In Uncategorized on 07/24/2015 at 17:50

No, not Tommy Hardy’s 1878 Venn diagram (beloved pun of my high school days), rather we have Judge Holmes viewing the scene of the conservation easement in another designated hitter concerning Anthony M. Kissling & Suzanne R. Kissling, Docket No. 19857-10, filed 7/24/15.

IRS wants The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a the Inveterate, Indomitable, Irrefragable, Illustrious, Indefatigable, Implacable Foe of the Partitive Genitive, and Old China Hand, to check out the properties, and Tony and Suz don’t object.

“This case has only one issue — the value of conservation easements – and the first motion is to have the Court visit the properties to see what they look like, which might help in placing later testimony in context. The Kisslings don’t object and the general rule is that judges in a bench trial may view the property – the viewing is a form of evidence — as long as both counsel attend.” Order, at p. 1. (Citations omitted).

Anyway, the trial is in Buffalo, NY, the properties are there, so no biggie.

But what Judge Holmes said next surprised me.

“The Court thinks a viewing is especially useful in this case — the judge trying the case is a native of the area and is wary of letting his general knowledge displace the specifics of the building and neighborhood at issue.” Order, at p. 1.

Judge, I thought you were a native of Brooklyn, NY. But maybe that’s because of Holmes v. US, Dockets 95-6009. 95-6103, wherein is stated that you leased an apartment in the St. George Hotel in Brooklyn, right out of law school. I’d hoped to subtitle this blogpost “But a Judge Grows in Brooklyn.” Thwarted, alas. Funnily enough, I did work for the cooperative housing corporation that owned the building some years later.

Back to taxes.

IRS also wants to toss two experts’ reports that Tony and Suz want in.

One report involves the costs of keeping up an easement-encumbered property. I can testify from my own experience that these costs are not insubstantial, if the enforcer, be it municipal or not-for-profit, takes the job seriously. And the issue whether our old chum the National Architectural Trust is more likely to play enforcer than the City of Buffalo rings true to Judge Holmes’ ear.

I haven’t been in Buffalo in more than ten years, but when last I visited it wasn’t exactly preservationists’ Heaven.

And just because the expert quotes others, that doesn’t make him a mere conduit for the opinions of others. He brings his own experience and knowledge to the mix.

IRS wants the valuation expert’s report tossed, because it didn’t comply with Rule 143(g)(1), the expert’s report checklist.

“The Court’s review of this report shows that this is not true. Part of the report is [expert]’s appraisal of the ‘before’ value of the properties using the income approach. The Court may or may not ultimately find it persuasive, but even the Commissioner notes that it is one of the generally accepted ways to appraise rental properties. We might also agree with the Commissioner that [expert]’s 2004 estimation of the properties’ ‘after’ value — which was then (when the case was still before IRS examination) based on reports of percentage reductions in value in other cases — was not ‘helpful,’ but [expert] then did a more detailed analysis in 2007. That addendum is part of his present report. Maybe the Commissioner is right that this addendum is little more than a post hoc rationalization; maybe the Kisslings are right that if [expert] finds a discount –after doing a property-specific analysis — that falls in the range of discounts established in other cases it only strengthens his conclusion.

“But that dispute must await trial on the merits: The report as it now stands meets the criteria of Rule 143(g), Tax Court Rules of Practice and Procedure.” Order, at p. 3. (Name omitted).(Emphasis by the Court).

Did [expert] draw back from the Primoli percentage precipice? What will the native find upon his return?

Who needs Thomas Hardy when we have The United States Tax Court?

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