Opinion
24061-18
09-14-2021
William L. Hutchinson & Kandis Hutchinson Petitioners v. Commissioner of Internal Revenue Respondent
ORDER
David Gustafson Judge.
Now before us are motions to compel filed by the Commissioner and a stipulation of settled issues filed by fewer than all the parties. We will order further filings.
The issues in this case arise from a statutory notice of deficiency issued to both petitioner William L. Hutchinson and petitioner Kandis Hutchinson jointly, based on joint tax returns for which the two petitioners shared joint and several liability. On August 20, 2021, the Commissioner filed two motions (Docs. 28-29) to compel discovery from petitioners. The Court ordered petitioners to file a response to the motions and ordered the Commissioner to file by October 1, 2021, a reply to petitioners' response, explaining the extent (if any) to which the motions to compel have become moot by virtue of petitioners' compliance with the discovery requests. (See Doc. 32.)
On September 10, 2021, there was filed in this case a "Stipulation of Settled Issues" (Doc. 35) by the Commissioner and Mr. Hutchinson only. That is, Ms. Hutchinson did not so stipulate. The intended effect of that stipulation is unclear to the Court. For example, if Ms. Hutchinson were to insist on proceeding to trial on issues that Mr. Hutchinson had purported to settle, then if the ultimate outcome of those tried issues were different from the resolution reflected in Mr. Hutchinson's stipulation, it would seem that non-identical decisions would be entered against two petitioners in the single case.
On September 13, 2021, Ms. Hutchinson filed a response (Doc. 39) to the Commissioner's motions to compel discovery (Docs. 28-29), which states:
Petitioner Kandis Hutchinson responds to the respondent's request for production of documents and interrogatories as follows.
1. On or about September 10, 2021, respondent and petitioner William Hutchinson filed a stipulation of settled issues in which William Hutchinson conceded in full the proposed deficiency set forth in the notice of deficiency and also conceded fifty percent (50%) of an accuracy related penalty.
2. Petitioner William Hutchinson has represented to the respondent and to petitioner Kandis Hutchinson that he shortly will pay in full the deficiency and the penalty as set forth in the stipulation of settled issues.
3. The interrogatories and request for production of documents directed to petitioner Kandis Hutchinson are all related to items of adjustment that comprise the deficiency which Mr. Hutchinson has now conceded in full and has agreed to pay.
4. Accordingly, the information sought by the respondent in the request for production of documents and interrogatories is no longer "relevant to the subject matter involved in the pending case." Tax Court Rule 72(b).
We congratulate the parties on their agreement (alleged by Ms. Hutchinson) as to the payment by Mr. Hutchinson of his liabilities that would result from the entry of a decision consistent with the stipulation that he and the Commissioner have signed. However, Ms. Hutchinson is incorrect in stating that the agreement of the other two parties about Mr. Hutchinson's liabilities and the parties' expectations about his payment of those liabilities renders irrelevant the discovery requests directed to the amount of Ms. Hutchinson's liability. We are hopeful that Ms. Hutchinson's expectations will be borne out, and the discovery requests may well become moot--but they are not yet moot or irrelevant. We do not yet have a basis for entering decision as to Ms. Hutchinson. It is therefore
ORDERED that Ms. Hutchinson's motion (Doc. 34) for an extension of time to file her response to the motions to compel is granted (so that the response she filed September 13, 2021, is deemed timely). It is further
ORDERED that our order of August 24, 2021 (Doc. 32), remains in force and effect insofar as it requires the Commissioner to file a response to petitioners' responses to the motions to compel by October 1, 2021. If the Commissioner wishes to withdraw the motions, then his reply should so state. It is further
ORDERED that, no later than October 18, 2021, the parties shall file a joint status report (or, if that is not expedient, then separate reports) giving their recommendations as to further proceedings with regard to Ms. Hutchinson, unless by that time they have filed a proposed stipulated decision as to both petitioners.