Opinion
20608-18 7097-19 7703-19
11-17-2023
EXCELSIOR AGGREGATES, LLC, BIG ESCAMBIA VENTURES, LLC, TAX MATTERS PARTNER, ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber Judge
Phase 1 of the trial in these cases was held from December 5 to 15, 2022, in Atlanta, Georgia. The cases involve charitable contribution deductions claimed for the donation of conservation easements and a fee simple interest in another property. Clayton M. Weibel, who prepared the appraisals supporting the values claimed for the contributions, was a defendant in a criminal case during Phase 1 of the trial. Mr. Weibel's attorney advised that, if called to testify, Mr. Weibel would likely claim his Fifth Amendment privilege as to most matters about which he might be questioned.
During Phase 1 of the trial, petitioners indicated that Mr. Weibel's testimony could be relevant to their reasonable cause defense under Treas. Reg. § 1.6664-4(h) and to the question of whether his appraisals were "qualified appraisals." See I.R.C. § 170(f)(11)(D), (E). At the conclusion of the trial, we indicated that we might conduct a further trial at some future date to hear testimony of Mr. Weibel, if and when he became available to testify. The parties filed simultaneous opening briefs on March 14, 2023, and simultaneous answering briefs on May 26, 2023, addressing only the valuation issue.
On September 22, 2023, the U.S. Department of Justice (DOJ) issued a press release. See Press Release, U.S. Dept. of Justice, Office of Public Affairs, Two Tax Shelter Promoters Found Guilty in Billion-Dollar Syndicated Conservation Easement Tax Scheme (Sept. 22, 2023), https://www.justice.gov/opa/pr/two-tax-shelter-promot-ers-found-guilty-billion-dollar-syndicated-conservation-easement-tax. In that press release, DOJ indicated that Mr. Weibel's criminal proceeding had concluded and that he was found not guilty on all charges. See id.
By Order served October 16, 2023, we directed the parties to file a status report indicating whether Mr. Weibel would be able to testify in these cases and (if so) whether any residual restrictions would be placed on his testimony. If Mr. Weibel was available to testify, we requested the parties to propose possible dates for Phase 2 of the trial and its expected length.
On November 13, 2023, the parties filed a joint status report. The parties represent that Mr. Weibel's counsel believes that Mr. Weibel faces the risk of future prosecution and will "invoke his Fifth Amendment privilege against self-incrimina-tion and refuse to answer any questions relating to his appraisals." Mr. Weibel's counsel has suggested that Mr. Weibel would testify "if he was granted immunity pursuant to 18 U.S.C. § 6200," a decision that would rest in the hands of DOJ, not the IRS. The parties agree that Mr. Weibel remains currently unavailable to testify in these cases.
Respondent maintains that Mr. Weibel's testimony is unnecessary and that a determination on the valuation issue "may facilitate a resolution of any potential Phase 2 of trial." The Court intends to issue an opinion on the valuation issue with all deliberate speed. If that forthcoming opinion facilitates full settlement of the cases, no further trial will be necessary. If the upcoming opinion does not facilitate full settlement of the cases, and if Mr. Weibel continues to remain unavailable to testify, the Court will dispense with any further trial and direct the parties to brief the remaining issues.
In consideration of the foregoing, it is
ORDERED that the parties shall file, on or before April 15, 2024, a joint status report detailing the then-present status of the cases.