*1 justification statute.7 within BOND, Appellant, Frederick O.
Id. at 1352. appeals’ the court of deci- reverse We summary judgment
sion, granted which REVENUE, COMMISSIONER OF the claim made under and dismissed Respondent. statute, Hyatt may and hold that dog bite No. A04-564. that statute. We
pursue a claim under Hyatt’s may claim be further hold Supreme Court of Minnesota. for the use of by the authorization limited the reasonable force under reasonable Feb. 2005. statute, found to be if that statute is force ultimately the facts as applicable under appeals the court of
determined. Because City’s alternative claims
did not reach the police immunity or address whether
of suit, subject to legal entity is a
department appeals to the with
we remand court If the to consider those issues.
directions City determines that the appeals
court of immunity, to the case should
is not entitled to the district court
then be remanded fact genuine
trial of issues of material
arising dog from the bite reasonable
force statutes.
Reversed and remanded to the court
appeals. (1990) (renumbered by- military dog an innocent police bites 24-521 or Ariz.Rev.Stat. (2003)). to, party par- "not a nor a stander —someone in, party or a ticipant suspected to be a nor legislature
7. We note that the Arizona amend- in, prompted use participant the act that dog exclude a ed its bite statute in 1992 to § dog.” 11— Ann. Ariz.Rev.Stat. "military police” dog that bites in defense 1025(C) Presumably, the Minneso- if person, when the bite occurred of itself or Legislature 347.22 ta wishes to make section dog apprehension, as the assisted with an police inapplicable to Statutes of Minnesota investigation, execution. See Ariz. or warrant liability dogs potential to inno- or to address 11-1025(B) (2003). § Ann. also Rev.Stat. bystanders, it will do so. cent apply note that the exclusion does not when *3 Bond, MN, Champlin, for
Frederick 0. Appellant. General, Hatch, Attorney Craig R.
Mike General, Anderson, Attorney Assistant St. Paul, MN, Respondent.
OPINION ANDERSON, H., Justice. PAUL attempted Bond Appellant Frederick 0. year liability all income tax for the to avoid a claim that “FREDERICK 2000 under is a constructive trust creat- OGAN BOND govern- under the by ed the United States in the progeny whose rests ing statutes Based on Security Act of 1935.” Social assertion, filed a federal estates this Bond all tax return and deducted and trusts fees, fiduciary leaving income for reported income of On his taxable $0.00. federal return, report- Minnesota fed- income based on his ed taxable $0.00 claimed a refund eral return and in- $2,304.53, of his state the full amount withholdings. payroll come initially Revenue Department of Minnesota refund, its but corrected granted Bond return. it audited his assessment when an of Revenue issued The Commissioner taxable income correcting Bond’s order $3,690.48 in total tax assessing Bond and $2,816.53for for the payments 2000— interest, taxes, and additional $373.95 filing issuing as a a frivolous him a Security Social number and $500 appeals return. Bond from a Minnesota card holding open and an account under Tax granting Court order Commission- his Social July number. On summary judgment er’s motion for a follow-up Bond sent letter to the Commissioner, affirming the Commissioner’s December SSA in which he stated 24, 2002 tax order. affirm. already the SSA had had sufficient respond January time to to his $49,499in Frederick 0. Bond earned letter, in which he enclosed the Trust Doc- year $48,638 wages, 2000 tax $183 — ument. He then stated that the SSA ordinary taxable divi- $678 respond needed to days within 30 or other- wages year, dends. From his *4 his wise it would collaterally estopped be from Inc., employer, Honeywell, withheld state denying the existence of the Trust. On $2,304.53. income tax the amount of 25, 2003, August Bond sent another letter Payroll statements and the W-2 for 2000 to the SSA stating Commissioner that he Honeywell were in the name of Fred- interpreted response the SSA’s lack of to erick O. Bond. agreement his letters as its to the Trust and that “this matter now stands secured filing year Before his returns for tax by the maxim doctrine of Collateral Estop- attempted Bond to secure from the pel.” (SSA) Social Administration an actual irrevocable written “Simple Social For his 2000 federal income tax Security Trust” named “FREDERICK O. returns, Bond filed Form 1041 for estates BOND.”1 Bond claims that the Trust al- and