Attorney-at-Law

THE REAL MCCOY

In Uncategorized on 04/27/2016 at 15:16

The $3 billion showdown between IRS and Guidant LLC f.k.a. Guidant Corporation, and Subsidiaries, et al., Docket No. 5989-11, filed 4/27/16, is getting toward crunch time. IRS wants to depose non-party Fred McCoy.

Judge Laro explains: “McCoy served as president of Guidant’s Cardiac Rhythm Management (CRM) business unit, operated through Cardiac Management (CPI) business unit, operated through Cardiac Pacemakers, Inc., for part of the years at issue.” Order, at p. 1.

IRS claims, and Judge Laro agrees, that, in the immortal words of Ira Gershwin, Fred’s got Rhythm. That is, while IRS has had a crack at lesser managers at CRM, “…none of the individuals interviewed can speak to the direction of the company or the reasons behind the directions of the company. Only the president of the company can provide the necessary knowledge of the relative economic contributions of the company’s various functions.” Order, at p. 3.

Guidant gave IRS some of Fred’s testimony from a products liability deposition, and while some of that might be helpful, “…McCoy’s prior depositions had a different focus from the deposition sought by respondent [IRS]. Moreover, to the extent that respondent may ask questions regarding the events that precipitated the product liability litigation, the focus of respondent’s questions assumedly will be different, as respondent seeks to understand the business evaluations, decisions and actions resulting from the product defects and ensuing litigation.” Order, at p. 3.

Moreover, IRS played nice and tried informal discovery, but Fred’s attorney wouldn’t agree to any recording of what Fred had to say. I won’t comment on that.

Judge Laro leans heavily on the size of the litigation, namely a Section 482 unscrambling of a digested omelet, with Section 376(a) and 367(b) alternative adjustments and a load of Section 6662 chops. As the late Senator E. McKinley Dirksen remarked, “A billion here, a billion there, and pretty soon you’re talking about real money.”

Back to Judge Laro: “The information sought is reasonably calculated to lead to the discovery of admissible evidence and/or is relevant. See Tax Court Rule 70(b). The proposed deposition would further the basic purposes of discovery-to ascertain facts which have a bearing on the issues before the Court and minimize surprise by allowing the parties to obtain knowledge of all relevant facts.” Order, at p. 4.

No doubt about it, Fred is the Real McCoy.

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