Judge Patrick J. (“Scholar Pat”) Urda needs little of his formidable intellect to deal with this discovery jumpball in Rock Bottom BBS, LLC, Barnett Properties, Tax Matters Partner,  Docket No. 9145-21, filed 12/27/22. The schema intended to accelerate the dispute resolution process by avoiding ambushes and bringing to light essential facts in advance of trial has turned into a prolonged and expensive quarrel. Rarely does it advance a case to trial and resolution. It does weaken and exhaust one’s adversary, assuming, that is, that it doesn’t do the same to one’s client.

It’s yet another GA boondockery, with a $12 million deduction on the line. So the Rock Bottoms send in five (count ’em, five) high-priced attorneys from a well-known tax litigation shop, who moved to compel IRS to respond to the following interrogs.

“…identify the provisions of I.R.C. § 170 and the accompanying regulations that Rock Bottom purportedly failed to satisfy, as well as the legal and factual basis underlying his position.” Order, at p. 2. IRS says that’s a BoP shift, but Judge Scholar Pat says it isn’t, and there’s precedent that says it’s OK, so answer, IRS. “We see no indication that these interrogatories are an impermissible attempt to shift the burden of proof (which, of course, would require a motion and this Court’s agreement that the requirements of Rule 142 or I.R.C. § 7491 have been met). To the contrary, they appear to be run-of-the-mill discovery requests to understand the Commissioner’s current factual and legal positions and, as such, should be answered in the normal course.” Order, at p. 2.

Next, the Rock Bottoms want to know why IRS denies they’re a partnership in the answer. IRS says they lack knowledge, but they’ll consider it as the case goes along, and that’s good enough for Scholar Pat.

“Rock Bottom finally seeks information about the witnesses that the Commissioner plans to call at trial, including the substance of their expected testimony and, for fact witnesses, their knowledge relating to the matters at issue. The Commissioner responds that the request is premature and that he ‘will identify potential witnesses in accordance with the Court’s Rules and Orders in this case.’” Order, at p. 3.

There’s a pre-trial scheduling order in place with deadlines for exchanging these particulars, so this is a nonstarter.

Taishoff says all this stuff should have been dealt with in a Branerton play-nice, rather than wasting time and running the meter. Rule 70(a) says it all: “…the Court expects the parties to attempt to attain the objectives of discovery through informal consultation or communication before utilizing the discovery procedures provided in these Rules.”