United States' Motion to Exclude Expert Testimony of Plaintiffs'

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establishing whether the taxpayer has “reasonable cause” to avoid asserted penalties. 3Weisbachdoes nothing more than interpret this legal standard and argue that the standard is met in thiscase. Indeed, that is the very use to which Plaintiffs put Weisbach’s report in previous courtfilings, and doubtless will also do so again at trial. 4Just last year, the Court of Federal Claims excluded a virtually identical report andtestimony. There, as here, the “expert report . . . concludes that the opinion letter provided to[the taxpayer] by [the opinion writer], is of the quality and character upon which taxpayers . . .could reasonably rely in preparing their tax returns.” 5Just as with Weisbach’s reports in thiscase, the report in Stobie Creek consisted of nothing more than “lengthy legal analyses of pastprecedent, complemented by arguments attempting to persuade the court that plaintiffsreasonably relied on the legal opinions in a law firm's tax opinion letter.” 6The court held thatbecause the report applied the law to the facts, it could not constitute admissible opiniontestimony under Rule 702. Weisbach’s expert report is inadmissible for the very same reasonshere.Yale’s expert report is similarly flawed because he opines on whether the transaction is“substantially similar”—again, a legal standard lifted directly from 26 U.S.C. §6501(c)(10), not astandard set forth in some other area of expertise—to the Son of BOSS listing notice issued bythe IRS (Notice 2000-44). In so doing, he does not purport to examine the underlying economics3 See Treas. Reg. §1.6664-4(c) (reasonable cause can be based on whether “taxpayer has reasonably relied in goodfaith on advice (including the opinion of a professional tax advisor) as to the treatment of the taxpayer (or any entity,plan, or arrangement) under Federal tax law.”)4 Plaintiffs’ Opposition to United States’ Motion for Summary Judgment and Plaintiffs’ Cross-Motion for SummaryJudgment on the Validity of Treas. Reg. § 1.752-6 (“MSJ Opp.”) 27.5 Stobie Creek Investments, LLC v. United States, 81 Fed. Cl. 358, 360 (2008).6 Id. at 363.Page 4 of 6
of the transactions in order to compare them with the transaction described in Notice 2000-44.Instead, he assumes the facts that Plaintiffs have given him and makes the legal argument thatthese facts are distinguishable from the facts in Notice 2000-44, based on Yale’s reading ofvarious statutes and regulations. This is merely an embellishment of a legal argument Plaintiffs’counsel has made in their prior briefs and is likely to repeat at trial. 7ConclusionThis Court has no need for expert witnesses playing “law professor” in the courtroom andparroting the same legal arguments that Plaintiffs’ counsel will advocate, and the Federal Rulesof Evidence do not permit such testimony. For the above stated reasons, the United Statesrespectfully requests that the Court preclude Plaintiffs from offering the proposed experttestimony of Weisbach and Yale.Date: November 2, 2009Respectfully submitted,JOHN MALCOLM BALESACTING UNITED STATES ATTORNEY/s/ Robert J. KovacevROBERT J. KOVACEVTrial AttorneyD.C. Bar No. 47525Tax Division, U.S. Department of JusticePost Office Box 55, Ben Franklin StationWashington, D.C. 20044Phone: (202) 307-6541Robert.J.Kovacev@usdoj.govDAVID G. ADAMSTrial AttorneyState Bar No. 00793227HOLLY M. CHURCHTrial AttorneyState Bar No. 24040691Tax Division, U.S. Department of Justice717 N. Harwood St., Suite 4007 MSJ Opp. 12-13.Page 5 of 6
Page 1: UNITED STATES DISTRICT COURTEASTERN
Page 7 and 8: Expert ReportOfDavid A. WeisbachUni
Page 9 and 10: c.v. is attached as Exhibit A. I am
Page 11 and 12: The background for the rules allowi
Page 13 and 14: which provide a general defense aga
Page 15 and 16: 2000-44 transaction. Without expres
Page 17 and 18: for the potential tender offer of S
Page 19 and 20: In particular, it is my understandi
Page 21 and 22: taxpayer wil prevail on the merits
Page 23 and 24: APPENDIX - DOCUMENTS REVIEWEDDescri
Page 25 and 26: DAVID A. WEISBACHUniversity of Chic
Page 27 and 28: 143-151.Paretian Intergenerational
Page 29 and 30: APPENDIXList of Prior Expert Testim
Page 31 and 32: QUALIFICATIONSI am an Associate Pro
Page 33 and 34: dollar-US dollar exchange rate duri
Page 35 and 36: facili tate the pursuit of a tender
Page 37 and 38: Beal's and Montgomery's formation o
Page 39 and 40: "-"~-_._.~-,----_..__.._._.__._--_.
Page 41 and 42: LOAN PREMIUM VARIATIONThe loan prem
Page 43 and 44: premium variation, but the second a
Page 45 and 46: Beal and Thomas Montgomery stated t
Page 47 and 48: was planning to acquire. Sanding al
Page 49 and 50: irelationship cannot be eva~uated i
Page 51 and 52: To summarize, Notice 2000-44 descri
Page 53 and 54:
IRS and Treasury sometimes refer to
Page 55 and 56:
swaps in BPB (as opposed to within
Page 57 and 58:
APPENDIX AETHAN YALECurriculum Vita
Page 59 and 60:
ETHAN YALEVitae, Page 3PUBLICATIONS
Page 61 and 62:
APPENDIX BDescriptionBa tes NumerMa
Page 63 and 64:
IRS Information Release IR 2004-64,
Page 65 and 66:
PURPOSE OF REPORTThis rebuttal repo
Page 67 and 68:
(BM Investments LLC, was subsequent
Page 69 and 70:
espect to a potential tender offer
Page 71 and 72:
premises if the "transaction" refer
Page 73 and 74:
e a payoff of at least $552.5 milli
Page 75 and 76:
WAS BEMONT FORMD FOR TAX REASONS? W
Page 77 and 78:
(Montgomery Deposition at 516:25-51
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his case (by showing that admitting
Page 81 and 82:
case. Another set of e-mail message
Page 83 and 84:
made in Australian dollars, for the
Page 85 and 86:
3. failure to treat the short finan
Page 87 and 88:
CONCLUSION OF REPORTThere are signi
Page 89 and 90:
DescriptionDeposition of Margaret M
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United States' Motion to Exclude Expert Testimony of Plaintiffs'

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