Opinion
24908-22
07-23-2024
JAMES S. MAXWELL & SANDRA K. MAXWELL, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Ronald L. Buch Judge
This case is calendared for trial at the session of the Court scheduled to commence on September 30, 2024, in Indianapolis, Indiana. On June 13, 2024, the Commissioner filed a Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f). The Court granted that Motion and ordered the Maxwells to respond by July 10, 2024. The Maxwells responded with a Motion for Summary Judgment (which the Court denied by Order served July 18, 2024). They included with their Motion for Summary Judgment a copy of the Commissioner's proposed Stipulation of Facts with handwritten notations. Those handwritten notations make clear that the Maxwells agree with some of the proposed stipulations, deny some, and qualify others.
Under Tax Court Rule 91, the parties are required to prepare a stipulation of facts before trial. A stipulation of facts is a comprehensive list of all matters that to which the parties agree; this allows to Court to focus on the issues that are in dispute. Rule 91(f) describes the process for when one party doesn't comply with the stipulation process. If a party refuses to stipulate, the party that is proposing to stipulate may file a motion to compel stipulation. The Court will generally order the noncompliant party to file a response to the motion. The response must show each part of the stipulation that is agreed by both parties and the part of the stipulation where there is a dispute, referring specifically to the agreed or disputed matter. The response must also show the sources and reasons for disagreeing with any matter proposed in the stipulation of facts.
In substance, the Maxwells provided a response as contemplated by Rule 91(f) (2). In their response, the Maxwells agreed to stipulations 1, 4, 7-15, 19-20, and 22-23. These paragraphs are stipulated. In their response, the Maxwells did not dispute stipulations 2-3, 5-6, 17, 21, or 27-29. We deem these paragraphs to have been stipulated. In their response, the Maxwells dispute stipulations 16 and 18. Those stipulations are similar to each other in that each alleges that the Maxwells did not maintain particular records. They disagree, but it is unclear whether they have produced to the Commissioner any of the records they claim to have maintained. We do not deem these paragraphs to be stipulated, but we will order the Maxwells to produce such records to the Commissioner. The Maxwells responses to stipulations 24-26 are unclear. Each of those proposed stipulations states what was reported on Schedules C, Profit or Loss From Business, that accompanied the Maxwells 2020 through 2022 Forms 1040, U.S. Individual Income Tax Return. The Maxwells made a handwritten alteration and wrote "type o" next to each of these stipulations. It is unclear, however, whether the Maxwells are stating that there were typographical errors on the respective Schedules C or that there are typographical error in the proposed stipulations. We need not resolve this conflict; the Schedules C can be offered as evidence, if necessary, and their contents will speak for themselves. We do not deem these paragraphs to be stipulated. In accordance with the foregoing, it is
ORDERED that the Court's Order to Show Cause served June 17, 2024, is discharged. It is further
ORDERED that paragraphs 1 through 15, 17, 19 through 23, and 27 through 29 of the Commissioner's proposed Stipulation of Facts appended as Exhibit F to his Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f), filed June 13, 2024, are deemed stipulated. All others (paragraphs 16, 18, and 26 through 28) are not deemed stipulated. It is further
ORDERED that by August 9, 2024, the Maxwells shall produce the following documents to the Commissioner: (a) any a login sheet or other business records for 2019 that identify the total number of children who attended the daycare each day, and (b) any financial records for 2019 that documented the daycare business's income.