Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:05-cv-00231-EJD

Document 172-2

Filed 05/16/2008

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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 Parners, a South Carolina general parnership,

Plaintiff,
v.

United States of America,
Defendant.

APPENDIX

Exhibit 1

Reply Declaration of David Steiner In Support of United States' Motion To Exclude The Expert Report and Testimony of Melvin F. Jager.
Declaration of A. Lawrence Kolbe, May 16,2008.

Pages 001-003

Exhibit 2

Pages 004-014

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS
No. 05-23 I T (Chief Judge Damich)

JZ Buckingham Investments LLC as Tax Matters Parner
of JBJZ Parters, a South Carolina general parership,

Plaintiff,
v.

United States of America,
Defendant.

REPL Y DECLARATION OF DAVID STEINER IN SUPPORT OF UNITED STATES' MOTION TO EXCLUDE THE EXPERT REPORT AND TESTIMONY OF MELVIN F. JAGER
DA VID M. STEINER, an attorney duly admitted to practice before this Cour, hereby declares, pursuant to 28 U.S.c. § i 746, as follows:
I. I am a trial attorney at the United States Deparment of Justice and am one of

the attorneys responsible for defending the interests of the United States in this matter. I submit this declaration in support ofthe United States' Motion to Exclude the Expert Report and Testimony of Melvin F. Jager.

2. Pursuant to the Court's order of

May 17,2007, the paries exchanged expert reports on June 1,2007. Plaintiff did not, at that time, serve the United States with any report by Melvin F. Jager.
with three expert witness reports

3. On June 1,2007, the United States served Plaintiff

prepared, respectively, by David DeRosa, Ph.D., Lawrence Kolbe, Ph.D., and David
LaRue, Ph.D. None of these reports dealt with the question of

shelter constituted any kind of intellectual propert.

whether the COBRA tax

4. The United States requested Dr. DeRosa to give his expert opinion on the following
subjects of

the COBRA transaction:
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a. Were the offsetting options correctly priced?
b. Was there any possibility that the long options owned by the Participants and the Parnership could be exercised without the offsetting options held short by the
Paricipants and the Parership also being exercised?

c. Viewing the transactions objectively, did the offsetting options provide the Parership with a reasonable possibility of achieving a non-tax profit?
d. Whether each offsetting option the Participants purchased, sold, or contributed to
the Parership 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 achieve any non-tax business purpose in contributing the

offsetting options to the Parnership, and did the Parnership have any non-tax
business purpose?

I, David M. Steiner, declare under penalty of perjury that the foregoing is true and correct. Executed on May 16, 2008.

sf David M. Steiner DAVID M. STEINER Trial Attorney, Tax Division U.S. Department of Justice Post Offce Box 55 Ben Franklin Station Washington, D.C. 20044 Telephone: (202) 307-5892

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CERTIFICATE OF SERVICE
I hereby certify that on May 1 ei, 2008, I electronically fied the foregoing Reply Declaration

with the Clerk of the Court using the ECF system which wil send notification of such filing to the
following:

Jocl N. Crouch Texas State Bar No. 05144220 Meadows, Collier, Reed Cousins & Blau, L.L.P. 901 Main Street, Suite 3700 Dallas, Texas 75202
sf David M. Steiner David M. Steiner Trial Attorney, Tax Division U.S. Deparment of Justice Post Offce Box 55

Ben Franlin Station
Washington, D.C. 20044 (202) 307-5892

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