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Escobedo v. United States

United States District Court, Ninth Circuit

November 14, 2013

FEDERICO ESCOBEDO, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [DOC. 31]

M. JAMES LORENZ, District Judge.

On February 24, 2012, Plaintiff Federico Escobedo commenced this tax refund action against Defendant United States of America. Plaintiff alleges that he is entitled to a refund of the federal income taxes he paid to the United States in tax years 2005 and 2006 because, under a bilateral treaty between the United States and Mexico that governs dual resident taxpayers, he was considered a resident of Mexico for federal income tax purposes during those years. Defendant now moves for summary judgment.

The Court found this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court DENIES Defendant's motion for summary judgment.

I. BACKGROUND

Plaintiff Federico Escobedo timely filed a U.S. Individual Income Tax Return (Form 1040) with the Internal Revenue Service ("IRS") for the 2005 and 2006 tax years and paid more than the amounts shown due on the Forms 1040. (Castaldi Decl., Ex. C, 41-42: 18-25, 1-3; Castaldi Decl. Exs. H and I.) On February 24 and 26, 2009, respectively, Plaintiff filed Amended U.S. Individual Income Tax Returns (Forms 1040X) with the IRS for the 2005 and 2006 tax years, claiming a refund of all the taxes, penalties, and interest he paid to the IRS for those years. (Castaldi Decl. Exs. L and M.)

In his Forms 1040X, Plaintiff asserted he is entitled to a refund because he should have been considered a tax resident of Mexico for 2005 and 2006. (Castaldi Decl. Exs. L and M.) On February 26, 2010, the IRS denied both of Plaintiff's claims for a refund. On February 24, 2012, Plaintiff commenced this action for a tax refund on the same grounds. (Compl. [Doc. 1].) Defendant now moves for summary judgment on the basis that Plaintiff was properly considered a United States resident for tax purposes in 2005 and 2006 his "center of vital interests" and habitual abode was in the United States.[1]

II. LEGAL STANDARD

Summary judgment is appropriate under Rule 56(c) where the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Id. at 322-23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

"The district court may limit its review to the documents submitted for the purpose of summary judgment and those parts of the record specifically referenced therein." Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001). Therefore, the court is not obligated "to scour the record in search of a genuine issue of triable fact." Keenan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995)). If the moving party fails to discharge this initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

If the moving party meets this initial burden, the nonmoving party cannot defeat summary judgment merely by demonstrating "that there is some metaphysical doubt as to the material facts." Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995) ("The mere existence of a scintilla of evidence in support of the nonmoving party's position is not sufficient.") (citing Anderson, 477 U.S. at 242, 252). Rather, the nonmoving party must "go beyond the pleadings" and by "the depositions, answers to interrogatories, and admissions on file, " designate "specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)).

When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita, 475 U.S. at 587. "Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he [or she] is ruling on a motion for summary judgment." Anderson, 477 U.S. at 255.

III. DISCUSSION

A. The Convention Between the United States and Mexico for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on ...


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