Opinion
13319-21S
09-08-2023
KRISTEN L. QUEVY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Ronald L. Buch Judge
This case is calendared for trial at the Court's September 25, 2023, session in Los Angeles, California. Ms. Quevy filed a Motion for Leave to File Report of a purported expert, John Balian, an attorney opining on the ultimate issues presented in this case. The Commissioner promptly filed a Motion in Limine to Exclude from Evidence the Expert Report and Testimony of John Balian. We will grant the Commissioner's motion.
Background
In 2018, Ms. Quevy received a $75,000 payment in connection with a settlement agreement. She reported $7,500 of it as taxable income. The Commissioner mailed Ms. Quevy a notice of deficiency for 2018, increasing her tax liability and proposing to impose the substantial tax understatement penalty. Ms. Quevy disagreed with the Commissioner's adjustments and timely filed a petition with this Court.
On August 25, 2023, Ms. Quevy filed a motion for leave to file an expert report. The expert report is prepared by an attorney, John Balian. In his report, Mr. Balian concludes that "had the taxpayer's tax return been properly prepared" and "that a finder of fact at trial can and should, looking at the facts of this case, conclude the 55% of the settlement amount qualifies under IRC 104(a) as tax-free."
On September 5, 2023, the Commissioner filed a Motion in Limine, arguing that "Mr. Balian's report seeks to usurp the Court's function as a trier of fact, by substituting his judgment for the Court's."
Discussion
In general, Rule 143(g) of the Tax Court Rules of Practice and Procedure permits parties to offer testimony from expert witnesses. Parties who intend to introduce expert witness testimony must first provide an expert witness report, which Ms. Quevy has done.
Expert witnesses may not provide their legal opinions or conclusions. This point is so well-settled in the law that the United States District Court for the Southern District of New York has chronicled opinions from every Federal judicial circuit supporting the point. See In re Initial Public Offering Securities Litigation, 174 F.Supp.2d 61, 64-65 (S.D.N.Y. 2001).
Proceedings in this Court are conducted in accordance with the Federal Rules of Evidence. Section 7453. Pursuant to Rule 143(g), expert testimony is admissible under rule 702 of the Federal Rules of Evidence if it assists the Court to understand the evidence or to determine a fact in issue. Id. Expert opinion about the law or how to apply law to facts does not "assist the trier of fact to understand the evidence or to determine a fact in issue." See Fed. R. Evid. 702. Consequently, this Court has excluded expert testimony that opines on the law. Id.; see also Alumax Inc. v. Commissioner, 109 T.C. 133, 175 (1997).
At the time Ms. Quevy filed her petition she resided in the Ninth Circuit, where jurisdiction to an appeal would lie. The Ninth Circuit has held that experts may not speak to matters of law. See Aguilar v. Int'l Longshoremen's Union Local # 10, 966 F.2d 443, 447 (9th Cir.1992) ("Here, the reasonableness and foreseeability of the casual workers' reliance were matters of law for the court's determination. As such, they were inappropriate subjects for expert testimony.").
Conclusion
Mr. Balian's report makes conclusions about how the law applies to the facts of Ms. Quevy's case. Because the making of these conclusions is in the exclusive province of the Court, his report and testimony are inadmissible. Accordingly, it is
ORDERED that Ms. Quevy's Motion to File Expert Report is denied. It is further
ORDERED that the Commissioner's Motion in Limine filed September 5, 2023, is granted.