Opinion
16157-18
12-21-2021
JAMES E. HANSEN & HELEN R. HANSEN, Petitioners v. Commissioner of Internal Revenue, Respondent
ORDER
Richard T. Morrison Judge.
We grant the September 30, 2021 motion for judicial notice filed by respondent, whom we refer to here as the IRS.
Background
On their 2015 return, the Hansens claimed a $67,569 deduction for "abandoned development costs", among other deductions. The $67,569 deduction related to (1) "a recycled asphalt topping" to a portion of a road and (2) "additional road improvements".
On July 20, 2018, the IRS sent the Hansens a notice of deficiency for 2015 disallowing the $67,569 deduction and the other deductions, determining a deficiency, and determining that the Hansens were liable for an accuracy-related penalty.
On March 6, 2020, the IRS conceded in its pretrial memorandum that all deductions challenged in the notice of deficiency (except for the $67,569 deduction) should be allowed. The IRS also conceded that the Hansens were not liable for the accuracy-related penalty.
On October 21, 2020, the Court granted the parties' Rule 122 motion to submit the case without trial.
On December 23, 2020, the IRS indicated through communications with Mr. Hansen and with Court personnel that it had conceded the case.
On September 30, 2021, the IRS filed a motion to take judicial notice of three satellite photographs identified as Exhibits 30-R through 32-R. The photos were taken at different times.
On September 30, 2021, the Court ordered that under Rule 91(f), a proposed stipulation containing 38 paragraphs was deemed established and that Exhibits 1-P through 14-P were admitted as evidence.
On October 6, 2021, the Hansens filed a response to the IRS's motion to take judicial notice.
On November 4, 2021, the Court ordered that under Rule 91(f), the IRS was deemed to admit that there is no deficiency in tax due from the Hansens for 2015, that there is no overpayment due to the Hansens for 2015, and that the Hansens are not liable for the accuracy-related penalty.
On November 23, 2021, the Hansens filed a motion for reasonable litigation or administrative costs.
On December 14, 2021, the IRS filed a reply to the Hansens October 6, 2021 response to the IRS's motion to take judicial notice.
Discussion
Federal Rule of Evidence 201(b) provides that a "court may judicially notice a fact that is not subject to reasonable dispute because it * * * can be accurately and readily determined from sources whose accuracy cannot be reasonably be questioned." The Court may take judicial notice at any stage of the proceeding. Fed.R.Evid. 201(d).
The IRS seeks to have judicial notice taken of three satellite photos that it downloaded from an official county website. 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.
Neither the Hansens nor the IRS have explained to the Court exactly what which 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.
Under those conditions, we will take judicial notice of the photos.
It is therefore ORDERED that respondent's September 30, 2021 motion to take judicial notice is granted.