Opinion
5520-08
09-08-2021
Malka Yerushalmi, Petitioner, and Joseph Yerushalmi, Janet Baldwin, Next Friend, Intervenor, v. Commissioner of Internal Revenue Respondent
ORDER
Mark V. Holmes, Judge
This case was on the Court's October 19, 2020 trial calendar for New York City. Intervenor is the debtor in a long-running bankruptcy case, but in 2019 the Bankruptcy Court lifted the automatic stay to allow him to file his own case and to give us the authority to adjudicate together both he and his ex-wife's tax liabilities for the years 1999 and 2000. We have since consolidated his and her cases.
Intervenor's bankruptcy case is ongoing, and the trustee of his bankruptcy estate has filed an adversary proceeding in Bankruptcy Court to authorize the sale of a condominium unit in which both intervenor and petitioner have an interest. Intervenor then moved for a protective order in this Court to stay the sale pending the outcome of this case. The Commissioner quickly made a jeopardy assessment against both petitioner and intervenor, the effect of which would seemingly be to ensure payment of the proceeds of any sale.
Intervenor cites Rule 103 as our authority to grant the order he seeks. That Rule is part of the section of our rules that governs discovery in our Court. It allows us to issue orders to protect persons who are the object of a "method or procedure" of discovery "from annoyance, embarrassment, oppression, or undue burden or expense." Rule 1013(a).
We see nothing in that rule that would allow us to second guess any decision of the Bankruptcy Court's to authorize the condominium sale. Intervenor's stated reason for filing the motion is, moreover, to avoid prejudice to the Commissioner's ability to apply any equity in the condominium to the Yerushalmis' tax debt and to prevent petitioner from possibly putting the condominium out of the Commissioner's reach. The Commissioner has shown he's capable of protecting his own interest through the jeopardy assessment.
Because the reach of Rule 103 does not by its plain language extend past the prevention of discovery abuse, and because the Commissioner's jeopardy assessment protects the IRS's ability to collect tax from the proceeds of any sale of the condominium, it is
ORDERED that intervenor's motion for protective order pursuant to Rule 103 is denied.