Opinion
12718-19
11-14-2023
OXBOW BEND, LLC, PARKWAY SOUTH, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber Judge
This case, which is part of a group of consolidated cases, is calendared for trial during a two-week special trial session beginning on August 19, 2024, in Atlanta, Georgia. The case involves a charitable contribution deduction claimed by Oxbow Bend, LLC (Oxbow Bend), for a conservation easement. The Internal Revenue Service (IRS or respondent) issued petitioner a notice of final partnership administrative adjustment (FPAA) disallowing Oxbow Bend's deduction and determining penalties.
In December 2021 the parties filed cross-motions for partial summary judgment addressing the question whether the IRS complied with the supervisory approval requirements of section 6751(b)(1) by securing timely supervisory approval of the penalties determined in the FPAA.That section provides that "[n]o penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination."
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
On March 22, 2022, pursuant to the Court's Opinion (T.C. Memo. 2022-23), we granted respondent's motion and denied petitioner's. We held that Revenue Agent (RA) Pamela Stafford secured supervisory approval on February 11, 2019, two months before the decision to assert penalties was formally communicated to Oxbow Bend in the FPAA, and that the supervisory approval was thus timely. In making this determination, we relied on a penalty lead sheet prepared by RA Stafford recommending the assertion of penalties. RA Stafford specified that she prepared that lead sheet on November 1, 2018, and digitally signed it on February 11, 2019. It was signed by her immediate supervisor, Catherine Brooks, who indicated that the date of her signature was also February 11, 2019.
On September 26, 2023, petitioner filed, at docket entry #98, a Motion for Reconsideration of our Order granting partial summary judgment for respondent. Petitioner cites a recent memorandum opinion of this Court, Lakepoint Land II, LLC v. Commissioner, T.C. Memo. 2023-111. In Lakepoint the IRS admitted that RA Stafford and Ms. Brooks had backdated a penalty lead sheet on which the Court had relied in a prior order ruling that RA Stafford had secured timely supervisory approval from Ms. Brooks. See id. at *7-8. Petitioner contends that "[t]he undisputed evidence in Lakepoint now reveals that RA Stafford, as well as RA Brooks, participated in creating a backdated penalty lead sheet."
On November 13, 2023, respondent filed a Response to petitioner's Motion for Reconsideration, in which he explains the salient factual differences between this case and Lakepoint. Respondent retrieved the metadata from the penalty lead sheet and has provided petitioner with a metadata summary report. That report demonstrates, using personalized employee identification numbers and timestamps, that Ms. Brooks digitally signed the penalty lead sheet on February 11, 2019, and that no other relevant modifications to the document were made. The IRS agent assigned to retrieve the metadata has submitted a Declaration under the penalty of perjury averring that these statements are true and accurate and has attached, as Exhibit B, a copy of the metadata report.
Petitioner has adduced no factual support whatever for its assertion that documents were backdated in this particular case. Rather, petitioner relies solely on the facts in LakePoint-a separate case-and surmises that if RA Stafford and her supervisor erred once, they must have committed the same error in hundreds of other cases on which they may have worked together. There is no logical or factual support for this argument. Finding the metadata report convincing, we will deny the Motion.
In consideration of the foregoing, it is
ORDERED that petitioner's Motion for Reconsideration of Order, filed September 26, 2023, at docket entry #98, is denied.