United States of America v. Karst et al

1
In the United States District Court
for the District of Kansas
_____________
Case No. 24-cv-04090-TC
_____________
UNITED STATES OF AMERICA,
Plaintiff
v.
MONTY KARST, INDIVIDUALLY AND AS EXECUTOR OF THE ESTATE
OF DONALD D. KARST, AND TODD ALAN TEMPLETON
Defendants
_____________
MEMORANDUM AND ORDER
The United States brought this suit against Monty Karst and Todd
Alan Templeton, seeking to recover unpaid federal estate taxes. Doc.
1. The Government alleges that Karst and Templeton are personally
liable for the outstanding tax debt of the Estate of Donald D. Karst as
trustees and beneficiaries who received estate property. Id. The Gov-
ernment now moves for summary judgment. Doc. 30. For the follow-
ing reasons, that motion is granted.
I
A
Summary judgment is proper under the Federal Rules of Civil Pro-
cedure when the moving party demonstrates “that there is no genuine
dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” when it
is necessary to resolve a claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d
664, 670 (10th Cir. 1998). And disputes over material facts are “genu-
ine” if the competing evidence would permit a reasonable jury to de-
cide the issue in either party’s favor. Id. Disputes—even hotly con-
tested ones—over facts that are not essential to the claims are
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irrelevant. Brown v. Perez, 835 F.3d 1223, 1233 (10th Cir. 2016). Indeed,
belaboring such disputes undermines the efficiency Rule 56 seeks to
promote. Adler, 144 F.3d at 670.
At the summary judgment stage, material facts “must be identified
by reference to affidavits, deposition transcripts, or specific exhibits
incorporated therein.” Adler, 144 F.3d at 671; see also D. Kan. R.
56.1(a)–(c). To determine whether a genuine dispute exists, the court
views all evidence, and draws all reasonable inferences, in the light
most favorable to the nonmoving party. See Allen v. Muskogee, Okla.,
119 F.3d 837, 839–40 (10th Cir. 1997). That said, the nonmoving party
cannot create a genuine factual dispute by making allegations that are
purely conclusory, Adler, 144 F.3d at 671–72, 674, or unsupported by
the record. See Scott v. Harris, 550 U.S. 372, 378–81 (2007).
The moving party bears the initial burden of showing the absence
of any genuine issue of material fact and entitlement to judgment as a
matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Savant
Homes, Inc. v. Collins, 809 F.3d 1133, 1137 (10th Cir. 2016). Once the
moving party meets its burden, the burden shifts to the nonmoving
party to demonstrate that genuine issues as to those dispositive matters
remain for trial. Celotex, 477 U.S. at 324; Savant Homes, 809 F.3d at 1137.
But in a case such as this one where the moving party—the Gov-
ernment—will bear the burden of proof at trial on a particular issue,
the moving party must meet “a more stringent summary judgment
standard.” Pelt v. Utah, 539 F.3d 1271, 1280 (10th Cir. 2008); see also
Donner v. Nicklaus, 778 F.3d 857, 876 (10th Cir. 2015) (discussing a mo-
vant with affirmative defenses). That standard requires the movant to
“establish, as a matter of law, all essential elements of the issue.” Pelt,
539 F.3d at 1280. Only then must the nonmovant “bring forward any
specific facts alleged to rebut the movant’s case.” Id.
B
This dispute concerns the recovery of unpaid federal estate taxes
from the beneficiaries and trustees of the Estate of Donald D. Karst.
The following facts are uncontroverted or, to the extent they were pre-
viously disputed, are established by the parties’ stipulations in the Pre-
trial Order.
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Donald D. Karst, a Kansas resident and owner of several oil and
gas businesses, died on September 15, 2007.1 Doc. 29 at ¶¶ 2(a)(i),
2(a)(ii), 2(a)(v). Prior to his death, he created the Donald D. Karst Rev-
ocable Trust on December 8, 1992, and transferred all of his then-
owned property to it. Id. at ¶ 2(a)(iii). Karst intended for the Trust to
own any property that he later acquired. Id. On the same day he created
the Trust, Karst signed his last will and testament, which provided that
any properties not owned by the Trust at the time of his death would
be conveyed to it upon his death. Id. at ¶ 2(a)(iv).
