foreclose Federal Tax Liens Against Frank and Ute Vacante on the Snedigar Road Property; and (16) To Foreclose Federal Tax Liens Against Frank and Ute Vacante on the August Avenue Property. (Doc. 90, ¶¶ 148-201.)

On November 30, 2009, Defendants moved for summary judgment on each cause of action contained in the SAC. (Doc. 105) Defendants argue that summary judgment is appropriate because they did not have the ability to pay CVIS’s taxes, did not have knowledge of the past due amounts, and did not take part in the financial decisions of CVIS. Defendants, however, did not file a “Statement of Undisputed Facts,” as required by Rule 56-260, Local Rules of Practice.

On December 14, 2009, the United States moved for summary judgment against Defendants Frank Vacante and Ute Vacante, seeking to reduce to judgment certain tax liabilities against Frank Vacante and Ute Vacante. (Doc. 119.) In particular, the United States seeks to: (1) reduce to judgment Frank and Ute Vacante’s individual tax liabilities for tax years 2000 and 2004; (2) reduce to judgment Frank Vacante’s Form 941 Employment Tax Liabilities for the tax periods ending June 30, 1993, September 30, 1993, December 31, 1993, March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994; (3) reduce to judgment Frank Vacante’s Form 940 Federal Unemployment Tax liabilities for the tax periods ending December 31, 1993 and December 31,1994.

On December 16, 2009, Defendants moved to dismiss the entire SAC on grounds that: (1) Frank Vacante never signed a lease for office space in Turlock on May 23, 1994; (2) Defendants were denied their due process rights during an unidentified appeals proceeding; (3) Defendants have a binding pre-nuptial agreement; (4) Revenue Officers Randy Reese and John Certini made material misrepresentations and false statements during their investigations; and (5) IRS manager Martha Rodriguez failed to properly supervise Revenue Officers Reese and Certini. (Doc. 124.)

The United States filed its opposition to Defendants’ summary judgment motion on January 25, 2010. (Doc. 128.) In support of its opposition, Plaintiff submitted: (1) a Memorandum opposing the motion (“Memorandum”); (2) a Statement of Facts in Support of its Opposition; (3) the Declaration of G. Patrick Jennings; and (4) Certificates of Assessments for the relevant tax periods at issue in this case. (Docs. 128-129.)

The United States opposes summary judgment on grounds that there remains a genuine issue of material fact concerning whether the Vacantes are “responsible parties” or “acted willfully” under 26 U.S.C. § 6672. (Doc. 128.) The United States also maintains that Defendants’ “claim for damages should be denied because they have not counterclaim[ed] for such a remedy, and so their claim is not part of this suit.” (Id. at 2:11-2:13.)

On February 4, 2010, Plaintiff United States filed its “Reply and Motion to Strike Vacantes’ Memorandum of Points Against Partial Summary Judgment.” (Doc. 132.) Attached to the United States’ reply was Defendants’ “Memorandum of Points Against Partial Summary Judgment.” The United States explains:

Frank Vacante sent a memorandum in opposition to the United States’ Motion for Partial Summary Judgment to counsel for the United States. This document has not appeared on ECF and does not appear to have been filed with the Court. The mailroom at counsel’s building received this document on the afternoon of Friday January 29, 2010, and counsel received this document on the morning of February 1, 2010.

(Doc. 132, 2:l-2:6.)

The United States moves to strike Defendants’ “Memorandum of Points Against Partial Summary Judgment,” i.e., Defendants’ opposition to Plaintiffs summary judgment motion, on grounds that it does not comply with the Rule 78-230(c), Local Rules of Practice. The issue of timeliness under Local Rule 78-230(c) is discussed in § V(A)(1), infra.

Defendants’ “Memorandum of Points Against Partial Summary Judgment,” includes over 180-pages of exhibits: (1) photocopies of more than 75 cancelled checks from payor ‘VIF Insurance Services” to payee “West America Bank;” (2) federal tax deposit slips; (3) taxpayer account statements; (4) confidential IRS correspondence re: overpayments and levy notices; (5) photocopies of Form 941 Employment Tax Returns for the tax periods ending June 30, 2001, September 30, 2001, December 31, 2001, March 31, 2002, June 30, 2002, September 30, 2002, December 31, 2002, March 31, 2003, March 31, 2004, June 30, 2005, September 30, 2006; (6) photocopies of Form 940 FUTA taxes for the tax periods ending December 31, 2001 and December 31, 2002; and (7) photocopies of Form 1040 tax liabilities for the 1993, 1994, and 2000 tax periods. (Doc. 136, pgs. 1-99, to 136-2, pgs. 1-81.) Defendants’ exhibits were not independently tabbed or otherwise identified.

