It is well-settled; that’s what a Judge says when someone’s case is going down the drain. Today Judge Courtney D. (“CD”) Jones says that to Kevin John, Sr. & Whitney S. Witasick, Docket No. 23069-16, filed 10/7/21*. Btw, to be precise, that’s “Mr. Kevin Witasick, Sr. and Mrs. Whitney S. Witasick (the Witasicks),” Order, at p. 1. I will not comment on this choice of nomenclature, as that might take us rather far afield.

Howbeit, Mr. Kevin went down in USDCWDVA for two (count ’em, two) years’ worth of Section 7201 tax evasion, related to excessive deductions for something called Stoneleigh. 4 Cir affirmed, and the Supremes passed. Arising therefrom, IRS wants partial summary J for the Section 6663 75% fraud chop, claiming collateral estoppel (issue preclusion).

Judge CD has bushelbasketsful of “somber reasoning and copious citation of precedent” that one who has taken a tax evasion fall has a fortiori either pled to, or been convicted on a trial of, fraudulently evading the payment of tax.

Mr. Kevin says “no, I did stipulate, but I did not capitulate.”

“For the years at issue, the parties stipulated that, ‘Respondent contends that if the Court decides that there is a deficiency for the [1999 and 2000 taxable years], petitioner, Kevin Witasick is collaterally estopped from challenging the fraud penalties for the [1999 and 2000 taxable years] because a jury convicted him of  federal income tax evasion pursuant to 26 U.S.C. section 7201. Petitioners dispute this contention.’” Order, at p. 3.

Judge CD says all that means is that Mr. Kevin and IRS agree there’s a dispute, not that IRS can’t move for summary J to resolve it. Mr. Kevin may disagree, but he had his chance to litigate it, and lost.

And neither facts nor law has changed since Mr. Kevin went down, at least not enough to decontrol the criminal conviction. The issue before Tax Court is the same Stoneleigh write-offs that were at issue in the USDCWDVA litigation.

However, Mr. Kevin can fight about the precise amount of the understatements of tax. He cannot fight about whether there were understatements. “While Mr. Witasick may dispute the amount of the deficiencies for tax years 1999 and 2000, we have repeatedly held that taxpayers convicted under section 7201 are precluded from denying the existence of underpayments for the years at issue.” Order, at p. 5. (Citations omitted).

Just add three-quarters of whatever comes out on the trial.

*Witasick 23069-16 10 7 21