Friday, November 25, 2005
Sheryl Stratton has published an interesting news report, Pressure Mounts on Tax Court in Kanter, Ballard, and Lisle Cases, also available on the Tax Analysts web site as Doc 2005-23891, 2005 TNT 226-1. Here is the opening:
On November 22, another circuit court of appeals ordered the Tax Court to reinstate the trial judge's original report finding no fraud in the cases against tax attorney Burton Kanter and two insurance executives, Claude Ballard and Robert Lisle.
The pressure is now on the Tax Court to consolidate the cases of the estates of Kanter and Lisle, both now deceased, with Ballard's case, and to address the merits of the original report submitted by Tax Court Special Trial Judge D. Irvin Couvillion, who presided over the five-week trial in 1994, which cleared Kanter, Ballard, and Lisle of fraud charges and income tax liability on an alleged kickback scheme.
And the pressure is mounting on the IRS to stop trying to collect amounts assessed against Kanter based on an opinion that has now been vacated by two circuit courts of appeal.
In the Tax Court's published opinion in Investment Research Associates Ltd. v. Commissioner, T.C. Memo. 1999-407, Tax Court Senior Judge Howard A. Dawson Jr., "adopting the opinion of Special Trial Judge D. Irvin Couvillion," held that three men and a corporation had committed fraud in failing to report more than $13 million in income. The Tax Court also upheld substantially all of the IRS's liability determinations and found that the three individuals had intended to evade taxes.
The Tax Court released the original report in June 2005 after the Supreme Court issued its March 2005 decision in the Ballard and Kanter cases, holding that the Tax Court's own Rule 183 required the special trial judge's original report to be included in the record.