holding that deemed admissions under Rule 37(c) are sufficient to satisfy the government's burden of proof with respect to the issue of fraud
How later courts described this case
- holding that deemed admissions under Rule 37(c) are sufficient to satisfy the government's burden of proof with respect to the issue of fraud
- observing that "Nothing * * * dictates that we should require respondent to present affirmative evidence of fraud, independent of the deemed admissions." (fn. ref. omitted)
- In applying sec. 6653(b) for the taxpayer's 1976 tax year, we stated that "Nothing * * * dictates that we should require respondent to present affirmative evidence of fraud, independent of the deemed admissions." (Fn. ref. omitted.)
- noting that deemed admissions under Rule 37(c) are sufficient to satisfy respondent's burden of proving fraud
Written by the judges who cited it.
The opinion
Goffe, J., dissenting: I respectfully dissent. I would not apply such a broad construction to the Court’s Rules so as to automatically impose the fraud penalty on unwary taxpayers.
While I do not favor applying our Rules in pro se cases differently than in cases where the taxpayers are represented, I feel that the lack of knowledge and understanding of our Rules by pro se taxpayers is so widespread that we are compelled to extend ourselves to protect the rights of all petitioners, whether represented or not, even if it might be more judicially efficient not to do so.
At the outset, let me say that I do not champion the cause of a taxpayer who files a petition in this Court and then fails to respond to any request for admissions, interrogatories, notice to produce, or other discovery method. Whether ignorant of the Rules or not, a taxpayer should make a goo;d-faith effort to cooperate with respondent and the Court. Thé opinion of the majority will, however, result in the imposition of the fraud penalty against taxpayers who have never seen a copy of our Rules and taxpayers who have seen them but do not understand them.
Petitioner plunged into the procedural pitfall in this case by his failure to object to respondent’s motion that the allegations of fraud in the answer be deemed admitted and because of petitioner’s failure to file a reply denying thbse allegations. The order setting respondent’s motion for hearing indicated the hearing would be in Washington, D.C. (petitioner presumably resides in the Boston, Mass., area where the case was set for trial). Respondent’s motion was expressed in the usual "legalese” which is not very informative to a layman, i.e., "that the undenied allegations in paragraph 7(a) through 7(i) of the answer be deemed admitted.”
The majority also refers to Rule 90 which provides for "Request for Admissions.” A request for admissions (as well as a notice to produce and request for interrogatories) is initiated by respondent independently of the Court. Upon the failure of petitioner to respond, the Court is asked to get into the act. Again, a pro se taxpayer might naturally be wary of such a procedure without a full understanding of our Rules and their objectives.
I would limit the application of our Rules to admissions of fact only. Subparagraphs (h) and (i) of paragraph 7 of respondent’s answer were not allegations of fact but, instead, were allegations of ultimate facts which are mixed questions of law and fact. Pure questions of fact, as distinguished from ultimate facts or mixed questions of law and fact, are accorded different standards of review on appeal. See Edwards v. Commissioner, 415 F.2d 578 (10th Cir. 1969), revg. 50 T.C. 220 (1968).
The holding of the majority may encourage some of the Commissioner’s agents to adopt an overly relaxed attitude toward the amount of factual foundation which ought to be included in the fraud allegations to which a petitioner is required to reply under our Rules. I would prefer to require the Commissioner to prove fraud in all cases. If sufficient facts (basic facts not ultimate facts) are not admitted by the pleadings, there is no great expenditure of time involved in presenting respondent’s evidence to the Court.
I conclude that we should continue to protect the rights of all taxpayers in fraud cases by weighing all of the evidentiary facts adduced to prove fraud instead of permitting the fraud penalty to be imposed by default.
Chabot and Ekman, JJ., agree with this dissenting opinion.