Attorney-at-Law

SUMMARY JUDGMENT – A CAUSERIE

In Uncategorized on 03/13/2014 at 17:03

A lot of the Tax Court (and other) cases I blog involve summary judgment. Not surprising, because a lot of summary judgment motions get made. And I myself am a great fan of the summary judgment motion.

For those who tuned in late, summary judgment is judgment without a trial. The sides tell their stories on paper, back them up with affidavits, declarations, copies of documents, and hand them to the judge.

Now trials are for finding out facts. We need to find out facts when there is a dispute about facts: who did (or didn’t) do what to whom and when and where and how?

But if there’s no dispute about facts (say everyone agrees that, for example, in the words of Ellie Greenwich’s and Jeff Barry’s 1963 hit, “I met him on a Monday and my heart stood still”), then no need for witnesses to testify or things to be introduced into evidence, just apply the law.

It’s also triple discovery, without the need for depositions (expensive), interrogatories (time consuming) or notices to admit (excuses to quibble). I say “triple”, because it gives me discovery from three parties: my client, the opposing party, and most importantly, the judge.

If I’m representing the moving party, my client had better lay out the whole story, because he or she is going to swear to it, and the other side will have it. Same for the other side: “marshal and lay bare your proofs” cuts both ways. It’s all in writing and sworn to.

And if we have to go to trial, the affidavits and exhibits to the motion and replying papers are handy tools for impeaching witnesses and limiting the scope of what stories the parties can tell.

Most importantly, as I said, the judge, in deciding the motion, educates me (and of course my adversary) as to what the judge thinks of the case and what the judge sees as the factual issues to be determined on a trial.

And if I did it right, even if the judge rules against me, my side of the story might just get the judge to lean a little toward my side of the case.

Now I’ve won some and lost some (as all attorneys will agree), but I never regretted making the motion.

Now we have a designated hitter today involving my indefatigable correspondent Robert “Uncle Bob” Jacobson, Docket No. 8447-13W, filed 3/13/14, from the desk of CSTJ Panuthos. IRS wanted summary judgment, but didn’t get it.

Uncle Bob listed a bunch of malefactors in his whistleblowing Form 211, but IRS dealt with only the lead entity, a nonprofit corporation since dissolved, whose assets were allegedly distributed to other nonprofits.

No good, says CSTJ Panuthos. Though Uncle Bob’s papers may not have been of the best, “(W)e are unable to conclude as a matter of law at this juncture of the proceeding that the claim does not relate to related organizations identified in petitioner’s claim and that there was no collection of tax proceeds as a result of administrative or judicial action with respect to the related organizations.

“Drawing all factual inferences against respondent, as the moving party in this motion, respondent [IRS] has not established that there is no genuine dispute as to any material fact. Summary judgment is not appropriate under these circumstances.” Order, at p. 2.

So there is an issue of fact; who were those other guys and what did IRS do about them, if anything?

But, as usual, the motion cuts multiple ways. Uncle Bob has told IRS what his case consists of. CSTJ Panuthos has told IRS what they need to do to meet, and maybe beat, Uncle Bob’s case. And Uncle Bob now knows something of what CSTJ Panuthos thinks of the case, if CSTJ Panuthos gets to try it, of course; he was only assigned the case to deal with the IRS’ motion.

Takeaway- It’s worth considering summary judgment. Even if you lose, you win.

Advertisements
  1. Dear Lew,

    First thanks for the coverage. Chief Special Trial Judge Panuthos once more displays he is a first-rate interpreter of the law, especially that old canon, “first things first.” You can’t ask, as did the IRS, for a summary judgment when the most basic facts of the case are still in hot dispute, with the IRS holding all the cards in the form of concealed institutional memory and hidden documentation. Had the IRS embraced me as a “friendly” Whistleblower, as it should have done, instead of characterizing my case as unworthy of its time and me as “hostile,” we’d have put the perps in prison before they could wreak havoc on our commonweal. My 13903 Complaint in May 2010, ignored by the agency, was in time to prevent the worst of the crimes I allege in my petition. The perps would be in prison and America would be waking up to a new morning.

    We also would have avoided the nonsensical sound and fury being passed off as serious Congressional oversight of the IRS.