Monty Karst and Todd Alan Templeton are the sons of Donald
D. Karst and served as the co-trustees of the Trust at the time of his
death. Doc. 29 at ¶ 2(a)(vi)–(vii). They are also the primary beneficiar-
ies of both the Trust and the Estate. Id. at ¶ 2(a)(x). Monty Karst also
serves as the executor of the Estate. Id. at ¶ 2(a)(viii).
Following their father’s death, Karst and Templeton filed a Form
706 (United States Estate Tax Return) reporting a gross estate value of
$3,975,487.44 and a self-reported estate tax liability of $792,790.75.
Doc. 29 at ¶¶ 2(a)(xiii), 2(a)(xv). Relying on this return, a delegate of
the Secretary of the Treasury made a valid assessment of the estate tax
in the amount declared by Karst and Templeton. Id. at ¶ 2(a)(xix).
Karst and Templeton subsequently elected to pay the estate tax in
yearly installments as permitted under 26 U.S.C. § 6166. Id. at
¶¶ 2(a)(xx)–(xxi).
Although Karst and Templeton made the first several installments,
they stopped making payments toward the Estate’s tax liability after
June 16, 2015. Doc. 29 at ¶¶ 2(a)(xxii), 2(a)(xxv). During the admin-
istration of the Estate and while the tax liability remained outstanding,
Karst and Templeton distributed the Estate’s assets—which were held
in the Trust—to themselves as beneficiaries. Id. at ¶¶ 2(a)(xi)–(xii),
2(a)(xiv). As of June 30, 2025, the outstanding balance of the Estate’s
federal tax liability, including interest and penalties, was $1,105,111.34.
Id. at ¶ 2(a)(xxx).
The United States filed this suit seeking a judgment to reduce the
Estate’s tax liability to a money judgment and to hold Monty Karst and
Todd Alan Templeton personally liable for the unpaid taxes. Doc. 30
1 All references to the parties’ briefs are to the page numbers assigned by
CM/ECF.
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at 1. The Government asserts that Karst and Templeton are personally
liable under 26 U.S.C. § 6324(a)(2) because they received or held prop-
erty from the gross estate that was not used to satisfy the tax debt.
Doc. 31 at 2, 14.
The Government now moves for summary judgment, claiming it
is entitled to judgment against the Estate for unpaid taxes (Count I),
personal liability against Monty Karst under Section 6324(a)(2) (Count
II), and personal liability against Todd Templeton under Section
6324(a)(2) (Count III). Id. Karst and Templeton oppose the motion.
Doc. 33.
II
The Government has met its burden of establishing not only all
essential elements to obtain relief on its claims, but also “that there is
no genuine dispute as to any material fact and [it] is entitled to judg-
ment as a matter of law.” Fed. R. Civ. P. 56(a). And Karst and Tem-
pleton’s counterarguments fail. Accordingly, the Government’s sum-
mary judgment motion is granted.
A
The parties’ dispute implicates the Government’s taxing authority
and the rules appurtenant to it. Article I of the Constitution authorizes
Congress to “lay and collect Taxes, Duties, Imposts and Excises.” U.S.
Const. art. I § 8, cl. 1. Pursuant to its taxing authority, Congress has
enacted a variety of laws codified in Chapter 26 of the U.S. Code that
authorize the Internal Revenue Service to lay and collect federal taxes.
Keller Tank Servs. II, Inc. v. Comm’r, 854 F.3d 1178, 1187 (10th Cir. 2017).