trusts rather than Form 1040 for indi- existed, ready having been established in reported viduals. He a total income of March but he wanted the Trust’s interest, in wages, taxable and or- in writing. Using terms to be a form dinary dividends, but he claimed a full Internet, available on the Bond sent to the Fees,” deduction for “Fiduciary leaving his a two-page SSA document setting out the federal taxable income at He then $0.00. specific Trust’s terms. He named the SSA a full claimed refund for his federal income Trust, as the Creator of the the SSA Gen- payroll tax withholdings. For his 2000 eral Beneficiary, Trust Fund as the return, Minnesota tax filed on March himself as the Trustee. The Trust Docu- 2001, Bond filed an M-l Individual Income
ment also allowed income from the Trust Tax form rather than an M-2 return for pay to “A Wage” Reasonable to the Trus- trusts, but he all modified name and identi- tee, including all of the living Trustee’s fication references to reflect that he was expenses. attempting to file a trust return. He re- Document, signed the Trust ported but taxable income based on $0.00 his provide Trust Document did not a 1041 filing and claimed a refund of signature line for the signa- $2,304.53, SSA and no the full payroll amount of his ture was obtained from the SSA. Never- withholdings for state income taxes. The theless, Bond asserted that the Department SSA has of Revenue initially sent Bond approval manifested its Trust a refund for this amount. opinion,
1. In this we will refer to the trust tablish with the SSA as the "Trust Docu- that Bond claims exists as "Trust” and the ment.” attempted written document that Bond to es- return, the Commissioner’s The tax court heard tax auditing Bond’s After summary judgment on Novem- Bond motion for notified of Revenue Commissioner 10, 2004, that, February if he 2003. On filing incorrect ber his was finding par- an order that the return within court file an amended issued did not notice, subject to a dispute the facts and he could be ties did not days of the having legal filed frivolous contentions were without not file an amended who is the person Bond did “when return. merit because that Bond’s Having determined has control over return. source of the trust income $43,024, the for 2000 was taxable income he cannot avoid corpus, the trust an In- sent Bond Department of Revenue of a trust.” liability by operation Report/Tax “[sjubstance Or- Income Tax Audit prevails dividual noted that The court 13, 2002, assessing der, dated December wages paid were form”—Bond’s over $3,749.86 in total taxes granted The court him and not to the SSA. .taxes, $2,816.53 for additional was which summary motion for the Commissioner’s was for and $500 was the Commissioner’s judgment $433.33 and affirmed 24, 2002, the On December penalties. taxes, $2,816.53 in assessing Bond Order *5 corrected to interest was amount of the tax plus for to $373.95, amount due reducing the total filing a frivolous tax as for $500 $3,690.48. appealed Bond the Commis- return. regular division of the order to the sioner’s cleri- that the tax court made Claiming responded The Commissioner
tax court. fact-finding, in its cal and mistakes errors 18, 2003, and, moved for September on for relief from the court’s Bond moved summary judgment. claims, he said Among several judgment. 24, 2003, hearing the before On October support not the court’s that the record did motion, Bond summary judgment on the deny not that he that he finding “[did] Ac- Illinois Public an Certified deposed the wages” or that earned (CPA) expert wit- purported as a countant a paid not to Social wages were theory his for support in an effort to ness mo- denied Bond’s Fund. The court Trust that the testified reporting. CPA time, Bond had At that tion for relief. the received from notices that Bond two a writ of certio- petition already filed Frederick O. refunds to the granting IRS rari to our court. and 2002 years for tax
Bond Trust
that
the IRS
proof
were administrative
I.
partic-
More
that the Trust exists.
agrees
tax court decisions
review
We
sent
the IRS
ularly, on December
juris
lacked
the court
determine whether
Trustee,
Bond,
informing
as
a notice
sup
diction,
decision is
the court’s
whether
that a
changed his return and
that it had
in conformi
and is
ported by the evidence
him in the total
would be sent to
refund
law,
the court
and whether
ty with the
$8,463,
unless
paid,
amount of taxes
of law.
any other error
committed
Bond received
other taxes.
