United States District Court, M.D. Florida, Tampa Division
D. WHITTEMORE UNITED STATES DISTRICT JUDGE
cause is before the court on remand from the Eleventh Circuit
Court of Appeals. On December 17, 2019, a hearing was
conducted on the United States' Renewed Motion for
Preliminary Injunction under 26 U.S.C. § 7406(a), as
directed by the Eleventh Circuit. Upon consideration, the
United States' motion is GRANTED.
Defendant Roland V. Askins III, Roland V. Askins III, MD,
P.A., and all persons and entities in active concert or
participation with them are enjoined from violating the
Internal Revenue employment tax reporting and payment
requirements, Specifically, Defendants shall, for each annual
quarter after the date of this preliminary injunction, file
or cause to be filed, all required employment tax returns and
pay to the Internal Revenue Service ("IRS") all
income and Federal Insurance Contributions Act
("FICA") taxes withheld from employees of Roland V.
Askins III and/or Roland V. Askins III, MD, P.A., and Roland
V. Askins Ill's and/or Roland V. Askins III, MD,
P.A.'s share of FICA taxes. Defendants shall segregate on
a semiweekly schedule all employment taxes of employees of
Roland V. Askins III and/or Roland V. Askins III, MD, P.A. in
a federal depository bank in accordance with the federal
support of its request, the United States relies on
Defendant's undisputed failure to remit withheld payroll
taxes to the IRS when he practiced with Askins & Miller
Orthopaedics, P.A., contending this demonstrates a likelihood
of future violations of the Internal Revenue Code as it
relates to collecting and remitting employee payroll taxes.
This court previously found that the United States had
demonstrated Askin's proclivity for unlawful conduct in
the past, by failing to pay over income tax and FICA taxes
withheld from employees of Askins & Miller Orthopaedics,
P.A. Specifically, this court found that "Defendants
have diverted and misappropriated those funds, rather than
remit them to the IRS." (Dkt. 43 at 3).
FICA, Defendant and Roland V. Askins III, MD, P.A, are
required to withhold payroll taxes from wages paid to
employees and remit those taxes, along with the
employer's share of FICA taxes, to the IRS. See
26 U.S.C. §§ 3101, 3102, 3111, and 3402. Once those
taxes are withheld, they "constitute a special fund held
in trust for the United States." Thibodeau v. United
States, 828 F.2d 1499, 1506 (11th Cir. 1987).
does not contest his or his P.A.'s responsibility to pay
his employment tax obligations, and admitted that Askins
& Miller Orthopaedics, P.A. failed to deposit or made
late deposits of employment taxes over a seven year period.
(Dkt. 23-2). And since December 2010, the IRS has made
numerous attempts to bring Askins & Miller into
compliance with its obligations through phone calls, in
person meetings, and installment agreements. (Id. at
¶¶ 28-31). And "[s]ince that time, the company
... has only sporadically complied with its obligations to
deposit its employment taxes and pay them over to the IRS.
The few instances in which the company has complied indicate
that Defendants know how to follow the law but nonetheless
choose to disobey it." (Id. at ¶ 4).
statutes with which Defendant must comply are specific, and
the record demonstrates that they are well aware of the
conduct the Government's proposed injunction addresses,
his failure to remit to the IRS taxes withheld from
employees. See 26 U.S.C. §§ 3102, 3111,
3402, 6302 and 6157; 26 C.F.R. § 31.6302-1. Indeed,
since practicing under Roland V. Askins III, MD, P.A.,
employee tax returns have been filed each quarter since the
last quarter of 2018, and withheld taxes and FICA taxes paid.
While the United States contends that ongoing violations are
occurring, in that it "appears" that employee wages
have been underreported and that two employees have been
misclassified as independent contractors (Dkt. 62 at 4), it
is unnecessary to delve into those contentions for purposes
of determining whether injunctive relief is appropriate,
since the history of transgression by Defendant and his
former P.A. alone demonstrates that unless enjoined, he is
likely to repeat those transgressions.
as here, the United States demonstrates a proclivity for
unlawful conduct, injunctive relief may be appropriate.
