The Liability-Offset Theory of Peracchi

SSRN Electronic Journal, 2015

C. opinion that has rejected the reasoning of a prior memorandum opinion."). 18 See infra Part II. See also, e.g., Bedrosian v. Commissioner, 143 T.C. No 4 (2014) (relying on various Memo opinions which previously held that pass-thru partners under Section 6231(a)(9) include disregarded entities, consistent with the IRS's conclusion Rev. Rul. 2004-88). That conclusion is highly questionable. See Alice G. Abreu, Paradise Kept: A Rule-Based Approach to the Analysis of Transactions Involving Disregarded Entities, 59 SMU L. Rev. 491, 546 (2006) (Rev. Rul. 2004-88 reaches a result "patently inconsistent" with the entity classification regulations and "calls into question the manner in which the Service will apply those regulations"). 6 Anastasoff had paid the taxes at issue on April 15, 1993, 29 but the IRS received the claim 3 years and 1 day later, on April 16, 1996. The IRS consequently denied her refund claim, concluding that although Section 7502's mailbox rule made her claim timely under Section 6511(a), that rule did nothing to alter Section 6511(b)'s separate three-year limitation. Anastasoff challenged this harsh result in court. After losing in the district court, she appealed to the Eighth Circuit. 30 Although the Eighth Circuit had previously decided the exact same issue, and in a way adverse to Anastasoff, that ruling came in an unpublished opinion. 31 And, under an Eighth Circuit rule, those opinions lacked precedential value and parties generally could not cite them. 32 Consequently, Anastasoff argued that the prior, indistinguishable case did not bind the court, and it could decide the Section 6511(b) issue in her favor. But the Eighth Circuit declared its own rule unconstitutional. Judge Arnold, writing on behalf of a unanimous panel, concluded that the "judicial power" under Article III did not grant courts the "power to choose for themselves, from among all the cases they decide, those that they will follow in the future, and those that they need not." 33 In fact, the obligation to follow precedent reflected "the historic method of judicial decision-making," 34 and this obligation separated the judicial power from a "dangerous union with the legislative power." 35 Judge Arnold did not, however, suggest that precedents could not be overruled, nor did he conclude that every opinion requires publication. Rather, precedent could be overcome "'by some 'special justification,''" 36 and courts could choose which opinions appear in official reporters. But the fact of publication could not control the authoritative value of an opinion. Although treating every opinion as precedent would burden already-overworked courts, the 29 Under Section 6513, taxes paid prior to the due date for filing a return are generally treated as paid on the due date.

1977

SSRN Electronic Journal

2009

Columbia Law Review, 2023

Two recent scandals spotlighted corporate fraud: the recent Wirecard scandal, which revealed €1.9 billion of missing corporate cash, and FTX's bankruptcy scandal. Those incidents raised questions about the blameworthiness of professional third parties-lawyers, auditors, and banks, among others-who repeatedly fail to protect large public corporations from corporate fraud and misconduct. Professional third parties often are not held accountable because they can rely on the in pari delicto defense, completely shielding them from liability. Under in pari delicto, which disallows a wrongdoer from benefiting from their own wrongdoing, a corporate officer or director's fraud or corporate misconduct is imputed to the corporation. Thus, the corporationincluding shareholders, liquidators, trustees, or others standing in the corporation's shoes-cannot recover from professional third parties. The adverse interest exception mitigates in pari delicto's harshness, but it is traditionally narrow: It only applies when an agent has "totally abandoned" a principal's interest. Yet a recent New York Appellate Division decision, Conway v. Marcum & Kliegman, signals increased judicial receptiveness to relax in pari delicto. This relaxation opens the door to holding professional third parties responsible and liable for failing to prevent the very conduct they were hired to monitor. This Note compares in pari delicto to the analogous English doctrine of illegality. It argues that English doctrine better encourages adherence to the gatekeeping duties owed by professional third parties. It finally recommends incorporating the English approach into in pari delicto case law by expanding the well-known fiduciary duty exception under in pari delicto to professional third parties.

