Fifth Circuit Sides With Eleventh Circuit and Taxpayer in Lisle, Orders Tax Court to Adopt Special Trial Judge's Report
The Tax Prof Blog is reporting that on Monday the 5th Circuit sided with the 11th Circuit and the taxpayer in the long-running Ballard - Kanter - Lisle saga in Lisle v. Commissioner, No. 07-60862 (Consolidated with 07-60863 & 07-60864) (5th Cir. Aug. 25, 2008):
In this appeal, unlike the first, we have the benefit of the fact findings and conclusions of the Special Trial Judge that were rejected by the Tax Court and obscured in the first appeal. With the benefit of a complete record, our equivocal findings in the first appeal, and the findings of the Eleventh Circuit in the appeal of the related case affecting taxpayer Ballard, Ballard v. Commr, 522 F.3d 1229 (11th Cir. 2008) (Ballard III), we conclude that the Tax Court reviewing the report of the Special Trial Judge failed to give due regard to the factfindings of the trial judge and erred in issuing a judgment contrary to those findings. Accordingly, for the reasons set forth below, we vacate the Tax Courts judgment as to the Lisles and remand with instructions to issue a final order adopting the Special Trial Judges report.