GWA, LLC, George A. Weiss, Tax Matters Partner, Docket No. 6981-19, filed 5/6/22, and IRS are fighting over experts’ reports. GWA has been here before, of course. See my blogpost “When – Redivivus,” 11/4/21.

The issue today is the alleged leverage (what our UK cousins call “gearing”) that the option basket tactic GWA used generated greater ROI cash-on-cash than would have been the case had they outright owned and traded the securities in the option basket. IRS claims the “option” was a sham; GWA really owned the securities. Of course, the deal was set up by an offshore tax-indifferent bank, well-known in the dodgeflogging community.

IRS wants to toss one of GWA’s experts, claiming he’s opining on GWA’s state of mind or motive, and that’s verboten. Judge Albert G. (“Scholar Al”) Lauber doesn’t reads the expert’s report thataway. Besides, “(R)espondent urges that these opinions ‘are straightforward and do not require the expertise of an economist.’ We know of no authority for the proposition that the Federal Rules of Evidence preclude an expert from testifying on the ground that the opinions he intends to offer are ‘straightforward.’” Order, at p. 2.

A straightforward expert? Put him in the Smithsonian; he’s a rare species.

But another of GWA’s brain trust does opine on motive, so ten (count ’em, ten) pages of his carefully-wrought prose bite the cliché.

IRS has two professors and a twenty-five-year veteran of “financial engineering.” GWA wants them out.

“While not asserting that any of these individuals lacks expertise in general, petitioner contends that none has sufficient expertise to render an opinion relating to ‘leverage’ and that Prof. T lacks sufficient expertise to testify on matters of accounting. We reject these arguments. Financial leverage and accounting are subjects with which all three experts, given their professions, necessarily have some level of familiarity. If there are material gaps in their knowledge or holes in their testimony, petitioner is free to explore them through cross-examination.” Order, at pp. 1-2. (Name omitted).

Oh, the “win your case anywhere but in the courtroom” games abound.