Opinion
21959-16
09-23-2022
FACEBOOK, INC. & SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Cary Douglas Pugh Judge
This case was set for further trial at the Court's August 22, 2022, San Francisco, California, special trial session. On July 15, 2022, respondent filed a Motion in Limine seeking to exclude certain of respondent's responses to petitioner's informal requests for admissions, and petitioner replied on July 29, 2022. Respondent's further brief was filed on August 10, 2022, and petitioner's on August 19, 2022. We heard argument on the parties' respective positions on August 22, 2022. For reasons stated more fully in the record of the proceedings, we conclude as follows:
First, the administrative record relating to the promulgation of Temporary Treasury Regulation § 1.482-7T may not be introduced but respondent's admissions regarding the regulations and their application may be introduced. Petitioner has waived a procedural challenge to those regulations (that is, petitioner has waived a challenge to the process by which the regulations were adopted) but petitioner has not waived a substantive challenge (that is, petitioner may argue that the regulations reach an outcome that is not permitted by statute either on their face or as applied to petitioner). Petitioner may cite admissions by respondent to the extent relevant to its substantive challenge. Respondent may object that petitioner's arguments are purely procedural.
Second, respondent's admissions relating to the audit that resulted in the notice of deficiency now at issue may be used by the parties consistent with Tax Court precedent (including, in particular, Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324 (1974)), the Federal Rules of Evidence regarding relevance, and our November 17, 2021, Order regarding a previous motion in limine. It therefore is
ORDERED that respondent's July 15, 2022, Motion in Limine is granted in part and denied in part.