In Uncategorized on 09/16/2020 at 16:51

CF Headquarters Corporation, Docket No. 22321-12, filed 9/16/20, was here back in ’14, in a discovery joust; see my blogpost “Be Late But Be Plausible,” 11/14/14, but I doubt that story will leave either of us any the wiser about why CF HQ and IRS are jousting about what 3Cir did in BrokerTec.

BrokerTec, you’ll recall, starred in my blogpost “The Capital of New Jersey,” 4/9/19, wherein His Honor Big Julie, a/k/a Judge Julian I Jacobs, hereinafter “HHBJJJIJ,”decided the Garden State’s unguided largesse to a World Trade Center runaway was a capital contribution per Section 118, and not payment for a benefit, thus not ordinary income.

Except 3Cir reversed. See CIR v .Brokertec Holdings, Inc. f.k.a. ICAP US Investment Partnership, No. 19-2603, decided 7/28/20. New Jersey’s unguided largesse was too unguided. No strings means it wasn’t capital, just income.

So CF HQ apparently relied on what HHBJJJIJ said, until they got word from 3Cir. Then CF HQ filed a Notice of Supplemental Authority. But CF HQ went a bridge too far.

So IRS “…filed a Motion to Strike, requesting therein that the Court strike, as prejudicial, certain portions of petitioner’s Notice of Supplemental Authority that ‘raise legal arguments and direct the Court to findings of fact and trial testimony that petitioner posits supports its legal argument.’ Respondent further argues that he ‘on the other hand has not been afforded the opportunity to rebut petitioner’s argument.’ Respondent advises that petitioner opposes the granting of the Motion to Strike, and further that, should the Court deny it, he ‘intends to file a Motion For Leave to respond to Petitioner’s Notice.'” Order, at pp. 1-2.

Remembering that “play nice” is Tax Court’s bedrock, Judge Gale treats the Notice of Supplemental Authority as a supplemental brief, and allows IRS thirty (count ’em, thirty) days to respond.

Takeaway- This is a good guide for dealing with adversaries who try to wild-card in legal arguments when scheduled briefing is completed.

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