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Default Judgment Forces Company to Comply With Tax Laws

AUG. 31, 2020

Dampier Electric Inc. et al. v. United States

DATED AUG. 31, 2020
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Dampier Electric Inc. et al. v. United States

UNITED STATES OF AMERICA,
Plaintiff,
v.
DAMPIER ELECTRIC, INC. and MARCUS DAMPIER,
Defendants.

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS AND GRANTING MOTION FOR DEFAULT JUDGMENT

On October 8, 2019, the United States of America (the "Government") filed this action against Dampier Electric, Inc. ("Dampier Electric") and Marcus Dampier ("Dampier") (collectively, "defendants") seeking entry of a permanent injunction under 26 U.S.C. § 7402(a) as necessary to enforce the internal revenue laws. (Doc. No. 1.) The Government served the summons and complaint on Dampier on October 26, 2019 and on Dampier Electric on October 17, 2019. (Doc. Nos. 4, 5.) On November 27, 2019, the Clerk of Court entered defendants’ defaults as to the complaint. (Doc. Nos. 10, 11.) On January 30, 2020, the Government filed a motion for entry of default judgment against defendants. (Doc. No. 13.) No opposition to the pending motion was filed. The matter was referred to a United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302.

On March 20, 2020, the assigned magistrate judge issued findings and recommendations recommending that the Government’s motion for entry of default judgment be granted, that judgment be entered against defendants, and that a permanent injunction be entered pursuant to 26 U.S.C. § 7402(a). (Doc. No. 16.) The findings and recommendations provided that any party could file objections thereto within fourteen (14) days. (Id. at 16.) To date, no objections have been filed and the time for doing so has now passed.

In accordance with the provisions of 28 U.S.C. § 636(b)(1)(C), the court conducted a de novo review of the case. Having carefully reviewed the file, the court concludes that the findings and recommendations are supported by the record and proper analysis.

Accordingly:

1. The findings and recommendations issued on March 20, 2020 (Doc. No. 16) are adopted in full;

2. Plaintiff’s motion for default judgment (Doc. No. 13) is granted;

3. Judgment is entered against defendant Dampier Electric, Inc. and defendant Marcus Dampier;

4. A permanent injunction pursuant to 26 U.S.C. § 7402(a) is entered against defendants with the following terms:

a. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to timely and accurately file all required federal income tax returns (i.e., Forms 1040, 1120, 1120s, 1065, etc.) with the IRS at such location as the IRS may deem appropriate;

b. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to timely and fully pay all federal income tax liabilities as required by the IRS;

c. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to timely and accurately file all required federal employment tax returns with the IRS at such location as the IRS may deem appropriate;

d. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to deposit withheld federal payroll taxes in an appropriate federal depository bank in accordance with the federal deposit regulations;

e. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to deposit federal employment taxes in an appropriate federal depository bank in accordance with the federal deposit regulations;

f. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to deposit federal unemployment taxes in an appropriate federal depository bank each quarter in accordance with the federal deposit regulations;

g. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required on the 1st day of each month to sign and deliver an affidavit to a designated IRS Revenue Office, or such other person as the IRS may deem appropriate, stating that the requisite withheld federal employment taxes due during the previous month were timely made;

h. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required on the 1st day of each month to sign and deliver an affidavit to the designated IRS Revenue Office, or such other person as the IRS may deem appropriate, stating that Dampier Electric’s requisite share of federal employment taxes due during the previous month were timely made;

i. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required on the 1st day of each quarter to sign and deliver an affidavit to the designated IRS Revenue Office, or such other person as the IRS may deem appropriate, stating that Dampier Electric’s requisite federal unemployment taxes due during the previous quarter were timely made;

j. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to timely pay all required outstanding liabilities due on each tax return required to be filed herein;

k. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are prohibited from assigning any property or making any disbursements after the date of the injunction until amounts required to be withheld from employee wages after the date of the injunction are paid to the IRS;

l. Dampier Electric, Inc., and Dampier, individually and doing business under any other name or using any other non-Dampier Electric, Inc., entity, and their representatives, partners, agents, servants, employees, attorneys, and anyone in active concert or participation with them, are required to immediately, and for a periods of five (5) years after the date of the injunction, notify the IRS of their relationship with any current or future business entity which they may currently or in the future own, manage, operate, or work for;

m. The United States may take post-judgment discovery to the same extent that post-judgment discovery is available to a judgment creditor under Federal Rule of Civil Procedure 69 to investigate and to ensure compliance with this injunction; and

n. The Court shall retain jurisdiction over this case to ensure compliance with this injunction; and

5. The Clerk of the Court is directed to close this case.

IT IS SO ORDERED.

Dated: August 28, 2020

[signed]
UNITED STATES DISTRICT JUDGE

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