Opinion
9745-20
02-09-2022
Stephen Cary Petitioner v. Commissioner of Internal Revenue Respondent
ORDER
David Gustafson Judge
In this order we will set a schedule for further proceedings. Failure to follow this schedule may result in dismissal of the case.
This is an income tax deficiency case, in which the principal issue is whether in 2017 petitioner Stephen Cary received IRA distributions that he then failed to report as income on his income tax return for that year. The IRS determined that he did receive the distributions and issued to him a notice of deficiency (Doc. 5, Ex. A) dated February 18, 2020, proposing to assess the resulting income tax and a 20% accuracy-related penalty under section 6662(a). He challenged that determination by timely mailing his petition to the Tax Court on May 18, 2020, more than 20 months ago. We issued a notice of trial and a standing pretrial order (Docs. 8-9) more than four months ago in September 2021, setting this case for trial at a session beginning February 7, 2022.
On January 3, 2022, the Commissioner filed a motion to dismiss for failure to properly prosecute (Doc. 10). We ordered Mr. Cary to file a response (see Doc. 11), but he did not do so. We were able to hold a pretrial telephone conference with the parties on January 31, 2022, during which Mr. Cary plausibly explained that he suffers from a disability that has interfered with his preparation of the case for trial. We asked whether a "next friend" should be appointed for him under Rule 60(d), but he declined the suggestion. Mr. Cary argued that he has already paid the liabilities at issue, but the Court explained that the issue in this case is the amount of his liability, not whether or not he has paid it. He requested the allowance of more time to prepare for trial, as an "accommodation" for his disability. The Court stated that it would hear that request at the upcoming trial session. Thereafter the Commissioner filed a motion for entry of decision (Doc. 17), with which he submitted documents of the IRA custodian that show distributions in 2017 to Mr. Cary. The motion for entry of decision acknowledges that Mr. Cary's tax payments for 2017 are sufficient to cover the disputed liabilities but asks the Court to enter decision so that those liabilities can be assessed.
When this case was called at the trial session on February 7, 2022 (a remote session via Zoomgov), Mr. Cary initially did not appear. At the Court's instruction, the trial clerk was able to reach Mr. Cary, and he participated by phone. He explained that he opposes the motion for entry of decision because he does not know whether he actually received the IRA distributions in 2017 and because, even if he did, he may be entitled to additional deductions that he may have failed to claim on his return. He also 1 disputes his liability for penalty and, if we rightly construe his contentions, asserts "reasonable cause" under section 6664(c). The Court indicated it would deny the motion for entry of decision and asked counsel for the Commissioner whether she could present her case by means of a motion for summary judgment, and she answered yes.
The Commissioner's motion for summary judgment should set out in numbered paragraphs the specific facts on which the Commissioner relies--presumably, facts about Mr. Cary's receipt of the IRA distributions in 2017. The Court explained to Mr. Cary that, to resist a motion for summary judgment, he cannot rely on his mere denial of the Commissioner's assertions but must make a showing of specific facts with appropriate substantiation (see Rule 121(d)). His response should state, by paragraph number, any assertion with which he disagrees, should explain the reason for the disagreement, and should cite whatever evidence supports his position. If he disagrees with the IRS's argument as to the law, then his response should also set out his position on the disputed legal issues. Q&As that the Court has prepared on the subject "What is a motion for summary judgment? How should I respond to one?" are available at the Court's website and are printed on the page attached to this order.
The Court asked Mr. Cary how much time he would need to assemble his information, and he initially stated "a couple months". Thereafter he expanded his request to six months, but the Court indicated it would not allow that much time but would instead give him until three months from today (i.e., until May 9, 2022). Mr. Cary has had ample time--four months since our notice of trial, and 20 months since the filing of his petition--to assemble whatever information is accessible; and we think that anything he cannot obtain before May 9 probably cannot be obtained.
To enable the Court to address the merits of this case, it is
ORDERED that the Commissioner's motion to dismiss for failure to properly prosecute (Doc. 10) and his motion for entry of decision (Doc. 17) are denied without prejudice. It is
ORDERED that, no later than March 9, 2022, the Commissioner shall file his motion for summary judgment. As to penalty liability, that motion should anticipate Mr. Cary's contentions on the fact-intensive issue of reasonable cause and should make any appropriate concession. It is further
ORDERED that, no later than May 9, 2022, Mr. Cary shall file a response to the motion for summary judgment, in compliance with the instructions given above. (Mr. Cary should note that, under Tax Court Rule 121(d), if he fails to file a response to the motion for summary judgment, then a decision may be entered against him.) It is further
ORDERED that, no later than May 27, 2022, the Commissioner shall file a reply (of, if Mr. Cary has filed no response, shall file a status report). 2
What is a motion for summary judgment? How should I respond to one?
The motion. A motion for summary judgment requests a ruling from a judge on some or all of the issues in a case before trial. If a motion for summary judgment is filed, the judge will review the documents submitted by the parties and consider whether the case can be decided without a trial. The party filing the motion must show that there is no genuine dispute of any important fact and that the party filing the motion is entitled to judgment in their favor as a matter of law. See Rule 121.
Your response. If the Court orders you to file a response to a motion for summary judgment, your response must: specify which factual statements in the motion for summary judgment you dispute, state what you contend the actual facts are, and cite the specific evidence that you rely on to support your factual contentions. That is, you must do more than deny or disagree with the motion. Instead, you must set forth specific facts that establish there is a factual dispute and that a trial is necessary to resolve that dispute. It is not enough merely to claim that a fact is in dispute. You must support your claim that there is a question about a material fact (or facts) by submitting with your response the evidence on which you rely.
Your evidence. Your supporting evidence may include your own sworn affidavit or unsworn declaration given under penalty of perjury. (Form 18, Unsworn Declaration under Penalty of Perjury). Your declaration can state facts about which you have personal knowledge. If your evidence includes documents, then you should submit those with your response (preferably numbered as Exhibits), and your declaration should identify and authenticate those documents. Your supporting evidence may also include other affidavits, stipulations, admissions, answers to interrogatories, or deposition transcripts.
Legal disputes. A motion for summary judgment may involve not only factual disputes but also legal disputes. If you disagree with the IRS's explanation of the law that applies to your case, you should explain your disagreement and cite the statutes, regulations, or other authorities that apply to your case.
Failure to respond. If the IRS files a motion for summary judgment in your case and the Court orders you to file a response, then your failure to file a response may be grounds for granting the motion. See Rules 121(d) and 123(b).
Results of summary judgment. If a motion for summary judgment is granted in favor of the IRS, then there will be no trial, and a judgment will be entered against you. Similarly, if you file a motion for summary judgment and it is granted, then there will be no trial, and a judgment will be entered in your favor.
https://ustaxcourt.gov/petitioners_start.html#START39 3