So says ex-Ch J L. Paige (“Iron Fist”) Marvel to the trusty attorney for SGB Land Company, LLC, Docs Field of Dreams, LLC, Tax Matters Partner, Docket No. 8460-23, filed 9/23/26.

The end run in question is an attempt to insert into evidence a baseline documentation report by Dr K. and an appraisal by none other than the well-known Mr. W.  Are they “historic documents,” admissible for their existence but not for the truth of anything either says, or are they admissible per FRE 803(6) as business records?

“Ordinarily, under our Rules, these types of documents would be offered into evidence as expert testimony reports and subject to the requirements of Rule 143(g). At trial, the testifying expert witness would identify the document as his own, and we would mark and receive it into evidence as the witness’s testimony. However, per its Pretrial Memorandum, petitioner does not intend to call either Dr. K or Mr. W to testify at trial. Consequently, petitioner does not contend that these documents are expert witness reports. Instead, recognizing that the documents constitute hearsay otherwise, petitioner argues that they are admissible for the truth of the matter asserted under Rule 803(6) of the Federal Rules of Evidence, commonly known as the business records exception to hearsay.” Order, at p. 2 (Footnotes omitted, but they say experts’ written reports go in as direct subject to cross, and if these aren’t, everyone agrees they’re hearsay.) (Names omitted).

Problem is, they’re not trustworthy, which caselaw says is essential.

“These documents are devoid of vital information on the circumstances in which and for which they were created and, most importantly, the impact of those circumstances on the methodologies and calculations used. This is information that can only be provided by the authors. For example, respondent correctly points out that the appraisal report contains a spreadsheet that vaguely claims to draw from ‘cost estimate[s] provided by developers,’ but provides no clarification whatsoever on who those developers were or how they came up with the costs. Additionally, we do not have sufficient information on how Dr. K or Mr. W  were compensated for the production of these documents or their broader involvement with the transaction at issue, facts which necessarily color the reliability of the ultimate valuations used….” Order, at pp. 2-3. (Names omitted).

And here comes the safety valve.

“Rule 803(6)(E) of the Federal Rules of Evidence provides the exact kind of safety valve that trial court judges need to prevent the use of the business records exception to circumvent the traditional expert testimony rules.  Respondent has given us ample reason to rely on it here.” Order, at p. 3. (Citation omitted).

There was a T. C. Memo. today, Brenton E. Williams and Octavia P. Williams a.k.a. Octavia Pearl, T. C. Memo. 2026-91. It was Octavia’s story and the aftereffects of a hurricane, but it turns on documentation, of which petitioners have none. No novel concepts here.

Toscano Holdings, LLC, Toscano Investments, LLC, Tax Matters Partner,  T. C. Memo. 2026-90, filed 9/22/26 (Here’s lookin’ at you, Kid, to the GoMD) says they got a raw deal at Appeals, so wipe the FPAA that knocked their Dixieland Boondockery down from $38 million to $6 million.

Judge Elizabeth Crewson Paris says the past is prologue, she won’t rewrite it, and Toscano can go to trial de novo. 

Toscano first refused to extend SOL so Exam could take a second look, then six (count ’em, six) months later offered to extend, but by then Exam had sent the file to Tech to craft the FPAA. Then after Toscano petitioned the FPAA, they got remanded to Appeals. The first Appeals hearing was postponed to avoid impacting the criminal trial of W the appraiser (who was acquitted on all counts). Then the hearing took place, with which Toscano finds fault.

Judge Paris won’t invalidate the FPAA. Toscano can go to trial and fight the one real question, valuation.

Once again, Greenberg’s Express rolls on.

Two (count ’em, two) years ago I asked whether pleading reliance on Section 6662(e)(3)(B)(i) objectivity was a good tactic. “Whether this is a good tactic remains to be seen,” I wrote in my blogpost “A Note of Sympathy,” 11/14/24. It did work for Amgen back then, according to Judge (then STJ) Jeffrey S. (“High-Rise”) Fried, and it works now for Eaton Corporation & Subsidiaries, Docket No. 2607-23, filed 9/22/26, a special day hereabouts.

Judge Albert G. (“Scholar Al”) Lauber recalls Judge High-Rise Fried’s analysis, and goes along with it, though of course not citing it as precedent, which it can’t be. But note well, practitioner: you can use the reasoning in an order as persuasive and mention the order.

IRS wants privilege waiver on all Eaton’s attorneys and CPAs, as Eaton asserts Section 6662(e)(3)(B)(i) as basis for their good-faith reliance argument to avoid net Section 482 adjustment chops. Eaton specifically does not mention experts, saying they relied on an objective test. IRS agrees, and Judge Scholar Al says it’s “100%” objective, but it still shows state of mind, and that brings in everything.

Judge Scholar Al doesn’t agree that asserting good faith reliance means all privileges are waived.

“We addressed a similar question in a discovery Order issued in Amgen, Inc. v. Commissioner, No. 15631-22. The IRS argued that the taxpayer, by advancing defenses to penalties, had implicitly waived privilege over various documents. We noted that an implied waiver of privilege may occur where the party claiming the privilege raises an issue as to its own knowledge, intent, or state of mind. T.C. No. 15631-22 (Order served Nov. 11 [sic], 2024, at 7). But the taxpayer there, in asserting penalty defenses, ‘ha[d] not pleaded any specific allegations relating to its own knowledge, intent, state of mind, or the reasonableness of its actions.’ And the taxpayer did not ‘rely on privilege[d] communications’ as a basis for its penalty defenses. Ibid. We accordingly ruled that no waiver of privilege had occurred.” Order, at p. 2.

Judge, the issue date of Judge Fried’s order was 11/14/24; 11/11/24 was Veterans’ Day, a public holiday in the District of Columbia. I trust Tax Court was closed, appropriately.

“Reduced to its essentials, respondent’s argument seems to be that a taxpayer is precluded from raising a defense to a transfer-pricing adjustment unless it waives privilege over all communications relating to that issue, even though the taxpayer does not intend to rely on those communications as a basis for its defense. The taxpayer would thus face a dilemma: it would have to waive privilege as a condition of exercising its right to assert a penalty defense, regardless of the nature of the defense it seeks to assert. In practical effect, this would impose a huge burden on taxpayers’ ability to secure privileged advice from their lawyers and tax advisors. This does not strike us as an appealing argument. It is especially unappealing on the facts of this case, where the penalty defense Eaton seeks to raise is 100% objective and in no way implicates its state of mind.” Order, at pp. 2-3. (Footnote omitted, but it says the order I blogged back on 4/6/15 raised a general good faith reliance defense, not the Section 6662(e)(3)(B)(i) defense, so doesn’t apply. See my blogpost “Never Call Retreat,” 4/6/15.)

Chaps, read my blog. I cover all this good stuff.