Court Opinion

ID: 4484528
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:48.565695+00
Date Added: 2024-06-11T08:49:14.657215
License: Public Domain

Dawson, J., concurring: I concur both in the result of this case and in the analysis of the majority opinion. I disagree with the dissent that the Court’s holding will operate as a trap for "unwary taxpayers” against whom the fraud penalty has been alleged by the Commissioner. I think our Rules preclude the possibility that the addition to tax for fraud will be imposed by default against a petitioner who indicates, however inartfully, that respondent should be put to his proof. Under Rule 37(c), respondent’s affirmative allegations of fraud are deemed denied in the absence of a reply. The petitioner is thus protected against his or her own inaction. However, respondent can move for an order that the undenied allegations be deemed admitted. Under Rule 21(a), such a motion must be served on the petitioner. The usual Rule 37(c) motion is not incomprehensible to the average petitioner. At the very least, it intuitively alerts him to the fact that respondent contemplates action adverse to his interest. Such alert should elicit some protective response. In any event, the Court does not automatically grant a Rule 37(c) motion but sends the petitioner a notice setting it for hearing. The notice expressly provides that respondent’s motion will be denied if a reply is filed on or before the hearing date. The petitioner who chooses not to do so can still protect his interest by appearing at the hearing. If this is inconvenient, Rule 50(c) provides for the submission of a written statement. The petitioner is clearly advised of this provision in the notice setting the motion for hearing. Thus far, the petitioner has been given a number of opportunities to deny respondent’s affirmative allegations. The simplicity of so doing, and thereby putting respondent to his proof of fraud at a later stage of the case, cannot be overstated. All the petitioner needs to do is deny those allegations.11 do not think it is asking too much to require this to be done. After all, it is the taxpayer who files a petition with this Court requesting to be heard. By so doing, he assumes certain responsibilities the discharge of which requires some measure of participation in the judicial process and a good-faith effort to comply with the Court’s rules. Even the granting of a Rule 37(c) motion does not mean that the fraud penalty will be automatically imposed on the petitioner. Respondent must still affirmatively move for judgment, either by written motion before trial or orally at trial, with respect thereto. Again the petitioner is given notice and the opportunity to be heard. If he wanted to deny fraud at that juncture, the Court could, if justice required, exercisé its discretion by vacating the Rule 37(c) order and permit a belated reply. The petitioner, here, was afforded several opportunities to be heard. All he had to do was to say in so many words: "I deny respondent’s affirmative allegations of fraud.” This would have been sufficient to put respondent to his proof with respect to fraud. Instead, he repeatedly chose to remain silent.2 Under these circumstances I see no unfairness in the action we have taken in this case. Finally, I do not share the dissent’s concern that our holding may encourage respondent to more freely allege fraud or to plead it with less particularity. Given the ease with which a petitioner can deny respondent’s affirmative allegations, and thus put him to his proof, respondent would be ill advised to allege fraud with the hope that a petitioner would default. Similarly, if respondent attempted to plead fraud only in a conclusory manner, the Court would probably look favorably on a petitioner’s motion for a more definite statement or a motion dispositive of the fraud issue. Fay, Simpson, Hall, Wiles, Wilbur, and Parker, JJ., agree with this concurring opinion.  Under Rule 31(b), no technical form of pleading is required, and under Rule 31(d), all pleadings are to be construed as to do substantial justice.   I do not know why petitioner chose this course of action. However, I seriously doubt that he was either intimidated by being before this Court or without some knowledge of the judicial process, because an aspect of this matter involving the enforcement of an administrative summons was previously litigated in the U.S. District Court and the Court of Appeals. See United States v. Freedom Church, 613 F.2d 316 (1st Cir. 1979).