Free Joint Status Report - District Court of Federal Claims - federal

Case 1:05-cv-00296-FMA

Document 55

Filed 07/07/2006

Page 1 of 3

IN THE UNITED STATES COURT OF FEDERAL CLAIMS GRAPEVINE IMPORTS, LTD., a Texas Limited Partnership, T-TECH, INC., a Texas Corporation as Tax Matters Partner Plaintiffs, v. United States of America, Defendant. § § § § § § § § § § § § §

Case No. 05-296T Judge Francis M. Allegra

JOINT STATUS REPORT AND PROPOSED SCHEDULE The parties to this case hereby file this joint status report and proposed schedule as ordered by this Court in its opinion issued June 14, 2006 (the "Opinion") and in connection therewith show the Court as follows: 1. The parties have each had the opportunity to review the Opinion and also recently discussed this case via a telephone conference on Tuesday, June 27, 2006. The parties agree that the Court should schedule a hearing where the parties can present evidence related to the 6-year limitations period. Before setting a final schedule governing that hearing, however, the parties ask the Court to schedule a telephonic conference where the court can give guidance on the evidentiary hearing's scope. The parties want to address every issue of concern to the Court, but they want to avoid going beyond those concerns at this stage of the proceeding. In particular, the parties would like further guidance on two issues: · Scope of Expert Testimony ­ The United States proposes that any expert testimony should be limited to two areas: (1) describing the form of the underlying transactions; and (2) explaining how the relevant tax returns report those transactions. No expert should be allowed to opine on the ultimate
Page 1

Case 1:05-cv-00296-FMA

Document 55

Filed 07/07/2006

Page 2 of 3

issues for this Court's determination: whether the returns omit income and whether the returns adequately disclose omitted income. Plaintiffs disagree with government's position that the experts should not be allowed to opine on the ultimate issues before the court. See Fed. R. Evid. 704(a). · Scope of Other Factual Evidence ­ The United States proposes that the hearing's other evidence should be limited to the relevant tax returns and any other evidence that helps describe the form of the underlying transactions. Evidence of any documentation provided to the IRS outside of the tax returns is irrelevant and should not be considered. In addition, Plaintiffs believe that evidence relating to the IRS's knowledge of transactions similar to the ones before the court is relevant to the determination of whether the tax returns adequately disclosed omitted income, if any. 2. Subject to changes prompted by any guidance received on the above issues, the parties propose the following tentative schedule: · Expert Designation ­ The parties are in agreement that the parties will require approximately 2 months for each to designate one or more expert witnesses that will testify at the evidentiary hearing and that expert witnesses should therefore be designated on or before August 31, 2006. · Expert Reports ­ The parties also agree that expert reports should be completed and presented to the other party on or before September 29, 2006. · Expert Depositions ­ The parties agree further that depositions of the expert witnesses should occur on or before October 31, 2006. · Pre-Hearing Designations and Motions ­ The parties agree to designate all hearing exhibits and file any pre-hearing briefs or motions by December 22,

Page 2

Case 1:05-cv-00296-FMA

Document 55

Filed 07/07/2006

Page 3 of 3

2006. The Parties will also provide the Court with an estimate of the time they believe will be needed to present their evidence. · Hearing Date ­ The parties therefore request that the evidentiary hearing be scheduled no sooner than January 15, 2007. · Other Discovery ­ Other than discovery related to the statue of limitations issue, the parties agree not to conduct any factual discovery without first obtaining the Court's permission. Respectfully submitted, FOR PLAINTIFFS FOR DEFENDANT _

/s/ M. Todd Welty _ /s/ Grover Hartt, III M. Todd Welty GROVER HARTT, III Josh O. Ungerman Attorney of Record David E. Colmenero Tax Division MEADOWS, OWENS, COLLIER, REED, U.S. Department of Justice COUSINS & BLAU, L.L.P. 717 N. Hardwood, Suite 400 901 Main Street Dallas, Texas 75201 Suite 3700 (214) 880-9721 (Main) Dallas, TX 75202 (214) 880-9741 (Fax) (214) 744-3700 Telephone EILEEN J. O'CONNOR (214) 747-3732 Facsimile Assistant Attorney General [email protected] DAVID D. GUSTAFSON [email protected] Chief, Court of Fed. Claims Section CHRISTOPHER R. EGAN DAVID R. HOUSE July 7, 2006 Of Counsel

ATTORNEYS FOR THE UNITED STATES July 7, 2006

339939

Page 3