On February 12, 2010, the United States filed its “Opposition to Frank Vaeante’s Motion to Dismiss,” arguing that “Vacante’s Motion to Dismiss is a series of allegations that two IRS Officers [made material misrepresentations] denying them due process.” (Doc. 141, 2:5 — 2:8.) According to the government, because “Vacante has not raised these claims in a prior proceeding [¶]... ] it is improper to raise them now after discovery is closed.” (Id. at 2:13-2:15.) The government also asserts that such claims can only be raised pursuant to 26 U.S.C. § 7433, which Mr. Vacante has failed to do.

The parties appeared before the Court on February 26, 2010 for argument on the motions filed by the Vacantes and the United States. During the hearing, Mr. Vacante requested an extension of time to oppose the United States’ motion. The Court granted the request and continued the hearing to April 19, 2010.

Defendants filed four documents on March 12, 2010:(1) an opposition to the United States’ motion for summary judgment; (2) a “Points and Memorandum in Support of Summary Judgment Motion;” (3) a “Points and Memorandum in Support of Motion to Dismiss [for] Failure of Due Process;” and (4) a “Points and Memorandum in Support of Jury Trial Motion.” In their opposition, Defendants acknowledged that VIF Insurance had payrolls of $42,245 in 1993 and $49,248.64 in 1994.

The United States filed its supplemental briefing on March 22, 2010. The substance of the United States’ supplemental briefing mirrors its original filings: Defendants’ unauthenticated and inadmissible evidence is insufficient to generate a genuine dispute of material fact on the issue of tax liability. The United States also recalculated Mr. Vacante’s Form 940 and 941 employment tax liabilities for the 1993 and 1994 tax years pursuant to the documentation produced on March 12, 2010. According to the United States, there is substantial documentary evidence demonstrating the Vacantes’ tax liabilities for the relevant tax periods.

IV. LEGAL STANDARDS.

A. Motion For Summary Judgment! Adjudication

Summary judgment/adjudication is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). The movant “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted).

Where the movant will have the burden of proof on an issue at trial, it must “affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). With respect to an issue as to which the non-moving party will have the burden of proof, the movant “can prevail merely by pointing out that there is an absence of evidence to support the non-moving party’s case.” Soremekun, 509 F.3d at 984.

When a motion for summary judgment is properly made and supported, the nonmovant cannot defeat the motion by resting upon the allegations or denials of its own pleading, rather the “non-moving party must set forth, by affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for trial.’ ” Soremekun, 509 F.3d at 984. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). “A non-movant’s bald assertions or a mere scintilla of evidence in his favor are both insufficient to withstand summary judgment.” FTC v. Stefanchik, 559 F.3d 924, 929 (9th Cir.2009). “[A] non-movant must show a genuine issue of material fact by presenting affirmative evidence from which a jury could find in his favor.” Id. (emphasis in original). “[Sjummary judgment will not lie if [a] dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In determining whether a genuine dispute exists, a district court does not make credibility determinations; rather, the “evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255, 106 S.Ct. 2505.

B. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss can be made and granted when the complaint fails “to state a claim upon which relief can be granted.” Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.1988).

To sufficiently state a claim for relief and survive a 12(b)(6) motion, a complaint “does not need detailed factual allegations” but the “[fjactual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Mere “labels and conclusions” or a “formulaic recitation of the elements of a cause of action will not do.” Id. Rather, there must be “enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955. In other words, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, — U.S. -, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal citation and quotation marks omitted).

In deciding whether to grant a motion to dismiss, the court must accept as true all “well-pleaded factual allegations.” Iqbal, 129 S.Ct. at 1950. A court is not, however, “required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir.2009) (“Plaintiffs’ general statement that Wal-Mart exercised control over their day-to-day employment is a conclusion, not a factual allegation stated with any specificity. We need not accept Plaintiffs’ unwarranted conclusion in reviewing a motion to dismiss.”).

