Thompson v. Comm'r of Internal Revenue, 8792-20

CourtUnited States Tax Court
Writing for the CourtAlbert G. Lauber, Judge
Docket Number8792-20
Decision Date21 November 2022



No. 8792-20

United States Tax Court

November 21, 2022


Albert G. Lauber, Judge

This conservation easement case is calendared for trial at a special session of the Court beginning on August 28, 2023, in Atlanta, Georgia. On September 28, 2022, petitioner filed a Motion to Compel Discovery, to which the Internal Revenue Service (IRS or respondent) responded. In its Motion petitioner continues its quest to challenge the reasonableness of the IRS's penalty and/or deficiency determinations on the theory that the IRS did not secure a formal appraisal of the easement (or secured an inadequate appraisal) before making those determinations.

Petitioner's Motion to Compel seeks two items of information. In its second request for production of documents, petitioner asked respondent to produce "copies of any and all appraisals the [IRS] obtained or relied upon to value the Conservation Easement" before filing its answer to the petition. In its second set of interrogatories petitioner asked respondent to identify all IRS employees who may have received any such appraisal and the dates of any such receipt.

This is not our first encounter with this subject. In April 2021 respondent filed a motion for partial summary judgment contending (among other things) that the IRS had secured timely supervisory approval for penalties first asserted in the answer to the petition. See § 6751(b)(1).[1] In its Objection to the motion petitioner contended that supervisory approval of those penalties, even if timely secured, was inadequate because the IRS "ha[d] not attempted to determine value of the easement." According to petitioner, "discovery in this case reveals there was no attempt [by the IRS] to determine the actual value of the property" before it determined the penalties.


Petitioner thus urged that approval of the penalties, even if timely secured, "cannot have been the result of meaningful review by either the attorney asserting the penalty or the supervisor who review[ed] and approve[ed] his work."

In an Opinion served July 20, 2022, we granted partial summary judgment for respondent on this point. See Thompson v. Commissioner, T.C. Memo. 2022-80. As we said there: "We have repeatedly rejected any suggestion that a penalty approval form or other document must 'demonstrate the depth or comprehensiveness of the supervisor's review.' Belair Woods, 154 T.C. at...

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