In Uncategorized on 09/20/2013 at 15:52

The burden of proof, the US Attorney, and Mr  James Haber are all shifty, as Judge Halpern weaves his way through a designated hitter, AD Investment 2000 Fund LLC, Community Media, Inc., A Partner Other Than The Tax Matters Partner, Et Al., Docket No. 9177-08, filed 9/20/13.

Long-suffering readers of my blog will remember Mr Haber, the Fifth Amendment specialist, a featured player in my blogpost “Ironbridge Over Troubled Water”, 6/5/12. Once again Mr Haber faces the hot seat, and invokes his sacred Constitutional privilege.

This is another one of the FPAA-TEFRA cases arising out of Mr Haber’s tax mattering for several partnerships that might or might not be partnerships, and might or might not have engaged in transactions lacking economic substance, but throwing off heavy-duty deductions. Howbeit, “Petitioners represent, and respondent does not contradict, that the principal witness having knowledge of these issues is James Haber, the President of The Diversified Group Incorporated. Diversified is the Tax Matters Partner of AD Investment and AD Global.” Order, at p. 1.

Judge Halpern grilled Haber in camera, and concluded Haber was right to invoke his sacred Constitutional privilege. Haber said he would do just that, whenever and wherever asked about anything.

The non-matterers claim they can’t prove a thing without Haber, and IRS doesn’t say no. So why not give Haber immunity from prosecution and let him speak his speech trippingly on the tongue?

Well, the U. S. Attorney was being cagy (or maybe shifty). “Petitioners blame respondent for being unable to prosecute their case with the testimony of Mr. Haber. They point to an October 25, 2011, letter from the United States Attorney, Southern District ofNew York, stating that Mr. Haber had been the subject of criminal investigations by the United States Attorney’s office and Internal Revenue Service’s Criminal Investigation Division New York field office into his and his companies’ tax shelter transactions. A letter of September 11, 2009, from the United States Attorney states that he has no present intention of seeking criminal charges against Mr. Haber. In our order dated November 20, 2012, we reported that, in response to the Court’s suggestion, respondent’s counsel had again inquired whether the United States Attorney would be willing to grant Mr. Haber immunity in connection with his tax shelter activities. Respondent’s counsel was informed that the United States Attorney would not do so ‘and would not explain why.’” Order, at p. 2.

The non-matterers argue that IRS and the US Attorney are both on the same team, and there’s much caselaw to support this. The IRS can’t claim it’s separate from the US Attorney. So the burden of proof should be shifted to IRS.

IRS says there’s much caselaw against a petitioner who takes the Fifth. True, says Judge Halpern, but Haber isn’t the petitioner here.

IRS says that Haber, by taking the Fifth, takes himself out as a witness for IRS as well as the non-matterers. OK, says Judge Halpern, but the facts of this case are what they are.

“It may be true, as respondent argues, that, by invoking his Fifth Amendment privilege not to testify, Mr. Haber is unavailable to both sides. Yet, we cannot overcome the particular facts of this case. Apparently, Mr. Haber is no longer the subject of a criminal investigation by the Internal Revenue Service and the United States Attorney’s office, and the transactions that may have given rise to the suspicion of criminal activities are long past, yet the Unites States Attorney’s office will not categorically relieve Mr. Haber of his fear of prosecution and will not explain why.” (Emphasis by the Court.) Order, at p. 3.

Anyway, Judge Halpern reverts to the old baseball umpire’s rule: “Some is balls and some is strikes, but they ain’t nuthin’ ‘til I calls ‘em.”

Or more elegantly: “Rule 142 addresses the burden of proof. In relevant part, Rule 142(a)(1) provides: ‘The burden of proof shall be upon the petitioner, except as otherwise provided by statute or determined by the Court’ (emphasis added). We think that, given the central role that Mr. Haber played in the transactions in question and his importance to petitioners’ case, the interests of justice will be served if we grant the motion.” Order, at p. 3.

IRS, go talk to the US Attorney, or go try the case. Without Mr Haber.

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