Opinion
286-21
03-04-2024
CURTIS K. KADAU & LORI A. KADAU, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Christian N. Weiler Judge.
Trial of this case commenced at a special trial session of the Court in Tampa, Florida, on February 20, 2024, and trial is scheduled to resume on March 4, 2024.
Currently pending before the Court are respondent's Motion in Limine to exclude or limit the testimony of Mr. Jeffrey Bleiweis, which was filed on February 5, 2024. Also pending is respondent's Motion in Limine to limit consideration of the expert report of Gordon C. Thompson to petitioners' 2012 and 2013 tax years and prohibit consideration of Mr. Thompson's report with regard to petitioners' 2014, 2015, 2016, and 2017 tax years.
At trial, respondent moved to introduce an exhibit (which was marked as 1001-R) which is the written protest by petitioners to IRS Independent Office of Appeals. Respondent also offered two additional exhibits (marked as 1008-R and 1009-R) which are written responses to information document requests and which were part of the IRS's audit of petitioners.
At trial, petitioners objected to the introduction of these three documents by respondent on the grounds of relevance. Petitioners contend that these documents violate the holding of Greenberg Express v. Commissioner, 62 T.C. 324 (1974), since the three documents relate to the IRS audit or administrative proceeding and are irrelevant at trial because this trial is a de novo proceeding.
Respondent, however, indicated at trial that these documents undermine or contradict trial testimony and therefore are relevant, and that Greenberg Express does not apply to respondent, but only limits a petitioner from "going behind the audit."
I. Respondent's Motions in Limine
The Court is not inclined to grant either of respondent's motions in limine. The Court has already heard from these two witnesses during petitioners' case in chief and ruled at trial as to any objections relating to the testimony of Mr. Jeffrey Bleiweis. Similarly, the Court admitted the expert report of Mr. Thompson at trial. We find the issue of his opinions, as to petitioner's 2014, 2015, 2016, and 2017 tax years, goes to his credibility and reliability as an expert. We find it more appropriate for respondent to deal with this issue on brief, after the conclusion of trial on the merits.
II. Greenberg Express
The government often argues that materials relating to a taxpayer's audit or administrative proceedings are irrelevant because the issues before this Court are de novo. See Greenberg Express, 62 T.C. 327; see also Moya v. Commissioner, 152 T.C. 182 (2019). This argument is predicated on Section 6214(a), through which, upon a timely filed petition, we have jurisdiction to redetermine the correct amount of the deficiency.
In Greenberg's Express, 62 T.C. at 328, we explained that, because a trial before the Court is a proceeding de novo, the Court's "determination as to a petitioner's tax liability must be based on the merits of the case and not any previous record developed at the administrative level." The principle articulated in Greenberg's Express - that the Court will not generally look behind a notice of deficiency - has been repeatedly upheld by appellate courts. See Pasternak v. Commissioner, 990 F.2d 893, 898 (6th Cir. 1993), aff'g T.C. Memo. 1991-181; Ogiony v. Commissioner, 617 F.2d 14, 16-17 (2nd Cir. 1980), aff'g and remanding T.C. Memo. 1979-32; Doyal v. Commissioner, 616 F.2d 1191, 1192 n.3 (10th Cir. 1980), aff'g T.C. Memo. 1978-307; Crowther v. Commissioner, 269 F.2d 292, 293 (9th Cir. 1959), aff'g on this issue 28 T.C. 1293 (1957). Although the rationale in Greenberg Express is often used to prevent investigation into respondent's motives or procedures, this is not its only use. In Wages v. Commissioner, T.C. Memo. 2017-103 at *17, this Court determined that documentation petitioners provided to respondent during examination was immaterial. While in this case it is respondent who seeks to offer and introduce documents petitioners furnished in audit, we find the documents to be immaterial as they were not introduced by petitioner, nor were they offered as impeachment evidence by respondent during cross-examination.
We conclude that our holding in Greenberg Express applies here and precludes the introduction of these three administrative documents. Our redetermination of petitioners' tax liability will be based on the merits of the case and the record, as developed at trial. Accordingly, we will sustain petitioners' objections and exclude proposed exhibits 1001-R, 1008-R, and 1009-R.
After due consideration and for the efficient disposition of this case, it is
ORDERED that respondent's Motion in Limine to limit consideration of the expert report of Gordon C. Thompson to petitioner's 2012 and 2013 tax years and prohibit consideration of Mr. Thompson's report with regard to petitioner's 2014, 2015, 2016, and 2017 tax years, filed December 27, 2023, is denied. It is further
ORDERED that respondent's Motion in Limine to exclude or limit the testimony of Mr. Jeffrey Bleiweis, filed on February 5, 2024, is denied. It is further
ORDERED that petitioners' objections to the admission of Exhibits 1001-R, 1008-R, and 1009-R are sustained.