It’s third time up for James E. Hansen & Helen R. Hansen, Docket No. 16157-18, filed 12/21/21; y’all will recall Jim & Helen’s previous visits; if not, see my blogposts “A Current Example,” 11/4/21, and “The Rewards of Virtue,” 12/8/21.

And it’s up, up and away, as IRS wants Judge Morrison to take judicial notice of three (count ’em, three) satellite photographs which appeared on the website of the county wherein Jim’s real estate developing was generating the deductions IRS disallowed.

Are these extraterrestrial snapshots relevant?

Maybe. IRS folded everything but $67K worth of recycled asphalt and some other road improvements pretrial. There followed a Rule 122 for the unfolded $67K, but Judge Morrison hadn’t ruled thereon when IRS folded the entire case: “no deficiency, no chops, no add-ons, no refund.”

Now IRS wants to put in the extraterrestrials, because Jim & Helen want Section 7430 admins and legals.

“The IRS asserts that satellite photos are useful to show the existence of buildings, locations of buildings, and locations of roads. The IRS also asserts that the satellite photos show the condition of roads and whether roads were paved or unpaved.

“The Hansens contend that the satellite photos are irrelevant because they relate only to the merits of the deduction. It is true that the merits of the deduction have been resolved. However, this alone does not preclude the photos from being relevant. There remains the issue of whether the IRS’s position was substantially justified. Sec. 7430(c)(4)(B).

“The Hansens also argue that it is difficult to tell from the photos the ‘condition of the recycled asphalt road improvements’ and the ‘washboard’ nature of roads. Relatedly, the Hansens argue that any changes to the color of roads between the photos was caused by ‘asphalt dust’. They also argue that expert evidence is needed to interpret the photos.

“These last objections do not address that the IRS intends the Court to draw conclusions about the existence of buildings, locations of buildings, and locations of roads. Thus, the Hansens have not argued or shown that there is a reasonable dispute about these facts.” Order, at pp. 2-3.Leaving out the neologism “relatedly,” Judge Morrison says he will take judicial notice, but to what extent and of what details are unclear.

“Neither the Hansens nor the IRS have explained to the Court exactly what which [sic] portions of the roads are in dispute as to their paved-or-unpaved nature or as to their conditions. As to the paved and unpaved nature of roads, and as to the conditions of roads, the Court will not draw any conclusions from the photos that are not obvious from the photos.” Order, at p. 3.

*James E Hansen Docket No 16157-18 12 21 21