Attorney-at-Law

WILDING

In Uncategorized on 08/01/2018 at 15:50

This infamous term figured largely in a major crime many years ago, wherein a serious miscarriage of justice occurred. Now it resurfaces, as IRS tries to wild-card in evidence, and the Section 6751(b) Boss Hoss sign-off, in two different designated hitters today.

First up, Judge David Gustafson with yet another chapter in the discovery joust on the eve of trial in Murfam Enterprises LLC, Wendell Murphy, Jr., Tax Matters Partner, et al., Docket 8039-16, filed 8/1/18 (Happy Palindrome Day!). I’ve blogged this case before, as the kerfuffle regarding IRS’ expert’s report is ongoing even as calendar call arrives Monday, August 6.

IRS claims it gave Murfam’s counsel all the stuff they want to supplement their expert’s report long ago. But Judge Gustafson isn’t buying. Rule 143(g) says reports have to be served and submitted 30 days in advance of calendar call, unless good cause shown and no prejudice to the other side.

“The Commissioner’s motion does not cite Rule 143(g) and does not mention (much less discuss) either ‘good cause’ for the untimely service and submission of the newly proposed material or ‘prejudice [to] the opposing party.” Order, at p. 3 (Close parentheses omitted in original).

So IRS, answer tomorrow. Murfam can reply, but better to prepare for trial. And guys, Judge Gustafson may not be able to rule on the supplement before the expert goes on the stand.

Next up, Benjamin Soleimani & Sharyn Soleimani, Docket No. 8884-13, filed 8/1/18. Trial ended a year ago, but IRS left out the Boss Hoss sign-off and Ben’s and Shar’s counsel never raised it either. Of course, in the meantime 2 Cir decided IRS has burden of production and proof, and thereby opened the whole Graevyard.

Judge Gale decides the Boss Hoss sign-off justifies reopener, as not cumulative, not impeaching, is material, would change outcome, and might satisfy the business record or res gestae hearsay exceptions. So he’ll reopen.

Except.

“Petitioners principally allege three ambiguities in the penalty approval form. First, petitioners note that under a column on the penalty approval form labeled ‘Assert Penalty’, there are two boxes, respectively labeled “Yes” and “No”, which may be checked for each penalty listed on the form. Petitioners note that, with respect to the substantial understatement penalty asserted by respondent, both the ‘Yes and ‘No’ boxes are checked.

“Second, petitioners note that within a box on the penalty approval form labeled ‘Reason(s) for Non-Assertions of Penalty(s)’, someone, ostensibly RA K, has typed, ‘The agent as [sic] considered and applied substantial understatement penalty per Section 6662.’ Petitioners note that a box underneath the aforementioned non-assertion box, labeled ‘Reasons for Assertions of Penalty(s)’, is blank.

“Third, petitioners note that the signature block provided on the penalty approval form for the supervisory approval of any initially determined penalty is labeled ‘Group Manager Approval to Assess Penalties Identified Above * * * (And for non-assertion of Substantial Understatement Penalty where dollar criteria for penalty has been met)’.” Order, at pp. 4-5. (Footnote and name omitted).

So let’s have discovery.

“While we will reopen the record, we will exclude the declaration and penalty approval form without prejudice in order to ensure petitioners are accorded the notice to which they are entitled. See 902(11), Fed. R. Evid. In addition, in order to eliminate any possible prejudice to petitioners from reopening the record for possible receipt of the evidence respondent has proffered, and to accord petitioners any rights to which they would have been entitled if respondent had sought to introduce the declaration and penalty approval form at trial…. we will allow discovery regarding the declaration and penalty approval form, as set forth below, and thereafter consider whether supplemental trial proceedings are necessary.” Order, at p. 8.

The past isn’t prologue when the Boss Hoss sign-off gets wild-carded in.

 

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