United States of America v. RICHARD E. WITKEMPER and ELLEN F. WITKEMPER

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-2029
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
R ICHARD E. WITKEMPER and ELLEN F. WITKEMPER ,
Defendants-Appellants.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:18-cv-00873 — James R. Sweeney II, Judge.
____________________
A RGUED J ANUARY 11, 2022 — DECIDED F EBRUARY 28, 2022
____________________
Before EASTERBROOK, S CUDDER , and K IRSCH , Circuit Judges.
S CUDDER , Circuit Judge. This case began when Richard Wit-
kemper, the owner of a small business, failed to withhold fed-
eral payroll taxes from his employees’ wages. The failure
caught up to him when the United States sued him and his
wife to collect the unpaid taxes and related penalties. A bench
trial ended in the government’s favor, and the Witkempers
now appeal the district court’s determination that the govern-
ment’s collection efforts fell within the prescribed statute of

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2 No. 21-2029
limitations. This issue presented is not close, and the Witkem-
pers’ counsel never should have pressed the point on appeal.
We affirm.
I
A
Richard Witkemper was the president and sole share-
holder of Maximum Spindle Utilization, Inc., a small manu-
facturing company in southern Indiana. The company had
employees, but from 2004 to 2006 never complied with its ob-
ligation to withhold and remit federal income and insurance
contribution taxes—so-called FICA taxes.
Maximum Spindle eventually went bankrupt. And be-
cause it could not fully collect the company’s unpaid taxes
during the bankruptcy proceedings, the IRS turned its atten-
tion to Richard Witkemper. In February 2008 the Service
lodged an assessment totaling $385,705.54 and recorded a no-
tice of a federal tax lien at the same time.
Witkemper seemed to respond to these developments, at
least at first, by expressing a desire to settle with the IRS. In
July 2008 he sent the IRS a signed Offer in Compromise—
effectively a settlement offer. The next month, the Service
accepted the Offer and the Witkempers’ accompanying $150
filing fee. And soon after, Witkemper began making $500
payments, the required monthly minimum under the
compromise. But apparently Witkemper fell on hard times or
otherwise had second thoughts about making additional
payments and sought to rescind the settlement. In February
2009, after the settlement had been in effect only 205 days, the
IRS approved Witkemper’s request to withdraw the Offer in
Compromise.

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No. 21-2029 3
Things only turned for the worse from there. Likely to
evade enforcement of the federal tax liens, Witkemper then
set in motion certain property transfers. To start, he and his
wife purported to transfer their interest in their family home
to their children. But after a series of subsequent transfers, the
property ended up back with the Witkempers. In another
sequence of transactions, Richard Witkemper transferred a
commercial property interest he had to his wife. She
eventually sold that property at a profit of $202,931.01, which
she deposited into her checking account and used to pay
personal expenses. Neither property transfer was made in
exchange for any consideration, and the IRS viewed both
transactions as essentially fraudulent conveyances.
By March 2018 the IRS ran out of patience and sued both
Richard and Ellen Witkemper in federal court in southern
Indiana to recover proceeds from the fraudulent property
transfers and the unpaid FICA taxes and related penalties.
The case proceeded to a one-day bench trial in October 2020.
The district court ruled in the government’s favor.
At trial, the Witkempers had no response to the merits of
the government’s position on the unpaid FICA taxes and re-
lated penalties, or for that matter on the challenged property
transfers. Without a substantive defense, they turned to pro-
cedure and sought to challenge the timeliness of the govern-
ment’s collection and related notification actions.
First, the Witkempers argued that the government could
not prove that its initial assessment of the FICA tax penalties
fell within the deadline prescribed by Congress. They backed
the contention solely by pointing to what they viewed as un-
reliable government records containing various clerical er-
rors.

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4 No. 21-2029
Second, the Witkempers claimed that because the govern-
ment filed its federal complaint on March 16, 2018—more
than 10 years after it assessed the FICA recovery penalties—
the lawsuit was outside the applicable statute of limitations.
And while an active Offer in Compromise would typically toll
that 10-year period, the Witkempers argued that the govern-
ment was not entitled to an extension of 205 days—the
amount of time the Offer in Compromise had been in effect—
because there was never an Offer in effect. Indeed, the Wit-
kempers insisted that the Offer in Compromise on file with
the IRS reflected forged signatures. And, as best we can tell,
Richard Witkemper advanced this position without contest-
ing that he had made payments pursuant to the terms and
conditions of the Offer in Compromise.
The district court found none of this persuasive. In a
lengthy opinion replete with careful factual findings, the
district court concluded that each of the government’s efforts
to collect—both in assessing penalties and filing suit against
the Witkempers—were timely. From there the district court
saw no merit to the Witkempers’ claims that the government’s
paperwork was rife with forgery. In the end, the district court
entered judgment in the government’s favor in the amount of
$385,705.54.
The Witkempers now appeal.
B
We have no trouble affirming the district court’s ruling for
the IRS. The government’s proof of unpaid FICA taxes and
related penalties, to say nothing of the fraudulent property
conveyances, was overwhelming. Indeed, we have a hard
time seeing why the Witkempers chose to go to trial. The

