United States' Motion to Exclude Expert Testimony of Plaintiffs'

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(Dubinsky at 30.)In Dubinsky's view, this supports theconclusion that "these steps were merely devices in achievingthe known end result -- generating a paper tax loss"(Id. )A difficulty with Dubinsky's approach is that the steptransactiondoctrine, as it is commonly understood, cannot beused to invent transactions that never took place. Yet, at page30 of his report, Dubinsky does exactly that. He investstransactions by imagining the result in an al ternati ve versionof reality with the transactions reordered.In any case,Dubinsky's assertions regarding the step-transaction doctrineamount to nothing more than a legal argument on which I expressno opinion.is THIS TRSACTION SUBSTANTIALLY SIMILA TO NOTICE 2000-44?After plodding through all of these assertions, which areunpersuasi ve, irrelevant, or both, Dubinsky arrives at his claimthat "Beal's tax strategy is, or is substantially similar to, aSon-of-Boss tax shelter described in IRS Notice 2000-44."(Dubinsky at 30.) He cites the following four characteristics,supposedly common to both the transactions at issue in this caseand to Notice 2000-44, to support this claim:1. offsetting financial positions;2. contribution of offsetting positions to a partnership;- 21 -
3. failure to treat the short financial position as aliabili ty; and4. large tax losses upon disposition of the partnershipinterest. (Id. )As an initial matter, this transaction did not involve a" (1) arge tax loss () upon disposition of the partnershipinterest" (Dubinsky at 30), the fourth item in Dubinsky's list.Hence, for Dubinsky's "substantially similar" assertion to beconvincing, it would have to be based on the first three itemsin his list.The first three items on Dubins ky' s list are apparentlynecessary for a transaction to be classified as substantiallysimilar to the transaction described in Notice 2000-44, butstanding alone they are not sufficient. One variation oftransaction described in Coordinated Issue Paper - DistressedAsset/Debt Tax Shelters, LMSB-04-0407-031 (April 18, 2007)involves a taxpayer who purchases and sells economicallyoffsetting option positions and contributes the offsettingposi tions to a partnership. The taxpayer takes the positionthat outside basis is increased for the long option, and notreduced for the short option on the theory that it is not aliabili ty. (Id. at note 4.) In other words, the transactionincl udes each of the first three items on Dubinsky's list.- 22 -
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UNITED STATES DISTRICT COURTEASTERN
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of the transactions in order to com
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Expert ReportOfDavid A. WeisbachUni
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c.v. is attached as Exhibit A. I am
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The background for the rules allowi
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which provide a general defense aga
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2000-44 transaction. Without expres
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for the potential tender offer of S
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In particular, it is my understandi
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taxpayer wil prevail on the merits
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APPENDIX - DOCUMENTS REVIEWEDDescri
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DAVID A. WEISBACHUniversity of Chic
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143-151.Paretian Intergenerational
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APPENDIXList of Prior Expert Testim
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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
Page 79 and 80: his case (by showing that admitting
Page 81 and 82: case. Another set of e-mail message
Page 83: made in Australian dollars, for the
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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