Trust owed
Jeffer
Revenue, 631 N.W.2d
son v. Comm’r
15, 2003, September
the same notice on
of
(Minn.2001).
are not
of
him a refund
year, granting
2002 tax
A &
of the tax court.
by decisions
bound
that
if the
$2,012.
contended
The CPA
Revenue, 608
Vending
H
Co. v. Comm’r
it
filing, it deems
taxpayer’s
accepts
IRS
(Minn.2000). But,
before
N.W.2d
as valid.
court,
dispute. Specifically,
we will
the tax
we must
are in
argues
overrule
Bond
clearly
that
court’s decision is
that
tax court
granted
conclude
erred when it
as a
summary
erroneous because the evidence
whole
the Commissioner’s motion for
reasonably support
judgment
the decision.
following
does not
because the
“material
(1)
County Hennepin,
Lewis v.
were at
“overwhelming
N.W.2d facts”
issue:
(Minn.2001).
supported by
evidence via several motions
(2)
law”;
expert
a sworn
deposition about
Minnesota Rules of Civil Proce
(3)
return;
validity
of Bond’s
“doc-
provides
grant
dure 56
that a court shall
umentary
validity
establishing
evidence
summary
if
judgment
the record shows
parties
and existence of the
with stand-
“that
genuine
any
there is no
issue as to
ing.”
argues
that
this evidence
party
material fact and that either
is enti
person
could lead a reasonable
to conclude
judgment
tled to a
as a matter of law.”
that “the account creation of the Social
Minn. R.
P. 56.03. The
Civ.
Minnesota Security Administration effects the cre-
apply
Rules of Civil Procedure
to tax court
ation of a constructive
is in
[T]rust
proceedings
they are not
where
inconsis
‘person’
fact a
under state and federal
procedures.
tent with
court
See Minn.
taxing
separate
statutes” and
from the
R.
reviewing
Civ. P. 81.01.
an
person producing
When
order
argues
the income. He
(1)
summary
judgment, we determine
the court did not review all of the
any genuine
whether there are
issues of
evidence that he submitted.
(2)
material fact and
whether the lower
Bond claims that the tax court “rewrote
court
application
erred
its
of the law.
the record of evidence on file” in order to
*6
(Minn.
Daniel,
543,
In re
656 N.W.2d
545
Specifically,
reach its result.
he criticizes
2003). The substantive
law identifies
part
the
of the court’s order
says
which facts are material. Anderson v.
“noticeably
any
absent from the record are
242, 248,
Liberty Lobby, 477 U.S.
106 S.Ct.
setting up
documents
the Trust or evi-
2505,
(1986);
pa Fahey, 555, Minn. 310 245 number.” Bond claims this statement is (1976) N.W.2d 259-60 (stating “[a] incorrect because of his contentions that material fact is one of such a as will nature the SSA established the Trust and issued affect the result or outcome of the case the tax Trust’s identification number in the resolution.”). depending on its On issues form of Security Bond’s Social number. fact, of material we view the evidence in says He that he submitted all of the fore- light the most favorable to the party going as evidence but does explain not how against summary judgment whom was him theory his allows to avoid all tax liabil- granted. Rosenberg v. Heritage Renova ity. tions, LLC, (Minn. 685 N.W.2d 324 2004). The tax court found that no material We review de novo the court’s in dispute granted facts were and law, the interpretation conclusions of of stat utes, agree. Commissioner’s motion. We In its application and Chapman law. memorandum, the court Revenue, stated what it v. Comm’r 651 N.W.2d (Minn.2002). found to be the relevant facts under the 830
tax law for its decision. The court found (1) 2000, We must first address Bond’s con that: in Bond resided in Minneso- genuine tention that issues of material wages, fact ta and earned taxable
§37 (2) (2) beneficiary vested with dividends; designated W-2 (3) a definite trust rights; wages paid were enforceable that his indicated legal had title and employer that his the trustee has individually and res which (3) taxes; Bond $2,304.53in interest. beneficiary state the beneficial withheld has (Bankr. In- Individual Bren, modified Minnesota filed a B.R. In re claimed a on which he D.Minn.2002). Tax Return only come if A trust is created taxes based state full refund for withheld demonstrates, by external ex the settlor income was de- that all on his assertion a trust. In the intent to create pression, (4) fees; and fiduciary ducted 36, 42-43, Trust, Minn. Bush’s re