In Uncategorized on 09/09/2014 at 20:23

I had a meeting with the Board of Directors of a client today at 3 p.m., EDT, so Tax Court, obliging as ever, released no opinions today, assuring thereby that I would not have to hasten back to my computer to get y’all the latest.

Judge Holmes (I’ll skip the honorifics) has two designated hitters, but the only point is that being convicted of tax fraud and some amount of underpayment in consequence thereof does not estop the fraudster from fighting over the exact amount he owes Uncle Samuel. To the same effect see my blogpost “Orders in the Court”, 3/9/12, the story of Albert Bront, ex-Revenue Agent.

But Judge Laro, hiding his light under a bushel and sending me on a lengthy boustrephon through a field of uninteresting orders, has one about experts who stray from the straight-and-narrow, making conclusions of law and findings of fact, and advocating rather than enlightening the Court.

The case is James A. Survilla, Transferee, Docket No. 6332-12, filed 9/9/14, but Jim is a bystander. The heavy in this piece is J. T. Atkins, IRS’ witness, whose credentials Judge Laro addresses in a footnote.

“Mr. Atkins graduated from Harvard Law School in 1982, after which he practiced mergers and acquisitions law for 3 years and worked as an investment banker for 29 years.” Order, at p. 1, footnote 1.

I’ll spare you my snarky remarks about those who practice briefly and hie themselves off to other (presumably more lucrative) endeavors. And certainly I’ll avoid the t-shirt: “Harvard- because not everyone can go to Cornell.”

There, now we can get on with it. Judge Laro: “To be admissible, expert testimony must be both relevant and reliable. To be reliable, expert testimony must be based on sufficient facts or data and it must be the product of reliable principles and methods properly applied. To be relevant, expert testimony must ‘assist the trier of fact to understand the evidence or to determine a fact in issue.’ ‘Expert testimony is not relevant if the expert is offering a personal evaluation of* * * the motivations of the parties.’ ‘The proponent of expert testimony must establish its admissibility by a preponderance of the evidence.’” Order, at p. 2. (Citations omitted).

Judge Laro serves as gatekeeper, and J. T. is a gatecrasher.

J. T. has predominantly given only legal conclusions, or at best mixed conclusions of law and fact. He’s telling the Judge what to find, and Judge Laro isn’t buying it.

But J. T.’s opinion isn’t wholly worthless.

Judge Laro: “Nonetheless, Mr. Atkins does provide several opinions which are properly within the purview of an expert, including his opinions that: (1) it is ‘not normal’ for a C corporation without operating assets to be purchased for more than its book value; (2) discussions centered on taxes and the removal of noncash assets and liabilities from a corporation are not ‘typically topics of* * * [primary] focus’; (3) the wire transfer or escrow of an acquired corporation’s cash assets as part of a stock sale is ‘highly unusual’; and (4) indemnity clauses regarding postclosing tax liabilities are ‘highly unusual’.” Order, at p. 6.

So J. T. can get that much in. But the rest goes over the side. And if IRS still wants J. T.’s explications to go in evidence at trial, they must redact his written opinion.


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