COUNSEL: James A. McDevitt, United States Attorney

W. Carl Hankla, Trial Attorney, Tax Division, U.S. Department of Justice

 

JUDGMENT AND ORDER OF FORECLOSURE SALE

 

Pursuant to the July 29, 2004 Order Granting the Government’s Motion for Summary Judgment; Denying Defendants' Motion for Summary Judgment and pursuant to 26 U.S.C. § 7402(a) and 7403(c) and 28 U.S.C. § 2001 and 2002,

 

It is ordered, adjudged and decreed that:

 

1. Judgment is entered in favor of the United States and against Bryce W.

Townley for the unpaid assessed balance of federal income tax liabilities and related

interest, penalties, fees and costs shown below:  [*2]

 

TAX YEAR	ASSESSMENT DATE	AMOUNT ASSESSED
1994	04/15/95	$ (394.00) (Withholding Credit)
	08/10/98	$ 3,319.00 (Income lax)
	08/10/98	$ 149.51 (Estimated Tax Penalty)
	08/10/98	$ 731.25 (Late Filing Penalty)
	08/10/98	$ 1,253.54 (Interest to Assessment Date)
	11/24/98	$ (808.39) Subsequent Payment]
	11/30/98	$ 16.00 Fees and Collection Costs
	08/23/99	$ 16.00 Fees and Collection Costs
	04/16/01	$ 16.00 Fees and Collection Costs
1995	04/15/96	$ (346.00) (Withholding Credit)
	08/10/98	$ 1,811.00 Income Tax)
	08/10/98	$ 77.37 (Estimated Tax Penalty)
	08/10/98	$ 366.25 (Late Filing Penalty)
	08/10/98	$ 412.07 (Interest to Assessment Date)
1996	08/10/98	$ 48,188.00 (Income Tax)
	08/10/98	$ 2,564.82 (Estimated Tax Penalty)
	08/10/98	$ 3,855.04 (Failure to Pay Tax Penalty)
	11/16/98	$ 722.82 (Failure to Pay Tax Penalty)
	05/22/00	$ 7,469.14 (Failure to Pay Tax Penalty)
	08/10/98	$ 10,842.30 (Late Filing Penalty)
	08/10/98	$ 7.208.73 (Interest to Assessment Date)
Total Assessments: $ 87.470.45

 

plus all penalties accruing under law after the dates of assessment, plus interest accruing after the dates of assessment pursuant to 26 U.S.C. § 6601, 6621, and 6622, and 28 U.S.C. § 1961 (c) until paid.

 

2. Judgment is entered in favor of the United States and against Charlene R. Townley for the unpaid assessed balance of federal income tax liabilities and related interest, penalties, fees and costs shown below:  [*3]

 

TAX YEAR	ASSESSMENT DATE	AMOUNT ASSESSED
1994	04/15/95	$ (394.00) (Withholding Credit)
	08/10/98	$ 3,319.00 (Income lax)
	08/10/98	$ 149.51 (Estimated Tax Penalty)
	08/10/98	$ 731.25 (Late Filing Penalty)
	08/10/98	$ 1,253.54 (Interest to Assessment Date)
	11/30/98	$ 16.00 Fees and Collection Costs
	08/23/99	$ 16.00 Fees and Collection Costs
	04/16/01	$ 16.00 Fees and Collection Costs
1995	04/15/96	$ (346.00) (Withholding Credit)
	08/10/98	$ 1,811.00 Income Tax)
	08/10/98	$ 77.37 (Estimated Tax Penalty)
	08/10/98	$ 366.25 (Late Filing Penalty)
	08/10/98	$ 412.07 (Interest to Assessment Date)
1996	08/10/98	$ 48,188.00 (Income Tax)
	08/10/98	$ 2,564.82 (Estimated Tax Penalty)
	08/10/98	$ 3,855.04 (Failure to Pay Tax Penalty)
	11/16/98	$ 10,872.30 (Late Filing Penalty)
	08/10/98	$ 7.208.73 (Interest to Assessment Date)
	11/16/98	$ 5,059.74 (Failure to Pay Tax Penalty)
Total Assessments: $ 85,146.62

 

plus all penalties accruing under law after the dates of assessment, plus interest according after the dates of assessment pursuant to 26 U.S.C. § 6601, 6621, and 6622, and 28 U.S.C. § 1961 (c) until paid.

 

3. The federal tax liens arising under 26 U.S.C. § 6321 from the unpaid income tax assessments described in paragraphs 1 and 2 above against Bryce W. Townley and Charlene R. Townley, for tax years 1994, 1995 and 1996, are hereby enforced against the real property described below as the Residence Property and the Investment Property.

 

4. The Residence Property, tax parcel number 2661712469090, is located at 18832 Pine Loop Road, Leavenworth, Washington 98826 and is legally described as Lot 19, Block 1, Alpine Acres according to the plat thereof recorded in Volume 7 of plats, page 33 and 34, records of Chelan County.

 

5. The Investment Property, tax parcel number 241701680365, is located at 226 Evans Street and 201 Orchard Street, Leavenworth, Washington 98826, and is  [*4]  legally described as the east 100 feet of Lot 6, Block 5, Leavenworth Gardens, according to the plat thereof recorded in Volume I of Plats, page 85, records of Chelan County, Washington.

 

6. An Internal Revenue Service Property Appraisal and Liquidation Specialist, or such representative as he may appoint or employ, is authorized and directed under 28 U.S.C. § 2001 and 2002 to offer for public sale and to sell the Residence Property and the Investment Property, along with any improvements, buildings, and appurtenances thereon or thereto, and this Judgment and Order of Foreclosure Sale shall serve as a special writ of execution and no further orders or process from the Court shall be required;

 

7. The Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative is authorized to have free access to the Residence Property and Investment Property and to take all actions necessary to preserve the Residence Property and Investment Property, including, but not limited to, retaining a locksmith or other person to change or install locks or other security devices on any part of the property, until the deeds to the Residence Property and Investment Property are delivered to the ultimate purchaser.

 

8. Bryce W. Townley, Charlene R. Townley, Bruce Alden Banister as Trustee of Beaver Valley Trust, their agents, successors and assigns, tenants, occupants, or other persons in possession or control of the Residence Property and Investment Property shall take all reasonable steps necessary to preserve the Residence Property and Investment Property (including all buildings, improvements, fixtures and appurtenances on the property) in their current condition. They shall not commit waste against the Residence Property and Investment Property, nor shall they cause or permit anyone else to do so. They shall not do anything that tends to reduce the value or marketability of the Residence Property arid Investment Property, nor shall they cause or permit anyone else to do so. They shall not record any instruments, publish  [*5] any notice, or take any other action (such as running newspaper advertisements or posting signs) that may directly or indirectly tend to adversely affect the value of the Residence Property and Investment Property or that may tend to deter or discourage potential bidders from participating in the public auction, nor shall they cause or permit anyone else to do so. Violation of this paragraph shall be deemed a contempt of court and punishable as such.

 

9. All persons occupying the Residence Property and Investment Property shall leave and vacate the Residence Property and Investment Property permanently within twenty (20) days of the date of this Order, taking with them their personal property (but leaving all improvements, buildings, and appurtenances to the property). If any person fails or refuses to leave and vacate the property by the time specified in this Order, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative is authorized (but not required) to take all actions that are reasonably necessary to bring about the ejectment, of those persons. A writ of assistance may, without further notice, be issued by the Clerk of Court pursuant to Rule 70 of the Federal Rules of Civil Procedure to compel delivery of possession of the Residence Property and Investment Property. If any person fails or refuses to remove his or her personal property from the premises by the time specified herein, the personal property remaining on the property thereafter is deemed forfeited and abandoned, and the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative is authorized to remove it and dispose of it in any manner he sees fit, including sale, in which case the proceeds of the sale are to be applied first to the expenses of sale and the balance to be applied toward the subject tax liabilities of Bryce W. Townley and Charlene R. Townley.

 

10. The terms and conditions of the sale of the Residence Property and Investment Property are as follows:

 

a. The sale of the Residence Property and Investment Property shall be free  [*6]  and clear of all liens or interests, specifically including those of the United States; Bryce W. Townley and Charlene R. Townley; Bruce Alden Banister, Trustee of Beaver Valley Trust; Jennifer and Daniel Sidebottom; and the current tenants or occupants.