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No. 21-2029 5
district court’s opinion shows that the government’s case
against them was open and shut.
What most concerns us is how the Witkempers have
approached their appeal. In raising two primary arguments,
they proceed as if the bench trial never happened. Even more,
they have paid no attention to the controlling—and
deferential—standard under which we review the district
court’s findings of fact.
First, as to the initial assessment, the Witkempers argue on
appeal, as they did at trial, that the government cannot prove
it assessed penalties on February 18, 2008. They allege that the
IRS’s Certificates of Assessment are unreliable and
fraudulent, given what appear to be typographic errors on at
least one document. But these small clerical errors, as the
district court explained, fall well short of showing the
government documents lack authenticity or are unreliable.
Though there may be some small inconsistencies in the
Certificates of Assessment, the Witkempers point to no
evidence that calls into question the date of the original
assessment. In fact, aside from the Certificates of Assessment,
there was other unchallenged evidence presented at trial that
corroborated the February 18 assessment date.
Second, despite the Witkempers’ insistence to the contrary,
we see no issue with the government’s timeliness in filing this
lawsuit. The Witkempers are right that a 10-year statute of
limitations applies to suits to recover penalties and that the
relevant time to sue tolls upon the government’s acceptance
of an Offer in Compromise. See 26 U.S.C. §§ 6502(a);
6331(i)(5), 6331(k)(1)(A). But those observations do little to
help the Witkempers. The evidentiary record contained more
than enough to support the district court’s finding that

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6 No. 21-2029
Richard Witkemper signed and submitted an Offer in Com-
promise and that the government received and accepted that
Offer. The government pointed out that Witkemper, despite
professing to have not signed the settlement, acknowledged
much of the other handwriting on the very same Offer was
his. And the government entered into evidence hundreds of
uncontested examples of his signature on other documents.
Even more, despite claiming he never signed the Offer, Wit-
kemper does not dispute that he submitted the many hun-
dreds of dollars in payments and fees associated with it.
There is no way on this evidentiary record to say we are
“left with a definite and firm conviction that a mistake has
been committed.” Anderson v. Bessemer City, 470 U.S. 564, 573
(1985) (quoting United States v. United States Gypsum Co., 333
U.S. 364, 395 (1948)). Based on the overwhelming evidence
presented at trial, the district court was well within bounds in
assessing the credibility of and rejecting Witkemper’s testi-
mony that he did not sign the document. See Morisch v. United
States, 653 F.3d 522, 529 (7th Cir. 2011) (“The credibility deter-
minations that a judge renders as the finder of fact command
a high degree of deference.”) (quoting Gicla v. United States,
572 F.3d 407, 414 (7th Cir. 2009)). Plain and simple, the district
court saw the case as overwhelmingly lopsided in the govern-
ment’s favor. So do we.
II
What we have seen in this appeal has troubled us. The
Witkempers’ counsel, Jason Smith, has advanced arguments
that have ignored the trial evidence and the deferential stand-
ard under which we must review the district court’s findings
of fact. When the government pointed this out in its opposi-
tion brief, Smith never replied—despite seeking an extension

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No. 21-2029 7
of time within which to file a reply brief. And making matters
worse, in oral argument Smith seemed surprised at the
Court’s questions about the trial evidence and standard gov-
erning our appellate review.
Unfortunately, we saw much of the same from Smith in
another recent appeal, Galloway v. Commissioner of Internal
Revenue, 2022 WL 400955 (7th Cir. 2022). There, Smith pressed
arguments expressly foreclosed by statute; indeed, we lacked
the authority to even consider the claims in his brief. In that
case, too, the government pointed out Smith’s obvious defi-
ciencies to no avail—he once again failed to file a reply brief.
And in oral argument Smith had no response to the substance
of the government’s position.
Right to it, Smith’s performance over these two recent ap-
peals falls well below the standards we expect from lawyers
authorized to practice in our Court. See Sambrano v. Mabus,
663 F.3d 879, 882 (7th Cir. 2011) (describing the role courts
have in protecting litigants from deficient legal representa-
tion). Twice in as many months, Smith has pressed frivolous
arguments with no realistic prospect of prevailing. And so,
too, are we aware that a district court in this Circuit recently
imposed disciplinary sanctions against Smith in an order that
did not mince words about his unacceptable performance. See
generally Order Overruling Defendant’s Objections to Magis-
trate Judge’s Report and Recommendation, Jackson County
Bank v. DuSablon, No. 1:18-cv-01346 (N.D. Ill. Feb. 12, 2020),
ECF No. 81. In all of these cases Smith represented clients who
deserved better.
Under Rule 46 of the Federal Rules of Appellate Proce-
dure, we may suspend or disbar a member of our bar if that
individual engages in “conduct unbecoming of a member of

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8 No. 21-2029
the court’s bar,” Fed. R. App. P. 46(b)(1)(B)—conduct which
is “contrary to professional standards [and] shows an unfit-
ness to discharge continuing obligations to clients or the
courts, or conduct inimical to the administration of justice.”
In re Snyder, 472 U.S. 634, 645 (1985).
Not taking this step lightly, what we have witnessed in
this case and the recent Galloway appeal leads us to question
Smith’s fitness to practice before our Court. Accordingly, we
order Jason Smith to show cause within 21 days of this
decision why he should not be removed or suspended from
the bar of this Court under Rule 46 of the Federal Rules of
Appellate Procedure.
AFFIRMED WITH ORDER TO SHOW CAUSE.

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