The laying of taxes begins with an “assessment,” which refers to
the IRS’s determination that a taxpayer owes the Government a certain
amount of tax. Keller Tank Servs., 854 F.3d at 1183–84. The IRS is au-
thorized to make assessments by 26 U.S.C. § 6201(a). Assessments
must be made within three years after a tax return is filed. 26 U.S.C.
§ 6501(a); Omega Forex Grp., LC v. United States, 906 F.3d 1196, 1205
(10th Cir. 2018).
Taxpayers must timely pay their assessed tax or incur penalties,
fees, and interest. 26 U.S.C. § 6601. But there are a variety of methods
by which taxpayers may seek relief regarding their tax liabilities, includ-
ing collection due process hearings, tax court, installment agreements,
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and offers-in-compromise. See Keller Tank Servs., 854 F.3d at 1187; Crop-
per v. Comm’r, 826 F.3d 1280, 1283 (10th Cir. 2016).
Still, the IRS’s assessments are presumptively correct, so the Gov-
ernment may rely on its assessments to prove its entitlement to judg-
ment. United States v. Fior D’Italia, Inc., 536 U.S. 238, 242 (2002). This
presumption of correctness also applies to the IRS’s Certificates of As-
sessments and Payments, also known as Form 4340s, which identify
the taxpayer and detail “the character of the liability assessed, the tax-
able period, . . . the amount of the assessment . . . [and] the date of
assessment.” Ford v. Pryor, 552 F.3d 1174, 1178–79 (10th Cir. 2008)
(citations omitted); Guthrie v. Sawyer, 970 F.2d 733, 737–38 (10th Cir.
1992).
Once a tax has been assessed, the IRS generally has ten years to
begin collection by levy or court proceeding. 26 U.S.C. § 6502(a)(1); see
United States v. Holmes, 727 F.3d 1230, 1233–34 (10th Cir. 2013). The
ten-year period is tolled while the IRS is prohibited from making a levy.
For example, the IRS may not make a levy while an offer-in-compro-
mise is pending or within 30 days after any rejection or appeal of a
rejection, 26 U.S.C. §§ 6331(i)(5), (k)(1), or while a collection due pro-
cess hearing and associated appeals are pending, 26 U.S.C.
§ 6330(e)(1). See United States v. West, No. 22-232, 2023 WL 6390485,
at *4 (D.N.H. Sept. 5, 2023). In other words, the IRS’s ten-year collec-
tion period is extended by the number of days that these tolling events
are pending. 26 U.S.C. § 6330(e)(1); see United States v. Dawes, 161 F.
App’x 742, 747 (10th Cir. 2005) (applying this rule). The Government
bears the burden of showing that its collection period was tolled. United
States v. Simons, 129 F.3d 1386, 1389 (10th Cir. 1997).
B
The Government has proven it is entitled to summary judgment
to collect the assessed taxes. It has satisfied its burdens regarding the
assessment and timeliness of its collection action against the Estate and
established that Karst and Templeton are responsible for the Estate’s
liabilities.
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1
To obtain a judgment against the Estate, the Government must
satisfy two key burdens. First, the Government must show the amount
owed by the Estate and that proper evidence supports its calculation
of that amount, which it may do by filing certificates of assessment and
other documents providing its assessment. Ford, 552 F.3d at 1178–79.
Second, the Government must show it timely filed the collection ac-
tion. 26 U.S.C. § 6502(a)(1); see also Holmes, 727 F.3d at 1233–34.