V. DISCUSSION.

A. The United States’Motion

The United States moves for summary judgment against Frank Vacante and Ute Vacante for the assessments of unpaid income taxes and penalties for the 2000 and 2004 tax years. (Doc. 119, 2:21-23.) The United States also moves for summary judgment against Frank Vacante as to: (1) his liabilities for Form 941 Employment Taxes for the periods ending June 30, 1993, September 30, 1993, December 31, 1993, March 31, 1994, June 30, 1994, September 30, 1994, and December 31, 1994; and (2) his liabilities for Form 940 FUTA taxes for the periods ending December 31, 1993 and December 31, 1994. (Id. at 2:23-3:2.)

“In an action to collect federal taxes, the government bears the initial burden of proof.” In re Olshan, 356 F.3d 1078, 1084 (9th Cir.2004) (quoting Palmer v. I.R.S., 116 F.3d 1309, 1312 (9th Cir.1997)). The government’s burden can be met by presenting federal tax assessments. United States v. Stonehill, 702 F.2d 1288, 1293 (9th Cir.1983). Certificates of Assessments and Payments (“Form 4340s”) are highly probative and in the absence of contrary evidence, are sufficient to establish a tax assessment was properly made and notice and demand for payment were sent. See Huff v. United States, 10 F.3d 1440, 1445 (9th Cir.1993) (“Generally, courts have held that IRS Form 4340 provides at least presumptive evidence that a tax has been validly assessed .... ”); Hughes v. United States, 953 F.2d 531, 535 (9th Cir.1992) (“Official certificates, such as Form 4340, can constitute proof of the fact that the [tax] assessments were actually made.”).

When supported by a minimal factual foundation, the IRS’ assessments for taxes and related penalties are entitled to a presumption of correctness and the burden shifts to the taxpayer to show the assessment is incorrect. See In re Olshan, 356 F.3d at 1084; Palmer, 116 F.3d at 1312. If the taxpayer fails to rebut the presumption, the government is entitled to judgment as a matter of law. See Hansen v. United States, 7 F.3d 137, 138 (9th Cir.1993) (finding taxpayers’ declaration that they did not receive notice of the tax assessment was insufficient to show a genuine issue of fact for trial where IRS presented Form 4340s).

The United States has submitted Form 4340s calculating the Vacante’s tax liabilities and the related penalties for 2000 and 2004, (Docs. 120-3 & 120-5), and Frank Vacante’s employer tax liabilities and related penalties for 1993 and 1994, (Docs. 120-8 to 121-2), along with Revenue Officer Randy Reece’s Declaration supporting those assessments. (Dec. of R. Reece ¶¶ 4r-25; Doc. 153-2, ¶¶ 10-22.) In further support of the assessments, the United States has submitted bank account records, the income tax returns for Ute and Frank Vacante (W-2 and 1040’s), associated tax documents, and the deposition testimony of Frank Vacante and Cjmthia Burris. (Docs. 120-2, 120-4, 120-6, 120-7, 122-2 to 122-4.) As to the subsequent adjustments, the United States submitted the declaration of IRS Agent Randy Reece and several corresponding account transcripts. (Doc. 133-1 to 133-7.) Because the United States’ showing exceeds the minimal factual foundation necessary, the assessments receive a presumption of correctness and the burden of proof shifts to Frank and Ute Vacante to demonstrate any error.

1. Defendants’Opposition ,

Defendants advance three arguments questioning the accuracy of the United States’ Form 4340s. First, as to their Form 1040 tax liabilities, Defendants assert that “[a] check was issued by Fidelity National Title Co. in favor of the IRS in the amount of $52,064.67 [...] [t]his amount paid 1040 taxes for 1997, 1998, 1999, 2000, and 2001, including all interest and penalties.” (Doc. 136, 1:20-1:22.) Second, Defendants argue that their outstanding individual income tax liabilities were satisfied pursuant to a levy on their social security benefits. Third, Defendants contend that “[a]ll 941 and 940 taxes for 6/30/93, 9/30/93, 12/31/93, 3/31/94, 6/30/94, 9/30/94,12/31/94 were paid. Three people worked at VIF Insurance in 1993 and 1994 [¶]... ] all three paid there [sic] taxes on Form 1040, including self-employment tax, Medicare, and federal and state tax.” (Doc. 136, 2:l-2:4.) These arguments were the focus of Defendants’ original and supplemental briefing.

2. Form 104,0 Liabilities

Defendants’ first argument is based on their belief that all outstanding 1040 tax liabilities were resolved pursuant to an October 29, 2004 check from Fidelity National Title to the IRS. According to Defendants, the $52,064.67 check satisfied all 1040 liabilities and left a surplus of $6000.00, which was not returned or otherwise explained.