McComb v. Jacksonville Paper Co., 336 U.S. 187, 192
(1949) ("By its terms it enjoined any practices which
were violations of those statutory provisions. Decrees of
that generality are often necessary to prevent further
violations where a proclivity for unlawful conduct has been
shown. Respondent's record of continuing and persistent
violations of the Act would indicate that that kind of a
decree was wholly warranted in this case.") (internal
citations omitted). The traditional factors "shaping the
district court's use of the equitable remedy" of
injunction are considered in determining the propriety of
injunctive relief under § 7402(a). United States v.
Ernst & Whinney, 735 F.2d 1296, 1301 (11th Cir.
1984). The United States must demonstrate: (1) a substantial
likelihood of success on the merits; (2) irreparable injury
will be suffered absent the injunction; (3) the threatened
injury outweighs the potential damage of the proposed
injunction; and (4) the injunction would not be adverse to
the public interest. Keeton v. Anderson-Wiley, 664
F.3d 865, 868 (11th Cir. 2011). The first, third, and fourth
factors are not disputed by Defendant.
among the principles governing the use of the injunctive
remedy is the traditional requirement 'that courts of
equity should not act . . . when the moving party has an
adequate remedy at law and will not suffer irreparable injury
if denied equitable relief.'" Ernst &
Whinney, 735 F.2d at 1301 n. 11 (alteration in original)
(quotations omitted). And, "[i]n determining whether the
[United States] is entitled to an injunction in this case, it
will be necessary ... to examine the extent to which its
interests are protected by available legal remedies."
Eleventh Circuit instructs that "the collectability of a
future money judgment to redress future harms is relevant in
determining whether legal remedies are 'adequate'
such that they preclude injunctive relief under §
7402(a)." Askins & Miller, 924 F.3d at
1359. Considering the unsuccessful efforts to collect by the
IRS, I find that the likelihood that the United States could
avoid irreparable harm by obtaining monetary relief is
virtually non-existent. As the United States correctly
contends, "[t]here is no reasonable prospect of
collecting any future money judgments . for unpaid employment
taxes." (Dkt. 62 at 7). Roland V. Askins III, MD, P.A.
has no assets and has substantial liabilities and a judgment
against it for more than $124, 000. (Id.). Roland V.
Askins Ill's practice is making "just
marginally" more than its expenses. (Id.). In
his October 2018 bankruptcy filing, he listed just $47, 925
in assets, and more than $4, 814, 000 in liabilities,
including trust fund recovery penalties of more than $95,
000. (Id. at 8). He listed no cash or liquid assets,
lives free in a condominium, and owns no real property.
(Id.). After expense and alimony, he has only $200
per month in available funds. (Id. at 8-9). There
is, accordingly, no prospect of recovering from
to the extent that this injunction enjoins Roland V. Askins
III, MD, P.A. from violating the Internal Revenue Code as it
relates to withholding and paying employee taxes, the
court's equitable authority permits this under principles
of privity. That authority extends to "nonparties
otherwise legally identified" with a party. ADT LLC.
v. NorthStar Alarm Servs., LLC, 853 F.3d 1348, 1352
(11th Cir. 2017). Roland V. Askins III is the sole
shareholder of Roland V. Askins III, MD, P.A., an S
corporation, and therefore can be said to be "in active
concert or participation with" him. Griswoldv. Cty.
of Hillsborough, 598 F.3d 1289, 1292-93 (11th Cir. 2010)
(finding sole shareholder in privity with entity). It follows
that its interests are represented and adjudicated in
connection with the issuance of an injunction. The
relationship between Roland V. Askins III and his P.A. is
sufficiently close to hind the P.A. to the injunction.