From Casetext: Smarter Legal Research

Excelsior Aggregates, LLC v. Comm'r of Internal Revenue

United States Tax Court
Nov 29, 2022
No. 20608-18 (U.S.T.C. Nov. 29, 2022)

Opinion

20608-18 7097-19 7703-19

11-29-2022

EXCELSIOR AGGREGATES, LLC, BIG ESCAMBIA VENTURES, LLC, TAX MATTERS PARTNER, ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent


ORDER

Albert G. Lauber Judge

These cases are calendared for trial at a special session of the Court beginning at 10:00 a.m., on Monday, December 5, 2022, in Atlanta, Georgia. In their pretrial memorandum filed November 14, 2022, petitioners stated that they may call, as supposed fact witnesses, three officers of the Internal Revenue Service (IRS or respondent). Respondent has filed Motions in Limine to exclude from evidence the proposed testimony of these three individuals and related stipulations and exhibits. We will grant the Motions to the extent set forth in this Order.

A. Respondent's Motion in Limine Pertaining to Karin Gross

In their pretrial memorandum petitioners stated that they may call as a fact witness Karin Gross, a Special Counsel in the IRS Office of Associate Chief Counsel (Income Tax and Accounting). Petitioners assert that Ms. Gross is a subject-matter expert on the charitable contribution deduction and "a frequent speaker on topics involving conservation easements" at conferences and continuing legal education programs. On November 25, 2022, respondent filed, at docket entry #301, a Motion in Limine to exclude from evidence the proposed testimony of Ms. Gross, as well as related stipulations and exhibits proposed by petitioners in the Second Supplemental Stipulation of Facts.

All references to docket entries in this Order are to docket entries in the lead case, Excelsior Aggregates, LLC v. Commissioner, No. 20608-18.

Petitioners previously moved to depose Ms. Gross, asserting that her comments at public conferences might be relevant to their "reasonable cause" defense to certain penalties. By Order served October 14, 2022, we denied that motion, reasoning that her "comments about conservation easements at public programs and conferences were entirely general in nature" and not keyed to the particular facts of petitioners' transactions. We explained: "Respondent represents-and petitioners do not dispute-that the transcripts of Ms. Gross' public comments, as well as her presentation materials distributed at the conferences, are already available to petitioners. To the extent petitioners or their agents relied on anything she said, they were necessarily relying on what she said then. What she might say at a future deposition has no relevance to any 'reasonable cause' defense petitioners might seek to mount." The same logic applies to any testimony that Ms. Gross might supply at trial, and we will therefore exclude such testimony.

In the Second Supplemental Stipulation of Facts, the parties have stipulated to the authenticity of comments that Ms. Gross delivered (sometimes jointly with IRS colleagues) about conservation easements at five conferences between August 23, 2012, and September 20, 2014. As we indicated in our Order served October 14, 2022, we will not foreclose petitioners from attempting to show, as part of a "reasonable cause" defense, that they relied on these presentations when implementing the conservation easement transactions at issue here. We will therefore overrule respondent's reserved objections to stipulation paragraphs 111-127 and the accompanying Exhibits 65-P through 72-P, and we will deny respondent's Motion in Limine, filed at docket entry #301, to the extent he seeks to exclude this information from evidence.

B. Respondent's Motion in Limine Pertaining to Jennifer Berry

In their pretrial memorandum petitioners stated that they may call as a fact witness Jennifer Berry, an IRS Special Agent. Petitioners allege that Ms. Berry, on November 13, 2019, executed an affidavit submitted in support of a search warrant preceding the indictment filed in United States v. Fisher et al., No. 1.21-CR-00231-TCB-CMS (N.D.Ga.). On November 25, 2022, respondent filed, at docket entry #300, a Motion in Limine to exclude from evidence the proposed testimony of Ms. Berry, as well as any proposed stipulation paragraphs discussing Ms. Berry's alleged affidavit. We agree with respondent that "[t]he work Ms. Berry performed in a completely unrelated criminal investigation will not make more or less probable whether the transactions [at issue] satisfy the requirements of section 170." Nor will her work on that unrelated matter shed any light on "the appropriate value of the subject properties," "whether penalties apply to the reported deductions," or "whether reasonable cause existed at the time the deductions" were claimed. Because the proposed testimony and stipulations have no relevance to any factual issues in these cases, we will grant respondent's Motion in Limine, filed at docket entry #300.

C. Respondent's Motion in Limine Pertaining to Drita Tonuzi

In their pretrial memorandum petitioners stated that they may call as a fact witness Drita Tonuzi, Deputy Chief Counsel (Operations) in the IRS Office of Chief Counsel. Petitioners assert that Ms. Tonuzi "can testify about her instructions to IRS Office of Chief Counsel attorneys to be aggressive when litigating syndicated conservation easement controversies, and to use all tools at their disposal to stop what she called 'this kind of abuse.'" On November 21, 2022, respondent filed, at docket entry #295, a Motion in Limine to exclude from evidence the proposed testimony of Ms. Tonuzi, as well as two proposed stipulation paragraphs referencing Ms. Tonuzi's alleged "instructions" to IRS lawyers. The proposed testimony and stipulations have no relevance to any factual issues in these cases. We will therefore grant respondent's Motion in Limine, filed at docket entry #295.

It is accordingly

ORDERED that respondent's Motion Limine, filed November 25, 2022, at docket entry #301, is granted in part and denied in part, to the extent set forth in this Order. It is further

ORDERED that respondent's Motion Limine, filed November 25, 2022, at docket entry #300, is granted. It is further

ORDERED that respondent's Motion Limine, filed November 21, 2022, at docket entry #295, is granted.


Summaries of

Excelsior Aggregates, LLC v. Comm'r of Internal Revenue

United States Tax Court
Nov 29, 2022
No. 20608-18 (U.S.T.C. Nov. 29, 2022)
Case details for

Excelsior Aggregates, LLC v. Comm'r of Internal Revenue

Case Details

Full title:EXCELSIOR AGGREGATES, LLC, BIG ESCAMBIA VENTURES, LLC, TAX MATTERS…

Court:United States Tax Court

Date published: Nov 29, 2022

Citations

No. 20608-18 (U.S.T.C. Nov. 29, 2022)