While the United States does not dispute that it received the $52,064.67 check in 2004, it argues that check was credited to the Vacantes’ Form 1040 tax liabilities for 1993-1999 and 2001, not the 2000 or 2004 tax periods. According to the United States, the check satisfied the liabilities for those years “in full,” however, “[n]o part of the proceeds received on October 29, 2004, was [sic] posted to the year at issue in this suit.” (Doc. 132, 2:18-2:22.)

To support its position, the government submitted the Vacantes’ Account Transcripts for Form 1040 income tax liabilities for the relevant tax years. The Account Transcripts indicate that the $52,064.67 check was credited to the outstanding Form 1040 tax liabilities for the 1993,1994, 1995, 1996, 1997, 1998, 1999, and 2001 tax periods, not against the 2000 and 2004 Form 1040 tax liabilities:

Liability on Amount Record

Tax Year_10/29/04_Posted_Fully Satisfied?_(Doc., Pg.)

1993_$ 6,897.38_$ 6,897.38_Yes_133-2, 2-3

1994_$ 8,879.65_$ 8,879.65_Yes_ 133-2, 4-5

1995_$ 6,076.52_$ 6,076.52_Yes_133-2, 6-7

1996_$ 7,549.93_$ 7,549.93_Yes_133-2, 8-9

1997_$10,720.41_$10,720.41_Yes_133-2,10-1

1998_$ 5,950.55_$ 5,950.55_Yes_133-2,12-3

1999_$ 3,129.30_$ 3,129.30_Yes_133-2,14-5

2001_$ 2,860.93 $ 2,860.93_Yes_133-2,16-7

TOTALS: $52,06^.67 $52,064.67

Here, despite Defendants’ argument that the $52,064.67 payment satisfied their individual income tax liabilities from 1993-1999 and 2001 — $52,064.67—as well as their individual income tax liabilities from 2000 and 2004 — $11,360.75—, no documentary evidence was offered to support such a claim. For example, Defendants do not produce a single document memorializing a “below market” global settlement or provide any other explanation for the disparity. Defendants’ claims are merely conclusory allegations, which are insufficient to defeat the government’s request for summary judgment. See, e.g., Hansen v. United States, 7 F.3d 137, 138 (9th Cir.1993) (“[nonmoving party] cannot rely on conclusory allegations unsupported by factual data to create an issue of material fact.”). Defendants also do not contest that their 1993-1999 and 2001 individual income tax liabilities totaled $52,064.67, which matches identically with their November 29, 2004 payment. Absent evidence that Defendants’ $52,064.67 payment satisfied more than $52,064.67 of tax liability or that the tax assessments were incorrect, Defendants have not met their burden for defeating the government’s summary judgment motion.

At oral argument on February 26, 2010, Defendants emphasized that they “paid year 2000 taxes including interest and penalties in full on October 29, 2004.” In its supplemental briefing, the United States asserted that was impossible for the proceeds to offset the Vacantes’ 2000 individual tax liabilities because “no assessments existed for tax year 2000 at the time of payment [October 29, 2004].” The evidence supports the United States’ position. In particular, the relevant Form 4340 shows that the first assessment against the Vacantes for tax year 2000 was made on December 25, 2006. (Doc. 120-3.) Here, because the tax liability did not exist in 2004, it was not “satisfied” pursuant to the Vacantes’ October 29, 2004 check. Setting aside Defendants’ own declarations/submissions, there is no evidence that the October 29, 2004 payment resolved the Vacantes’ 2000 individual income tax liabilities.

That is not the end of the analysis, however. During oral argument on April 19, 2010, Defendants claimed that their supplemental briefing erased all uncertainty concerning when they filed their Form 1040 taxes for the 2000 tax year. In particular, the Vacantes referred to several certified mail receipts which were attached to their supplemental opposition. (Doc. 145, pgs. 37-39.) The receipts allegedly relate to their Form 1040 taxes for the 2000 tax year. According to the Vacantes, these receipts demonstrate that they mailed — and paid — their 2000 Form 1040 taxes in May of 2002. This argument is a nonstarter. First, Mr. Vacante fails to identify the receipts or establish their origin — by declaration or otherwise; there is no way to validate his claims concerning the certified receipts. In this regard, the documents are not properly authenticated and are stricken from the summary judgment record. See Conkey v. United States, 545 F.Supp.2d 1013, 1016-17 (N.D.Cal.2008) (striking two certified mail envelopes because they were not properly authenticated); see also Harris v. Freedom of Info. Unit Drug Enforcement Admin., No. 06-CV-0176-R, 2006 WL 3342598 at *1 (ND.Tex. Nov. 17, 2006) (striking certified mail receipts on grounds that they “[wejre not properly authenticated.”).