    But the IRS didn’t act on either my Complaint or, five months later, my Whistleblower claim, filed to elicit from EOS that it knew I existed. I can’t account for the agency’s subsequent’ shoot from the hip, aim for its foot strategy. Maybe you know more about that than I do.

    My case is necessarily about money. It was the stock in trade of the racketeers whom I allege duped the IRS in an attempt to end-around the Constitution –specifically, its separation of powers clause, which the perps in high places thought they could avoid by creating a tax-exempt to assume the powers that a Cabinet secretary, fearing Congressional oversight, chose not to. (I call it Iran-Contra redux. Fortunately, no one was assassinated in this dodge, only our nation’s reputation.)

    But — and this is of greater importance to me — this case is also about cynical people in positions of power purposely employing tax law to cloak their perpetration of felonies, grave crimes that, I allege, contributed to our current national disaster: a Bedlam for a Congress; a nation that’s virtually ungovernable, a blighted presidency; and a democracy once again tromped upon by a few rich and powerful people — an elite without partisan loyalties, who play both sides of the aisle — who thought they knew better.

    Now the IRS finds itself in a pickle. If as you say, Judge Panuthos has shown the IRS its way out … it’s a path littered with glass, lined with barbed wire, peppered with landmines, and prowled by a fact-starved investigative press that’s primed to bite first and ask questions later. To satisfy the implicit conditions of candor and openness required for a summary judgment to issue at this point, the IRS will have to turn over institutional rocks larger than those in almost any of its prior controversies; then investigate, perhaps even implicate political, legal, and corporate actors of immense stature. Some giant political players and over 70 multinational corporate CEOs were dragged into what I allege was a political crime cloaked in a bogus marketing scheme disguised as a public charity to simultaneously (1) elect candidates in the 2010 midterm elections and (2) make a little richer those involved in the racket, in and out of government. Since when does the IRS condone giving and accepting tax-exempt contributions in return for contributors becoming “marketing partners,” as the Non-Compliant Taxpayer’s fundraising brochure advertised?

    Further, I allege that some of the laundered money in this scheme went to Republicans elected in 2010’s congressional landslide, Darryl Issa and his colleagues on the House Oversight Committee notwithstanding. In fact, the Committee members themselves may have directly benefited from the IRS facilitating (and now harboring) this racket. How convenient to have an IRS to beat up on and at the same time, have it permit tax-exempts to fill your campaign chests. If you’re a House Republican, you can have your cake and eat it too.

    But wait, the perps weren’t all Republicans. Far from it. Some very high-profile Democrats, I allege, people a lot more important than Lois Lerner, were centrally (if naively) implicated in this racket. The facts have been reported in the press. But the players’ motives are muddled. The racket in some sense was the proverbial camel, created by a committee, and with about as much brains coordinating it. A comprehensive explanatory framework is lacking, pending all of the facts being made known. If the Judge permits, in discovery we will find it.

    As the sour cherry on this sadly spoiled cake, the IRS may have deliberately helped the racketeers, or at least their henchmen. In my petition, I allege that the Cincinnati office, “guided” from DC, may have collaborated with a very powerful legal firm to ensure that the firm’s client, my Non-Compliant Taxpayer, received a favorable 501(c)3 determination in a record two weeks. (Two weeks!) The NCT was a private company with its corporate charter in default, an uncertain headquarters — was it in DC? In California? In Shanghai? or none of these? — an incomplete application, a CEO who a year later had to step down responding to press allegations of massive excess benefit transactions (insider dealings); and a confusing (in my Complaint’s terminology, “perjurious”) rationale for why it deserved 501(c)3 status in the first place. And what about the other 501(c) that the Judge calls out and that I allege was part of the scheme, it and its overseas franchisee that served as a political and financial go-between? As prominent are they are, as central to the money-raising and campaign-funding I allege, and so easy to find (unlike my nemesis), why didn’t the IRS at least do them the honor of a “survey,” too? Or how about an audit, for all three?

    The IRS, I allege, by its abuse of discretion, co-prototyped the twisted use of 501(c)4s for political purposes and enabled some unsavory characters to break not one but multiple laws. With its clumsy motion, it attempted to stitch into place the very veil that we should have been pulling back as collaborators. Exactly how does the IRS now proceed?

    This is its rub.

    You know, Lew, my case could get interesting. Stick around.

    Like

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: