Free Motion to Amend Pleadings - Rule 15 - District Court of Federal Claims - federal

Case 1:05-cv-00231-EJD

Document 95

Filed 07/17/2007

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS No. 05-231 T (Chief Judge Damich) ______________________________ JZ Buckingham Investments LLC as Tax Matters Partner of JBJZ Partners, a South Carolina general partnership, Plaintiff, v. United States of America, Defendant.

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UNITED STATES' MOTION FOR LEAVE TO AMEND ANSWER TO ASSERT COUNTERCLAIM FOR PENALTIES Pursuant to RCFC 15(a), the United States of America hereby moves, based upon newly discovered evidence, for leave to amend its answer to assert a counterclaim for accuracy-related penalties. Penalties were not previously asserted in this matter because the partners, Jerry Zucker and James Boyd, had entered into an agreement with the IRS under IRS Announcement 2002-2, under which the IRS had agreed not to assert penalties against the partners in exchange for their agreement to make a full disclosure of any requested information concerning their tax shelter transactions. It has recently been discovered by the United States that Zucker and Boyd not only withheld relevant documents from the Internal Revenue Service but also made false statements to the Internal Revenue Service in their disclosure statements signed under penalties of perjury, in material breach of their disclosure obligations under IRS Announcement 2002-2. Some of the

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Case 1:05-cv-00231-EJD

Document 95

Filed 07/17/2007

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documents not disclosed were also not timely produced by plaintiff in response to the United States' discovery requests in this litigation. Based upon this newly discovered information and because the partnership in this litigation, JBJZ Partners, is clearly liable for accuracy related penalties under 26 U.S.C. § 6662 for its participation in the COBRA tax shelter, the United States seeks leave to amend its answer to assert a counterclaim for penalties. On July 16, 2007, counsel for the United States requested plaintiff's concurrence in this motion and Plaintiff's counsel advised that it does not concur. A proposed order granting this motion is being filed herewith, to which is attached a proposed Second Amended Answer and Counterclaim for Penalties.

Respectfully submitted,

s/ Dennis M. Donohue DENNIS M. DONOHUE Attorney of Record Chief Senior Litigation Counsel U.S. Department of Justice - Tax Division Post Office Box 403 Ben Franklin Station Washington, D.C. 20044 (202) 307-6492

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Case 1:05-cv-00231-EJD

Document 95

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CERTIFICATE OF SERVICE I hereby certify that on July 17, 2007, I electronically filed the foregoing Reply Memorandum with the Clerk of the Court using the ECF system which will send notification of such filing to the following: Joel N. Crouch Texas State Bar No. 05144220 Meadows, Collier, Reed Cousins & Blau, L.L.P. 901 Main Street, Suite 3700 Dallas, Texas 75202 s/ David M. Steiner David M. Steiner Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 55 Ben Franklin Station Washington, D.C. 20044 (202) 307-5892

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