2016

The Court concluded that an individual's personal assets are not subject to discovery or execution merely because the individual also serves as the managing agent of a judgment debtor in a representative capacity. Background Michael and Rhonda Mona (husband and wife) were the co-trustees of the Mona Family Trust. Far West Industries sued the trust and Michael Mona, both individually and in his capacity as trustee. Rhonda Mona was not a party to this law suit. The California Superior Court found Michael Mona, individually and in his capacity as a co-trustee, guilty of fraud. The trust and Michael (the alter ego of the trust) were liable to Far West in the amount of $17.8 million. Far West domesticated the California judgment in Nevada. Prior to the domestication, Michael and Rhonda entered into a post-marital settlement agreement, dividing proceeds from a recent stock sale as their respective separate property. Under NRS 21.270, the Nevada district court ordered Michael to appear for a judgment debtor examination, and provide the necessary documentation. Michael failed to provide the post marital settlement agreement. Far West then moved to examine Rhonda Mona as a trustee to the Mona Family Trust. During this second judgment debtor examination, the district court ordered the Monas to produce more documents, including Rhonda's personal financial documents regarding three personal bank accounts. Rhonda did not disclose these documents. As a result of Michael and Rhonda violation of the Court's orders, the district court sanctioned both of the Monas under NRCP 37. The district court also found that the post-marital agreement created a fraudulent transfer 2 , and the funds in Rhonda Mona's personal bank accounts were community property subject to execution. 3 Lastly, the court ordered the Mona's to not dispose of their property. 4 The Mona's filed for a writ of mandamus, arguing that Rhonda was not a party to the case and therefore order of execution of Rhonda's bank accounts were improper. Discussion Consideration of the writ petition 1 By William D. Nobriga. 2 NEV. REV. STAT. §112.180. 3 NEV. REV. STAT. §21.320 (stating that a "judge…may order the property of the judgment debtor…in the hands of the debtor or any other person,…to be applied toward the satisfaction of the judgment)(emphasis added). 4 NEV. REV. STAT. §21.330.

And to be clear: the basis for all three appeals is that the United States government, through its trustees and other officials and departments, such as the U.S. Treasury has been engaged in a fraud against the People seeking relief through bankruptcy. This fraud asserts that creditors are private parties, when in fact the real undisclosed creditor is their government, which is attempting to recoup taxpayers funds assets acquired through the Emergency Economic Stabilization Act (“EESA”). Opening Brief, Appeal No. 23-1166, at pp. 22-65. *** The constitutional arguments asserted in all three appeals will include: That from 2000 through 2004 the United States government, through the Department of Commerce and the Office of the Comptroller of the Currency became aware that the Financial Industry was destroying and/or losing the original paper promissory notes signed by borrowers in favor of keeping “electronic originals” of such notes in violation of many state laws modeled on the 1993 version of section 3-309 of the Uniform Commercial Code. See Stafne declaration, ¶¶ 12, 13, and Exhibits 10 and 11. Notwithstanding this warning the financial industry, including purportedly too-big-to-fail institutions continued to destroy Notes in favor of keeping electronic originals. See Stafne declaration, ¶ 14, Exhibit 12. Government officials, including judges, were aware before the passage of the EESA that this reckless conduct by a greedy financial industry which purported it was too big to be allowed to fail jeopardized this Nation’s economy. And based on this Niczyporuk through her counsel asserts that the Supreme Court of the United States in violation of the Separation of Powers and Federalism structures of this Nation’s organic law inappropriately changed the Rules of Civil Procedure in a way that prevented property owners from bringing what until then had been valid lawsuits against financial institutions for this type of misconduct. See Stafne Declaration, ¶ 15, Exhibit 13. The evidence Niczyporuk presents also demonstrates that the hundreds of billions of dollars of taxpayer monies paid by the United States to bail out the financial industry by acquiring mortgage loans like hers was for the public good. See e.g. Yellen v. Collins, 141 S.Ct. 1761 (2021). And it is Niczyporuk’s position that forcing her and her family to bear the cost of the financial industry’s misconduct by way of judicial theft of her home through the Bankruptcy Court violates the Takings Clause, which requires that real property shall not be taken for public use without just compensation. Indeed, the United States Supreme Court has long held “[t]he taking by a state of the private property of one person or corporation without the owner’s consent, for the private use of another, is not due process of law and is a violation of the Constitution.” Missouri P. R. Co. v. Nebraska, 164 U.S. 403, 417 (1896) citing cases. Niczyporuk also asserts that this inappropriate “taking” of her home by the Bankruptcy Court and giving her home to ambiguously described entities is being accomplished by the State of Washington inappropriately impairing her contract agreements which in 2006 required that lost or destroyed promissory notes could only be enforced by way of compliance with RCW 62A.3-309.

University of Kansas Law Review, 2024

When property changes hands, the pre-existing right of the seller to bring an inverse condemnation claim against the government does not always pass to a subsequent owner. Sometimes it does. If valid takings claims expire on sale, the government may experience a windfall. But if a buyer gets a deal on burdened property and then sues under a prior owner’s takings claim, the new property owner gets a windfall. Established Supreme Court rules draw distinctions between the character of various “takings” to determine whether a claim survives a transfer of ownership. But the character of these distinctions is blurred (along with the rights of landowners) in Washington, Louisiana, and other states that continue to follow the “subsequent purchaser rule,” which is inconsistent with the U.S. Supreme Court’s ruling in Palazzolo v. Rhode Island. In those states, the determination of who gets the windfall may depend on the narrow distinction of whether a subsequent purchaser’s status turns on the doctrine of “standing” or “ripeness.” Additionally, a new SCOTUS rule about recurring temporary physical invasions of property delineates and expands what constitutes a “taking.” These regulation-enabled invasions present a new challenge in determining whether a valid inverse condemnation claim passes on sale.

2005