In Uncategorized on 04/29/2020 at 13:55

Not Gonna Happen

Pace Paul Simon’s 1972 hit (is it really 48 years? Oh, little darlin’ of mine, I can’t for the life of me, remember a sadder day…), the mother and child reunion will not take place. STJ Panuthos says no in William French Anderson & Kathryn D. Anderson, Docket No. 23789-16, filed 4/29/20.

STJ Panuthos is following Judge Nega’s toss of IRS’ partial summary J motion by tossing IRS’ issue preclusion try. IRS wants to prevent Wm French from claiming that a business associate, desirous of stealing the business from Wm French, got him sent up for sexually abusing a minor child. Now Wm French went all the way to the Supremes, and all he got was the same 14 (count ‘em, 14) years hard time the CA Superior Court gave him to begin with.

For the backstory, see my blogpost “Mother and Child Reunion,” 2/13/19. STJ Panuthos rules on IRS’ renewed try for a protective order redacting the names of the mother and father (and twin sister) of the abused person (now an adult). “The Court will not repeat the discussion and conclusions described in the February 13, 2019 Order. No different or new circumstances have arisen that would cause the Court to alter the prior conclusion. The Court will deny respondent’s motion for a protective order.” Order, at p. 4.

But Wm French still wants to prove he didn’t do it. He wants to deduct his legals in defending the criminal case, per Section 162 ordinary-and-necessary.

No, Wm French isn’t claiming he’s in the child-molesting business. He says he “…was the ‘Father of Gene Therapy’, that he was the former Director and founder of the Gene Therapy Laboratory at the University of Southern California and the owner of many biomedical companies around the world.” Order, at p. 2. It would seem he claims his partner(s) set him up, therefore his legals were to protect his businesses.

“We conclude that respondent has not satisfied the second condition for collateral estoppel, that the issues presented are in substance the same as those resolved in the earlier litigation. There is no doubt about petitioner’s conviction of a crime. The conviction was upheld on appeal. Petitioners have advised that they are prepared to stipulate to that conviction. They do not seek to deny that petitioner was convicted of the crimes for which he was charged. Petitioners seek to link the legal expenses incurred in defense of the criminal charges with Dr. Anderson’s business activity. Petitioners have the burden of proof on this issue. To be entitled to the claimed legal expense deduction they must establish that the expenditures were ordinary and necessary expenses paid or incurred in a trade or business. Section 162; Commissioner v. Tellier, 383 U.S. at 690-695. While petitioners’ burden is substantial in this case, it does not mean that they should be denied an opportunity to prove their case. The issue in this tax case is not the same as the issue in the criminal case. The Court strongly urges the parties to communicate and stipulate facts pursuant to the Court’s rules.” Order, at p. 3.

I can see Jeff Epstein’s estate trying this one. But it didn’t do so good for Big Jim Cavanaugh. See my blogpost “Well-Settled No Deduction – Part Deux,” 1/27/12.


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