Opinion
12980-20
07-11-2022
DAVID R. HALL & JENNIFER L. HALL, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber, Judge
With respect to petitioners' 2013 and 2015 tax years, the IRS determined deficiencies of $231,052 and $184,136, respectively. The principal issue is whether petitioners are entitled to charitable contribution deductions for gifts of non-public stock. The IRS disallowed the deductions on the grounds that petitioners did not attach to their returns qualified appraisals or fully-completed Forms 8283, Noncash Charitable Contributions. See I.R.C. § 170(f)(11). Their gifts, valued at $982,472 and $500,017 respectively, were required to be reported in Section B of Form 8283, which requires the submission of detailed information regarding gifts of non-publicly-traded stock and gifts of property valued in excess of $5,000. In the case of such gifts, the Form 8283 must include an executed "declaration of appraiser" and a "donee acknowledgment," and a "qualified appraisal" of the stock must be attached to the return. Petitioners did not satisfy these requirements.
Petitioners timely petitioned this Court in November 2020. In their petition they alleged that they had "reasonable cause" for failing to comply with section 170(f)(11). See I.R.C. § 170(f)(11)(A)(ii)(II). Petitioners asserted that petitioner husband prepared their returns using TurboTax, a tax preparation software offered by Intuit. They alleged that "TurboTax was not programmed to and could not generate a Section B of the Form 8283 regardless of how [they] entered the charitable contribution . . . on the TurboTax questionnaire."
We set this case for trial during the Court's June 13, 2022, remote trial session. On May 13, 2022, petitioners lodged a written report of Elmer (Pete) Lewis as a proposed expert witness. In his report Mr. Lewis, a return preparer, states that he "duplicated the preparation of [petitioners'] tax returns using the Intuit TurboTax programs" and that he, too, received an incomplete Form 8283. However, he was not present when petitioner husband inputted information into (and answered queries from) the software, so he cannot confirm that he did in fact execute the same steps as 1 petitioner husband. Mr. Lewis opines that "there is a flaw in the programming of the 2013 and 2015 TurboTax software."
On June 1, 2022, respondent filed a Motion in Limine to exclude Mr. Lewis's report from evidence. Respondent contends that Mr. Lewis lacks specialized expertise on software engineering questions related to TurboTax and that, in any event, Mr. Lewis's report is not based on any technical or specialized knowledge. Petitioners objected to the Motion on June 8, 2022.
This case was tried on June 16, 2022. We heard argument on the Motion after both parties had conducted a voir dire of Mr. Lewis. During voir dire he admitted that he is not a software engineer, that he has never worked for Intuit in any capacity, and that he has never used TurboTax to prepare returns for clients.
Proceedings in the Tax Court are conducted in accordance with the Federal Rules of Evidence (FRE). See § 7453; Rule 143, Tax Court Rules of Practice and Procedure. Testimony by expert witnesses is governed by FRE 702 and 703. FRE 702 provides that a witness who is "qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion" if (1) he has "scientific, technical, or other specialized knowledge" that will help the trier of fact; (2) "the testimony is based on sufficient facts or data"; (3) "the testimony is the product of reliable principles and methods"; and (4) he "has reliably applied the principles and methods to the facts of the case."
We will grant the Motion in Limine and exclude Mr. Lewis's report from evidence. Mr. Lewis opines that "[t]here is a flaw in the programming of the 2013 and 2015 TurboTax software," but he does not have the expertise to render any such opinion. He is not a software engineer; he has never worked for Intuit; and he has no technical knowledge of the TurboTax software. Nor does he cite any industry sources, tax authorities, Intuit pronouncements, or any other reliable source for an opinion that there is (or was) a flaw in the TurboTax software. It is simply an inference he drew from using the 2013 and 2015 versions of the software once.
Petitioners nonetheless argue that Mr. Lewis has sufficient knowledge to opine on the "user interface" for TurboTax's software. Assuming arguendo that this would be a legitimate subject for expert testimony, Mr. Lewis lacks the necessary expertise. He admitted during voir dire that he has never used TurboTax to prepare returns for clients. He has used TurboTax only in preparing his personal, individual income tax returns. And the last time he used it for that purpose was in 2009, 13 years ago. Thus, Mr. Lewis has little experience (and no apparent expertise) with TurboTax's "user interface."
Mr. Lewis obtained the 2013 and 2015 versions of the TurboTax software, allegedly followed the instructions and prompts, and drafted a report describing his experience. This could have been done by any return preparer in the country. Indeed, 2 it could presumably have been done by many computer-literate taxpayers who self-prepare their returns using TurboTax. This simply is not expert testimony.
Mr. Lewis's report offers no help to the Court in understanding any evidence, grasping the inner workings of any industry, or determining any fact in issue. It simply expresses his personal opinion about how the "reasonable cause" issue should be decided. That is the province of the Court, not of an expert. See, e.g., Hosp. Corp. of Am. v. Commissioner, 109 T.C. 21, 59 (1997) ("Testimony that expresses a legal conclusion and does not assist the trier of fact is not admissible.").
Upon due consideration, and for cause more fully appearing in the transcript of the proceedings, it is
ORDERED that respondent's Motion in Limine, filed June 1, 2022, is granted. 3