In Uncategorized on 04/16/2019 at 15:51

Sorry, George Jones and Speedy, but relief from (getting out of) a signed stipulation in US Tax Court is not “just a swallow away.”

Just ask Edward Roberson & Connie Roberson, Docket No. 27486-15, filed 4/16/19. And Judge Buch will definitely roger that transmission.

Ed & Connie were fighting with IRS over Ed’s Sched C. They were on for trial last November. They answered the calendar call and were awaiting trial, when they stiped out. Fellow practitioners tell me that maybe 70% of Tax Court cases on the calendar either get bounced on default or are stiped out.

IRS promptly sent the decision documents to Ed & Connie in November. Judge Buch gave them to January 7 this year to sign, but Shutdown.

When IRS went back to work, Ed & Connie said they weren’t signing, because the Sched C income was lower and deductible expenses higher.

IRS moved to enter decision (what we State courtiers call “judgment”) based on the stip; Ed & Connie counter with their revised numbers.

Judge Buch: “We may modify or set aside a stipulation that is clearly contrary to the facts, but we do not set aside a stipulation that is consistent with the record simply because one party claims the stipulation is erroneous. We may grant relief if a party asserts contractual defenses, but a unilateral mistake of fact in a binding, unambiguous stipulation is not a ground for relief.

“The Robersons did not present any contractual defenses. The Robersons raised the issue of this alleged error only after the parties entered into the stipulation. The Robersons’ unilateral mistake (assuming there was one) is not grounds to set aside a contract.” Order, at p. 2. (Citations omitted, but get them for your memo of law file).

The Robersons claim the stip was a “take it or leave it” proposition. But they knew from IRS’ amended answer four months before trial that Sched C numbers were on the table.

And finally, the real point: “Moreover, the Robersons were represented by their counsel who also had notice of the items in dispute. The parties thus freely and fairly signed the stipulation long after both parties were aware of what was at issue. We are reluctant to relieve a party from a stipulation when the party entered into the stipulation with full knowledge of the relevant facts.” Order, at pp. 3-4. (Citations omitted; see above parenthetical).

Of course, Ed & Connie could have gone to trial. They didn’t, so they’re stuck. Who stipulates, capitulates.

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