Opinion
272-18
08-28-2024
LONTRAC ENTERPRISES, LLC, LONTRAC INVESTORS, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Patrick J. Urda, Judge
This case is scheduled for the Court's special trial session in Atlanta, Georgia, beginning September 23, 2024, and involves a charitable contribution deduction claimed by Lontrac Enterprises, LLC (Lontrac) for the donation of a conservation easement. The Internal Revenue Service (IRS) issued a notice of final partnership administrative adjustment (FPAA) to Lontrac Investors, LLC (Lontrac Investors), Lontrac's tax matter partner and petitioner in this case, disallowing this deduction and determining penalties for Lontrac's 2014 tax year.
The Commissioner has filed his first request for admissions pursuant to Rule 90. [Doc. 112.] Lontrac Investors responded with an objection to the admission requests and its own motion for a protective order, both premised on the ground that the Commissioner had failed to engage in informal consultations before filing his requests for admissions. [Docs. 113-14.] The Commissioner subsequently filed an objection to the motion for protective order [Doc. 118], as well as a motion for review of the sufficiency of Lontrac Investors' answers to the first requests for admissions [Doc. 119]. Lontrac ended the briefing relevant to these matters by objecting to the Commissioner's motion for review of sufficiency of answers. [Doc. 123.]
Statutory references are to the Internal Revenue Code, Title 26 U.S.C. (I.R.C.), in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
We will grant the Commissioner's motion for review and deny Lontrac Investors' motion for protective order. Rule 90 permits a party to serve upon another party written requests for admission of the truth of any nonprivileged matter relevant to the pending action, so long as the matter is "set forth in the request and relate[s] to statements or opinions of fact or of the application of law to fact . . . ." Upon being served with written requests for admission, the answering party must: (1) specifically admit or deny the matter; (2) state in detail why the matter cannot be truthfully admitted or denied; or (3) state a detailed objection. See Rule 90(c). Under Rule 104(d), an evasive or incomplete answer to a Rule 90 request for admission is treated as a failure to respond.
A party who has requested admissions may move for a determination as to the sufficiency of any answers or objections. See Rule 90(e). In that case, absent a justified objection, the Court "shall order that an answer be served." See id. Further, should the Court determine that any answer does not comply with the requirements of Rule 90, we have discretion either to order an amended answer or order that the matter is admitted. See id.
Consistent with our discovery rules, informal consultation between the parties is required before turning to this mechanism. Specifically, "the Court expects the parties to attempt to attain the objectives of such a request through informal consultation or communication before utilizing the procedures provided in this Rule." Rule 90(a).
The Commissioner has established that he sought almost all of the information in the requests for admissions through informal mechanisms, including a comprehensive Branerton letter, telephone consultations, and the stipulation process. The matters are plainly relevant, and the Commissioner is entitled to his answers as contemplated by our Rules. As the Commissioner complied with the informal consultation procedures contemplated in Rule 90, we will deny the motion for protective order.
We agree with Lontrac Investors that the Commissioner did not establish that he previously sought agreement with respect to requests for admissions 6 and 7, which seek Lontrac Investors' position on whether granite and metagreywacke are "different types of rock" and have "different uses." [Doc. 112 at 4.] We trust that the parties will be able to define their positions on these points without need of Court intervention.
It is therefore
ORDERED that the Commissioner's Motion to Review the Sufficiency of Answers or Objections to Request for Admissions, filed May 3, 2024, is granted in part in that, on or before September 16, 2024, Lontrac Investors shall serve answers or amended objections, as specified above, to Request Nos. 1-5 and 8-52 and denied as to Request Nos. 6 and 7. It is further
ORDERED that Lontrac Investors' Motion for Protective Order Pursuant to Rule 103, filed April 9, 2024, is denied.