Attorney-at-Law

THE LIMITS OF SUMMARY J

In Uncategorized on 10/04/2021 at 14:33

And Depositions

I’ve said it many a time: I’m a great fan of summary J. It’s quick and a (relatively) cheap form of discovery. It requires your client to lay bare his/her proofs, and requires your adversary to do likewise. Best of all, and unlike every other form of discovery, it gives you discovery of the judge; you can see what the judge thinks of your case, and your adversary’s.

But overuse of summary J is the hallmark of the lazy (or maybe overworked) lawyer. It cannot substitute for knowing your case and adequately preparing it.

Here’s Anthony Aulisio, Jr., Docket No. 13943-18, filed 10/4/21, and he’s on a discovery doubleheader. He’s fighting an increase in the deficiency (based on his amended return), and denial of a NOL. IRS has also moved (cross-moved, although you can’t do that in Tax Court, unlike every other court I know of) for summary J.

But Judge Alina I. (“AIM”) Marshall will have none of it.

AA tried to knock out IRS’ late-filed motion for leave to amend to up the ante, but he lost that one, so he can’t fight it again.

“The Court will not entertain arguments with respect to its order… granting respondent’s motion for leave to file an amendment to answer. The Court has already denied petitioner’s motion for reconsideration of the order, holding that petitioner’s arguments went to the underlying merits of the case and not to any procedural deficiencies. Under section 6214(a), the Court has jurisdiction to redetermine the correct amount of petitioner’s deficiency, even if the amount so redetermined is greater than the amount in the notice of deficiency.” Order, at p. 3.

But the increased deficiency isn’t a walkover for IRS, either.

“Respondent’s motion and petitioner’s motion do not present the Court with undisputed material facts from which a decision may be rendered as a matter of law. See Rule 121(b). Petitioner’s amended tax return does not establish the truth of the facts stated therein, … but his statements in his return are admissions that may be overcome only through cogent evidence…. Petitioner will be given the opportunity to present such evidence at trial. While the parties agreed to exchange evidence for the issue to the greatest extent possible by February 22, 2021, the record is not closed. The parties’ respective motions for partial summary judgment on the issue are denied.” Order, at p. 3. (Citations omitted, but get them for your memo of law file).

AA is also fighting a disallowed business deduction for a money judgment against him later overturned by an appellate court. My hip readers, of course, have shouted “Tax benefit rule! Deduct in Year X, take as income in Year Y!” AA apparently didn’t, but that’s not all.

Section 461(f) requires transfer of control over the property given in satisfaction of the judgment. “While petitioner has submitted a writ of levy for the real property, neither party has submitted evidence showing whether petitioner transferred control of the real property. The parties also do not adequately address respondent’s arguments with sufficient facts or legal analysis to permit us to decide this issue as a matter of law. The parties’ respective motions for partial summary judgment on the issue are denied.” Order, at p. 5.

As for the NOL, “(I)n general, the taxpayer bears the burden of establishing both the existence of the net operating losses and the amounts of the losses that may be carried forward. To substantiate both, the taxpayer is required to maintain records sufficient to enable the Commissioner to determine the correct tax liability. Sec. 6001; sec. 1.6001- 1(a), Income Tax Regs. Under the Cohan rule, if a taxpayer establishes that an expense is deductible but is unable to substantiate the precise amount, the Court may estimate the amount, bearing heavily against the taxpayer whose inexactitude is of his or her own making. However, to apply the Cohan rule the Court must have some information to estimate the proper deduction. It is well settled that self-serving declarations are not sufficient to substitute for records …and that tax returns alone do not establish that a taxpayer suffered a loss…. “Order, at pp. 5-6. (Citations omitted).

But Judge AIM falls back on the good old “most favorable inferences for the non-movant” presumption, and cuts off IRS’ summary J.

So set up for trial, guys.

But AA isn’t through; he wants to depose the plaintiff and their attorney from his money judgment case. See Order, 10/4/21.

But he never bothers to show that he notified them that he was going to ask for the depositions; in fact “… petitioner requested that we order respondent ‘not to warn the deponents that they may be served.’”

AA obviously never read Rule 74(c)(2)(B), but Judge AIM explains it to him.

“Rule 74(c)(2)(B) allows 15 days for a party or the nonparty witness to object to the deposition. The noticing party may then move for an order with respect to any objection and must annex to the motion the notice of deposition, proof of service, and a copy of any responses and objections. Petitioner filed petitioner’s motion pursuant to Rule 74(c)(3), which provides the procedures for deposing party witnesses without the consent of all the parties. As a threshold matter, neither Mr. B nor Mr. S is a party in this case. The appropriate procedures for deposing nonparty witnesses—without consent of the parties—are provided in Rule 74(c)(2). Petitioner has not met the procedural requirements of Rule 74(c)(2) as there is no indication that he gave proper written notice to the nonparty witnesses to be deposed nor that his motion was filed with respect to an objection from a party or nonparty witness.” Order, at pp. 2-3. (Names omitted).

“Petitioner has failed to show that the deposition of Messrs. B and S would yield specific and precise factual information essential to his case or could lead to such admissible evidence that is not already in the record. We remind petitioner that nonconsensual depositions are not to be used as a substitute for cross-examination at trial or to obtain information that can practicably be obtained by other informal or formal discovery methods.” Order, at p. 3. (Names omitted).

AA is pro se. Should be quite a trial.

 

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: