Opinion
12271-20 12274-20
03-01-2023
JACKSON STONE SOUTH, LLC, JACKSON SOUTH INVESTMENTS, LLC, TAX MATTERS PARTNER, et al., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
ALINA I. MARSHALL JUDGE
These cases concern whether Jackson Stone North, LLC (JSN) (docket No. 12274-20), and Jackson Stone South, LLC (JSS (docket No. 12271-20), and together with JSN, the LLCs), are entitled to section 170(a) charitable contribution deductions in their partnership tax years ending December 31, 2016, for section 170(h) qualified conservation contributions. If not, we must decide whether the LLCs are liable for accuracy-related penalties.
Unless otherwise noted, all section references are to the Internal Revenue Code (Code), Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
This Order:
• Grants respondent's Rule 121 Motion for Partial Summary Judgment filed November 3, 2022, insofar as it holds that the notice of final partnership administrative adjustment (FPAA) issued to each LLC is valid, and denies the Motion as to whether respondent obtained section 6751(b) supervisory approval of the proposed penalties;
• Denies petitioners' Motion for Protective Order filed January 17, 2023; • Denies petitioners' Motion to Compel Responses to Interrogatories filed January 19, 2023; • Grants in part petitioners' Motion to Compel Production of Documents filed
January 19, 2023; • Denies respondent's Motions to Overrule Objections to and Compel Deposition of Howard Brian Jackson, filed January 19, 2023; and
• Grants respondent's Motion to Enforce the Subpoena to Howard Brian Jackson, filed February 3, 2023.
Background
Neither party disputes the following facts, which the Court derives from the First Stipulation of Facts, filed January 10, 2023, the Petitions, and the Motion papers. The LLCs are Georgia limited liability companies that were treated at all relevant times as TEFRA partnerships for federal income tax purposes. This Order assumes, as petitioners claim, that the LLCs' principal places of business were in South Carolina when the Petitions were filed. See infra Discussion Part I.A (explaining that we draw all inferences in the light most favorable to the nonmoving party in resolving a motion for partial summary judgment).
For partnership tax years beginning before January 1, 2018, see Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 1101(a), 129 Stat. 584, 625, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. No. 97-428, §§ 401-407, 96 Stat. 324, 648-71, governs the tax treatment and audit procedures for certain partnerships, including the LLCs. References to any of sections 6221- 6234 pertain to the Code as it existed before the repeal of TEFRA.
I. Conservation Easement Claims
Each LLC was formed May 23, 2016, and received a tract of real property in Jones County, Georgia, from the H. Brian Jackson Farm Family Limited Partnership on September 12, 2016. Jackson North Investments, LLC (JN Investments), and Jackson South Investments, LLC (JS Investments), were formed as Georgia limited liability companies on September 13, 2016, and raised cash from the sale of membership interests, which they used to purchase 95% interests in JSN and JSS, respectively, on December 13, 2016. Three days later, the LLCs contributed conservation easements over their tracts of real property to the Oconee River Land Trust, Inc., an organization described in section 170(b)(1)(A)(vi).
Respondent's Motion for Partial Summary Judgment at ¶¶ 11 and 26 incorrectly suggests that the LLCs contributed the tracts in fee simple.
On Form 1065, U.S. Return of Partnership Income, for its partnership tax year ended December 31, 2016, each LLC claimed a $19,044,000 section 170(a) charitable contribution deduction for the easement it granted, purportedly based on an appraisal prepared by Dale W. Hayter, Jr., and listed Mr. Jackson as its tax matters partner (TMP). On December 19, 2018, Internal Revenue Service (IRS) Revenue Agent Anthony Bryant (RA Bryant), who examined the returns, received Forms 8822-B, Change of Address or Responsible Party-Business, purporting to change the LLCs' addresses to a location in South Carolina. On July 15, 2019, RA
Bryant received statements (Certifications) in which Mr. Jackson purported to certify his retirement as TMP and appointed JN Investments and JS Investments as successor TMPs for JSN and JSS, respectively, for their partnership tax years in issue. See Treas. Reg. § 301.6231(a)(7)-1(d). The Certifications used the new South Carolina addresses for JSN and JSS.
II. Examination of the Returns
On July 9, 2020, the IRS issued to each LLC multiple FPAAs. Among those FPAAs, each LLC was sent two FPAAs to that LLC's address listed on its Form 1065 for the partnership tax year ending December 31, 2016: one addressed to Mr. Jackson as TMP and one addressed to "Tax Matters Partner of" the LLC. In addition, each LLC was sent two FPAAs to the LLC's purported new South Carolina address: one addressed to Mr. Jackson as TMP and one addressed to "Tax Matters Partner of" the LLC.
Each FPAA reduced the LLC's claimed charitable contribution by $19,044,000 on the ground that the LLC did not establish that it "made a noncash charitable contribution during the tax year ended December 31, 2016," or that it satisfied the requirements of section 170 and the corresponding regulations for deducting a noncash charitable contribution. Underpayments resulting from this adjustment, the FPAAs continued, "are attributable to a gross valuation misstatement" and subject to section 6662(h) 40% accuracy-related penalties. Alternatively, each FPAA asserted section 6662A penalties of 20% of the understatements arising from the adjustment, which it said were attributable to a transaction described in Notice 2017-10, 2017-4 I.R.B. 544, 545 (§ 2), a section 6707A(c) listed transaction. As a further alternative, each FPAA asserted a section 6662(a) accuracy-related penalty of 20% of the underpayments arising from the adjustment, which it said were attributable to section 6662(c) negligence or disregard of rules or regulations, section 6662(d) substantial understatements of income tax, and section 6662(e) substantial valuation misstatements. To the extent the section 6664(c) reasonable cause defense or any other defense to the penalties could apply, each FPAA concluded, neither the LLC nor its partners have established that any such defense precludes the asserted penalties.
Margaret M. McCarter asserts in her Declaration in support of respondent's Motion for Partial Summary Judgment that she was RA Bryant's immediate supervisor during the examinations and that RA Bryant made the initial determinations of the penalties asserted in the FPAAs. She adds that on October 28 and November 12, 2019, she personally approved such initial determinations by signing Civil Penalty Approval Forms as to JSN and JSS, respectively. The Stipulation includes copies of both forms, which bear her dated electronic signatures.
III. Tax Court Proceedings
Petitioners sought readjustment of the claimed deductions in this Court on October 15, 2020. See § 6226(a)(1).
A. Discovery by Petitioner
1. Interrogatories
In the disputed interrogatories, petitioners inquired as to respondent's bases for denying allegations including the following:
• The Commissioner has made no determination that the easements did not meet any of the four conservation purposes described in section 170(h)(4);
• Mr. Hayter was, at the time of the appraisals, a qualified appraiser as defined in section 170(f)(11)(E) and Treasury Regulation § 1.170A-13(c)(5);
• The appraisals performed by Mr. Hayter and used as the basis for the charitable contribution deductions at issue were qualified appraisals as defined in section 170(f)(11)(E) and Treasury Regulation § 170A-13(c)(3);
• The conservation easements restrict in perpetuity the uses that may be made of the properties; and
• The conservation easements conveyed to Oconee the right to preserve and protect the property in perpetuity. See § 170(h)(2)(C).
Petitioners served written interrogatories on December 12, 2022, and respondent provided his answers on January 11, 2023. See Rule 71. In answer to interrogatories asking respondent to explain the basis of the foregoing denials, respondent promised to set forth his legal position on these issues in his pretrial memorandum. Indeed, respondent's Pretrial Memorandum, which he timely filed February 6, 2023, sets forth his arguments on these issues under the headings "ISSUE 1" and "ISSUE 3."
2. Document Requests
Petitioners also seek to compel the production of documents as specified in their Motion to Compel Production of Documents, filed January 19, 2023, attaching Petitioners' First Request for Production of Documents and Petitioners' Second Request for Production of Documents. Respondent responded to petitioners' Motion on February 22, 2023, detailing respondent's position on completed items, ongoing efforts, and objections.
Among other items, petitioners have requested that respondent "produce the Designation to Act or Notification of Personnel Action (SF-50) for Margaret McCarter to serve as Supervisory Internal Revenue Agent in the Small Business/Self-Employed (SB/SE) division of the IRS with regard to" JSN and JSS.
B. Discovery by Respondent
1. Mr. Jackson
Respondent sent a notice of deposition for Mr. Jackson to his and petitioners' counsel on December 30, 2022, and both objected on January 18, 2023. See Rule 74(a). Mr. Jackson had already refused a consensual deposition and an informal, transcribed interview. The notice scheduled the deposition for January 23, 2023, and directed Mr. Jackson to produce certain documents. Respondent demanded substantially similar documents from Mr. Jackson in a subpoena duces tecum issued January 6, 2023, to which neither Mr. Jackson nor petitioners have properly objected. At a subpoena hearing on February 1, 2023, Mr. Jackson's counsel asserted that Mr. Jackson did not retain the documents at issue after he resigned as TMP.
2. Investor Interviews
Respondent's counsel has conducted and might continue to conduct interviews with investors who purchased membership interests in JN Investments and JS Investments.
Discussion
I. Respondent's Motion for Partial Summary Judgment
A. Summary Judgment Standard
The purpose of summary judgment is to expedite litigation and avoid costly and unnecessary trials. FPL Grp., Inc. & Subs. v. Commissioner, 116 T.C. 73, 74 (2001). We shall grant a motion for partial summary judgment regarding an issue when there is no genuine dispute of material fact and a decision may be rendered as a matter of law. Rule 121(b); Elec. Arts, Inc. & Subs. v. Commissioner, 118 T.C. 226, 238 (2002). We construe the facts and draw all inferences in the light most favorable to the nonmoving party to decide whether partial summary judgment is appropriate. Sundstrand Corp. & Consol. Subs. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). The nonmoving party may not rest upon the mere allegations or denials in its pleadings but must set forth specific facts showing there is a genuine dispute for trial. Rule 121(d); Sundstrand, 98 T.C. at 520.
B. Validity of the FPAAs
Respondent's Motion asks us to hold that the FPAAs issued in both cases are valid. Petitioners object on the following grounds:
1. Issued to TMPs
Section 6223(a) requires the IRS to mail the FPAA to the TMP, defined in section 6231(a)(7). Petitioners assert that the FPAAs are invalid because the IRS issued them to Mr. Jackson as TMP instead of JN Investments and JS Investments, which succeeded Mr. Jackson as TMPs. Petitioners abandon this argument in their Objection to Respondent's Motion for Partial Summary Judgment filed December 5, 2022 (Objection to MPSJ), and the argument fails in any event. An FPAA is treated as mailed to the TMP if mailed to "THE TAX MATTERS PARTNER" at the address of the partnership provided on the partnership return, unless the address is updated as provided in the regulations. See Treas. Reg. § 301.6223(a)-1(a)(1); see also Triangle Inv'rs Ltd. P'ship v. Commissioner, 95 T.C. 610, 614 (1990). Here, respondent mailed generic FPAAs to the "Tax Matters Partner" of both LLCs at the addresses on Forms 1065 for the partnership tax years ending December 31, 2016. Assuming arguendo respondent was required to mail the FPAAs to the addresses listed on Forms 8822-B, we reach the same conclusion because generic FPAAs were mailed to the "Tax Matters Partner" of both LLCs at the LLCs' South Carolina addresses listed on the Certifications and Forms 8822-B.
Section 6223(a) refers to the "Secretary" rather than the IRS, and section 7701(a)(11)(B) defines "Secretary" as the Secretary of the Treasury or his delegate. The Secretary of the Treasury has delegated to the Commissioner responsibility for the administration and enforcement of the internal revenue laws. Treas. Order 150-10 (Apr. 22, 1982).
The issuance of additional copies of the FPAAs that named Mr. Jackson, even if he was no longer the TMP of either LLC, does not invalidate the FPAAs sent to the generic "Tax Matters Partner." See Berkshire 2006-5, LLP v. Commissioner, T.C. Memo. 2016-25, at *8.
2. No Valuation
Petitioners' Objection to MPSJ argues that the FPAAs are invalid because they lack "specific allegations of fact and/or the application of fact to law such that the proffered determination is arbitrary, capricious, and clearly erroneous." Petitioners point out that the FPAAs failed to value the conservation easements and argue, based on Scar v. Commissioner, 814 F.2d 1363, 1369 (9th Cir. 1987), rev'g 81 T.C. 855 (1983), that they therefore lack a "factual basis" for the assertion of valuation misstatement penalties. Even if the Court denies the deductions "based on the technical requirements of Section 170," the Objection to MPSJ explains, it still must value the conservation easements to determine whether a section 6662 valuation misstatement penalty applies. See RERI Holdings I, LLC v. Commissioner, 149 T.C. 1, 21 (2017), aff'd sub nom., Blau v. Commissioner, 924 F.3d 1261 (D.C. Cir. 2019).
The U.S. Court of Appeals for the Ninth Circuit framed the issue in Scar as "whether a form letter that asserts that a deficiency has been determined, which letter and its attachments make it patently obvious that no determination has in fact been made, satisfies the statutory mandate." Id. at 1367. The Court "conclude[d] that the Commissioner must consider information that relates to a particular taxpayer before it can be said that the Commissioner has 'determined' a 'deficiency' in respect to that taxpayer." Id. at 1368. In Scar, the purported notice revealed that no determination had been made. Id. at 1370.
We decline to delve into the applicability and legacy of Scar because, even if Scar were binding on the Court in this case, it would not dictate the result. An FPAA, like a notice of deficiency, should notify the affected taxpayers that the IRS has "made a final administrative determination for particular tax years." See Clovis I v. Commissioner, 88 T.C. 980, 982 (1987). The FPAAs sent to the LLCs do this. Each explains that the IRS reduced by $19,044,000 the charitable contribution claimed on the return for the partnership tax year ended December 31, 2016, because the LLC did not establish that it made a noncash charitable contribution during such year or satisfied the statutory and regulatory requirements for deducting such contribution. By asserting 40% accuracy-related penalties to the full extent of the underpayments resulting from the claimed deductions, the IRS implicitly asserted a zero value for the easements. We conclude that there are no disputes of material fact with respect to this issue and that the FPAAs are valid.
The Golsen rule does not apply because the Ninth Circuit is not the appellate venue for these cases. See infra note 7.
C. Supervisory Approval of Penalties
Section 6751(b) prohibits the assessment of any penalty under the Code "unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination."Respondent's Motion asks us to hold that the IRS complied with section 6751(b) as to the penalties proposed in the FPAAs, and petitioners object on the following grounds:
Respondent denies for lack of knowledge or information petitioners' allegation that the LLCs' principal places of business were in South Carolina when the Petitions were filed, and therefore maintains that the appellate venue for these cases may be the U.S. Court of Appeals for the Eleventh Circuit. See § 7482(b)(1)(E). The Eleventh Circuit has held that section 6751(b) generally does not require supervisory approval at any particular time before assessment. Kroner v. Commissioner, 48 F.4th 1272, 1278 (11th Cir. 2022), rev'g in part T.C. Memo. 2020-73. Respondent acknowledges that, if petitioners' allegation is true, the appellate venue for these cases generally would be the U.S. Court of Appeals for the Fourth Circuit, which has no such precedent. See Golsen v. Commissioner, 54 T.C. 742, 757 (1970) (holding that the Tax Court will follow a Court of Appeals decision which is squarely on point where appeal from our decision lies to that Court of Appeals alone), aff'd, 445 F.2d 985 (10th Cir. 1971). As noted supra, therefore, we assume in resolving respondent's Motion that petitioners' factual allegation is correct.
1. IRS News Release IR-2019-182
The same day Ms. McCarter claims to have approved RA Bryant's initial determination of the penalties asserted against JSS, the IRS announced that it would "develop and assert all appropriate penalties" in cases involving syndicated conservation easement transactions, "including penalties for participants (40 percent accuracy-related penalty)." IRS News Release IR-2019-182, 2019 WL 6001189 (Nov. 12, 2019). Petitioners argue that the quoted language is a section 6751(b) "initial determination" of penalties requiring supervisory approval, which RA Bryant did not timely obtain as to JSS.
2. Remaining Disputes of Material Fact
Petitioners further argue that respondent failed to show compliance with section 6751(b) because he "did not prove there was no dispute of material fact as to (1) whether Margaret McCarter was [RA] Bryant's immediate supervisor; (2) how and when Ms. McCarter approved [RA] Bryant's determination to assert penalties; and (3) whether the electronic signature on the Civil Penalty Approval Form demonstrates that a document was signed by a particular individual at a certain time in the absence of other more reliable forms of proof." Such assertions are not specific facts showing there is a genuine dispute for trial. See supra Discussion Part I.A (explaining the summary judgment standard). Nevertheless, and including because of our ruling on petitioners' Motion to Compel Production of Documents infra, we conclude that genuine disputes of material fact may remain.
II. Petitioners' Discovery Motions
A. Motion for Protective Order
Rule 103(a) provides that upon motion "by a party or any other affected person, and for good cause shown, the Court may make any order which justice requires to protect a party or other person from annoyance, embarrassment, oppression, or undue burden or expense." Petitioners ask the Court to issue a Rule 103(a) protective order prohibiting respondent from contacting or interviewing investors in JN Investments and JS Investments. Respondent filed an Objection to Motion for Protective Order Pursuant to Rule 103 and a supporting Memorandum on February 10, 2023. We agree with respondent and will deny petitioners' motion.
Generally speaking, informal requests for information or interviews "are not subject to restriction under Rule 103" because they "do not fall within our discovery procedures." Fu Inv. Co. v. Commissioner, 104 T.C. 408, 410 (1995). For this case in particular, we note that petitioners' counsel do not claim to represent the investors (who can seek their own protective orders as affected persons) or that the investors supervise, direct, or regularly consult with petitioners' counsel regarding these cases. See Rule 103(a); Model Rules of Pro. Conduct R. 4.2; see also, e.g., Grandbouche v. Commissioner, 99 T.C. 604, 610-14 (1992) (granting a nonparty's Rule 103(a) motion for protective order). We further note petitioners' statement that the investors are "non-managing members" who "have no authority to bind the partnership."
B. Motion to Compel Responses to Interrogatories
Rule 71(b) provides that answers to interrogatories "shall be made . . . as completely as the answering party's information shall permit" subject to the requirement that the answering party "make reasonable inquiry and ascertain readily obtainable information." The interrogatories must be answered "fully under oath." Rule 71(c).
In the disputed interrogatories, petitioners inquired as to respondent's bases for denying allegations including the following:
• The Commissioner has made no determination that the easements did not meet any of the four conservation purposes described in section 170(h)(4);
• Mr. Hayter was, at the time of the appraisals, a qualified appraiser as defined in section 170(f)(11)(E) and Treasury Regulation § 1.170A-13(c)(5);
• The appraisals performed by Mr. Hayter and used as the basis for the charitable contribution deductions at issue were qualified appraisals as defined in section 170(f)(11)(E) and Treasury Regulation § 170A-13(c)(3);
• The conservation easements restrict in perpetuity the uses that may be made of the properties; and
• The conservation easements conveyed to Oconee the right to preserve and protect the property in perpetuity. See § 170(h)(2)(C).Many of respondent's answers generally stated that discovery was ongoing, respondent's pretrial memorandum would state their legal position, respondent had hired an expert witness and would send the expert witness' report at the specified date, and/or that the answer could be found in Form 886-A, Explanation of Items, included in the administrative file.