on his tax return his Minnesota based (1957). The settlor N.W.2d on he also deduct- 1041 form which federal any particular form need to use does not Having fiduciary fees. income as ed all Id. at to create a trust. or words record, conclude we reviewed must show But the settlor N.W.2d at 619. filings and tax statements Bond’s W-2 definite, explicit declara unequivocal, “a findings. these 2000 confirm trust,” must or circumstances tion of of the data any not contest Bond does certainty beyond “show with reasonable forms, only the conclusions these found on a trust was intend doubt that a reasonable them.2 We conclude to be reached § 41 created.” 90 C.J.S. ed to be its discre- court did not abuse that the tax record and determin- reviewing tion any not manifested The has SSA of material'fact genuine no issues ing that individual a trust with intent to create disputed. were of Social taxpayers. purpose individual create trusts with
was not to social insur provide was to taxpayers, but II. men, women, “security of the ance for the Next, determine wheth we must against certain of the Nation and children application in its the tax court erred er of life.” Eco vicissitudes hazards and that FREDERICK law. Bond asserts Hearings Security Act nomic Before created a constructive Trust O. BOND is *7 and Means House Ways on Committee of the Trust by and that allows the SSA3 (1935) Cong. 74th 13 Representatives, fiduciary all his income to deduct of of the Unit the President (Message from fees. A Recommenda Transmitting ed States Subject of Eco the Legislation on tion for law, common Minnesota Under the claims that (1) Security). Bond nomic are express of an trust the essentials of the duties; provide evidence following acts with enforceable designated trustee meaning a con- the of misconstrues CPA’s 3. Bond not mention the tax court did 2. The "has no trust trust. A constructive structive The CPA’s deposition in its memorandum. only a fiction a trust but is in fact as existence however, spoke only to his belief in testimony, unjust-enrichment, adopted by equity as an O. BOND the FREDERICK the existence of Knox, 222 Minn. rectifying remedy." v. Knox findings any the court’s and not to of Trust 225, Con- 232 25 N.W.2d Thus, despite Bond’s claim above. listed abus- "designed to correct are structive trusts testimony of fac- provides evidence the CPA’s a con- relationships and force fiduciary es of testimony opinion disputes, the CPA’s tual PJ unjust veyance prevent enrichment." to legal con- any possible relevance for only has Corp. Skoglund, v. 453 N.W.2d Acquisition clusions. 1990). (Minn. intent to establish the FREDER- may SSA’s federal assessments and dif- (1) Trust: the ICK 0. BOND issuance of fer from federal In Specktor assessments. (2) number; Security Revenue, Bond’s Social the v. Comm’r we concluded that of Security although gross distribution of Bond’s Social Minnesota income is de- (3) card; holding open income, the of an adjusted ac- fined as federal the Com- count under his issued Social may adjust missioner a taxpayer’s gross number. conclude that We these three income based on the Commissioner’s own genuine acts do not create a issue as to independent investigation of the taxpayer. (Minn.1981). whether the intended to SSA create a 308 N.W.2d have, therefore, trust and that these three acts are more comparable to acts taken to create infor- rejected argument the that federal ad- mation-tracking systems. justed gross conclusive, income was ob- serving that approach such an would only other argument is that the nullify several state give statutes which collaterally estopped SSA is from denying the Commissioner of Revenue authority existence Trust because it failed to examine tax returns and make assess- respond to to his attempts to establish the ments if deficiencies are found. More- Trust Document. We repeatedly have over, if gross federal income was con- held that a party seeking apply equita trolling, state tax authorities would be estoppel against government ble agency powerless to correct taxpayer’s re- acting sovereign capacity its a heavy has turn if adjusted the federal gross income Airlines, proof. burden of Northwest Inc. were the result of a mistake or fraud. County Hennepin, 632 N.W.2d of (Minn.2001). proof This includes a