Opinion
10704-19
12-27-2021
Robertino Presta & Antonella Presta Petitioners v. Commissioner of Internal Revenue Respondent
ORDER
Mark V. Holmes Judge
This is one of two consolidated cases assigned to this division of the Court. We've previously ruled on a motion to compel the production of documents in docket number 10703-19; a similar motion was pending in this case before the consolidation.
Respondent moved on September 17, 2021 to compel more complete responses to some of his document-production requests. The Prestas then supplemented their responses, but not to respondent's satisfaction. Their initial response featured overbroad objections (e.g., "vague, overly broad, and unduly burdensome") of the sort no longer permitted under the current Federal Rules of Civil Procedure. Their supplemental response apparently produced a number of actual documents, but many more specific responses that state "petitioners have been unable to locate any documents responsive to this request for tax years 2010-2016." As in the similar motion to compel in the CFM case, this includes numerous categories of pertinent email traffic and even such routine documents as corporate resolutions.
The requests themselves seek obviously discoverable information, and would normally trigger a form order to compel. (The one minor exception is request 52, which seeks "all documents not produced . . . that [petitioners] believe are relevant to any matters at issue in this case or that petitioner expects to introduce at trial." This either seeks the subjective beliefs of petitioner's counsel, which treads on work-product privilege; or jumps the gun on exchange of trial exhibits, for which the Court will establish a much later deadline for in its pretrial order.)
In the case of requests 14, 34, and 38-39, petitioners' response is reasonable and the Court will not order further production (with the exception of responsive documents that are in the form of emails or attachments to emails).
The potentially major problem of vanished emails led to a conference call and discussion of what petitioners' counsel is doing to recover these possibly very important documents. Since that call there does seem to have been progress: It is possible that many of these emails are recoverable from the use of more advanced technology than petitioners had first used. Relevant emails may also be recoverable from the captive's manager/promoter -- respondent has already proceeded with discovery on that front. It also remains possible that the Court will entertain motions for discovery through depositions under Rule 74(c) and that we might expect discovery to extend to questions of evidence spoliation, given the consequences that topic might have on factfinding in these cases.
It is therefore
ORDERED that respondent's September 17, 2021 motion to compel production of documents is granted as to requests 1-12; and to requests 14, 34, 38-39, and 41-50 to the extent they seek the production of emails (including attachments), and petitioners shall, on or before January 3, 2022, serve on counsel for respondent those documents requested in respondent's request for the production of documents served on petitioners on June 7, 2021. (The Court notes petitioners' informal promise during the conference to have done so by December 24, 2021.) It is also
ORDERED that respondent's September 17, 2021 motion to compel production of documents is denied as to request 52. It is also
ORDERED that if petitioners do not fully comply with the provisions of this order, the Court may impose sanctions under Tax Court Rule 104, which may include dismissal of this case and entry of a decision against them.