Even assuming the unauthenticated receipts are admissible as evidence, the record contradicts the Vacantes’ unsupported assertion that these receipts are proof that they mailed their Form 1040 tax returns in May 2002. As the undisputed evidence submitted by the Government demonstrates, the Vacantes neither filed nor paid their 2000 Form 1040 taxes in 2002; rather, they did not submit their tax return until April 7, 2008. {See Doc. 120-2 (Vacantes’ Form 1040 for tax year 2000, filed in April 2008); Doc. 120, ¶ 4.) The Vacantes have come forward with no admissible evidence to rebut this record. There is no genuine dispute of material fact.

3. Social Security Levy Payments

Defendants next argue that their outstanding individual income tax liabilities were satisfied pursuant to a levy on their social security benefits. Specifically, Defendants contend that “Mrs. Vacante’s Social Security was levied in the amount of $398.00 [monthly] starting in May of 2006 for period of 24 months,” and “Mr. Vacante’s Social Security was levied in the amount of $127.00 a month for 23 months.” (Doc. 136, 1:23-1:25.)

The United States does not dispute that it levied Defendants’ social security benefits, however, it asserts that “most of the levy payments were posted to tax periods not at issue in this suit.” (Doc. 132.3:16-3:17.) According to the declaration of IRS Agent Randy Reece, attached to the United States’ February 4, 2010 reply, the IRS identified several levy payments made from the Vacantes’ social security stipends in 2006 and 2007. These levy payments, however, did not offset the tax obligations forming the substance of this litigation:

The IRS received levy payments in the amount of $398 a month, beginning in March of 2006 and ending in December of 2006 [¶]... ]

On March 6, 2006, a levy payment in the amount of $398 was posted to the Form 941 employment tax liabilities of VIF Insurance for the quarter ending March 31,1995 [...]

On April 25, 2006, and May 24, 2006, levy payments in the amount of $398 were posted to the Form 941 employment tax liabilities of VIF Insurance for the quarter ending March 31, 1993 [¶]... ] On June 23, 2006, a levy payment in the amount of $398 was posted to the Form 1040 individual federal income tax liabilities for Ute Vacante for 1994. When the Vacantes late-filed a Joint Income Tax Return for 1994, the IRS abated the individual assessments against Ute Vacante, and assessed federal income tax liabilities against the Vacantes jointly for 1994, per their late-filed return. Part of the $398 levy payment covered lien fees incurred by the IRS related to Ute Vacante’s 1994 federal tax liabilities. The remainder was transferred as a credit toward the trust fund recovery-penalties assessed against Ute Vacante for the tax period ending December 31, 1998 [¶]... ]

On August 3, 2006, September 3, 2006, October 3, 2006, November 3, 2006, and December 3, 2006, levy payments in the amount of $398 were posted to the Form 941 employment tax liabilities of VIF Insurance for the quarter ending March 31,1993[... ]

The IRS received levy payments in the amount of $409 each month beginning in January of 2007 and ending in May of 2007 [¶]... ]

On January 3, 2007, January 25, 2007, February 21, 2007, March 26, 2007, and April 25, 2007, levy payments in the amount of $409 were posted to the Form 941 employment tax liabilities of VIF Insurance for the quarter ending March 31,1993[... ]

On May 23, 2007, a levy payment in the amount of $409 was posted to the Form 941 employment tax liabilities of VIF Insurance for the quarter ending June 30,1993[... ]

On December 26, 2007, the IRS received a levy payment in the amount of $1309.05. On January 24, 2007, and on February 28, 2007, the IRS received levy payments in the amount of $134.40. On March 28, 2007, the IRS received a levy payment in the amount of $120.30 [¶]... ] the[se] levy payments were posted to the trust fund recovery penalties assessed against Frank Vacante for the tax period ending December 31, 1998 [...]

(Dec. of R. Reese, Doc. 133, ¶¶ 6-15.)

