United States of America v. Neuberger

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
UNITED STATES OF AMERICA, *
Plaintiff, *
v. * Civil Action No. EA-22-2977
ISAAC M. NEUBERGER, *
Defendant. *
MEMORANDUM OPINION
Plaintiff United States of America initiated this action on November 16, 2022, pursuant
to the Federal Priority Statute, 31 U.S.C. § 3713, seeking a judgment against Defendant Isaac M.
Neuberger “for transferring the assets of [ ] Lehcim Holdings, Inc. [(Lehcim)] to third parties
before paying the United States’ claim for income taxes at a time when Lehcim . . . was
insolvent.” ECF No. 1; see also ECF No. 41. On August 4-6, 2025, the Court held a bench trial
to determine liability and damages, if any, arising from the United States’ claim. ECF Nos. 127–
129. On October 23, 2025, pursuant to Federal Rule of Civil Procedure 52, the Court issued a
Memorandum of Decision that found Mr. Neuberger personally liable for the United States’
claim pursuant to 31 U.S.C. § 3713(b). United States v. Neuberger, Civil Action No. EA-22-
2977, 2025 WL 2997558 (D. Md. Oct. 23, 2025); ECF No. 144. Thereafter, at the Court’s
request for additional briefing, the parties filed memoranda of law specifically addressing the
issue of damages.1 ECF Nos. 147–150; 152–153. The Court heard oral argument on January 7,
2026. ECF No. 154. For the reasons set forth below, the Court will enter judgment in favor of
the United States and against Mr. Neuberger in the amount of $1,880,987.96.
1 The issues of liability and damages were not bifurcated at trial. Rather, the Court
requested additional briefing on the issue of damages because the parties’ post-trial submissions
did not comprehensively address damages and because, as discussed herein, see II., infra, case
law does not clearly illuminate the appropriate method of assessing damages in this case.
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I. BACKGROUND
The United States’ sole cause of action arises under the Federal Priority Statute, which
provides, in pertinent part, that “[a] claim of the United States Government shall be paid first
when . . . a person indebted to the Government is insolvent and . . . the debtor without enough
property to pay all debts makes a voluntary assignment of property . . . [or] . . . an act of
bankruptcy is committed.” 31 U.S.C. § 3713(a)(1)(A)(i), (iii). Under the Federal Priority
Statute, “the term ‘claim’ . . . means any amount of funds . . . that has been determined by an
appropriate official of the Federal Government to be owed to the United States by a person,
organization, or entity other than another Federal agency.” 31 U.S.C. § 3701(b)(1). “Federal
courts at all levels of review have consistently held that this broad definition encompasses
federal tax debt.” Neuberger, 2025 WL 2997558, at *12; ECF No. 144 at 232 (collecting cases).
Section 3173(b) provides that a “representative . . . paying any part of a debt of the
person . . . before paying a claim of the Government is liable to the extent of the payment for
unpaid claims of the Government.” 31 U.S.C. § 3713(b). “Although the statutory language may
suggest strict liability, courts have interpreted Section 3713(b) as requiring evidence that: (1) the
representative transferred or distributed the debtor’s assets before paying an antecedent claim of
the United States; (2) when the debtor is insolvent; and (3) with knowledge or notice of the
United States’ claim.” Neuberger, 2025 WL 2997558, at *16; ECF No. 144 at 32. After trial,
the Court found Mr. Neuberger personally liable under Section 3713(b) because he was
Lehcim’s representative; had knowledge of the United States’ claim for tax liabilities; and played
an integral role in the development, oversight, and execution of a plan to pay entities other than
2 Page numbers refer to the pagination of the Court’s Case Management/Electronic Case
Files (CM/ECF) system printed at the top of the cited document, except that references to the
trial transcript include both the transcript page and line numbers and references to exhibits
include both the exhibit number and, as applicable, the Bates number of the referenced page(s).
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the United States when Lehcim was insolvent. Neuberger, 2025 WL 2997558, at *16-17; ECF
No. 144 at 31–33.
To contextualize the following discussion of damages, a brief summary of the salient
issues related to the United States’ claim is necessary.3 As relevant here, the Court found that
“[f]or the tax years 2010 through 2020 Lehcim reported liabilities on the balance sheet of its
Form 1120 [U.S. Corporate Income Tax Return] that primarily consisted of the three Nightingale
loans.” Neuberger, 2025 WL 2997558, at *4; ECF No. 144 at 7 (citing ECF No. 114-1 ¶ 45;
Plaintiff’s Exhibit (PX) 008–PX 018). “During these same tax years, Lehcim claimed substantial
tax deductions each year for the 18 percent interest accruing on the 2002 Nightingale loan.”
Neuberger, 2025 WL 2997558, at *4; ECF No. 144 at 7 (citing ECF No. 114-1 ¶ 46).
The parties stipulated, and the Court found, that by July 2018, Mr. Neuberger was aware
of the Internal Revenue Service’s (IRS) preliminary conclusion that Lehcim’s loan interest
deductions on its 2010 to 2015 returns were improper and that Lehcim owed additional taxes for
those years. Neuberger, 2025 WL 2997558, at *4; ECF Nos. 114-1 ¶ 49; 144 at 8; Joint Exhibit
(JX) 023. The parties further stipulated, and the Court further found, that Mr. Neuberger
received a copy of the letter the IRS sent to Lehcim on March 14, 2019. Neuberger, 2025 WL
2997558, at *5; ECF Nos. 114-1 ¶¶ 50, 54; 144 at 8; JX007. At trial, IRS employee Pamela
Harris testified that this letter, commonly referred to as a “30-day letter,” “is a report that is
issued at the conclusion of an examination” (or audit). ECF No. 137 at 16:18–17:2. This letter
“gives the taxpayer[ ] 30 days to [ ] agree, to request a conference with a manager, to provide
additional information, or to write a protest and request an appeals conference.” Id. at 17:6–9.
The March 14, 2019 (or 30-day) letter identified the proposed tax deficiencies, associated
3 The Court’s prior Memorandum of Decision sets forth a more fulsome factual
background. United States v. Neuberger, Civil Action No. EA-22-2977, 2025 WL 2997558, at
*2-9 (D. Md. Oct. 23, 2025); ECF No. 144 at 3–19.
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penalties, and interest for Lehcim for the years 2010 to 2015 in the amount of $1,880,987.96.4
Neuberger, 2025 WL 2997558, at *5; ECF Nos. 114-1 ¶¶ 51–52; 144 at 8; JX007 at 0067–0070.
The parties further stipulated, and the Court found, that on November 20, 2019, the IRS
mailed a statutory notice of deficiency to Lehcim (at the address of Mr. Neuberger’s law firm),
which identified a liability of $1,435,245 in unpaid taxes and penalties (exclusive of interest).
Neuberger, 2025 WL 2997558, at *5; ECF Nos. 114-1 ¶ 58; 144 at 8–9; JX015 at 0204–0205.
The amount of the tax liability and penalties identified in this notice and the previously issued
30-day letter are the same. JX007 at 0067–0070; JX015 at 0210, 0212. At trial, Ms. Harris
testified that this notice is “a legal report” that the IRS issues “at the conclusion of an
examination” (or audit). ECF No. 137 at 19:3–5. If the taxpayer does not respond to the 30-day
letter, the IRS “would issue the statutory notice of deficiency,” which gives the taxpayer 90 days
“to agree or to petition [the] tax court if they don’t agree.” Id. at 19:6–9. Lehcim did not agree
with the IRS’s conclusions outlined in the 30-day letter or statutory notice of deficiency, but it
did not appeal the 30-day letter or petition the United States Tax Court.5 Neuberger, 2025 WL
2997558, at *5; ECF Nos. 137 at 17:10–15, 19:10–16; 144 at 8–9.
As noted, after having notice of the United States’ claim, Mr. Neuberger helped engineer
and oversee an elaborate plan—involving 10 rounds and 124 individual booking entries—to
transfer money among various entities, including Lehcim, to repay the loans that the IRS had
concluded were not bona fide. Neuberger, 2025 WL 2997558, at *5-7; ECF Nos. 114-1 ¶¶ 66–
4 The letter identified penalties attributable to delinquency, 26 U.S.C. § 6651(a); failure
to file, 26 U.S.C. § 6651(a)(1); and accuracy, 26 U.S.C. § 6662(a). Joint Exhibit (JX) 007 at
0084–0089. Failure to pay penalties, 26 U.S.C. § 6651(a)(2), were not included. Id. at 0084–
0087. The letter further indicated that the interest on the taxes and penalties had been calculated
through April 11, 2019. Id. at 0067–0070.
5 The Internal Revenue Service (IRS) subsequently assessed Lehcim’s tax deficiencies
on July 13, 2020, and on other dates thereafter. Neuberger, 2025 WL 2997558, at *5; ECF Nos.
114-1 ¶ 64; 144 at 9.
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69, 75; 144 at 9–10, 12–13. This repayment plan was executed between June 24, 2019, and
March 5, 2020. Lehcim was insolvent at the time of and because of the repayment plan transfers.
Neuberger, 2025 WL 2997558, at *9, *14; ECF No. 144 at 18, 29. According to the IRS,
Lehcim’s tax liability remains unpaid.6 Neuberger, 2025 WL 2997558, at *8; ECF No. 114-1 ¶¶
78–79; 144 at 15.
II. DISCUSSION
The only remaining question before the Court is the amount of damages Mr. Neuberger
owes the United States based on his failure as Lehcim’s representative to give priority to the
United States’ claim. The cases are clear that a representative’s liability is “limited to the extent
of the payment or value of the assets” paid or distributed. United States v. Coppola, 85 F.3d
1015, 1020 (2d Cir. 1996). Here, the total amount of funds that Mr. Neuberger helped distribute
($8,816,813) exceeds Lehcim’s tax debt under any of the United States’ proffered calculations.7
Neuberger, 2025 WL 2997558, at *6; ECF No. 144 at 12.
The United States contends that Mr. Neuberger is liable for the full amount of Lehcim’s
unpaid tax debt, including all penalties and interest, which continue to accrue so long as the
balance remains unpaid. ECF No. 147 at 6 (“In short, if Lehcim owes it, then, under the Federal
6 On May 12, 2022, the IRS served a notice of levy in the amount of $1,543,929.29 upon
the bank in which Mr. Neuberger’s law firm has its operating account, which resulted in the bank
freezing those funds. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. v. United States, Civil
Action No. EA-22-2129, 2024 WL 3234000, at *1 (D. Md. June 28, 2024), reconsideration
denied, 2025 WL 659546 (D. Md. Feb. 28, 2025). The propriety of the IRS’s action in this
regard is the subject of the law firm’s wrongful levy claim in the related case, Neuberger, Quinn,
Gielen, Rubin & Gibber, P.A. v. United States, Civil Action No. EA-22-2129, which is set for a
bench trial beginning on February 17, 2026. ECF No. 113 (EA-22-2129).
7 The United States’ calculations of Mr. Neuberger’s asserted liability have grown
throughout the pendency of this case. Compare ECF Nos. 1 ¶ A; 41 ¶ A ($2,091,455 plus
interest) with ECF No. 141 at 33 ($3,084,593.74 as of August 4, 2025, plus statutory interest)
and ECF No. 147 at 7 ($3,330,664 as of October 31, 2025, plus interest accruing thereafter under
the Internal Revenue Code).
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Priority Statute, so does Mr. Neuberger, including statutory interest.”); see also ECF Nos. 149 at
5–6; 152 at 3. According to the United States, calculation of damages here is “statutory
arithmetic,” which totals “$3,330,664 as of October 31, 2025.” ECF No. 149 at 6. The United
States posits that to reach this amount, the Court must begin with “the amounts of the tax
assessments . . . determined in Le[hc]im’s audit” and then calculate the penalties that “accrue as
a matter of law under 26 U.S.C. §§ 6651(a) and 6662(a) for Lehcim’s failure to file returns,
properly report tax, and pay tax when due,” and then further add “the amount of interest [that]
accrues as a matter of law under 26 U.S.C. § 6621 from the date the taxes were due until they are
paid.” ECF No. 147 at 6.
Remarkably, the United States asserts that “[t]here is no grey area in this phase of the
case” (ECF No. 147 at 6), while simultaneously failing to offer clear legal or evidentiary support
for its position. The United States has not identified precedent or other binding authority that
holds that the intricate tax code calculations it proposes govern damages in a Federal Priority
Statute case. The cited statutes concern computation of penalties and interest under the Internal
Revenue Code in connection with a tax liability. At the risk of stating the obvious, the United
States’ cause of action in this case arises under the Federal Priority Statute, not the tax code,
which necessarily shapes the scope of available remedies. E.g., United States v. Cole, 733 F.2d
651, 655-656 (9th Cir. 1984) (“Although this [Section 3713] case involves collection of a tax
debt, it is not an action against the taxpayer or under the Internal Revenue Code.”).
