Attorney-at-Law

PLAY NICE AT THE GRAEV

In Uncategorized on 07/10/2018 at 17:25

Or, Does Greenberg’s Express Run Here Any More?

On a day when the only opinion is a Sum. Op. non-substantiation scarcely worth my time, to say nothing of the more valuable time of STJ Daniel A (“Yuda”) Guy, I turn back to the monumental silt-stir that is Graev.

Judge Holmes was right; Graev was a night-of-the-living-dead, resurrecting cases awaiting written opinion, and stirring silt like a cement-mixer on steroids.

Today we have Calvin G. Walker & Stacy Walker, Docket No. 30216-13, filed 7/10/18. The only issue is reopening the record for Section 6663 fraud chops and Section 6662(a) accuracy-chops. Ex-Ch J L Paige (“Iron Fist”) Marvel has this one, and reopens.

But the way she does it reminded me of Judge Holmes’ silt-stirring concurrence in Graev II, 149 T. C. 23, filed 12/20/17 (see my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.

What will happen to Greenberg’s Express?  ‘As a general rule, this Court will not look behind a deficiency notice to examine the evidence used or the propriety of respondent’s motives or of the administrative policy or procedure involved in making his determinations.’  Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327 (1974) (emphases added) (citing Human Eng’g Inst. v. Commissioner, 61 T.C. 61, 66 (1973)).  Imagine if a taxpayer after reading this Opinion wants to know what really happened behind the scenes for the penalty to have made its way into his notice of deficiency.  How can we deny him discovery about communications between the auditor and the supervisor now that what happens before the Commissioner issues a notice of deficiency is a material fact?  How about communications between auditor and supervisor and any pre-notice advice from counsel?  Will interrogatories be enough or will we create some sort of testimonial privilege or will we just overturn this part of Greenberg’s Express?  Who knows?” Graev II, 149 T. C. 23 at pp. 48-49.

Well, I won’t hold Judge Holmes in suspense any longer, as here’s ex-Ch J Iron Fist’s take.

“ORDERED that respondent’s…motion to reopen the record is granted in that the record is reopened for the purpose of receiving evidence, either in the form of a supplemental stipulation of facts or by way of a supplemental trial regarding the section 6751(b)(1) penalty approval requirement and whether it is met in this case. It is further

“ORDERED that the parties shall have until September 17, 2018, to engage in the informal exchange of information as required by Rule 70, and, if the section 6751(b)(1) issue cannot be developed and resolved informally, to complete formal discovery.” Order, at p. 6.

Stirring times, these.

 

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