United States District Court, D. Massachusetts
MEMORANDUM AND ORDER DENYING MOTION TO
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
United States of America filed this case to collect a civil
penalty assessed against Defendant Monica Toth for her
alleged failure to timely report her financial interest in,
and/or her signatory or authority over, a foreign bank
account for the 2007 calendar year. Currently before the
Court is Toth's motion to dismiss [ECF No. 49]. For the
reasons explained below, Toth's motion to dismiss is
motion to dismiss stage, the Court accepts as true all
well-pleaded facts, analyzes those facts in the light most
hospitable to the plaintiff's theory, and draws all
reasonable inferences from those facts in favor of the
plaintiff. United States ex rel. Hutcheson v. Blackstone
Med., Inc., 647 F.3d 377, 383 (1st Cir. 2011). The
following facts are taken from the complaint. [ECF No. 1].
1999, a bank account was opened in Toth's name at UBS AG
in Zurich, Switzerland (the “Account”). The
Account has remained open continuously since 1999. At all
times since the Account was opened, Toth had a financial
interest in the Account and held the authority to control the
disposition of the funds in the Account.
case concerns Toth's tax liability related to the Account
for the year 2007. At all times during the 2007 calendar
year, Toth was a United States citizen and resident. Toth
prepared her own federal income tax return for the year 2007,
which she signed under penalty of perjury and filed in a
timely manner. Toth failed to report any income or loss from
the Account, or otherwise disclose the existence of the
Account, in her 2007 return. Toth also failed to file a
Financial Bank Account Reports form (“FBAR”)
prior to June 30, 2008, as required by 31 U.S.C. § 5314
and 31 C.F.R. § 1010.350.
FBAR is required when a United States citizen has a financial
interest in, or signatory or other authority over, any
foreign financial accounts that individually or collectively
have a maximum value greater than $10, 000 during the
calendar year. 31 U.S.C. § 5314; 31 C.F.R. §
1010.350. The Government alleges that the Account's
balance exceeded $10, 000 and that Toth had a financial
interest in, and/or signatory or other authority over, the
Account at all times during the 2007 calendar year.
after June 2008, the IRS initiated an audit as to Toth's
tax liability for 2007, during which time the IRS
investigated matters relating to the Account. As of June 30,
2008, the Account's balance was at least $4, 347, 407. On
September 19, 2013, the Treasury Department assessed a civil
penalty (the “FBAR Penalty”) against Toth in the
amount of $2, 173, 703, due to Toth's willful failure to
disclose the Account to the IRS. Notice of the assessment of
the FBAR Penalty and a demand for payment was sent to Toth on
or about September 19, 2013. Toth has neglected, refused, or
failed to pay the FBAR Penalty.
September 16, 2015, the United States initiated this action
against Toth. [ECF No. 1]. On October 13, 2016, Toth filed a
motion to dismiss [ECF No. 49] and memorandum in support [ECF
No. 50] arguing that the instant action should be dismissed
pursuant to Federal Rules of Civil Procedure 12(b)(2), (4),
(5), and (6). The Government filed oppositions on October 27,
2016 [ECF No. 51] and December 14, 2016 [ECF No. 55].
LEGAL STANDARDS AND DISCUSSION
Toth's motion to dismiss pursuant to Rules 12(b)(4) and
first moves to dismiss this action for insufficient and
defective service of process pursuant to Federal Rule of
Civil Procedure 12(b)(4) and (5). [ECF No. 49]. She argues
that the Government failed to comply with the time
limitations of Rule 4(m). [ECF No. 50 at ¶ 20].
“The plaintiff is responsible for having the summons
and complaint served” upon the defendant within
“120 days after the complaint is filed” unless
this time period is extended by the Court following a showing
of good cause. Fed.R.Civ.P. 4(c)(1), (m). The complaint was
filed on September 16, 2015. [ECF No. 1]. On February 1,
2016, the Government filed its proof of service, indicating
that a professional process server had effected service upon
Toth pursuant to Massachusetts Rule of Civil Procedure
4(d)(1) on January 11, 2016. [ECF No. 4 at 3]. As Toth was
served within “120 days after the complaint [was]
filed, ” the Government complied with the requirements
of Federal Rule of Civil procedure 4(m).
also argues that service was insufficient because the
Government failed to have her personally served with the
summons and complaint. [ECF No. 50 ¶ 19]. “Unless
federal law provides otherwise, an individual . . . may be
served in a judicial district of the United States by . . .
following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where
the district court is located or where service is made . . .
.” Fed.R.Civ.P. 4(e)(1). Massachusetts Rule of Civil
Procedure 4(d)(1) allows for service to be made “by
delivering a copy of the summons and of the complaint . . .
by leaving copies thereof at [the plaintiff's] last and
usual place of abode.” Mass. R. Civ. P. 4(d)(1). Here,
a copy of the summons and complaint were left at Toth's
last and usual place of abode, 76 Hallet Hill Road, Weston,
Massachusetts. [ECF No. 4 at 3]. Thus, because the
Government complied with Massachusetts state law in serving
Toth, service was not defective.
Toth's motion to dismiss pursuant ...