the morning of the month council we have a tax case here damn it's dealing with two specific years at issue and i just want to make sure that the court and everybody focus on these two years for these and titties because there is a lot of documents on the record that deal with five different entities and three separate years so the two parties we have integrity engineering and if they're pack sure that enzo eleven thirty of a way and then we have mr or mrs congo with their texture and twelve thirty one a b it's undisputed in this case that at the time the commissioner issued the statutory notice of deficiency to these two entities for these two years it was beyond the three year statute limitations commissioner has conceded that that's undisputed so when the petitioners alleged in their petition that they were barred by the statute of limitations the commissioners that the petitioners met their prima facia case and met their burden by submitting into evidence the tax returns along with that you're going to notice that  it's that then shifted the burden to the commissioner and the commissioner then have the burden to say i know mind statutory no sufficiency is late but here's why i get out and what the commissioner typically does a situation like this introduced into evidence a form eight seventy two which is a unilateral waiver it's consent form well the form eight seventy two that the commissioners made in this case in the commissioners all concession is utterly meaningless it makes no sense it contains years that are not the taxable years at issue in this matter now the commissioner in his pleading didn't say anything about these forms rather said we have valid forms valid on their face that extend the period for assessment well that is not the case so what they happen is this case goes to trial and at trial the commissioner through its council says you know what these forms the result the mutual mistake please reform them now i'm stressing to the court that it's commissioner's counsel who makes this argument and the reason why i stress that is because there was no testimony in this for trial commissioner failed to put anybody on the stand to say i drafted the form eight seventy two i made this mistake this is where the mistake is this is what we really intended to be on the document this is why it should be reformed there is nothing there is no testimony there is no pleading there's nothing at all except an argument on the day of trial that this form which is conceded to be utterly meaningless is the result of a mutual mistake and witness in this matter he's a party to that document they failed to call him as a witness just like they failed to call their own person who drafted that document as a witness all these facts as to why was this drafted the way it was why did it contain this data why was it signed that could have all been answered had the commissioner taken why instep to try to meet its burden because the burden had shifted and it shifted from the petitioners to the commissioner who wants to tax returns and the notice of the efficiency was entered into evidence seems to me the best evidence for the government is probably the negotiations continuing after the score was soon respect to the two thousand and eight tax years  let's understand of those facts or dispute the negotiations we know and what happened there ya know was according to the record back in two thousand and ten was the first time correspondence occurred between petitioners and responded however the way the record reads that was for integris two thousand and seven tax year the two thousand and eight tax year which is the actual tax year at issue that does not come into play in the record in till february of two thousand and twelve after the form eight seventy two at issue has already been executed when in that february letter from the commissioner to the petitioners that says you know here's what we believe your tax should be that came out april fifteenth two thousand and twelve the petitioners did on february twenty seventh submit a document to the commissioner asking for administrative review and it's essentially a protest petition now that protest was for five entities for three taxable years and it was on the merits and that is the key here it was on the merits for all three years it had nothing to do with procedure no obligation on behalf of the petitioners to say by the way the  statue imitations has ran rather it's a merit based case and it was for tax year zero eight zero nine ten so the fact that the merits are the same for zero eight as they are for all nine as they are for ten why wouldn't the petitioner include it to try to be done with the commission at that point so we get to trial then and we have the commissioner make the argument that there's mutual mistake well in order could mutual mistake it has to be clear and convincing evidence to the court that the parties have an actual mutual mistake in the document there was no evidence of a mutual mistake other than the document doesn't make sense i don't disagree that the document doesn't make sense it's a bad document it was drafted in error but does that mean it's a mutual mistake the commissioner did not even put its own agent on the stand who drafted the document or its own agent on the stand who signed the document to say this is the mistake this is what it should have been this is what i intended it to be instead we're left to play a guessing game oh let's not throw at me if there's no absolutely no logical reason in the world is there for either the consul's of their company or mr bastion twelve there's no logical reason on the planet way nobody would have signed that if they thought it was for that year right i think there's nothing in the record that says is that the only mistake i mean i agree the doctrine makes no sense i agree it's a bad document but to simply say as the tax court did because you signed a form eight seventy two i'm going to say that you intended to waive a statute of limitations and we're just going to go with the one that's ever whatever is closest i mean are there other errors on that why is the december thirty first deadline why is that not in there there's just no evidence in the record i think it's fair to say that the point the parties were in  i think that would be a fair assumption but i stress the word assumption because there's nothing in the record to support that use the term mike my question really goes to whether the taxpayers had an obligation to point out s regime and the case law holds just the opposite that the commissioner when they're relying on a document they have an obligation to to be careful in what they do and that a taxpayer is on a no obligation to correct the mistakes of the commissioner because they are an arm of