I write today on a “dictated” oral decision at the conclusion of trial in Veribest Vesta, LLC, True North Resources, LLC, v. Commissioner (T.C. Dkt # 9158-23; docket entries here at docket # 199). Bottom line, the taxpayer’s (only because they got caught) claim went “True South.”
Note on Tax Court Orders: Orders can be relatively short dealing with routine procedural matters or may be longer when they serve the same function as T.C.M. opinions. Juge Buch’s opinion is the latter sort where he enters as an a one-page order attaching his lengthy findings of fact and conclusions dictated into the record at the close of the lengthy trial. This Order serves as the report (same as T.C. and T.C.M. opinions) required by § 7459(a), here. One difference between an Order and the other Tax Court opinions is that the Order does not list counsel. Readers can identify counsel for the parties by clicking the docket entries link above and clicking at the box on upper right for a printed docket sheet.
Veribest involved a standard plain vanilla bullshit
Syndicated Conservation Easement shelter, with many Tax Court opinions and Circuit
Court affirmances in other similar cases preceding Veribest in essence calling out the
bullshit. Some cases have been decided on other grounds, but there was always a
common problem of false hyper-inflated valuations of the easements; often (I can’t
say always) the valuations claimed were many, many times the real cost of the
whole property (including the easement) reasonably close to the date the
easement was carved out and “donated” to a willing
“charity.” There could be several procedural footfaults for claiming
deductions, but false overvaluations have been a common feature of many
bullshit tax shelters since the days of Jackie Fine Arts and Barrister. Old
timers will remember those shelters from the 1970s and 1980s.
In the SCE cases that have barraged the Tax Court dockets with much wasted resources involving many lawyers making lots of money, one feature has been the taxpayers (through their lawyers making lots of money) proffering expert witnesses who lack credibility. I include at the end of this blog some earlier blog offerings in bullshit tax shelters (including one-off rather than syndicated) with valuations that were not credible.
Today, I want to note Judge Buch’s warning of the potential for Section 6673 penalties. Section 6673, here, is titled “Sanctions and costs awarded by courts.” The Section permits the Tax Court to award costs: