The case of United States v. Monty Karst involves a lawsuit brought by the United States Government against Monty Karst and Todd Alan Templeton in the U.S. District Court for the District of Kansas. Decided by Judge Toby Crouse on February 27, 2026, the court granted summary judgment in favor of the Government to recover unpaid federal estate taxes.

Here is a detailed breakdown of the facts, the Government’s claims, and the Court’s ruling:

Background and Factual History

Donald D. Karst died on September 15, 2007, leaving his property, including several oil and gas businesses, in a revocable trust. His sons, Monty Karst and Todd Alan Templeton, served as co-trustees of the trust and were the primary beneficiaries of both the trust and the estate. Monty also served as the executor of the estate.

Following their father’s death, the brothers filed an estate tax return reporting a gross estate value of $3,975,487.44 and a self-reported tax liability of $792,790.75. They elected to pay the tax in yearly installments under 26 U.S.C. § 6166. However, they stopped making payments toward the tax liability after June 16, 2015. Crucially, while the tax debt remained unpaid, Monty and Todd distributed the estate’s assets to themselves as beneficiaries. By June 30, 2025, the outstanding balance, including interest and penalties, had grown to $1,105,111.34.

The Government’s Claims

The United States sought summary judgment on three counts:

Count I: To reduce the Estate’s tax liability to a money judgment.
Counts II & III: To hold Monty Karst and Todd Templeton personally liable for the unpaid taxes under 26 U.S.C. § 6324(a)(2), which holds recipients of estate property personally liable when estate taxes go unpaid.

The Court’s Analysis and Rulings

The court ruled entirely in favor of the Government, finding no genuine dispute of material fact. The decision rested on several key legal pillars:

Validity of the Tax Assessment: The IRS’s initial assessment of $792,790.75 and the subsequent calculations showing an outstanding balance of $1,105,111.34 were supported by an IRS Form 4340 and a balance due computation. The court noted that these forms carry a legal presumption of correctness, and the defendants had already stipulated to their admissibility.
Statute of Limitations: Monty and Todd argued that the Government’s time to collect the debt had expired. Normally, the IRS has ten years to begin collection proceedings. However, the court explained that the brothers’ election to defer payments under 26 U.S.C. § 6166 legally suspended the 10-year limitations period until the IRS terminated the election on May 10, 2018. This extended the Government’s filing deadline to May 8, 2028, making the September 2024 lawsuit perfectly timely.
Personal Liability of the Defendants: Under 26 U.S.C. § 6324(a)(2), trustees and beneficiaries who receive estate property are personally liable for unpaid estate taxes up to the value of the property they received. Because Monty and Todd received estate property valued at approximately $3.97 million—far exceeding the $1.1 million tax debt—the court found them jointly and severally liable for the full amount.

Rejection of Defendants’ Arguments

The defendants attempted to argue that the Government failed to provide a sufficient breakdown of the debt, including distinct calculations for interest and penalties. The court rejected this argument for three primary reasons:

Judicial Admissions: The brothers had already stipulated to the tax deficiency amounts in the Pretrial Order, which legally binds the parties and precludes them from contesting those amounts later.
Failure to Controvert Evidence: The defendants failed to provide any specific evidence, such as affidavits, exhibits, or deposition testimony, to create a genuine factual dispute as required by Federal Rule of Civil Procedure 56.
Abandoned Defenses: While the defendants preserved three affirmative defenses in the Pretrial Order, they completely failed to raise them in their response to the summary judgment motion, meaning the court deemed them abandoned and waived.

Final Judgment and Next Steps

Judge Crouse ordered judgment against the Estate of Donald D. Karst and against Monty Karst and Todd Alan Templeton (jointly and severally) for $1,105,111.34, plus any statutory additions and interest that continue to accrue until paid in full.

The court set a deadline for the parties to submit a proposed agreed judgment reflecting the final accruing interest charges by 5:00 PM on March 6, 2026. If they fail to do so, the parties are ordered to appear for an in-person hearing on March 10, 2026, at the federal courthouse in Topeka, Kansas, to resolve the final language.

Prepared with assistance from NotebookLM.