 

b. The sale shall be subject to building lines, if established, all laws, ordinances, and governmental regulations (including building and zoning ordinances) affecting the Residence Property and Investment Property, and easements and restrictions of record, if any;

 

c. The sale shall be held on the premises of the Residence Property and/or Investment Property or any other place permitted by the provisions of 28 U.S.C. § 2001;

 

d. The date and time for sale are to be announced by the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative;

 

e. Notice of the sale shall be published once a week for at least four consecutive weeks before the sale of the Residence Property and Investment Property in at least one newspaper regularly issued and of general circulation in the county wherein the Residence Property and Investment Property are situated, and, at the discretion of the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative, by any other notice that he or his representative deems appropriate. The notice shall contain a description of the Residence Property and Investment Property and shall contain the terms and conditions of sale in this Judgment and Order of Foreclosure Sale;

 

f. The sale of the Residence Property and Investment Property shall be subject to a minimum bid, the amount of which shall be determined by the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative at his sole discretion. If the minimum bid is not met or exceeded, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative may, without further permission of this Court, and under the terms and conditions in this  [*7]  judgment and Order of Foreclosure Sale, reduce the minimum bid, and, if necessary, hold a new public sale;

 

g. At the time of the sale of the Residence Property and Investment Property, the successful bidder shall be required to deposit with the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative a minimum of ten (10) percent of the bid, with the deposit to be made by cash, certified check or cashier’s check payable to the United States Treasury. Before being permitted to bid at the sale, bidders shall display to the Internal Revenue Service Property Appraisal and Liquidation Specialist, or his representative, proof that they can make the deposit required by this Judgment and Order of Foreclosure Sale (the United States may bid as a credit against the outstanding amount of the above-described judgment, without tender of cash);

 

h. The balance of the purchase price for the Residence Property and Investment Property is to be paid to the Internal Revenue Service Property Appraisal arid Liquidation Specialist or his representative by the successful bidder within twenty (20) days following the date of the acceptance of the bid. The payment shall be made by certified check, cashier’s check or money order payable to the United States Treasury. In the event that the bidder fails to fulfill this requirement, the deposit shall be forfeited and applied to cover the expenses of the sale, with any amount remaining to be applied to the outstanding federal tax liabilities of Bryce W. Townley and Charlene R. Townley as stated above, and the Residence Property and Investment Property shall be again offered for sale in accordance with the provisions of this Judgment and Order of Foreclosure Sale;

 

i. The sale of the Residence Property and Investment Property shall be subject to confirmation by this Court. Upon confirmation of the sale, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall execute and deliver quit claim deeds conveying the Residence Property and  [*8]  Investment Property to the purchaser. Upon confirmation of the sale, all interests in, liens against, or claims to the Residence Property and Investment Property that are held or asserted by all parties to this action are discharged and extinguished, and redemption rights under state law shall not apply to this sale under federal law;

 

j. The purchaser is responsible to take the necessary action for the ejection of anyone who may be occupying the Residence Property and Investment Property on the date of the sale; and

 

k. The sale is ordered pursuant to 28 U.S.C. § 2001 and is made without right of redemption.

 

l. When the sale of the Residence Property and Investment Property is confirmed by this court, the Chelan County Auditor shall permit the transfer of the Residence Property and Investment Property to be reflected upon that county’s register of title.

 

12. After the confirmation of the sale of the Residence Property and Investment Property, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall distribute the amount paid by the purchaser in the following order of preference, until that amount is exhausted. First, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall retain an amount sufficient to cover the expenses of sale, including any costs incurred to secure or maintain the Residence Property and Investment Property. Second, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall satisfy any delinquent Chelan County property taxes that may constitute a lien against the Residence Property and/or Investment Property under 26 U.S.C. § 6323(b)(6). Third, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall pay to the United States by check made payable to the United States Treasury arid delivered by certified or overnight express mail addressed to Carl Hankla, United States Department of Justice, Tax  [*9]  Division, 555 Fourth Street N.W. Room 7225, Washington. D.C., 20001, an amount to cover the federal tax liabilities of Bryce W. Townley and Charlene R. Townley for tax years 1994, 1994 and 1996, which liabilities have been reduced to judgment by this Court as set forth in paragraphs 1 and 2 above, plus all penalties accruing under law after the dates of assessment, plus interest accruing after the dates of assessment pursuant to26 U.S.C. § 6601, 6621, and 6622, and 28U.S.C. § 1961(c) until paid. In the event that the federal tax liabilities are satisfied, the Internal Revenue Service Property Appraisal and Liquidation Specialist or his representative shall interplead the surplus sale proceeds into the registry of the Court.