In Uncategorized on 06/27/2018 at 16:30

That Obliging Jurist, Judge David Gustafson, is at it again, instructing taxpayers and their counsel, and admonishing IRS and its counsel, in a sermonette about prejudice (but the Pride of Steventon, who inspired my title, has nothing on Judge Gustafson when it comes to discussing prejudice).

Here’s Murfam Enterprises LLC, Wendell Murphy, Jr., Tax Matters Partner, et al., Docket No. 8039-16, filed 6/27/18. If this sounds familiar, doubtless it’s because I blogged another iteration thereof only the day before yesterday. See my blogpost Mise En Place, 6/25/18. Then, Judge Gustafson was a trifle testy concerning the parties’ epistolary jousting on the eve of trial.

Today the Murfams are trying to get in one (count it, only one) “Amendment to Petitions,” which recites what the Murfams want to change in their three (count ‘em, three) consolidated cases. And they don’t lodge the three amendments, which would presumably incorporate what the aforesaid document recites.

Ordinarily, seeking amendment without lodging text thereof draws a rebuke, but Judge Gustafson, aware that trial is coming apace, lets it go.

“Murfam’s motion explains why it believes the Commissioner would not be prejudiced by the proposed amendments. The explanation is credible, and we see no obvious prejudice. However, the motion advises that ‘Respondent objects to the granting of this Motion.’ We will therefore order the Commissioner to file a response to the motion for leave. If that response is indeed an objection, then it should explain why and how the Commissioner would be prejudiced by the amendments. Of course, ‘prejudice’ for this purpose does not mean mere disadvantage but rather an unfair disadvantage arising from the delayed filing. A party alleging prejudice must be able to explain what it would have done differently heretofore if the amendment had been made earlier (or if the newly proposed contentions had been included in the original petition). Of course, consenting to the filing of an amended pleading is not a concession of the merits of that pleading.

“(If we do grant the motion for leave, then we will not order the filing of the lodged ‘Amendment to Petitions’ but will instead strike that document and order Murfam to file, in each of the three cases, a conformed amended petition for that case that reflects the amendments that Murfam requests leave to make.)” Order, at pp. 1-2. (Emphasis by the Court). And presumably IRS gets a chance to amend its answers.

In short, IRS, this is a chance for could’a would’a should’a.

But trial looms, so IRS gets until Monday to object, and if IRS does, let them say how to cure the prejudicial effect. The Murfams also get a tight timetable to get in the amended petitions, if allowed, and IRS gets same to answer.

Prejudice means real prejudice.


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