Opinion
19714-16
09-20-2023
CLAIR R. COUTURIER, JR., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber Judge
This case involving petitioner's 2004-2014 tax years is calendared for the first phase of trial beginning September 25, 2023, in Washington, D.C. The case principally concerns whether (and in what amount) petitioner is liable for excise taxes for excess contributions to his individual retirement account (IRA). See I.R.C. § 4973(a). A central question concerns the value, as of July 20, 2004, of the stock of The Employee Ownership Holding Company, Inc. (TEOHC), 4,586 shares of which were distributed to petitioner's IRA on that date.
On August 31, 2023, the parties filed a First Supplemental Stipulation of Facts. Respondent reserved a relevancy objection to Paragraph 204 of the Stipulation and to attached Exhibit 163-P. Both relate to the sale, in early 2007, of the assets of TEOHC and certain other entities, allegedly for $60,880,000. On September 18, 2023, respondent filed at docket entry #195 a Motion in Limine, requesting that these parts of the Stipulation be excluded from evidence as irrelevant.
Proceedings in the Tax Court are conducted accordance with the Federal Rules of Evidence (FRE). See § 7453; Rule 143. Under the FRE, only relevant evidence is admissible. See FRE 402. Evidence is relevant if it tends to make a fact more or less probable than it would be without the evidence and the fact is consequential to determining the action. FRE 401.
In resolving the excess contributions question, the Court must determine the fair market value of the TEOHC stock as of the July 2004 valuation date. Respondent urges that the sale of TEOHC's assets, two and a half years later, is irrelevant in determining the value of TEOHC's stock in July 2004. As respondent observes, the Court may consider subsequent events when determining the value of property only if those subsequent events were reasonably foreseeable as of the valuation date. See Estate of Jung v. Commissioner, 101 T.C. 412, 431 (1993).
Whether the 2007 asset sale was "reasonably foreseeable" in July 2004 presents a question of fact. The Court will consider at trial the evidence bearing on this question, as well as all other evidence relevant in determining the value of the TEOHC stock as of July 2004. We will accordingly deny respondent's Motion in Limine and determine the relevance (if any) of the 2007 asset sale after considering all the evidence introduced at trial.
In consideration of the foregoing, it is
ORDERED that respondent's Motion in Limine, filed September 18, 2023, is denied.