In Uncategorized on 02/28/2018 at 15:50

I’ve often said I’m a great fan of summary J; it smokes out one’s opponent (and the Court), and paves the way for an efficient trial. One tells one’s own story first, and the other side tells theirs. Then, Rashomon-like, the Judge untangles the story, finding out what, if anything, must be fought out at the trial.

Stipulated facts, on the other hand, can be a trap. I know that the darling of the Tax Court’s nursery is the Rule 122 fully-stipulated case. But where one’s whole case depends upon the actions of a nonparty, one ought not to stipulate one’s case away.

Here’s the sad tale of Kevin E. Rushing, 2018 T. C. Memo. 23, filed 2/28/18. The case went from Judge Pugh to Judge Gustafson to Judge Laro.

It’s an SFR for each year at issue, based on third-party reportage and bank records reconstruction. Kev has got a VA 80% disability rating, and claims ex-Mrs Kev made away with all the cash from his real estate rentals, his military pay, and his construction and insurance business, so he never got a dime. Therefore, he never was in receipt of any of the income IRS claims he had.


The Rule 122 record is a four-page stipulation, which never mentions ex-Mrs Kev or disappearing moneys. Kev argues ex-Mrs. Kev’s depredations on brief, but that’s not evidence, and Kev has burden of proof.

“All that is before the Court is a four-page stipulation of facts (without any corresponding exhibits) establishing that petitioner had received certain income during the tax years at issue, that there were rental checks deposited into petitioner’s bank accounts, and that there were unexplained deposits into the LLC’s bank accounts over which petitioner had signature authority.  While petitioner had sought to introduce as evidence certain exhibits attached to his seriatim reply brief, we held by order that those exhibits were inappropriate for inclusion with the brief and were to be stricken from the record.  One of those exhibits, petitioner’s affidavit, could not have constituted evidence.  See Rule 143(c).  Petitioner’s other exhibits, while supporting some of his statements made on brief, were not timely or appropriate and would not have been dispositive on the issues in contention even were they admissible.

“The core of petitioner’s argument–that his former wife wrongfully gained access to the bank accounts in question and had exclusive dominion over them during the taxable years at issue–is unsupported by any evidence, whether a stipulation or exhibit thereto or other appropriate source.” 2018 T. C. 23, at p. 15.

Judge Laro rounds it out: “Had petitioner timely offered further stipulations of facts, witness testimony, or any other evidence, we would have been able to consider the ways in which such evidence supported his contentions.  In its absence, we can look no further than the facts stipulated by the parties and summarized in this opinion’s background section.  Those facts do not controvert respondent’s determination in the notice of deficiency of petitioner’s tax liabilities.” 2018 T. C. Memo. 23, at p. 16.

Kev was not pro se. I’ll not comment further in that regard, except to say that there but for the grace of you-know-Whom go any of us.



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