Free Motion for Extension of Time - District Court of Federal Claims - federal

Case 1:05-cv-00576-FMA

Document 10

Filed 11/01/2005

Page 1 of 3

IN THE UNITED STATES COURT OF FEDERAL CLAIMS No. 05-576 T (Judge Allegra) ________________________

PRESTOP HOLDINGS, LLC, JL INVESTMENT TRUST, JOHN M. LARSON, GRANTOR/TRUSTEE, TAX MATTERS PARTNER FILING AS NOTICE PARTNER, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. __________________________ DEFENDANT'S MOTION TO EXTEND TIME FOR FILING THE JOINT PRELIMINARY STATUS REPORT __________________________ Pursuant to Rule 6(b) of the Rules of the Court of Federal Claims, the defendant respectfully moves for a 27-day extension for filing the Joint Preliminary Status Report from November 3, 2005, to November 30, 2005. Plaintiff's counsel has no objection to the requested 27-day extension. This is the second extension requested for this purpose, the first being for 10 days. The defendant requests the extension in order to permit the Department of Justice to determine whether to seek a stay of this case pending the motion to stay being filed in the case of Presidio Advisors, LLC, Norvest Ltd. v. United States, Fed. Cl. No. 05-411 T, in which the named plaintiff here, John M. Larson, is the principal of a named party. The motion to stay in Presidio Advisors is being filed on November 1, 2005.

-1-

935995.1

Case 1:05-cv-00576-FMA

Document 10

Filed 11/01/2005

Page 2 of 3

In support of this motion, the defendant states the following: 1. As stated in the previous motion to extend, on August 29, 2005, the named plaintiff in this case, John M. Larson, and Robert Pfaff, who was the other partner in Prestop through his grantor trust, were indicted in the United States District Court for the Southern District of New York, along with seventeen others, for conspiracy to defraud the Internal Revenue Service, evade taxes, and file false returns in connection with their design, marketing and implementation of illegal tax shelters. Stein, 05 Cr. 888 (S.D.N.Y. August 29, 2005). In addition, on October 17, 2005, a Superseding Indictment was filed against John M. Larson and Robert Pfaff, along with 17 others, in which Larson and Pfaff were indicted for conspiracy to defraud the Internal Revenue Service, evade taxes, and file false returns in connection with their design, marketing and implementation of illegal tax shelters, as well as using the illegal tax shelters to evade their own taxes. Stein, S1 05 Cr. 888 (S.D.N.Y. October 29, 2005). 2. The partnership in this TEFRA proceeding used a tax shelter to offset income from other transactions so that the income was not properly reported on plaintiff Larson's tax return. According to the Superseding Indictment, Larson and others created entities, such as the ones in this case, to execute tax shelter transactions and to conceal the tax shelter and the resultant use of losses produced by the shelter. 3. Because the partnership items involved in this proceeding flow through to the individual returns of Larson and Pfaff, the Tax Division of the Department of Justice is coordinating with the United States Attorneys office for the Southern District of New York with respect to filing a motion for stay in this case on the grounds that discovery case may interfere with the criminal investigation described above.

-2-

935995.1

Case 1:05-cv-00576-FMA

Document 10

Filed 11/01/2005

Page 3 of 3

4. On November 1, 2005, the United States filed a motion for stay in this Court in the case of Presidio Advisors, LLC, Norvest Ltd. v. United States, Fed. Cl. No. 05-411 T. In that case John Larson and Robert Pfaff are the two principals of Presidio Advisors. The grounds for the motion to stay that case are that proceeding with the case will interfere with the criminal case in the Southern District of New York. The plaintiffs' response to that motion is due November 14, 2005. 5. The extension of time for filing the JPSR is requested pending the decision on the motion to stay filed in the Presidio Advisors described above. WHEREFORE, the defendant prays that its motion to extend the due date for filing the JPSR be granted. Respectfully submitted, November 1, 2005 s/David R. House DAVID R. HOUSE Attorney of Record U.S. Department of Justice - Tax Division Court of Federal Claims Section Post Office Box 26 Ben Franklin Station Washington, D.C. 20044 (202) 616-3366 EILEEN J. O'CONNOR Assistant Attorney General DAVID GUSTAFSON Acting Chief Of Counsel

-3-

935995.1