Neither party has identified, and the Court has not found, any case that explicitly
discusses—let alone establishes—the method of damage calculation in a case such as this. The
cases upon which the parties rely in support of their respective arguments serve as mere
examples of when various courts have—and have not—held a representative or executor liable
for penalties and/or interest in addition to a tax debt. Compare ECF Nos. 147 at 9–10; 152 at
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10–12 (discussing cases) with ECF Nos. 150 at 9–10; 153 at 6–9 (discussing cases). These cases
do not, however, conclusively establish that Mr. Neuberger is liable for the full extent of
Lehcim’s tax debt as if he were the taxpayer himself. At best, the parties’ smattering of cases
from across the country over the last several decades are persuasive authority. The weight they
carry is limited by the fact-bound nature of the decisions, none of which closely parallel the case
at bar. For example, in United States v. Estate of Kime, the court found the executor of the
taxpayer’s estate personally liable for the balance of all unpaid taxes, penalties, and interest,
which had already been assessed, when the executor distributed to himself the estate’s assets.
950 F. Supp. 950, 952 (D. Neb. 1996); see also United States v. Estate of Kime, No. 4:CV95-
3054, 1996 WL 774543, at *1-2 (D. Neb. Nov. 5, 1996). Thus, unlike here, at the time the
executor distributed assets in derogation of the priority of the United States’ claim, all of the
liabilities had accrued, and the executor had notice of the full amount due. The utility of these
cases is further circumscribed by the fact that the holdings relate to other legal issues entirely.
For example, the court’s discussion of Section 3713 in United States v. Whisenhunt was limited
to recounting the fact that a default judgment had been entered against the executor and
observing that his “failure to fully pay the Estate’s federal estate tax and penalties constituted a
violation of his statutory duties under 31 U.S.C. § 3713 as well as a violation of his fiduciary
duties under the Texas Probate Code.” No. 3:12-CV-0614-B, 2014 WL 3610792, at *1 (N.D.
Tex. July 21, 2014).8
8 The parties also offer a series of final judgments from other cases, which they contend
support their respective positions. Compare ECF Nos. 147-9 (holding the estate executor liable
for the amount owed, plus “all interest and statutory additions that accrue under the Internal
Revenue Code”); 147-10 (same) with ECF No. 153-1 (calculating interest on the representative’s
liability under the general civil interest statute, 28 U.S.C. § 1961(a)). By their nature, these final
judgments do not contain any substantive discussion of how a court should reconcile the United
States’ cause of action (Federal Priority Statute) and the nature of its claim (unpaid taxes).
Therefore, these exhibits, like the cases discussed above, offer mere illustrations of how different
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As reference to Whisenhunt foreshadows, most of the cases the United States cites
involve the liability of an executor for the estate’s tax liabilities, which is related, but adjacent to
the issues presented in this action.9 The statutory requirements for a Federal Priority Statute
claim are distinct, and more streamlined, for an estate executor as opposed to another type of
representative. Claims arising under Section 3713(a)(1)(A) require a triggering event. 31 U.S.C.
§ 3713(a)(1)(A)(i)-(iii); see also United States v. Neuberger, Civil Action No. EA-22-2977, 2024
WL 3964886, at *8 (D. Md. Aug. 27, 2024); ECF No. 88 at 15 (discussing the elements of the
United States’ cause of action); Neuberger, 2025 WL 2997558, at *15-16; ECF No. 144 at 29–31
(discussing the triggering event element). The representative must take some affirmative action,
i.e., a voluntary assignment of property, an attachment of property, or an act of bankruptcy, for
liability to ensue. 31 U.S.C. § 3713(a)(1)(A)(i)-(iii).
In contrast, liability attaches under Section 3713(a)(1)(B) when “the estate of a deceased
debtor, in the custody of the executor or administrator, is not enough to pay all debts of the
debtor.” 31 U.S.C. § 3713(a)(1)(B). This statutory scheme reflects the principle that a
“fiduciary (personal representative) of [a taxpayer’s] estate” is “responsible for the payment of
income and estate taxes, as well as additions to tax, owed by [the taxpayer’s] estate.” Allen v.
Commissioner of Internal Revenue, 78 T.C.M. (CCH) 828, 1999 WL 1063545, at *7 (T.C. Nov.
24, 1999). An executor’s fiduciary duty to settle the estate’s affairs is also reflected in the
Internal Revenue Code. E.g., 26 U.S.C. § 6901(a)(1)(B) (providing that the liability of a
fiduciary under Section 3713(b) with respect to income, estate, or gift tax “shall . . . be assessed,
courts have resolved this issue and provide no reasoned support for the determination of damages
here.
9 E.g., United States v. Stiles, No. CIV.A. 13-138, 2014 WL 6775263, at *1 (W.D. Pa.
Dec. 2, 2014); United States v. Whisenhunt, No. 3:12-CV-0614-B, 2014 WL 3610792 (N.D. Tex.
July 21, 2014); United States v. Estate of Kime, No. 4:CV95-3054, 1996 WL 774543 (D. Neb.
Nov. 5, 1996).
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paid, and collected in the same manner . . . as in the case of the taxes with respect to which the
liabilities were incurred.”). Thus, the executor’s liability runs directly to that of the estate, which
further distinguishes the liability of an executor from that of an ordinary representative under
Section 3713.
Further calling into question the United States’ proffered damage calculation is case law
addressing the award and calculation of interest in a Federal Priority Statute case such as this.10
For example, in United States v. Read, the court applied the discretionary analysis of
prejudgment interest that applies in civil cases and which considers equitable factors, rather than
the statutory mandate that applies in tax cases. No. 3:14-CV-344 (MPS), 2016 WL 310721, at
*3 (D. Conn. Jan. 26, 2016); see also Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 717, 727
(4th Cir. 2000) (“The award of prejudgment interest is within the discretion of the district court,”
which “must weigh the equities in a particular case to determine whether an award of
prejudgment interest is appropriate.”). Notably, the Read court observed that “[o]f the cases that
cite 31 U.S.C. § 3713 and discuss prejudgment interest, most decline to award it.” 2016 WL
310721, at *3 (discussing cases). Other decisions refusing to apply the Internal Revenue Code
interest rate in cases that do not arise under the tax code—even if they involve the collection or
priority of a tax debt—are in accord. E.g., Cole, 733 F.2d at 655-656 (calculating interest under
28 U.S.C. § 1961(c)(1) in a Section 3713 case); In re Milspec, Inc., 82 B.R. 811, 813 n.4 (Bankr.
E.D. Va. 1988) (observing that “an ‘internal revenue case’ refers only to a case in which the
action is against the taxpayer or under the Internal Revenue Service Code”) (quoting 28 U.S.C.
§ 1961(c)(1)); In re Conn. Aerosols, Inc., 42 B.R. 706, 711 (D. Conn. 1984) (concluding that a
10 The award of interest in civil cases is authorized by statute: “[i]nterest shall be allowed
on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(a). This
same statute contains a carve-out “any internal revenue tax case.” 28 U.S.C. § 1961(c)(1). In
such cases, interest is governed instead by “[S]ection 6621 of the Internal Revenue Code.” Id.
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bankruptcy proceeding, in which the IRS was a creditor, was not an “internal revenue tax
case[ ]” because it did not involve a “dispute over the computation of tax or whether tax is
owed”) (quoting 28 U.S.C. § 1961(c)(1)).
The lack of clear authority governing the calculation of damages in this action calls for
analysis of the few cases that do exist, as well as the exercise of reason and judgment. To this
end, the undersigned finds persuasive cases that have concluded that the operative variable in
determining the damages is the amount of the United States’ claim at the time of the
representative’s payment. For example, in United States v. Estate of Dickerson ex rel. Tate, the
court concluded that the relevant questions for determining damages were “how much was the [ ]
property worth when Tate distributed it to himself and what was the unpaid balance of
Dickerson’s debt, including penalties and interest, at the time of such distribution.” 189 F. Supp.
2d 622, 626-627 (W.D. Tex. 2001) (emphasis in original). Consistent with this approach, the
United States Tax Court held in Johnson v. Commissioner of Internal Revenue that the
representative was liable only for the amount of unpaid taxes of which she had notice, not the
after-accruing penalties and interest. 78 T.C.M. (CCH) 358, 1999 WL 667281, at *3 (T.C. Aug.
27, 1999) (awarding $30,000 in damages because “Ms. Johnson knew about the taxes owed by
Mr. Johnson to the extent of $30,000” and “should have paid this amount to the Internal Revenue
Service before making each of the five disbursements”). Similarly, in Singleton v.
Commissioner of Internal Revenue, the United States Tax Court held that the representative was
“liable for unpaid estate taxes together with interest accrued thereon to . . . the date respondent’s
notice of liability was mailed to petitioner.” 71 T.C.M. (CCH) 3127, 1996 WL 283687, at *1
(T.C. May 30, 1996). Key to the courts’ assessment of damages in these cases was the amount
of the United States’ claim of which the representative had knowledge at or before the time
payment was made in derogation of the United States’ priority.
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These cases are consonant with another body of case law holding that “in order to qualify
for first priority in payment under 31 U.S.C. § 3713(a), the debt owed to the United States
Government must be in existence at the time the insolvent person assigns the property.” Cerilli
v. Newport Offshore, Ltd., 624 A.2d 835, 838 (R.I. 1993); accord United States v. Renda, 709
F.3d 472, 482 (5th Cir. 2013); In re Metzger, 709 F.2d 32, 34 (9th Cir. 1983); United States v.
Lazare, No. 214CV01075APGVCF, 2016 WL 1127627, at *6 (D. Nev. Mar. 4, 2016);
Guillermety v. Secretary of Educ. of U.S., 241 F. Supp. 2d 727, 733 (E.D. Mich. 2002). The
United States is therefore not entitled to the after-accruing interest and failure-to-pay penalties it
seeks as part of its damage calculation.11
The undersigned finds that Mr. Neuberger is liable for the $1,880,987.96 in unpaid taxes,
penalties, and interest identified in the IRS’s March 14, 2019 (or 30-day) letter. This represents
the amount of the United States’ claim that had accrued and of which Mr. Neuberger had
knowledge prior to and during execution of the repayment plan, which was carried out from June
25, 2019, to March 5, 2020. Although the 30-day letter identified the IRS’s preliminary
conclusions regarding tax liabilities and penalties, these same amounts were subsequently
confirmed in the November 20, 2019 statutory notice of deficiency, which was issued while the
repayment plan was underway. The undersigned does not find that the equities of this case
counsel in favor of an award of prejudgment interest. As noted, case law does not find robust
support for the award of prejudgment interest in Federal Priority Statute cases. Read, 2016 WL
310721, at *3. Further, the facts of this case do not counsel in favor of such an award.
11 As Mr. Neuberger correctly notes, a portion of the penalties the United States now
claims could not have been due as a matter of law at the time Mr. Neuberger executed his role in
the repayment plan. ECF No. 148 at 8 n.2 (citing 26 U.S.C. § 6651(a)(3) (addressing imposition
of failure-to-pay penalties)). To the extent that the United States rests on its assertion that
“‘unpaid taxes’ automatically include[ ] not just the tax itself, but also accrued additions to tax
and interest,” including failure-to-pay penalties (ECF No. 152 at 3–4), it fails to bridge the gap
between the Internal Revenue Code and the Federal Priority Statute with controlling case law.
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Importantly, there is no indication that Mr. Neuberger engaged in self-dealing. Cf. id. (awarding
prejudgment interest because, among other things, “rather than advance the common good, Reed
enriched himself and his family at the public’s expense”).
Finally, it is worth noting that even if the United States’ position regarding the
calculation of damages were correct, there is an inadequate evidentiary basis to support its
requested damage award. The United States acknowledges that “application of the relevant
statutes is laborious in this case . . . because it involves many penalties, many dates, many years,
and (for 2011) multiple tax assessments.” ECF No. 149 at 6. To aid the Court in these
“laborious” calculations, as part of its post-trial briefing, the United States has tendered “reports
calculating interest for each tax year from commercial interest-calculation software . . . that the
IRS uses,” as well as a declaration of an IRS employee that purports to explain the report. ECF
No. 147 at 6-7. These post-trial exhibits were not entered into evidence and Mr. Neuberger did
not have an opportunity to raise objections or test their veracity via cross-examination. ECF No.
155 at 48:2-11. The United States Court of Appeals for the Fourth Circuit has found that
evidence of formulaic damage calculations submitted in connection with post-trial briefing, but
not entered in evidence, may be appropriate in tax claims. E.g., Bahan Textile Mach. Co. v.
United States, 453 F.2d 1100, 1102 n.2 (4th Cir. 1972) (concluding that although the United
States’ calculations were not themselves in evidence, they were “in the nature of arguments
based on evidence and . . . it was not improper to include them in the post-trial brief”). Yet, the
Court is unaware of any cases holding that such formulaic calculations are appropriately applied
to the Federal Priority Statute claim at issue here. To the extent that the United States contends
that such materials need not be entered into evidence because the calculation of penalties and
interest are statutorily determined, the Court refers to the previous discussion regarding the
applicability of Internal Revenue Code calculations to the disposition of damages in this action.
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III. CONCLUSION
In light of the foregoing, it is hereby ordered that judgment in the amount of
$1,880,987.96 is entered in favor of the United States and against Mr. Neuberger. A separate
Order follows.
Date: January 23, 2026 /s/
Erin Aslan
United States Magistrate Judge
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