We will deny the motion to compel as to these interrogatories. Contention interrogatories, as were propounded here, are within the bounds of discovery, serving to clarify and narrow the issues in dispute. See, e.g., Zaentz v. Commissioner, 73 T.C. 469, 477-78 (1979); Rule 70(b). We agree that respondent's answers were general and were not given under oath. We understood, however, respondent's answers to say that he had not yet completed discovery, had not received final reports from experts, and had not finalized his position on certain issues. Since that time, respondent's pretrial memorandum has been filed and expert reports and rebuttal reports have been lodged. As a result, petitioners have received the answers they sought.
C. Motion to Compel Production of Documents
Petitioners "seek information and documents related to Respondent's legal and factual position in order to prepare for trial," and allege that respondent "consistently did not meet their [sic] discovery obligations." Respondent says that he is now in compliance with his discovery obligations, particularly with respect to the many items addressed in petitioners' Motion relating to Electronic Discovery Requests (EDR). As of the time respondent filed his response, he had been providing EDR to petitioners "on a rolling basis"; he had provided five batches of documents, and planned to imminently provide a sixth batch of EDR and an updated privilege log. Respondent further stated that "[i]n addition to the EDR responses, respondent sent flash drives to petitioners on February 3, 2023 and February 16, 2023 containing all documents received through February 14, 2023 from third parties through respondent's informal and formal discovery. Respondent will continue to provide documents not stipulated to petitioners on a rolling basis." We are satisfied that respondent generally is meeting his obligations.
Respondent did not, however, "produce the Designation to Act or Notification of Personnel Action (SF-50) for Margaret McCarter to serve as Supervisory Internal Revenue Agent in the Small Business/Self-Employed (SB/SE) division of the IRS with regard to" JSN and JSS. Respondent stated that he "objected to these requests on the grounds they were unduly burdensome and seek personnel information. Moreover, during the examination, petitioners' counsel interacted with Ms. McCarter in her official capacity as a Supervisory Internal Revenue Agent, including by letter dated March 13, 2019." Respondent also stated, more generally, that "[d]ocuments that involve an IRS agent's and manager's thought processes goes behind the statutory notice of deficiency and because Tax Court proceedings are de novo, such documents are not relevant and not reasonably calculated to lead to the discovery."
We do not see how compliance with this request would be unduly burdensome, and we expect that petitioners' request relates to whether Ms. McCarter was an immediate supervisor for the purpose of section 6751(b). Accordingly, we will grant petitioner's Motion only in that respondent is to provide a Designation to Act or Notification of Personnel Action (SF-50) for Ms. McCarter or else any other documentation supporting respondent's position that Ms. McCarter was an immediate supervisor for the purpose of section 6751(b).
III. Respondent's Motions to Overrule Objections to and Compel Deposition of Mr. Jackson and to Enforce Subpoena
A. Motions to Overrule Objections to and Compel Deposition of Mr. Jackson
We will deny respondent's Motions to compel the deposition of Mr. Jackson pursuant to Rule 74(c), which provides that the taking of a deposition of a nonparty witness without the other party's consent is "an extraordinary method of discovery." In determining whether a particular case warrants such method, we weigh factors including (1) whether the movant has established "a specific and compelling basis" for the deposition, seeking "specific and precise factual information essential to [the movant's] case"; (2) whether the movant intends the deposition to serve as more than a substitute for cross-examination at trial; and (3) whether the movant has had prior opportunities to obtain the desired information or could obtain it through other means or from another source. See K&M La Botica Pharmacy, Inc. v. Commissioner, T.C. Memo. 2001-33, at *8-10.
None of these factors favors granting respondent's Motion. Respondent does not set forth the specific and precise factual information essential to his case that he would obtain from Mr. Jackson, alluding only to petitioners' incomplete discovery responses. Respondent's Pretrial Memorandum says he expects to call Mr. Jackson as a witness at trial, and his Motion does not explain why he cannot obtain the information through Rule 71 interrogatories. See Rule 74(c)(1)(B).
