Case 1:06-cv-00245-EJD
Document 63-2
Filed 05/16/2008
Page 1 of 4
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
Nos. 06-245T, 06-246T, and 06-247T (Consolidated)
MURF AM FARMS, LLC, §
By and Through Wendell H. Murphy, Jr., §
a Partner Other Than Tax Matters Partner, §
By and Through Stratton K. Murphy, §
§
PSM FARMS, LLC, §
§
a Partner Other Than Tax Matters Partner, §
MURPHY PORK PARTNERS, LLC §
By and Through Wendell H. Murphy, Jr. §
a Partner Other Than Tax Matters Partner, §
~ §
Exhibit 1
Plaintiffs, §
§ § § §
UNITED STATES OF AMERICA, §
Defendant. §
APPENDIX
Reply Declaration of David Steiner In Support of United States' Motion To Exclude The Expert Report and Testimony of Melvin F. Jager.
Pages 001-003
Exhibit 2
Declaration of A. Lawrence Kolbe" May 16,2008.
Pages 004-014
-lV-
Case 1:06-cv-00245-EJD
Document 63-2
Filed 05/16/2008
Page 2 of 4
IN THE UNITED STATES COURT OF FEDERAL CLAIMS
Nos. 06-245T, 06-246T, and 06-247T (Consolidated)
MURFAM FARMS, LLC, §
By and Through Wendell H. Murphy, Jr., §
a Partner Other Than Tax Matters Partner, §
PSM FARMS, LLC, §
By and Through Stratton K. Murphy, §
§
§
a Partner Other Than Tax Matters Partner, §
MURPHY PORK PARTNERS, LLC §
By and Through Wendell H. Murphy, Jr. §
a Partner Other Than Tax Matters Partner, §
v. §
Plaintiffs, §
§ §
§ §
UNITED STATES OF AMERICA, §
Defendant. §
REPL Y DECLARATION OF DAVID M. STEINER IN SUPPORT OF UNITED STATES' MOTION TO EXCLUDE THE EXPERT TESTIMONY OF MELVIN F. JAGER
DA VID M. STEINER, an attorney duly admitted to practice before this Court, hereby declares, pursuant to 28 U.S.c. § 1746, as follows:
1. I am a trial attorney at the United States Department of Justice anù am one of the
attorneys responsible for defending the interests of submit this declaration in support of Report and Testimony of
the United States in this matter. I the United States' Motion to Exclude the Expert Melvin F. Jager.
i¡
l GOVERNMENT'S
3283610.1
~ 1
¡j
; EXHIBIT
001
Case 1:06-cv-00245-EJD
Document 63-2
Filed 05/16/2008
Page 3 of 4
2. Pursuant to the Court's order of
May 17,2007, the parties exehanged expert reports on June 1,2007. Plaintiffs did not, at that time, serve the United States with any report by Melvin F. Jager.
3. On June 1,2007, the United States served Plaintiffs with three expert witness reports prepared, respectively, by David DeRosa, Ph.D., Lawrenee Kolbe, Ph.D., and David LaRue, Ph.D. None of these reports dealt with the question of whether the COBRA tax
shelter constituted any kind of intellectual propert.
4. The United States requested Dr. DeRosa to give his expert opinion on the following
subjects of
the COBRA transaction:
a. Were the offsetting options correctly prieed?
b. Was there any possibility that the long options owned by the Paricipants and the
Partnerships could be exercised without the offsetting options held short by the
Paricipants and the Partnership also being exereised?
e. Viewing the transactions objectively, did the offsetting options provide the Parterships with a reasonable possibility of achieving a non-tax profit?
d. Whether eaeh offsetting option the Participants purchased, sold, or contributed to the Parnerships represented a component element of a single transaction structure?
e. Does an analysis of the hedging transactions done by Deutsche Bank support the
single transaction opinion?
f. Did the Paricipants achicve any non-tax business purpose in eontributing the
offsetting options to the Parnerships, and did the Partnerships have any non-tax
business purose?
I, David M. Steiner, declare under penalty of perjury that the foregoing is true and correct. Exeeuted on May 16, 2008.
sl David M. Steiner DAVID M. STEINER Trial Attorney, Tax Division U.S. Department of Justice Post Offce Box 55
Ben Franlin Station Washington, D.C. 20044
Telephone: (202) 307-5892
2
3283610.1
002
Case 1:06-cv-00245-EJD
Document 63-2
Filed 05/16/2008
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CERTIFICATE OF SERVICE
I hereby certify that on May 1 ei, 2008, I electronically filed the foregoing Reply Declaration
with the Clerk of the Court using the ECF system which will send notification of such filing to the
following:
Joel N. Croueh Texas State Bar No. 05144220 Meadows, Collier, Reed Cousins & Blau, L.L.P. 901 Main Street, Suite 3700 Dallas, Texas 75202
sl David M. Steiner David M. Steiner Trial Attorney, Tax Division u.s. Deparment ofJustice
Post Offce Box SS
Ben Franklin Station Washington, D.C. 20044 (202) 307-5892
3
3283610.1
003