A graphical representation of Defendants’ levy payments shows that the payments did not offset the tax obligations forming the substance of the government’s motion:

Similar to § V(A)(1), the United States provides substantial evidence establishing that the levy payments were used to offset other federal tax liabilities of the Defendants, not the liabilities at issue in this litigation. Defendants, in contrast, provide only two documents supporting their litigation position: (1) an October 11, 2004 letter from the IRS to “Instant Services, Inc.” describing a $52.84 Form 940 tax liability stemming from 2003 tax year, (Doc. 136, pgs. 82-83); and (2) a June 13, 2005 letter from the IRS to “Instant Services, Inc.” outlining a $17,092.11 Form 941 tax arrearage stemming from the quarter ending December 31, 2001. (Doc. 136-2, pgs. 61-63.)

Neither document is relevant to the issues presented by the government’s motion. The two letters relate to Form 940 and 941 employment taxes levied against Instant Services, Inc. for the 2001 and 2003 tax periods. In this regard, the letters bear little relation to the issues raised in the United States’ motion — i.e., Form 940 and Form 941 employment taxes levied against Frank Vacante’s sole proprietorship for the 1993 and 1994 tax periods. Defendants continue to conflate and confuse the issues raised in the Second Amended Complaint with those raised by the government’s motion for summary judgment. They are not identical. Defendants’ evidence is insufficient to rebut the presumption of correctness arising from the Form 4340s submitted by the government.

4. Form 940 and 941 Employment Taxes

Mr. Vacante argues that the government unfairly and without proper documentation assessed employment taxes against VIF Insurance for the 1993 and 1994 tax years. He asserts that he owes no employment tax for the years at issue because the monies Ute Vacante, Dan Belew, and Cynthia Burris received from VIF Insurance during those years did not constitute wages or income. Instead, the employees in question were treated as “independent contractors” and paid “commissions.” The government responds to this argument by observing that the taxpayer bears the burden of persuasion in this litigation. It also contends that, despite Mr. Vacante’s self-serving declaration, there exists adequate competent evidence to support the assessments in question.

To determine whether a factual dispute exists as to Mr. Vacante’s employment tax liabilities, it is necessary to harmonize the arguments advanced — and evidence presented' — by the parties during the two stages of briefing. In his original opposition, Mr. Vacante did not submit a signed declaration, relying instead on unsigned tax returns and various bank records. Mr. Vacante asserted VIF Insurance employees paid their own federal employment taxes during these two tax years, therefore any assessments against Defendants for this period were meritless:

All 941 and 940 taxes for 6/30/93, 9/30/93, 12/31/93, 3/31/94, 6/30/94, 9/30/94, 12/31/94 were paid. Three people worked at VIF Insurance in 1993 and 1994. Dan Belew III, Ute Vacante, and Cynthia (Nunes) Burris. All three paid there (sic) taxes on Form 1040, including self employment tax, Medicare, and federal and state tax. The total payroll for VIF Insurance for 1993 was $42,245.00 and 1994 was $49,248.64. The figures used by the Plaintiff are completely without foundation. After 10 years the United States has only produced three people who worked at VIF.

(Doc. 136, 2:l-2:4.)

The government responded with a number of evidentiary objections. According to the government, Mr. Vacante did not produce evidence or the possibility that he can produce evidence sufficient to overcome the presumption that the tax assessments levied by the IRS are correct. Specifically, as to Cynthia Burris, the government contended that “[t]he Vacantes did not include any evidence that Cynthia (Nunes) Burris paid self-employment taxes.” (Doc. 132, 4:14-4:15.) The government correctly cited Rivera v. National R.R. Passenger Corp., 331 F.3d 1074, 1078 (9th Cir.2003) for the proposition that an unsupported assertion of self-payment does not create a genuine dispute of fact.

As to Dan Belew III, the government argued that unauthenticated and unsigned tax returns do not demonstrate that the assessment was incorrect:

The Vacantes included with them memorandum copies of Form 1040 Tax Returns that they claim are the tax returns of Dan Belew, III. However, these returns are not signed, and the Vacantes have no evidence that they are authentic or filed with the IRS. Furthermore the Vacantes have submitted no evidence that Dan Belew, III ever paid any self-employment tax.

(Doc. 132, 4:15-4:19.)

The government similarly objects to the use of Frank and Ute Vacante’s Form 1040 tax returns to rebut the presumption of correctness:

The Vacantes included purported Form 1040 Tax Returns for Frank and Ute Vacante for 1993 and 1994, but these returns are unsigned and the Vacantes have submitted no evidence that they are authentic.

(Doc. 132, 4:20^:22.)