The Government has satisfied both burdens. Concerning the
amount owed, the Government has established the Estate has an out-
standing liability of $1,105,111.34 as of June 30, 2025. The parties stip-
ulated to the admissibility of the IRS Form 4340, Doc. 29 at ¶ 2(b)(ix),
and the balance due computation from the IRS Revenue Officer, id. at
¶ 2(b)(x). The Form 4340 shows that the initial tax liability was
$792,790.75. Doc. 32-12 at 2. The Form 490 and IRS Revenue Officer
affidavit show that the outstanding tax liability—accounting for penal-
ties and interest—was $1,105,111.34 as of June 30, 2025. Docs. 32-13
at 2; 32-14 at 4. The parties stipulated to these amounts. Doc. 29 at
¶¶ 2(a)(xv), 2(a)(xxx). And they enjoy a presumption of correctness. See
Fior D’Italia, Inc., 536 U.S. at 242 (“An ‘assessment’ amounts to an IRS
determination that a taxpayer owes the Federal Government a certain
amount of unpaid taxes. It is well established in the tax law that an
assessment is entitled to a legal presumption of correctness.”); see also
Ford, 552 F.3d at 1179 (“Form 4340[ ] is ‘presumptive proof of a valid
assessment.’”); United States v. Schwartz, 615 F. Supp. 3d 184, 188
(E.D.N.Y. 2022) (“[T]ax calculations (including calculations of interest
and penalties) are presumptively valid and create a prima facie case of
liability.”).
The Government also satisfies its timeliness burden. Karst and
Templeton argue that the statute of limitations has run on the Gov-
ernment’s right to collect from the Estate. Doc. 29 at § 4(b).2 They are
wrong. While the Government generally has ten years to collect estate
2 Because the Government does not argue to the contrary, it is assumed that
Karst and Templeton have authority to assert arguments on behalf of the
Estate. They have served as co-executors of the Estate, Doc. 29 at ¶ 2(b)(viii),
which authorizes them to act in that representative capacity. See generally Fed.
R. Civ. P. 17(b)(noting that capacity be sued in a representative capacity is
determined by state law); Kan. Stat. Ann. § 59-701(noting that letters testa-
mentary are granted to executors).
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taxes from a decedent’s estate, 26 U.S.C. § 6502(a)(1), the ten-year lim-
itations period was suspended here pursuant to 26 U.S.C. § 6503(d)
because the Estate made a deferment election pursuant to 26 U.S.C.
§ 6166. Doc. 29 at ¶ 2(a)(xxix). When an estate elects to pay in install-
ments under Section 6166, the limitations period is suspended until the
IRS terminates the election. 26 U.S.C. § 6503(d); United States v. Johnson,
920 F.3d 639, 645–47 (10th Cir. 2019). Thus, the Section 6166 election
shifts the deadline to ten years after the IRS’s termination of the elec-
tion, id., which in this case occurred on May 10, 2018. Doc. 29 at
¶ 2(a)(xxvii). This results in an extended deadline of May 8, 2028,
which means that the statute of limitations did not preclude the Gov-
ernment’s filing of this suit on September 10, 2024. See Johnson, 920
F.3d at 645–47.
2
The Government claims Karst and Templeton are personally liable
for the Estate’s tax debt. Doc. 31 at 12–13. Section 6324(a)(2) makes
recipients of estate property—including spouses, transferees, trustees,
and beneficiaries—personally liable for unpaid estate taxes. 26 U.S.C.
§ 6324(a)(2). This personal liability extends “to the extent of the value,
at the time of the decedent’s death, of such property.” Id.; see also John-
son, 920 F.3d at 645.
The parties’ stipulations establish each element required for per-
sonal liability under Section 6324(a)(2). The estate tax was assessed and
remains unpaid. Doc. 29 at ¶ 2(a)(xix) (the Government assessed an
estate tax on September 1, 2008); id. at § 2(a)(xxx) (as of June 30, 2025,
$1,105,111.34 remains unpaid). On the date of Donald D. Karst’s
death, Karst and Templeton were co-trustees of the Trust. Doc. 29 at
¶ 2(a)(viii). As trustees, they held legal title to all Estate property. Id. at
¶ 2(a)(xiv) (stipulating that “[a]ll the Estate assets were in the Trust”).
Karst and Templeton were “the primary beneficiaries of the Trust and
the Estate.” Doc. 29 at ¶ 2(a)(x). They received substantial assets from
the Estate, including oil and gas leases valued at approximately $2.7
million. Id. at ¶¶ 2(a)(xi)–(xii). The property they received was included
in the gross estate. The Estate’s Form 706 reported a gross estate value
of $3,975,487.44. Id. at ¶ 2(a)(xiii). Assets held in a revocable trust are
included in the decedent’s gross estate. 26 U.S.C. § 2038; see also Doc.
29 at ¶ 2(a)(xiv). Karst and Templeton distributed estate property to
themselves without fully paying the tax. And acknowledging this debt,
they made partial payments but eventually stopped paying in June 2015
while a substantial balance remained. Doc. 29 at ¶¶ 2(a)(xxii), 2(a)(xxv).
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Finally, they then distributed estate assets to themselves but have not
yet retired that tax liability. Doc. 31 at 13–14.
Satisfying these elements makes Karst and Templeton jointly and
severally liable. Personal liability under Section 6324(a)(2) is joint and
several among all transferees. Johnson, 920 F.3d at 645. Each of Karst
and Templeton is liable “to the extent of the value, at the time of the
decedent’s death, of such property” received. 26 U.S.C. § 6324(a)(2).
Because the total value of property they received as trustees and ben-
eficiaries ($3,975,487.44) exceeds the outstanding tax liability
($1,105,111.34), each of Karst and Templeton is personally liable for
the full amount. See Johnson, 920 F.3d at 645.
* * *
Because the Government has satisfied its burdens, the burden
shifts to Karst and Templeton to overcome the presumed validity of
the IRS’s assessments. Guthrie, 970 F.2d at 737–38 (“If a taxpayer does
not present evidence indicating to the contrary, a district court may
properly rely on the [IRS’s assessments] to conclude that valid assess-
ments were made”); see also United States v. Jones, No. 23-5112, 2024 WL
2890978, at *2 (10th Cir. June 10, 2024) (applying this rule in affirming
district court’s summary judgment decision in favor of the Govern-
ment). Karst and Templeton have not done so. In fact, Karst and Tem-
pleton do not contest their personal liability at all. They have not ar-
gued that they are not personally liable under Section 6324(a)(2). They
do not dispute that they were trustees and beneficiaries. Doc. 29 at
¶¶ 2(a)(viii), 2(a)(x). Nor do they dispute that they received estate prop-
erty. Id. at ¶¶ 2(a)(xi)–(xii). And they do not dispute that all estate assets
were in the Trust and that they distributed those assets to themselves.
Id. at ¶ 2(a)(xiv); Doc. 31 at 13–14. Put simply, there is no factual basis
to believe anything but what the stipulations establish. As a result, no
triable issue remains and the Government is entitled to judgment as a
matter of law on all three counts.
C
Karst and Templeton’s response fails to undermine the Govern-
ment’s request for summary judgment. They fail to establish the pres-
ence of a genuine dispute of material fact or identify any argument that
precludes the Government’s entitlement to judgment as a matter of
law.
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Karst and Templeton primary argument is that the gross estate
value and current balance due are insufficiently supported. Doc. 33 at
2–4. They do not argue that the amounts identified by the Government
are inaccurate. Rather, their objection is based on a belief that the Gov-
ernment provides only “minimal information,” id. at 2, and “fails to
[properly] state the debt with a distinct breakdown of interest and pen-
alties which would be required for summary judgment,” id. at 3.
Karst and Templeton’s argument fails for multiple reasons. For
one, Karst and Templeton stipulated to the amount of the tax defi-
ciency, and to the admissibility of the underlying exhibits supporting
these amounts and values they now seek to contest. Doc. 29 at
¶ 2(a)(xiii) & ¶ 2(b). Those stipulations are judicial admissions that
bind the parties and preclude the argument now being made. MVT
Servs., LLC v. Great W. Cas. Co., 118 F.4th 1274, 1286 (10th Cir. 2024);
see also Prager v. Campbell Cnty. Mem’l Hosp., 731 F.3d 1046, 1056 (10th
Cir. 2013) (noting that “unless the court modified its pretrial order, the
parties are bound to its contents and may not contradict its terms”);
United States v. Koleski, 33 F. App’x 471, 472 (10th Cir. 2002) (“A de-
fendant’s stipulation waives any challenge contrary to the stipula-
tion.”).
