Paul L. Caron

Saturday, March 6, 2010

District Court Rules on Government's Challenge to Expert Testimony of David Weisbach & Ethan Yale in Son of BOSS Tax Shelter Case

A federal district judge in Texas yesterday ruled on the Government's motion to disqualify Tax Profs David Weisbach (Chicago) and Ethan Yale (Virginia) from testifying as expert witnesses in a Son of BOSS tax shelter case involving billionaire investor Andrew BealBelmont Investments, LLC v. United States, No.  4:07cv9 (Mar. 5, 2010):

Having considered theUnited States’ Motion to Exclude Expert Testimony of Plaintiffs’ Tax Lawyer “Experts” David Weisbach and Ethan Yale (Dkt. 145), the Court finds that the motion should be GRANTED in part and DENIED in part.

David Weisbach may testify as to whether the tax opinions of Coscia, Greilich & Company complied with applicable tax opinion standards and whether such complied with Treasury Regulations and Rules including Treasury Circular 230. David Weisbach may not testify as to whether Plaintiffs’ actions were reasonable. This is a matter reserved for the Court.

As to Ethan Yale, the Court grants the motion in that the Court does not have enough information as to whether Mr. Yale’s qualifications satisfy Federal Rules of Evidence 702. However, this Order does not preclude Plaintiffs from establishing sufficient qualifications at trial.

(Hat Tip: Richard Jacobus.)  Other documents in the case:

Prior TaxProf Blog coverage:

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I had no idea that the conclusory text you posted was the verbatim entire ruling by the Mag judge. No explanation why Weisbach cannot testify on some legal issues (whether the actions were reasonable) but not other legal issues (whether the actions comply with Circular 230).

Expert testimony is not to opine on legal conclusions/determinations to be made by the court. My guess is that there is no explanation for the ruling because there is no explanation for the ruling--other than some long and tortured (and probably embarrassing) opus the likes of Murphy I.

Posted by: tax guy | Mar 6, 2010 4:01:55 PM

Perhaps the explanation for the ruling may be found in the government's briefs, which the judge evidently found persuasive, at least in part.

Posted by: Jake | Mar 7, 2010 7:43:41 AM


By the same token, perhaps the explanation for the ruling can be found in the plaintiff's briefs, which the judge evidently found persuasive in part.

It would be nice if explanations were forthcoming from courts on their rulings, good, bad, or otherwise. I am not suggesting that summary orders are inappropriate on the whole. In my experience, however, when it comes to courts' rulings brevity is not wit but rather an inability to justify the action/ruling/opinion.

But that is why God invented the "granted" and "denied" stamp. And in most instances when an order is stamped granted or denied, no explanation is necessary. But when a court says something, but as little as possible, it is likely because it cannot explain or justify the little that was said.

For all the ridicule and public flogging the DC Circuit took in Murphy I, I have profound respect for their willingness to publicly explain at length the reasons for the decision. Of course, it allowed others to criticize it and dismantle it, but at least they had the guts to put it out there and suffer the consequences (as courts are ill equipped, or should I say not equipped at all, to defend their decisions). But it allowed for discourse on the why's and wherefore's rather than a summary opinion that merely found for Ms. Murphy with little to no explanation. Practitioners and academics would have been left to divine the strange result and theories underlying it. The legal system is better for them having explained the reasons. It lead to reasoned and informed discourse and judgments.

Or perhaps the judge was just observing the maxim of saying nothing, well almost nothing, and be thought the fool rather than open his mouth and remove all doubt. E.g., O’Donnabhain v. CIR, 134 T.C. No. 4 (J. Foley, dissenting).

Posted by: tax guy | Mar 7, 2010 9:51:38 AM

tax guy,

The notion that a summary order reflects a lack of integrity on the judge's part is questionable. When a federal district court judge says something, but as little as possible, about an interlocutory ruling like a pretrial motion in limine, the real world explanation is that such judges are busy and have better things to do than belabor the obvious.

No comment on Murphy I, save to note the DC Circuit panel had the courage to recognize its initial error and publish a well reasoned and correct second opinion.

Posted by: Jake | Mar 7, 2010 2:55:17 PM