United States of America v Joshua D. Flushman, et al, No. 2:2015cv01531 - Document 38 (D. Nev. 2016)

Court Description: ORDER GRANTING 37 Stipulation and Order of Injunction. IT IS FURTHER ORDERED that all pending motions [#34] are DENIED as moot, this action is DISMISSED, and the Clerk of Court is directed to CLOSE THIS CASE. Should the government require additional action of the court to enforce the injunction, it must file a Motion to Reopen Case to seek that relief. Signed by Judge Jennifer A. Dorsey on 11/23/2016. (Copies have been distributed pursuant to the NEF - DC)
Download PDF
United States of America v Joshua D. Flushman, et al Doc. 38 Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 1 of 6 1 CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 2 3 4 5 6 PAUL T. BUTLER Trial Attorney, Tax Division U.S. Department of Justice P.O. Box683 Washington, D.C. 20044 202·514-1170 (v) 202·307·0054 (f) 7 8 Of Counsel: DANIEL BOGDEN United States Attorney 9 Counsel for the United States 10 IN THE UNITED STATES DISTRICT COURT 11 FOR THE DISTRICT OF NEVADA 12 UNITED STATES OF AMERICA, 13 Plaintiff. 14 v. 15 16 JOSHUA D. FLUSHMAN, ET AL, ' Defendants. 17 ) ) ) ) ) ) ) ) ) ) Case No.2: 15·Cv·Ol531·JAD·NJK !PROPOSED) STIPULATED ORDER OF INJUNCTION 18 19 20 21 Plaintiff, the United States of America, and Defendants Joshua D. Flushman ("Flushman") and Joshua D. Flushman, D.C., Ltd. ("Fiushman Ltd"), stipulate as follows: 1. The United States filed a complaint alleging that defendants repeatedly failed to meet 22 their filing and payment obligations under the Internal Revenue Code with respect to 23 employment tax liabilities for Flushman Ltd. 24 25 2. Defendants admit that this Court has jurisdiction over them and over the subject matter of this action. Dockets.Justia.com Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 2 of 6 3. Defendants waive the entry of findings of fact and conclusions of law under Federal 2 Rule of Civil Procedure 52 and 26 U.S.C. §§ 7402. 3 4. Defendants enter into this Stipulated Order oflnjunction voluntarily. 4 5. Defendants waive any rights they may have to appeal from the Stipulated Order of 5 6 Injunction. 6. Defendants acknowledge that entry of this Stipulated Order of Injunction neither 7 precludes liability (e.g. the assessment of taxes, interest, or penalties) against them for asserted 8 violations of the Internal Revenue Code, nor precludes defendants from contesting any such 9 liability. 10 7. Defendants consent to the entry of this Stipulated Order oflnjunction without further 11 notice and agree that this Court shall retain jurisdiction over them for the purpose of 12 implementing and enforcing this Stipulated Order of Injunction. Defendants further understand 13 that if they violates this Stipulated Order of Injunction, they may be found to be in contempt of 14 court and may be sanctioned for that. 15 8. Entry of this Stipulated Order oflnjunetion resolves only the government's civil 16 injunction claim, and neither precludes the government from pursuing any other current or future 17 civil or criminal matters or proceedings against Defendants, nor precludes them from contesting 18 their liability in any other matter or proceeding. Nothing in this Stipulated Order of Injunction 19 should be construed as an admission of the allegations contained in the United States' complaint. 20 21 9. If Defendants violate the Injunction, they may be subject to civil and criminal sanctions for contempt of court. 22 23 24 WHEREFORE, the Court hereby FINDS, ORDERS, and DECREES: A. The Court has jurisdiction over this action under 28 U.S.C. § 1340 and 1345 and under 26 U.S.C. §§ 7402. 25 2 Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 3 of 6 1 2 3 B. Defendants Joshua D. Flushman and Joshua D. Flushman, D.C., Ltd., consent to the entry of this injunction and agree to be bound by its terms. c. As an employer, Defendant Flushman Ltd. is required by law to withhold from its 4 employees' wages federal income and Federal Insurance Contributions Act ("FICA") taxes, and 5 to pay over to the IRS those withholdings, along with the employer's own FICA and Federal 6 Unemployment Tax Act ("FUTA") taxes (collectively referred to as "employment taxes" or 7 " federal employment taxes"), under26 U.S.C. §§ 3102,31 I I, 3301,3402, and 3403, make 8 periodic deposits of the FICA taxes withheld from its employees' pay, as well as the employer's 9 share of employment taxes, in an appropriate federal depository