Free Motion for Partial Summary Judgment - District Court of Federal Claims - federal

Case 1:05-cv-00999-MMS

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No. 05-999 T (Judge Margaret Sweeney)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS

EPSOLON LIMITED, BY AND THROUGH SLIGO (2000) COMPANY, INC., TAX MATTERS PARTNER,

Plaintiff
v.

THE UNITED STATES,

Defendant

DECLARATION OF JOHN LINDQUIST

EILEEN 1. O'CONNOR Assistant Attorney General

DAVID GUSTAFSON DAVID R. HOUSE Attorneys Justice Department (Tax) Court of Federal Claims Section P.O. Box 26

Ben Franlin Post Offce
Washington. D.C. 20044 (202) 616-3366

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Page
T ABLE OF CONTENTS

Declaration of John Lindquist .................................................. 1

Exhibits
1

Description
A true and correct copy of States Cour for the Northern District of

the Cour Order issued by United
Ilinois, granting

leave for IRS to serve a John Doe Summons upon Sidley Austin.
2.
3.
A true and corrected copy of

the "John Doe" summons.

True and corrected copy ofletter dated October 27,2003, provided by Sidley Austin with some the identities of the paricipants in the
described transaction.

4.

A true and corrected copy of petition filed in the United States
v. Sidley Austin Brown & Wood LLP, No.03-9355 (USDC N.D. IlL.)

to enforce the "John Doe" summons.
5.

Court's Order informing Sidley Austin Brown & Wood to follow the procedures in connection with
True and corrected copy of petitioner's application for enforcement of

the Joh Doe Summons.

6.

A true and corrected copies of redacted letters from John Linguanti of Baker & McKenzie to Sidley Austin.
True and corrected copy of

7.

Court's Agreement Order dated

February 6, 2004.
8.

True and corrected copy of "Motion to Intervene.

9.

True and corrected copy of "Motion to Withdraw Motion to Intervene and Motion for Protective Order."

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TABLE OF CONTENTS (Continuation)
10.

True and corrected copy of Judgment granting United States' Petition to enforce the "John Doe" summons.
True and corrected copy of

11.

Court's Order staying the Court's

April 28, 2004, Order.
12.

True and corrected copy of redacted e-mail from Austin Sidley To John Lindquist.

13.

Redacted true and corrected copy of Sidley Austin's supplemental production.

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IN THE UNTED STATES COURT OF FEDERAL CLAIS
(Judge Sweeney)

No. 05-999 T
EPSOLON LIMITED, by and through SLIGO (2000) COMPANY, INe., Tax Matters Partner,
Plaintiff,
v.

THE UNTED STATES OF AMERICA,
Defendant.

DECLARTION OF JOHN LINQUIST

I, John A. Lindquist, pursuant to 28 U.S.e. § 1746, declare as follows:
1. I am a Trial Attorney with the U.S. Department of Justice, employed in the Tax

Division, Northern Region, with a post of duty at Washington, D.e.
2. As part of my duties as a tral attorney with the Tax Division, I was responsible for

obtaining authorization for service by the IRS of a "John Doe" summons upon Sidley Austin
Brown & Wood, LLP (now known as Sidley Austin, LLP) ("Sidley Austin"). As part of

my

duties, I was also assigned to enforce the "John Doe" summons.
3. On October 14,2003, the United States District Court for the Northern District of

Ilinois, issued an order granting leave for the IRS to serve a John Doe summons upon Sidley
Austin. A true and correct copy of the Court Order is attached as Exhibit 1.
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4. On October 15,2003, the IRS served a "John Doe" summons upon Sidley Austin (the

"John Doe" summons). A true and correct copy ofthe "John Doe" summons is attached as
Exhibit 2.

5. As set forth in the rider to "John Doe" summons, attached hereto as Exhibit 2, the
summons required Sidley Austin to produce:

the name, address and taxpayer identification number for each United States
taxpayer who, durng any par of the period Januar 1, 1996 through October 15,

2003, participated in a transaction which was or later became a 'listed transaction'

or other 'potentially abusive tax shelter' organized or sold by the law firm of Sidley Austin Brown & Wood LLP and its predecessor Brown & Wood LLP.
6. By letter dated October 27,2003, Sidley Austin provided the Service with the
identities of some, but not all, of the paricipants in the described transactions. Sidley Austin
represented that it was withholding the identities of

those who had either failed to consent or their identities pursuant to the "John Doe" summons.

refused to consent to its disclosure of

Tucker's identity was not among the identities revealed by Sidley Austin to the IRS in its letter
dated October 27,2003. A true and correct copy of

that letter is attached as Exhibit 3.

7. On December 27,2004, I filed a petition on behalf of

the United States to enforce the
that petition that I filed in United States v.

"John Doe" summons. A true and correct copy of

Sidley Austin Brown & Wood LLP, No. 03-9355 (USDC N.D. Il.)("the Court") is attached as
Exhibit 4.
8. On January 14, 2004, the Court ordered Sidley Austin to give its clients who were
subject to the "John Doe" summons until Januar 23,2004, to advise Sidley Austin of

their

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intention to assert that their identities were protected by privileges. 1 A true and correct copy of

that Order is attached as Exhibit 5.
9. Pursuant to the Order attached as Exhibit 5, Sidley Austin was also directed to

provide copies of all such letters it received to the United States, with client names redacted. See
Order attached as Exhibit 5.

10. Pursuant to the Order attached as Exhibit 5, the United States received multiple
redacted letters from Sidley Austin, including two letters dated Januar 22,2004, from Thomas
Linguanti of Baker & McKenzie. True and correct copies of

these two letters are attached as

Exhibit 6.
11. On February 6, 2004, the Court issued an Order pursuant to which all persons who
objected to the disclosure of

their identities to the Internal Revenue Service ("Service") would be

permitted to intervene in the summons enforcement proceeding. A true and correct copy of that
Order is attached as Exhibit 7.
12. Pursuant to the Februar 6,2004 Order, a motion to intervene was fied on February

26, 2004, by Baker & McKenzie on behalf of two clients whom it identified as "Baker Doe 1"
and "Baker Doe 2." A copy of

the Motion to Intervene is attached as Exhibit 8.

13. On April 14, 2004, "Baker Doe 1" and Baker Doe 2" fied a Motion to Withdraw
their Motion to Intervene in the summons enforcement action. A true and correct copy of that
Motion is attached as Exhibit 9.
14. At paragraph 4 of

the Motion attached as Exhibit 9, it was represented that the Baker

1 Although the Order referenced "clients" of Sidley Austin, the summons required

production of the identities of all U.S. taxpayers that had paricipated in the transactions specified in the "John Doe" summons.
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Does would "no longer be pursuing protection of their identities," and that counsel for the Does

had instructed counsel for Sidley Austin to provide the clients' names to the Governent if
Sidley Austin believed that the names were responsive to the John Doe Summons.
15. The motion to withdraw was granted on April

15, 2004.

16. Upon withdrawal of

the Baker Does' motion to intervene, I requested that counsel for

Sidley Austin turn over the identities of the Baker Does. In response to this request, counsel for
Sidley Austin apprised me that Sidley Austin would not turn over the identities of the Baker

Does to the Service without a court order or wrtten consent from the Baker Does.
17. Shortly thereafter, counsel for Sidley Austin informed me that Sidley Austin had

requested that counsel for the Baker Does provide Sidley Austin with wrtten consent to disclose
the summoned identities of

the Baker Does to the Service and that the Baker Does had refused to

provide Sidley Austin with written consent.
18. On Apri128, 2004, the Cour entered

judgment granting the United States' Petition to
that

enforce the "John Doe" summons. A copy of

judgment is attached as Exhibit 10.
28,

19. On April 30, 2004, the Court issued a fuher Order staying the Court's April

2004 order "for the period during which this proceeding remains pending, including all appeals,

including the period until all appeals are disposed of, or until expiration of the period in which all

appeals may be taken or a request for rehearing may be made." A copy of that Order is attached
as Exhibit 11.

20. On June 29,2004, after the expiration of

the period durng which an appeal from the

Cour's April 28, 2004 order could be taken under FRA 26(a), Sidley Austin sent me an e-mail
in which it represented that it was disclosing the "balance of the names and address of the
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interveners in the John Doe action," to which was attached a list which included the name "Keith
Tucker." A redacted tre and correct copy of

that email and list are attached as Exhibit 12.

21. In the list attached as Exhibit 12, Sidley Austin disclosed the name "Keith Tucker"

under the heading "Diversified - Spread Options," but did not disclose the identifying Social

Security Number for Keith Tucker. Nor did Sidley Austin disclose, at this time, the names and
identifying Employment Identification Numbers for any paricipating entities, including, but not

limited to, the controlled U.S. entities Sligo (2000) and Epso1on.

22. At that time, upon my inquiry, counsel for Sidley Austin represented to me that this

additional summoned information was not readily available because the New York offces of

Sidley Austin had been destroyed on September 11,2001. However, upon my demand, Sidley
Austin was subsequently able to recover the names of the paricipating entities from its retained
copies of the opinions which it had issued.

23. On March 3, 2005, counsel for Sidley Austin hand delivered to me a supplemental
response to the "John Doe" summons in which Sidley Austin for the first time identified the
names of

participating entities, including, but not limited to, the controlled U.S. entities Sligo

(2000) and Epsolon. A redacted true and correct copy of Sidley Austin's supplemental

production on March 3,2005, is attached as Exhibit 13.

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I declare under penalty of peijury that the foregoing is tre and correct. Executed in
Washington, D.C., on this 9th day of

May, 2006.

/' JOH, A. L QUIST
( Trjal Attorney, Tax Division,

Ir-

'-.S. Deparment of Justice

Post Offce Box 55 Ben Franlin Station Washington, DC 20044

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