In Uncategorized on 01/17/2020 at 01:12

Years ago a client told me what he’d learned in AA. Show up. Even if you can’t do much, show up. Be where you’re supposed to be. Be there sober, but be there.

Well, that obliging Jurist, Judge David Gustafson puts that lesson in a designated hitter off-the-bencher, Thomas V. Meyers & Joanne T. Meyers, Docket No. 8453-19, filed 1/16/20.

Their trial was the only one on that day in Winston-Salem, NC. The morning was spent with a stip of agreed facts. IRS dropped the chops. Trial started in the afternoon. First up was Thomas, but his testimony was halted for Joanne, who couldn’t be present the next day, to testify about her extensive religious activities. Thomas said he’d show up the next day, but didn’t.

“At about 9:15 a.m…., respondent’s counsel advised the Court that Mr. Meyers had sent an email (Ex. 30-R) stating that he would not appear.

“The email stated that business conflicts had arisen so that he could not come. A second email stated that the judge has ‘already made up his mind – it’s going to be a waste of time. We were were all there today, and he’s got all the information he needs. He’ll have to make a decision with what he’s got, and we’ll accept his decision.’ We placed a telephone call to Mr. Meyers with respondent’s counsel standing by, in the hope that we
could have a conference call, but the call went straight to voicemail. We stated in voicemail that his failure to appear is improper, that he should come to trial, and that we would start at 9:30 as scheduled. He did not appear, and proceedings resumed at 9:30 a.m., consisting of argument by respondent’s attorney from the evidence on the record. The Commissioner moved orally for dismissal of the case for failure to prosecute and for the imposition of a penalty under section 6673(a).” Transcript, at p. 10.

Thomas’ no-show really steamed Judge Gustafson.

“A party’s failure to appear at trial – and especially his failure to appear for cross-examination after he has been permitted to put on his own testimony in ‘direct examination’ –is a most serious offense against the process. Ours is an adversary system, and it presumes that the truth can best be discerned by allowing competing parties to challenge and probe each other’s claims. Where a party evades cross-examination, he frustrates this process fundamentally. He unfairly disables the opposing party from being able to probe his evidence, and he invites the inference that his claims could not bear up under examination.

“So serious is this violation that it justifies wholesale dismissal of the case for ‘failure to prosecute”, with the consequence that the deficiency determination of the Commissioner is upheld.” Transcript, at p. 12.

But the quality of Judge Gustafson’s obliging character is unstrained.

“However, it is the frequent practice of this Court-often at the instance of the Commissioner – to dismiss a case for failure to prosecute but to enter decision in a deficiency amount smaller than what appears in the SNOD. Typically this occurs when respondent’s counsel has determined to concede an issue and affirmatively proposes the smaller deficiency amount. In the same way, we prefer if possible, even in such a circumstance, to enter a decision based on the facts demonstrated by the evidence rather than as a punishment. But to do so without rewarding the petitioner for his non-appearance, we must scrutinize his evidence closely and resolve all doubts against him. We will attempt to do so in this instance, but this requires us, in effect, to impose a heightened burden of proof on the non-complying petitioners.” Transcript, at pp. 12-13.

Well, Thomas seems to have “deliberately concocted a non-authentic receipt and tried to make the Commissioner and the Court assume that it was authentic.” Transcript, at p. 14.

IRS counsel then elaborated on what her cross would have been. Thomas would have had a most unhappy morning. As it was, Judge Gustafson has no confidence in Thomas’ veracity, and was inclined to bounce all his claims absent independent corroboration, which Thomas had not.

Judge Gustafson mercifully allowed Thomas and Joanne all of their home mortgage interest on Schedule A, even though they claimed 94% of their home was used for business on their Schedule Cs, because the lender confirmed the amount.

I’ll spare you Judge Gustafson’s deconstruction of the rest of the Meyers’ deductions. Joanne had a lot of mileage for religious purposes but no substantiation. Section 274 blew away most of their other deductions, and want of receipts put paid to all but $187 of the rest.

IRS wants a Section 6673 frivolity chop, but Judge Gustafson says it might require Section 6751(b) Boss Hossery, and IRS’ version is an e-mail that is hardly unequivocal. Nevertheless, Judge Gustafson isn’t deciding that in an off-the-bencher, although as a dyed-in-the-wool Boss Hoss fan, he comes mighty close. And while he can sua sponte do one for Thomas and Joanne, Thomas and Joanne never had a yellow card in either of their two previous trips to USTC.

So a Rule 155 beancount. But I somehow doubt Thomas and Joanne will be putting in a lot of numbers.



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