Opinion
11868-20
10-17-2023
PARKERSON CHURCH RESERVE, LLC, STUCKEY TIMBERLAND, INC., TAX MATTERS PARTNER PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Respondent
ORDER
Christian N. Weiler Judge
On September 1, 2023, respondent filed a Motion to Consolidate Docket Numbers 11868-20, 25981-21. In the motion, respondent asks to consolidate for trial, briefing, and opinion the above referenced case, with Parkerson Sands, LLC, Stuckey Timberland, Inc. Tax Matters Partner v. Commissioner of Internal Revenue, Docket No. 25981-21. Respondent also filed the same motion in the Parkerson Sands case on September 1, 2023. Both cases are pending before the undersigned judge, with this case set for trial commencing on March 25, 2024.
Background
A. Parkerson Sands
On July 14, 2021, the IRS issued a Notice of Final Partnership Administrative Adjustment (FPAA), with respect to Parkerson Sands, LLC's conservation easement donation during year 2017. On October 11, 2021, petitioner - as tax matters partner - timely petitioned the Court disputing the adjustments found in the FPAA. On March 14, 2023, Parkerson Sands received a letter from the IRS Independent Office of Appeals (Appeals) stating that Appeals was returning the case to respondent's counsel due to an ongoing criminal matter involving appraiser Clay Michael Weibel, the appraiser for Parkerson Sands' 2017 conservation easement donation. To date, Parkerson Sands' case has not been considered by Appeals.
B. Parkerson Church
On July 8, 2020, the IRS issued a Notice of Final Partnership Administrative Adjustment (FPAA), with respect to Parkerson Church Reserve, LLC's conservation easement donation during year 2016. On September 28, 2020, petitioner - as tax matters partner - timely petitioned the Court disputing the adjustments found in the FPAA. On November 16, 2022, Parkerson Church participated in a conference with Appeals. On December 14, 2022, Appeals closed the case as unagreed and returned the case to respondent's counsel. On February 13, 2023, the Court set the Parkerson Church case for trial commencing on March 25, 2024.
In the Motion to Consolidate, respondent contends both cases involve conservation easements of contiguous real property located in Dodge County, Georgia; have the same tax matters partner, Stuckey Timberland, Inc. (petitioner); and are represented by the same legal counsel. Respondent also contends both sand mining and residential use were the claimed highest and best uses for both the contiguous properties prior to easements; while recreational and agricultural use are now the claimed highest and best uses for the contiguous properties. In sum, respondent contends time, expense and resources of the Court and the parties will be materially conserved through consolidation of these cases for trial.
On October 3, 2023, petitioner filed a response to respondent's Motion to Consolidate. In the response, petitioner asked this Court to deny respondent's Motion to Consolidate based on the following grounds:
1. The two cases do not involve the same transaction; they involve completely different transactional facts, in different tax years, relating to different pieces of real estate.
2. Due to the different procedural postures for each case, consolidation at this time would result in increased litigation costs, significant risk of confusion, and possible delay to the resolution of each case.
3. Consolidation of the cases is premature before the parties have the opportunity to settle all or part of each case with the IRS Office of Appeals.
4. Respondent's Motion to Consolidate relies on factual generalizations, inaccurate and misleading statements, and broad assertions of the outstanding legal issues, though the cases are only superficially similar and in fact involve unique parcels of real property, different tax years, different appraisers, different parties, and varying facts.
5. Consolidation of the cases would not avoid unnecessary costs, delay, or duplication.
Discussion
The Court may consolidate cases involving common questions of law and fact to avoid unnecessary costs, delay or duplication. Rule 141(a). Consolidation rests in the sound discretion of the Tax Court. Odend'hal v. Commissioner, 75 T.C. 400, 402 (1980). In cases where petitioners are the same and questions of law and fact are similar, then consolidation is an appropriate device used to promote judicial economy and save substantial time and expense for the parties. Rule 141(a); Ctr. for Intl. Understanding v. Commissioner, 84 T.C. 279 (1985).
Unless otherwise indicated, Rule references are to the Tax Court Rules of Practice and Procedure.
The Court questions petitioner's main argument that consolidation of these cases will not save substantial time and expense for the parties. The Court appreciates respondent's contention that these cases involve contiguous properties, each involving a conservation easement, and similar if not identical claimed highest and best uses. The Court has regularly consolidated conservation easement cases involving similar fact patterns. The Court finds respondent's Motion for Consolidation to be compelling.
However, petitioner's response goes on to note how the parties in Parkerson Sands have not engaged in significant trial preparation and how the case is still awaiting a resolution with Appeals. It remains unclear whether the petitioner in Parkerson Sands can now proceed to Appeals based on the apparent acquittal of appraiser Clay Weibel. These factors run counter to consolidation.
The Court is inclined to permit additional time for the petitioner in Parkerson Sands to prepare for trial and a conference with Appeals. Accordingly, the Court is not inclined to grant a Motion to Consolidate at this time should the parties prefer to keep the March 2024 trial date. However, the Court encourages counsel for the parties to meet and confer to determine whether trial on March 25, 2024 in the Parkerson Church case remains appropriate; or whether it is more appropriate to hold one consolidated trial at a future period in time, after the petitioner in Parkerson Sands has been given adequate time for trial preparation and a possible conference with Appeals.
Considering the foregoing, it is
ORDERED that respondent's Motion to Consolidate Docket Numbers 11868-20, 25981-21 filed on September 1, 2023, is denied, without prejudice. It is further
ORDERED that on or before November 23, 2023, the parties are to meet and confer to determine whether trial beginning on March 25, 2024, in this case remains appropriate and report back to the Court by a joint status report (or separate if preferred).