The government’s evidentiary objections are well-taken. In this Circuit, unauthenticated and unsigned tax returns are insufficient to place any material fact in controversy. See Bias v. Moynihan, 508 F.3d 1212, 1224 (9th Cir.2007) (“Rule 56(e) of the Federal Rules of Civil Procedure requires that a proper foundation be laid for evidence considered on summary judgment. The documents must be authenticated [----]”); see also Nat’l Steel Corp. v. Golden Eagle Ins. Co., 121 F.3d 496, 502 (9th Cir.1997) (“Conclusory allegations [¶]... ] without factual support, are insufficient to defeat summary judgment.”); Cristobal v. Siegel, 26 F.3d 1488, 1494 (9th Cir.1994) (“We have repeatedly held that unauthenticated documents cannot be considered in a motion for summary judgment.”). Courts require the party claiming error to affirmatively produce evidence demonstrating that the assessment was incorrect, which Mr. Vacante did not do in his original opposition.

However, during oral argument on February 26, 2010, the Court instructed Mr. Vacante on the relevant legal standards, namely Federal Rule of Civil Procedure 56(e). Mr. Vacante requested an extension of time to file supplemental briefing, which was granted. As part of his supplemental briefing, Mr. Vacante did not submit a formal declaration, but his supplemental opposition to the motion for summary judgment, construed with the leniency typically afforded pro se parties in complying with procedural requirements, see Lucas v. Miles, 84 F.3d 532, 535 (2d Cir.1996), satisfies the requirements. In his declaration, which was signed under penalty of perjury, Mr. Vacante denies that VIF Insurance had the financial capacity to “employ” three individuals during the relevant tax years — and that the individuals were “independent contractors.” He also asserts that the IRS’ employment tax figures were incorrectly based on Central Valley Insurance Services, not VIF Insurance:

1. Frank Vacante owned and operated VIF Insurance services as his sole proprietorship and sole property from 1983-1994.

2. Frank Vacante notified the IRS on January 3, 1993 that he no longer had employees.

3. No payroll tax was due from Frank Vacante or VIF Insurance during the periods 3/31/93, 6/30/93, 9/30/93, 12/31/93, 3/31/94, 6/30/94, 9/30/94 or 12/31/94.

4. VIF’s business was 95% high risk auto insurance.

5. In November 1989, the people of California passed Prop 103, the California Insurance Initiative.

6. Prop 103 limited how insurance companies rated policies, restricted profit and dictated rate reductions of 10%.

7. Many of the insurance companies VIF represented were working with a 10-15% margin at the time. It was not feasible to comply with the new laws so a majority of the companies withdrew from the California market. Many of the remaining companies placed a moratorium on new business. VIF insurance went from representing greater than 100 insurance companies to fewer than 10 in a matter of months.

8. VIF Insurance Services went from selling approximately 90-100 new policies per month in 1989, to less than 15-25 per month by 1993.

9. Due to changes in billing practices by the insurance companies, VIF’s residual income fell sharply from 1990-1994. These billing practices were designed to cancel policies.

10. Due to the reduction of business and clientele, VIF Insurance did not need an office staff.

11. All day to day business was handled by Mr. & Mrs. Vacante after January 1993.

12. All direct sales were handled by Dan Belew and Cynthia Nunes. Both were licensed agents and appointed by the insurance companies being represented. This is mandated by the California Department of Insurance and is an industry standard practice for direct sales.

13. The total payroll for VIF Insurance Services in 1993 was $42,245.

A. Frank Vacante and Ute Vacante received $16,150 and paid all taxes due, including federal income tax, social security tax, self employment tax and Medicare on Form 1040.

B. Dan Belew III received $16,495 as commission reported on form 1099 to the IRS. Mr. Belew III paid all the tax due including federal income tax, social security tax, self employment tax and Medicare on his Form 1040.

C. Cynthia Nunes received $9,600 as commission reported on form 1099 to the IRS. Ms. Nunes (Burris) has testified under oath during deposition in this matter that she paid all federal income tax, social security tax, self employment tax and Medicare tax due on her Form 1040.

14. The total payroll for VIF Insurance Services in 1994 was $49,248.

A. Frank Vacante and Ute Vacante received $22,170 and paid all taxes due, including federal income tax, social security tax, self employment tax and Medicare on Form 1040 for the year 1994.

B. Dan Belew III received $17,478.64 as commission reported on form 1099 to the IRS. Mr. Belew III paid all the tax due including federal income tax, social security tax, self employment tax and Medicare on his Form 1040.

