The opinion of the court was delivered by: Savage, J.
In this action brought by the United States to reduce tax assessments to judgment against defendant Thomas Stevenson and to foreclose upon real property held in the name of his son, Joshua Stevenson, the United States has moved for summary judgment. It contends that there is no dispute that Thomas Stevenson failed to pay federal income taxes for six years and he owes $502,623.00*fn1 plus penalties, interest and statutory amounts. In addition, it argues that the undisputed facts establish that Thomas Stevenson is the true owner of the residential property which is titled in his son Joshua's name. It seeks to foreclose on this property to satisfy the tax liabilities.
Opposing summary judgment and in their cross-motion for summary judgment, the Stevensons argue that the tax assessments against Thomas Stevenson cannot be reduced to judgment because the United States never provided him with the statutorily required notices of deficiency. In the alternative, they claim that the United States has not satisfied its burden to show that its tax assessments against Thomas Stevenson are correct. They have not addressed the issue of the ownership of the property.
Thomas Stevenson, a licensed veterinarian, has owned and operated the Twin Valley Veterinarian Clinic since 1987. Stevenson Dep., p. 9-10. In 1994, he stopped filing income tax returns because his "beliefs had changed." Stevenson Dep., pp. 23-24. He did not pay federal income taxes for tax years 1994 through 1999. Stevenson Dep., p. 22.
Twice in 2000, Thomas Stevenson met with an Internal Revenue Service (IRS) agent to discuss the IRS's contention that he was liable for back taxes. Stevenson Dep., pp. 17-18. During the meetings, he provided the IRS with financial records, including receipts and cancelled checks, for his veterinary business. Stevenson Dep., pp. 18, 21. Subsequent to the meetings, he received letters from the IRS notifying him that he owed outstanding taxes. Stevenson Dep., pp. 18-19.
On October 19, 2001, Joshua Stevenson took title to real property located at 201 N. Chestnut Street, Elverson, Pennsylvania. Compl. ¶ 15and Answer ¶ 5. Robert Tursack lent Thomas Stevenson money for the purchase of the property. Because he was aware of Thomas Stevenson's tax problems, Tursack wanted a mortgage on the property as security. Although Tursack lent the money to Thomas Stevenson, Joshua Stevenson, who was nineteen years old at the time and a college student in Idaho, was listed as the mortgagor on the loan documents. Tursack Dep., pg. 23-24. Joshua Stevenson continues to live in Idaho. Thomas Stevenson, his wife and other children reside in the Elverson property. Thomas Stevenson has always paid the mortgage, property taxes, insurance and maintenance expenses for the property. Stevenson Dep., p. 58.
Summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In examining the motion, we must view the facts in the light most favorable to the non-movant and draw all reasonable inferences in his favor. Conopco, Inc. v. U.S., 572 F.3d 162, 165 (3d Cir. 2009).
The party moving for summary judgment bears the initial burden of demonstrating that there are no genuine issues of material fact. Fed. R. Civ. P. 56(c). Once the movant has done so, the opposing party cannot rest on the pleadings. To defeat summary judgment, he must come forward with probative evidence establishing the prima facie elements of his claim. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). The non-movant must show more than the "mere existence of a scintilla of evidence" for elements on which he bears the burden of production. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). An inference based upon speculation or conjecture does not create a material fact. Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n.12 (3d Cir. 1990).
The Internal Revenue Code mandates that "no assessment of a deficiency . . . and no levy or proceeding in court for its collection shall be made, begun, or prosecuted" until a notice of deficiency is mailed to the taxpayer. 26 U.S.C. § 6213(a). Unless it sends the notice to the taxpayer, the IRS can not proceed to assess the taxes due. Robinson v. U.S., 920 F.2d 1157, 1158 (3d Cir. 1990). In other words, the notice of deficiency is a prerequisite to the tax collection process. Id.
The notice of deficiency may be sent by certified or registered mail to the last known address of the taxpayer. 26 U.S.C. § 6212(b)(1); See U.S. v. Shafer, No. 93-0389, 1996 WL 208352 *4 (E.D. Pa. April 26, 1996) (citing Berger v. Commissioner, 404 F.2d 668, 673 (3d Cir. 1968)). Actual receipt of the notice is not necessary. The notice requirement is satisfied upon proper mailing to the taxpayer's last known address. Berger, 404 F.2d at 672. The address on the taxpayer's most recent tax return is the last known one. Shafer, 1996 WL 208352 *4. The address on the taxpayer's correspondence ...