United States District Court, D. South Dakota, Southern Division
MEMORANDUM OPINION AND ORDER
Lawrence L. Piersol United States District Judge.
United States of America commenced this action to reduce to
judgment unpaid federal income tax assessments made against
Jeffrey A. Nelson, to obtain a judicial determination that
the "J A. Nelson Irrevocable Trust" is a nominee
and/or alter ego of Jeffrey A. Nelson, and to foreclose the
resulting tax liens. Beverly Nelson, the Minnehaha County
Treasurer's Office, and Jeffrey Nelson as Trustee of the
J. A. Nelson Irrevocable Trust are named only in Count II,
the count to enforce the tax liens, because they may claim an
interest in the real property. Jeffrey Nelson and Beverly
Nelson move to dismiss the Complaint. The United States
resists the motion. For the following reasons, the motion to
dismiss will be denied.
facts, according to the Complaint, are as follows:
and Beverly Nelson, husband and wife, reside in Dell Rapids,
South Dakota. Jeffrey Nelson acquired the property described
in the complaint on September 22, 1978 and has continuously
used it as his personal residence. On or about October 25,
1978, Jeffrey Nelson transferred the property by quitclaim
deed to the J. A. Nelson Irrevocable Trust for no
Nelson has personally paid the Minnehaha County Treasurer
real property taxes assessed on the property.
Nelson did not file federal income tax returns for the tax
years 2004 through 2011, inclusive. Nelson was given timely
notice of the assessments against him each of those years.
Nelson owes $152, 350.27 in taxes and statutory additions.
Notices of federal tax liens were filed against both Jeffrey
A. Nelson and the J. A. Nelson Irrevocable Trust. As of
November 30, 2016, Jeffrey Nelson owes $152, 350.27 in taxes
and statutory additions.
support of their motion to dismiss the complaint, the Nelsons
argue the Court does not have subject matter jurisdiction
over the claims against them, personal jurisdiction over them
is lacking, venue is improper, and Plaintiff has failed a
state a valid claim. (Docs. 7 and 11.)
Subject Matter Jurisdiction
Court has subject matter jurisdiction over the claims in this
case pursuant to 26 U.S.C. § 7402 and 28 U.S.C.
§§ 1340 and 1345. Under section 7402, federal
district courts have jurisdiction "to render such
judgments and decrees as may be necessary or appropriate for
the enforcement of the internal revenue laws." 26 U.S.C.
§ 7402(a). Section 1340 grants original jurisdiction to
district courts "of any civil action arising under any
Act of Congress providing for internal revenue." 28
U.S.C. § 1340. Finally, section 1345 provides, in
pertinent part: "the district courts shall have original
jurisdiction of all civil actions, suits or proceedings
commenced by the United States." 28 U.S.C. § 1345.
This Court has subject matter jurisdiction over this action
brought by the United States as Plaintiff, seeking to enforce
a lien arising from an assessment of federal income tax.
See, e.g., United States v. Harvey, 2013 WL 5604307,
at *2 (D.S.D. Oct. 11, 2013) (concluding subject matter
jurisdiction existed under 28 U.S.C. §§ 1340 and
1345 and 26 U.S.C. § 7402 over case seeking adjudication
of federal tax lien). Accordingly, the Nelsons are not
entitled to dismissal of this action for lack of subject
exists when a defendant is domiciled in the forum state.
See Goodyear Dunlop Tires Operations, S.A. v. Brown,564 U.S. 915, 924 (2011) (noting that "[f]or an
individual, the paradigm forum for the exercise of general
jurisdiction is the individual's domicile"). The
Nelsons admit they are residents of the State of South Dakota
and that the property is located in South Dakota. (Doc. 7,
pp. 2 and 8.) The Nelson's mailing address is the same as
the property location in Dell Rapids, (docs. 11 and 11-1),
and they were served with the summons and complaint at the