Revenue, v.Weed Comm’r 550 N.W.2d showing that government’s wrongful (Minn.1996) (internal 285, 289 citations party’s conduct induced the detrimental omitted). reliance. Id. Affirmative misconduct is not inadvertence, mistake, simple Bond earned imperfect wages, conduct. The taxable only ordinary SSA has declined to dividends respond Having income, to Bond’s 2000. letters and notices at earned the tempting he cannot up to set the Trust avoid taxation Document. contrivances. Therefore, The tax we conclude that court is free to look the SSA’s in to the sub stance, just form, action is not insufficient to establish that it of a transaction. affirmatively represented Midwest Federal supports that it Sav. and Loan Ass’n v. Revenue, the existence of the Comm’r FREDERICK 0. N.W.2d *8 (Minn.1977). BOND granting by Trust. of a refund IRS, erroneous, whether valid or does also may conclude that Bond not not prevent the Commissioner from inde rely on notices from the granting IRS pendently evaluating Bond’s state taxes. refunds to the Frederick 0. Bond Trust Thus, years for tax reasons, 2001 and 2002 for all of foregoing as a basis to establish that the Trust exists. For in- we conclude that the Bond Trust does not purposes, come tax Accordingly, Minnesota defines “net exist. we hold that the tax income” as federal taxable income. Minn. court did not err when it affirmed the 290.01, § Stat. subd. 19 Minnesota Commissioner’s concluding Order assessments, however, Bond, tax independent individual, are as an earned income in
839 interest, tax cordingly, and we hold that the court did wages, taxable the form it not err when affirmed the Commission- ordinary dividends. for penalty er’s assessment of a filing of a frivolous tax return. III. Affirmed. cannot avoid tax Having held that Bond interest, and liability wages, for taxable through the mechanism
ordinary dividends ANDERSON, J„ BARRY, having G. not Trust, we must now decide purported of a been a member of the court at the time of affirming tax court erred in whether the submission, in part took no penal assessment of a the Commissioner’s consideration or decision of this case. frivolous return. Minnesota ty filing a PAGE, (concurring specially). Justice (2000), 289A.60, im § subd. 7
Statutes
filing
for the
of a
posed
a $500
result,
I
in
concur
but differ as to
It is
well
generally
“frivolous return.”4
the rationale. This is a review on writ of
that frivo
in federal tax law
established
court,
to the tax
which affirmed
certiorari
objective
determined under an
lousness is
interest,
liability,
an
tax
assessing
order
position
and that a
is “frivolous”
standard
penalty.
a
return
The rele-
and
frivolous
See, e.g.,
if it
no basis in law or fact.
has
During
vant facts
not at issue.
are
(3d
States,
Kahn v.
formed
with
of Revenue noti-
protection against hardships
Minnesota Commissioner
basic
created
incorrectly reported
fied Bond that he had
by
earnings
the
of
due
loss
to illness or old
liability
tax
and could be assessed a
Castro,
181,
his
age.” Mathews v. De
429 U.S.
a
filing
for
frivolous return
431,
185-86,
$500
97 S.Ct.
the federal Form 1040 substantially state return was incorrect return). frivolous, making thus him liable for primary objective The age of the old penalty. Bradley frivolous return Cf. disability States, (9th aspects system of the social tois v. United 817 F.2d 289A.60, § percent 1. Minnesota Statutes required subdivision of the amount of tax to be (2000), assigned liability in the amount of shown on the return” for returns filed after person filing $500 ato frivolous tax return. 25, 2003, May December 2003. Act of ch. provision has since been amended to 3, 5,§ Minn. art. Laws 780. provide “penalty greater *10 Cir.1987) (test tax re for frivolous federal position taken when the
turn is met law). I in fact or has no basis
individual Bond’s asser to further refute
see no need copious reasoning
tions “with somber sug might to do so precedent;
citation of col- arguments have some
gest that these v. Inter
orable merit.” Crain Comm’r of (5th Revenue, F.2d
nal
Cir.1984). (concur-
ANDERSON, A. RUSSELL
ring specially). concurrence of Jus- join special
I in the Page.
tice THOMPSON, petitioner, Lee
Dallas
Appellant, Minnesota, Respondent.
STATE of
No. A04-682.
Supreme Court Minnesota. 10, 2005.
Feb.