C. Cynthia Nunes received $9,600 as commission reported on form 1099 to the IRS. Ms. Nunes (Burris) has testified under oath during deposition in this matter that she paid all federal income tax, social security tax, self employment tax and Medicare tax due on her Form 1040 [...]

2[ ]. Forms 940 and 941 filed by the IRS are not based on interview or investigation for the tax periods 3/31/94, 6/30/94, 9/30/94 or 12/31/94. Assessments for these periods are incorrectly based on Forms 940 and 941 filed by the IRS on a different business. Central Valley Insurance Services was the sole proprietorship of Dan Belew HI [■ --]

(Doc. 145,11:2-12:26,14:1-14:6.)

The government responds that Mr. Vacante has still offered nothing to counter the evidence provided by the government, i.e., the Form 4340s are sufficient to establish that the tax assessments were correctly made. The government also objects to Mr. Vacante’s evidence on grounds that it is unauthenticated, contains hearsay, and was not made on the basis of his personal knowledge. The government is correct; unauthenticated and unsigned tax returns are inadmissible to establish a genuine issue of material fact. See Bias, 508 F.3d at 1224. The same is true as to documents containing hearsay and statements lacking personal knowledge.

Despite these evidentiary objections, Mr. Vacante has submitted sufficient evidence to make out a triable issue as to whether, in 1993 and 1994, Ute Vacante, Dan Belew and Cynthia Burris were treated as independent contractors. Here, there are two conflicting interpretations on whether the workers at issue were “independent contractors” or “employees.” Mr. Vacante declares that the individuals were paid “commissions,” did not have specific job responsibilities or work functions, and operated largely outside a manager or “boss.” (Doc. 145 at 11:2-14:6.) Additionally, it is undisputed that Mr. Vacante paid self-employment tax on his VIF Insurance income in 1993 and 1994, and that Ms. Burris reported $764.00 in self-employment tax in 1994. (Doc. 153, 4:22-4:25, 9:3-9:4.) Mr. Vacante also communicated to the IRS in 1993 that he did not have any “employees” and, according to his declaration, reconfigured his office structure based on dialogue with an IRS Agent. (Doc. 145, pg. 43; Doc. 145, 12:15-13:5.) All of these facts weigh in favor of independent contractor status.

This is contrary to the government’s characterization of individuals working at VIF Insurance during the relevant time periods. Initially, the government assessed employment tax liabilities against Mr. Vacante based on wages paid by him in 1992, the deposition testimony of Cynthia Burris, and Ute Vacante’s 1994 W-2 filing, which stated she was paid $75,000 by VIF insurance. However, the United States reduced Mr. Vacante’s Form 940 and 941 tax liabilities for 1993 and 1994 based on figures he provided on March 12, 2010, where he describes the payments as “commissions.” Because Mr. Vacante’s wage figures — the “commissions” — were accepted by the government, it is unclear if the original assessments still provide the foundation for the government’s argument.

Even assuming the original assessments provide the basis for the government’s characterization, there is a triable issue as to whether Mr. Vacante treated Ute Vacante, Dan Belew, and Cynthia Burris as employees for tax purposes in 1993 in 1994. With respect to Ms. Burris’ deposition testimony, it is an insufficient basis to resolve the issue of employee vs. independent contractor status. In her deposition, Ms. Burris does not clearly describe her duties, whether she invested in the insurance business or the generation of insurance leads, the level of professionalism required, or any number of circumstances relevant to whether an individual is an “employee” or an “independent contractor” for federal tax purposes. See United States v. Porter, 569 F.Supp.2d 862 (S.D.Iowa 2008) (analyzing the twenty factors to consider when examining whether sufficient control existed to establish an employer-employee relationship). There is also record evidence that Ms. Burris considered herself to be an independent contractor, not an employee. (Doc. 153, 9:3 — 9:4) (“Th[e] [tax] return filed by Ms. Burris [in 1994] reported $764 in self-employment tax [.... ]”.)

The same reasoning applies to the government’s reliance on the wages paid by VIF Insurance in 1992 and the $75,000 in wages allegedly paid to Ute Vacante in 1994. First, the government’s reliance on 1992 figures is contradicted by Mr. Vacante’s declaration, in which he explains how the insurance business contracted following intense regulation. This added cost and regulatory oversight resulted in a severe reduction in VIF’s workforce in 1993. Second, Mr. Vacante explained during February 26th’s oral argument that he forged his wife’s signature to obtain a bank loan. According to Mr. Vacante, he misrepresented to the bank that Ute Vacante made $75,000 in 1994 in order to inves