Attorney-at-Law

PLUS ÇA CHANGE – NOT SO FAST

In Uncategorized on 12/20/2019 at 16:35

Thrasys, Inc., Docket No. 11565-15, filed 12/20/19, has ruffled the holiday spirits both of IRS and Judge Albert G (“Scholar Al”) Lauber, as Thrasys tries to bail on three (count ‘em, three) stips, embedded in a single motion for summary J.

We know that’s a Rule 54(b) footfault, but Judge Lauber will let them move on two points only: “(1) whether petitioner may properly defer to 2009, under the deferral method permitted by Rev. Proc. 2004-34, the $15 million payment it received form [sic] its customer in 2008; and (2) if the $15 million payment is properly deferred to 2009, after petitioner converted to S corporation status, whether the $15 million was subject to tax under I.R.C. § 1374(b)(1) as a ‘net recognized built-in gain.’” Order, at p. 6.

And lest Thrasys try another quarterback sneak, “(T)he Court will not consider any other issues when ruling on any forthcoming motion for summary judgment by petitioner.” Order, at p. 6.

Thrasys wants to bail on the stips signed by two former attorneys who worked on their case. Stip one stated that 2008 was resolved, except for proper treatment of the $15 million. Stip two conceded that the $15 million was not a non-taxable “deposit.” This in 2017; in 2018, both attorneys were separated from Thrasys’ attorney’s firm (under what circumstances is not stated).

Now Thrasys wants to go back to the “deposit” argument formerly conceded, and to raise other 2008 issues.

I often admire the deft maneuver, but this merits a Taishoff “Oh, Please.”

Judge Lauber says that although Thrasys failed to hand over all documents in response to IRS’ discovery request, and IRS moved for sanctions, the first former attorney ponied up, so he dropped the sanctions. And when same Thrasys’ attorney conceded all 2008 issues except the $15 million, Judge Scholar Al denied IRS’ motion for summary J on the change in accounting method issue. See my blogpost “Plus Ça Change,” 12/4/18. Judge Scholar Al notes that Thrasys never moved for a Rule 161 vacation if Judge Scholar Al got it wrong, as they now claim.

Besides, the same attorney signed the petition and was counsel throughout this five-year journey. Judge Scholar Al finds it “implausible” that both attorneys who worked under him acted without his or his client’s knowledge. That’s being kinder and gentler than I would be; I’d use a phrase connected with omnibuses.

So now counsel wants to put the 2008 year back on the table four (count ‘em, four) years after IRS answered the petition, and after counsel conceded all but the $15 million. That’s attempting to amend pleadings, where leave is required, and Judge Scholar Al tells counsel, in the phraseology of our home town,  “fuggedaboutit.”

This is ambush on steroids.

Counsel is stuck. So is Thrasys.

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