The starting point for this discussion is Senyszyn v. Commissioner, TC Memo 2016-137,. here, which I have previously discussed in my Federal Tax Crimes Blog because, although a civil case, the background is a criminal tax evasion case. See Tax Court Again Rejects Collateral Estoppel For Some Deficiency and Civil Fraud Penalty Where No Tax is Due (Federal Tax Crimes Blog 7/24/16), here. The issue was whether the Court had to apply the doctrine of collateral estoppel based on on the tax evasion conviction that had as an element an evaded tax (sometimes call tax due and owing or tax deficiency). A specific amount of evaded tax is not required for conviction. So, in his case, there was just some unstated amount of tax due and owing. The Court knew based on the record that, in fact there was no tax evaded. That knowledge certainly casts doubt on the criminal conviction, but the criminal conviction was not an issue in the case. Judge Halpern, the Tax Court Judge, had to do justice in the case before him where the facts showed that there was no tax deficiency. He simply decided to do justice.
Some of the key points Keith discusses are:
- Filing motions for reconsideration is a strategic step. Those motions can backfire.
- Keith notes the procedures that the IRS has to follow to obtain approval to file a motion for reconsideration.
- Keith notes that, bottom line, the doctrine of collateral estoppel exists to achieve efficient justice by avoiding re-litigating facts already determined. But there may be outlier cases where following the previous determination will patently defeat justice. This was one of them, and the judge exercised the equitable powers he perceived he had to do justice.