Opinion ID: 603772
Heading Depth: 3
Heading Rank: 3

Heading: Liability of Barrister Associates for Fees Received From

Text: 73 Limited Partnerships of Which it was Not the General Partner 74 Barrister Associates next contends that the penalty assessment should not have been based on $125,000 in general partner's fees attributed to Barrister Equipment Associates Series 122 and 129, because Barrister Associates was not the general partner of those two limited partnerships and thus did not receive income from them. According to Barrister Associates, another entity, Barrister Associates, Inc., which is not a party to the present action, acted as general partner of the two partnerships and received the general partner's fees from those limited partnerships. Thus, Barrister Associates concludes, the $125,000 in revenues should have been excluded from the assessment against it. 75 Because the district judge concluded that this issue related to the amount of the penalty, rather than to Barrister Associates' liability as a promoter of abusive tax shelters, he held that Barrister Associates bore the burden of proving that it did not receive the general partner's fees in question. See In re Tax Refund Litigation, 766 F.Supp. at 1259-60. Barrister Associates takes issue with this allocation of the burden of proof, and argues that, because this question concerns Barrister Associates' liability for organizing and promoting Barrister Equipment Associates Series 122 and 129, the government had to prove Barrister Associates received the pertinent general partner's fees by clear and convincing evidence. 4 We disagree. 76 Had this matter been tried with regard to each limited partnership, we might well be inclined to find this issue to be one of liability rather than damages. However, under the procedural ground rules agreed to by the parties, the government had no obligation to prove that Barrister Associates, or any of the other appellants, had violated Section 6700 with respect to the organization and promotion of each of the ninety-five limited partnerships. Rather, the government had to show only that Barrister Associates had engaged in activities prohibited by Section 6700 with respect to any of the six representative limited partnerships, which did not include either Series 122 or 129. All remaining questions went to the size of the penalty, and the government was entitled to a presumption that its assessment of the penalties was correct. See Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 9, 78 L.Ed. 212 (1933). Barrister Associates thus had the burden of proving that it was not the general partner of Barrister Equipment Associates Series 122 and 129. 77 The district court found that Barrister Associates had not met this burden. In re Tax Refund Litigation, 766 F.Supp. at 1259-60. This finding was not clearly erroneous. See Fed.R.Civ.P. 52(b). Specifically, the court relied on Form 1065 partnership tax returns and the attached Schedules K-1 filed by the two limited partnerships for the fiscal years ending October 31, 1983 and October 31, 1984, that indicated that the general partner of the two limited partnerships was itself a partnership called either Barrister Associates or Barrister Associates, Inc. The court also relied on the fact the lease agreements and service agreements entered into by the two limited partnerships were signed Paul Belloff, General Partner of Barrister Associates, the General Partner. See In re Tax Refund Litigation, 766 F.Supp. at 1259-60. Barrister Associates does not dispute the content of these documents but argues that they were not admitted into evidence. Again, we disagree. 78 Appellants signed a pretrial order stipulating to the authenticity of these documents and their admissibility, reserving only the right to object under Fed.R.Evid. 403. Appellants do make an argument based on Rule 403, and we perceive no prejudice to appellants from Chief Judge Platt's deeming them to be part of the record. 79