Sally Conforte v. United States of America

With tax liabilities of over $17 million, Sally Conforte has brought this action in an effort to get a $15 million credit against these liabilities, asserted by her to be the going concern value of her brothel, now levied upon and sold by the United States. Her effort to litigate her tax liabilities in this fashion fails. We dismiss those causes of action of which the district court had no jurisdiction. We affirm summary judgment against Conforte as to those causes of action over which the district court had jurisdiction.

BACKGROUND

Conforte was the owner with her husband Joseph of the Mustang Ranch, a brothel legal under the law of Storey County, Nevada. The Confortes incurred liability for unpaid federal income and employment taxes in an amount over $19 million. On November 26, 1982 Sally Conforte filed a petition under Chapter 11 of the Bankruptcy Code. In 1984 the bankruptcy court approved a plan of reorganization that permitted the Mustang Ranch to operate for six years, during which all claims were to be paid. By 1990 the tax debt was still largely unpaid. The Internal Revenue Service (the IRS) gave the Confortes several extensions, and the Confortes conveyed to the United…