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Correction: I incorrectly stated that the motion for immunity was filed by the expert witnesses.  In fact, it was filed by the petitioner.  That correction may not seem like much of a difference but it signals a different motivation for filing the motion.  Petitioners want the testimony of the expert witnesses rather than having them take the 5th which would send a terrible signal about their reports.  Even though petitioner’s attorney must have known their motion had almost no chance of success, they signaled their desire to have the court hear it.

In an order entered on September 22, 2022, in Oconee Landing Property LLC, et al v. Commissioner, Dk. No. 11814-19 the Tax Court denied the request of a partnership litigating a conservation easement case seeking to have the Tax Court grant immunity to two witnesses who prepared the appraisals of the easements at issue in the case.  The Court also declined to find that the appraisals were qualified appraisals.  I don’t remember seeing a request to the Tax Court that it grant immunity to witnesses previously but it has happened which is why the Court could dispose of this request by order rather than through a precedential opinion – more on that below.  The request does not signal strength and confidence in the appraisals.  It’s hard to imagine a better way to cast doubt on the quality of an appraisal than to have the appraiser assert a constitutional privilege against incrimination rather than talk about the appraisal.


The case is set for trial in mid-November before Judge Lauber who seems to be working pretty hard for an old guy now on senior status.  He has a three week special trial session in the Fumo case I have blogged on many occasions here, here, here, here, here and here which began on October 3 in Philadelphia and another special trial session in the Oconee case in November.  Without going too far off on a tangent about the Fumo case, I do want to mention that I first blogged on this case on October 8, 2013, as it began its now almost decade long journey in the Tax Court.  Since the Fumo case involves a jeopardy assessment, the length of its visit to the Tax Court has fascinated me.  When it got assigned to Judge Lauber a year or two ago I knew we were closing in on the end but even the speedy and hard-working Judge Lauber could not swiftly bring the Fumo case to a conclusion.

In November of 2021, Judge Lauber issued an order in the Oconee case compelling the depositions of non-party witnesses Thomas F. Wingard and Martin H. Van Sant – the appraisers in the case who gave the supporting appraisals for the conservation easement claimed in the case.  The Order states that:

When they were asked any questions referring to “syndicated conservation easements,” their counsel invoked their Fifth Amendment privilege against self-incrimination and instructed them not to answer.

On July 29, 2022, the IRS filed a motion to compel the appraisers to answer the questions on which they had claimed a Fifth Amendment privilege.  Following the motion the Court held an informal conference with the parties and the appraisers’ counsel.

We informed deponents’ counsel that we would have overruled most (if not all) of his objections based on the Fifth Amendment because the questions asked seemed anodyne and appeared to create no “real danger” of self-incrimination. Rodgers v. United States, 340 U.S. 367, 374 (1951).

Instead of ordering a second round of depositions, Judge Lauber directed the IRS to send the appraisers up to 45 written questions and to frame the questions in a factual manner in order to minimize their Fifth Amendment concerns.

We directed Messrs. Wingard and Van Sant to answer these questions under penalties of perjury within 14 days of their counsel’s receipt of the written questions. We noted that if the Fifth Amendment privilege was claimed as to any question, deponents’ counsel would need to supply a detailed explanation laying out the ground for the claim, cognizant that the Fifth Amendment only protects against real dangers, and not remote or speculative possibilities. Zicarelli v. N.J. State Comm’n, 406 U.S. 472 (1972).

Before answering the written questions, the appraisers’ counsel sent a letter to the IRS:

requesting that respondent: (1) advise whether Messrs. Wingard and Van Sant are the subjects or targets of an ongoing criminal investigation, (2) take steps to ensure that Messrs. Wingard and Van Sant are granted immunity from prosecution relating to their testimony in this case, or (3) enter a stipulation granting Messrs. Wingard and Van Sant immunity. According to petitioner, respondent’s counsel declined these requests and served the 45 questions.

Then the appraiser’s counsel filed a Motion to Compel Immunization of Third-Party Witnesses with the Tax Court in the Oconee case asking the Tax Court to grant these witnesses immunity since the IRS would not do so.  The IRS responded to that motion arguing that the Tax Court lacks jurisdiction to grant witness immunity or to order the IRS to do so.  The Tax Court agreed with the IRS.

It is well established that this Court lacks jurisdiction to grant criminal immunity to a witness who may be called to testify before the Tax Court. This power resides solely with the U.S. District Courts and only upon the request of the U.S. Attorney for the applicable district. 18 U.S.C. §§6001-6003; see, e.g., Coulter v. Commissioner, 82 T.C. 580, 583 (1984) (finding that “the Tax Court is not authorized to grant immunity” to a taxpayer); Hartman v. Commissioner, 65 T.C. 542, 547 (1975) (denying a taxpayer’s request for immunity “since jurisdiction to take such action is vested exclusively in the United States District Courts, and then only upon application of a United States Attorney”); Reynolds v. Commissioner, T.C. Memo. 1981-364, 42 T.C.M. (CCH) 395, 397 (holding that a taxpayer’s request that we grant him immunity “is spurious since jurisdiction to take such action is vested exclusively in the U.S. District Courts, and then only upon application of a U.S. Attorney”). It is equally well established that this Court lacks jurisdiction to compel the IRS to seek an order of immunity for a witness. See Hartman, 65 T.C. at 547-48; Hershberger v. Commissioner, T.C. Memo. 1979-522 (finding that a taxpayer’s request that the Tax Court order the IRS to grant him transactional immunity was baseless). This Court has no “inherent authority” to confer immunity on a witness. Such discretionary power is statutorily reserved to the Executive Branch and is available to neither the Tax Court nor U.S. district courts (absent an application from a U.S. Attorney). See 18 U.S.C. §§ 6001-6005.

This paragraph sums up the well-established state of the law.  I am a bit surprised that the appraisers asked the Tax Court to grant them immunity given this background.  I am not surprised that they might be nervous about the appraisals they provided for a conservation easement but they made a business decision some time ago for which they are now facing the consequences.

Probably because they knew that their chances of success on the motion to compel immunization were low, they tossed in another Hail Mary and asked the Tax Court in the alternative to find that the appraisal they prepared was a “qualified appraisal” prepared by “qualified appraisers” as those terms are used in IRC 170(f)(11)(A) & (E).  The Court declined to rule on this and said wait for trial.  I have a feeling that the trial may not end the way they hope but I know nothing about the case.

The order shows the limitation of the Tax Court’s powers when it comes to granting immunity.  In a case like this it makes sense for the IRS to prefer that the appraisers take the 5th rather than granting them immunity and having them actually answer the questions.  Taking the 5th is not a good look for the quality of the work they performed.

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