bank in accordance with the 10 federal deposit regulations, under 26 U.S.C. §§ 6302, 6157; 26 C.F.R. §§ 31.6302-1, 31.6302(c)- 11 1, 31.6302(c)-3, and file with the IRS certain quarterly employment tax returns, Employer's 12 Quarterly Federal Tax Returns (Form 941), and annual FUTA Tax Returns (Form 940) 13 (collectively "employment tax returns"), under 26 U.S.C. § 6011; 26 C.F.R. § 31.6071(a)-l. 14 D. Defendant Flushman determines financial policy for Defendant Flushman Ltd., 15 directs the payments ofFlushman Ltd.'s bills, authorizes payroll to Flushrnan Ltd. employees, 16 authorizes or makes federal tax deposits for Flushman Ltd., and prepares and transmits Flushrnan 17 Ltd.'s payroll tax returns. 18 E. Defendants have repeatedly failed to meet their obligations described in 19 Paragraph C, above, conduct that substantially interferes with the enforcement of the internal 20 revenue laws, and that injunctive relief is appropriate to prevent the recurrence of that conduct 21 pursuant to the Court's inherent equity powers and I.R.C. § 7402(a). 22 23 24 25 F. IT IS ORDERED under 26 U.S.C. § 7402 that Defendants shall for a period continuing three years from the date of this order: i. Timely withhold and deposit withheld FJCA taxes, as well as Flushman Ltd's share of FICA taxes, employment taxes, and unemployment taxes, as they become 3 Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 4 of 6 due, in an appropriate federal depository bank in accordance with federal deposit 2 regulations; 3 4 ii. Timely deposit FUTA taxes, as they become due, in an appropriate federal depository bank each quarter in accordance with federal deposit regulations; iii. 5 Timely file Form 941 employment tax returns and Fonn 940 6 unemployment tax returns, as they become due, with a designated IRS revenue officer or 7 at such other location as the IRS may designate and deem appropriate; 8 9 10 11 12 iv. Timely file all corporate and personal income tax returns as they become v. Timely pay all outstanding liabilities due on each return required to be due; filed by items iii. and iv., above; vi. File amended Form 941 and Form 940 returns for all periods for which 13 returns have been previously been filed covering the periods starting with the second 14 quarter of 2015 through the current quarter and such amended returns will indicate that 15 Flushman was an employee of Flushman Ltd during all such periods and will include 16 substantiation of the wages paid to Flushman for each such quarter; 17 vii. File past due Form 940 returns for tax years 2012 and 20 14; 18 viii. File past due Form 1120 corporate income tax returns for the tax years 19 20 21 22 23 2011 through 2015, inclusive; IX. File past due Form 1040 personal income tax returns for the tax years 2011 through 2015, inclusive; x. File all of the returns required to be filed by items vi., vii., viii., and ix., above no later than April 17, 2017; 24 25 4 Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 5 of 6 1 G. IT IS FURTHER ORDERED that the United States be entitled to conduct 2 discovery to monitor Defendants' compliance with the tenns of the injunction entered against 3 them; and 4 H. IT IS FURTHER ORDERED that the Court retain jurisdiction over the 5 Defendants and this action to enforce any tenns of the injunction entered against them. 6 I. IT IS FURTHER ORDERED that all pending motions [#34] are DENIED as moot, this action is DISMISSED, and the Clerk of Court is directed to CLOSE THIS CASE. Should the government require additional action of the court to enforce the injunction, it must file a Motion to Reopen Case to seek that relief. IT IS SO ORDERED 7 8 9 10 _________________________________ Jennifer Dorsey, U.S. District Judge November 23, 2016 11 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 Case 2:15-cv-01531-JAD-NJK Document 37 Filed 11/22/16 Page 6 of 6 Prepared by: CAROLINE D. CIRAOLO Principal Deputy Assistant Attorney General 2 3 4 /-Jl z-z.- ,201 6. ____ t Dated: _1 ...... By: PAUL T. BUTLER Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 683 Ben Franklin Station Washington, D.C. 27044 Telephone: (202) 514-1170 5 6 7 8 Of Counsel: DANIEL BOGDEN 9 United States Attorney 10 1I Reviewed and Agreed: 12 13 Dated: J/,vr,..nl,w-- ZL. , 2016 14 15 16 17 Solomon, Dwiggins, heer, Ltd. 9060 West Cheyenne Avenue Las Vegas, NV 89129 Telephone: (702) 589-5284 Counsel for Defendants Joshua D. Flushman, D.C., Ltd. and Joshua D. Flush man 18 19 20 21 22 23 24 25 6