B. Motion to Enforce Subpoena
Mr. Jackson was duly served with a valid subpoena on January 6, 2023. Mr. Jackson did not properly respond to the subpoena. The Court held a hearing on February 1, 2023, at which Mr. Jackson's counsel appeared and stated that, when Mr. Jackson was no longer the TMP of either LLC, "everything he had went to the Tax Matters Partner, and he had no records left, no emails."
Rule 147(b) provides that a "subpoena may also command the person to whom it is directed to produce the books, papers, documents, electronically stored information, or tangible things designated therein, and may specify the form or forms in which electronically stored information is to be produced." It further provides that "[t]he Court, upon motion made promptly and in any event at or before the time specified in the subpoena for compliance therewith, may (1) quash or modify the subpoena if it is unreasonable and oppressive, or (2) condition denial of the motion upon the advancement by the person in whose behalf the subpoena is issued of the reasonable cost of producing the books, papers, documents, electronically stored information, or tangible things." No such motion was filed.
Whether to quash or modify a subpoena lies within the Court's discretion. See Grandbouche v. Commissioner, 99 T.C. 604, 617 (1992); Amazon v. Commissioner, T.C. Memo. 2014-245, at *8. In exercising this discretion, the Court must balance the burden upon the subpoenaed party against the value of the information to the serving party. See Durkin v. Commissioner, 87 T.C.1329, 1401-1403 (1986), aff'd 872 F.2d 1271 (7th Cir. 1989); Amazon v. Commissioner, supra at *8-9. Given Mr. Jackson's role in these transactions, the documents sought by respondent are or may be relevant to this case. Petitioner has not formally responded to the subpoena or filed a motion to quash or modify the subpoena. We will grant respondent's motion in that we will direct Mr. Jackson to promptly respond to the subpoena by producing any responsive documents to the parties within two business days of receipt of this Order or certifying that he has no responsive documents.
Upon due consideration, it is
ORDERED that Respondent's Motion for Partial Summary Judgment filed November 3, 2022, is granted in part, i.e., as to the validity of the FPAAs, but denied in all other respects. It is further
ORDERED that petitioners' Motion for Protective Order Pursuant to Rule 103 filed January 17, 2023, is denied. It is further
ORDERED that petitioners' Motion to Compel Responses to Interrogatories filed January 19, 2023, is denied. It is further
ORDERED that petitioners' Motion to Compel Production of Documents filed January 19, 2023, is granted in that respondent is to provide a Designation to Act or Notification of Personnel Action (SF-50) for Ms. McCarter or else any other documentation supporting respondent's position that Ms. McCarter was an immediate supervisor for the purpose of section 6751(b). Petitioners' Motion to Compel Production of Documents is denied in all other respects. It is further
ORDERED that respondent's Motion to Overrule Howard Brian Jackson's Objections to and Compel Deposition of Howard Brian Jackson filed January 19, 2023, is denied. It is further
ORDERED that respondent's Motion to Overrule Petitioners' Objections to and Compel Deposition of Howard Brian Jackson filed January 19, 2023, is denied. It is further
ORDERED that respondent's Motion to Enforce the Subpoena to Howard Brian Jackson filed February 3, 2023, is granted in that Mr. Jackson shall promptly respond to the subpoena by producing any responsive documents to the parties within two business days of receipt of this Order or certifying that, after diligent search, he has no responsive documents. It is further
ORDERED that, upon receipt of this Order, respondent provide a copy of it to Mr. S. Fenn Little, Esq., Counsel for Mr. Howard Brian Jackson. It is further
ORDERED that, in addition to regular service on the parties, the Clerk of the Court serve a copy of this Order on Mr. S. Fenn Little, Esq., Counsel for Mr. Howard Brian Jackson, 1490 Mecaslin St., NW, Atlanta, GA 30309.