For another, they fail to controvert the Government’s facts as Rule
56 requires. Take the Government’s assertion of the gross estate’s spe-
cific value, where it identified the specific value of the Estate and cited,
as support, the Form 706 reflecting that amount, the parties’ stipula-
tion in the Pretrial Order concerning the same, and Karst and Temple-
ton’s response to a request for production admitting to the same. Doc.
31 at 5, ¶ 18. Karst and Templeton attempt to controvert that assertion
by offering a statement that the calculation might be inaccurate, but
fail to confront the substance of the Government’s specific and sup-
ported assertion with any evidence such as affidavit, exhibit, stipula-
tion, deposition testimony, or contrary evidence in the record to create
a factual dispute. Doc. 33 at 2, ¶ 18; see also id. at 3, ¶ 37 (failing to
support in a similar fashion). That will not do. Fed. R. Civ. P. 56(c)(1)
(requiring a party asserting a genuine dispute to support that conten-
tion with a citation to evidence); Tufaro v. Oklahoma ex rel. Bd. of Regents
of Univ. of Oklahoma, 107 F.4th 1121, 1131 (10th Cir. 2024).
Karst and Templeton also cite three non-binding cases to argue
that “that the [Government’s] failure to provide a clear breakdown of
the debt amount, including interest and penalties, can preclude sum-
mary judgment.” Doc. 33 at 2 (citing In re Vann, 321 B.R. 734 (Bankr.
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W.D. Wash. 2005); In re Wright, 19 B.R. 271 (Bankr. D. Mass. 1982);
United States v. Billheimer, 197 F. Supp. 2d 1051 (S.D. Ohio 2002)). Leav-
ing aside the foregoing failures, these cases are inapposite in that they
principally concern the amount of liability (which Karst and Temple-
ton have admitted by stipulation) and two of them concern an entirely
different issue (a creditor’s proof of claim in a bankruptcy proceeding).
Put simply, they have identified no basis to disregard the Govern-
ment’s evidence or entitlement to judgment as a matter of law.
Finally, Karst and Templeton preserved three affirmative defenses
in the Pretrial Order. Doc. 29 at ¶ 4(b). But they did not raise these in
response to the Government’s motion for summary judgment, so they
are deemed abandoned. As a result, they are waived and disregarded
for purposes of summary judgment. See Digital Ally, Inc. v. Utility Asso-
ciates, Inc., 882 F.3d 974, 977 (10th Cir. 2018) (concluding a failure to
address an alternate bases in a dispositive motion “amounts to a con-
cession”); see also Hinsdale v. City of Liberal, 19 F. App’x 749, 768-69
(10th Cir. 2001) (affirming summary judgment on nonmovant’s claims
because he abandoned his claims “by failing to address them in his
response to [movants’] motion for summary judgment”).
III
For the foregoing reasons, the Government’s Motion for Summary
Judgment, Doc. 30, is GRANTED.
Judgment shall enter as follows:
A. Against the Estate of Donald D. Karst, for $1,105,111.34 as of
June 30, 2025, plus statutory additions that have and will continue to
accrue as allowed by law until paid in full;
B. Against Monty Karst and Todd Alan Templeton as jointly and
severally liable under 26 U.S.C. § 6324(a)(2), for the same amount.
Unless the parties submit a proposed agreed judgment reflecting
the charges and interest that continue to accrue by 5:00 PM on March
6, 2026, the parties shall appear for an in-person hearing to resolve that
language at 11:30 AM on March 10, 2026, in Courtroom 401, Frank
Carlson Federal Building and U.S. Courthouse, Topeka, Kansas.
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It is so ordered.
Date: February 27, 2026 s/ Toby Crouse
Toby Crouse
United States District Judge
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