government i have a duty to be responsible just as if i committed an error on my income tax return it's a bit if it's an innocent error are still responsible for it they can say well you know it's just a major mistake you please reform it and not have penalties in this specific scenarios which say well i'm not i can't say for sure that's what happened in this particular scenario but one might read these facts to look that way in the way the case law reads is that the petitioner is under no obligation to correct the commissioner not to the extent the petitioner did something in furtherance to make the commission or to take action in reliance upon the alleged error that's going on well then the commissioner may demand against the petitioner because a petition is actual actions this is not us that will argue the case this is the mutual mistake in the reformation i know my lights on and the one thing that i did want to stress is it's a two step process with the major mistake first fighting each mistake and then finding are there enough overt acts in the record to show the true intent of the parties there are no overt acts in the record to show the intent of the commissioner in this case or the intent of the petitioners sheet that's in the record shows that as of june thirtieth of two thousand and twelve they did not i believe that they had a valid extension the statue imitations again the commissioner failed to present any witnesses to testify as to why that document said what it said intended the agreements to extend the time to assess tax for two thousand and eight those findings are not clearly erroneous to the contrary they are supported by substantial evidence in the record that evidence starts with the agreements themselves as written those agreements purport to extend the time to assess tax for tax periods that do not exist and as written those agreements would not actually effectuate the extension of any assessment period and as both tax court and the fifth accuracy related penalty against these tax payers i mean your honor nothing has been assessed assessed technically assessed yet because the assessment period is suspended while the litigation continues but yes there is an accuracy this was she intended to do simply else as opposed to just saying look some of these made a mistake if the heir us this is a meaningless document all signed it is harmless your honor that evidence begins with the particular i'm trying to understand what evidence there is with respect to the tax payers intention regarding the signature on the mistaken form your honor it's undisputed that taxpayers representative who signed these forms is an attorney procedure and law and the dates listed on these forms are three years after the day when the taxpayers returns for tax year two thousand and eight would normally be due which is to say the day on which the assessment period for two thousand and eight would end these mistaking the dates mistakenly entered on the forms therefore have a direct connection that taxpayers representative would have recognized to tax year two thousand and eight and no connection at all to any other tax lawyers  speculation as compared to actually putting some evidence on suits you've got an adversarial relationship why would it be reasonable for even an experienced tax advocate to say what they read a mistake they've asked me to sign meaningless document it's harmless to do so your honor it's not speculation it's an inference from the particular mistake on the form and there's no requirement in mutual mistake cases that the party asserting mutual mistake provide live testimony as to the parties any witnesses but in the words case in which the tax court first established its own authority to reform contracts that case also involved a form eight seventy two a extension agreement in the tax court found purely on the basis of circumstantial evidence largely consisting of the sole fact that the forms referred to an entity that had no relationship to the tax payer which the individual taxpayer in that case owned a similarly named ent show mutual mistake well your honor the sixth circuit in the hanover insurance case in the context of a commercial general liability policy held that circumstantial evidence concerning the fact that the question was whether that policy suit me the question of whether that policy had an exclusion for professional liability claims there was no exclusion in the plain language of the policy of the insurer claim to mutual mistake and the sixth circuit upheld the jury verdict of mutual mistake over a judge motion for judgment as a matter of law on the grounds that the insured had a separate professional liability policy so why are you going to circumvent your wee stretching one why the effort to stretch the law so far here  case and it was only the assessment period for year two thousand and eight that was drawing to a close when the i r s requested taxpayers to sign the extension agreements furthermore the protest letter which taxpayers referred to in their argument could have included procedure like you means it could have raised a statute of limitations argument if tax payers believed that the extension forms had not applied to tax year two thousand and eight if they had not intended those forms to apply for tax year two thousand and eight they would have believed that they had a perfectly good waterproof argument that at the time they sent the protest letter integra engineering could no longer be assessed with tax for tax year two thousand and eight and yet they chose not to raise that argument in their protest letter so the timing of the audit the agreement itself the course of negotiations following the signing of the forms that continued to refer to tax your two thousand and eight and the protest letter all give rise to a very strong in that both the i r s and tax payers intended these agreements to apply to two thousand and eight moreover if the agreements were not intended to apply to two thousand and eight the question becomes what assessment period they were intended to apply to and there's no reason at administratively chichen the record that she pertains to another entity owned been controlled by craig council that entity signed a form eight seventy two a extension agreement that contains a precisely analogous mistake and the lead sheet for this entity reflects that the assessment period for two thousand and eight had been extend so we're doing so there are lots of mistakes so where do we find this this is in the the other lead lead sheet that you say was correct no your honor because these agreements contain a mutual mistake and the taxpayers returns it's undisputed on appeal satisfy the requirements for accuracy related penalty if there are no further questions i'll finish that thank