Opinion
14796-14
05-17-2024
VITALY NIKOLAEVICH BATURIN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER CONCERNING ADDITIONAL STIPULATIONS
David Gustafson Judge
This case is set for further trial at a session beginning November 18, 2024. (See Doc. 58.) Under our standing pretrial order (Doc. 59), pretrial memoranda are to be filed by October 28, 2024, and a stipulation of facts is due to be submitted November 4, 2024. We will give the parties instructions about their pretrial preparation of stipulations.
This case was originally tried in April 2015. (See Doc. 18 (trial transcript).) At that trial the parties submitted a stipulation of facts (Doc. 16), which included Exhibits 1-J through 11-J (corrected by Doc. 26). This Court issued an opinion (Doc. 32, 153 T.C. 231 (2019)) in favor of the petitioner, and we entered decision (Doc. 36) in accordance with that opinion and the parties' computations (Docs. 33-35). The Commissioner appealed (Doc. 37); and in due course the U.S. Court of Appeals for the Fourth Circuit released its opinion, 31 F.4th 170 (4th Cir. 2022), which reversed the decision of this Court, remanded the case for further proceedings, and instructed (31 F.4th at 177-178) that
on remand, the Tax Court should determine what Jefferson Lab gained from having Dr. Baturin on staff. In doing so, the court should consider, for example, the following questions: If not Dr. Baturin, would Jefferson Lab have brought someone else to work on upgrading the detector? Did the projects Dr. Baturin worked on pre- and/or postdate his tenure at Jefferson Lab, or were they dependent on his presence? Did Jefferson Lab retain the rights to the product of Dr. Baturin's research? How much discretion did Dr. Baturin have to direct the day-to-day performance of his work? Cf. Rev. Rul. 80-36, 1980 WL 129605, *1 (outlining relevant considerations to determine whether researchers' income was tax-exempt under U.S.-Japan Income Tax Convention). In short, was there a "substantial quid pro quo" here? Bingler [v. Johnson], 394 U.S. [741] at 751, 89 S.Ct. 1439 [(1969)].
The parties' previous stipulation (Docs. 16, 26) and the testimony given (Doc. 18) at the previous trial in April 2015 retain their status as evidence in this case, and they will be supplemented--not replaced--by the evidence to be presented on remand at the further trial session in November 2024.
On remand, the parties and the Court should benefit from the instruction given by the Fourth Circuit in its opinion. In deciding this case, we expect to try to answer the following questions, which are derived from that opinion as quoted above:
1. What did Jefferson Lab gain from having Dr. Baturin on staff?
2. If not Dr. Baturin, would Jefferson Lab have brought someone else to work on upgrading the detector?
3. Did the projects Dr. Baturin worked on pre-and/or post-date his tenure at Jefferson Lab, or were they dependent on his presence?
4. Did Jefferson Lab retain the rights to the product of Dr. Baturin's research?
5. How much discretion did Dr. Baturin have to direct the day to day performance of his work?
6. Was there a substantial quid pro quo here?
The parties' previously filed stipulation of facts was composed before the trial of this case and before the issuance of the opinions of the Tax Court and the Fourth Circuit. We believe that, as a result of those subsequent events, the parties should now be able to stipulate additional facts, perhaps including the answers to some or all of the Fourth Circuit's questions. Notwithstanding the final deadline of November 4, 2024, for filing stipulations, it is
ORDERED that the parties shall promptly begin to work on additional stipulations and should not wait for the November 2024 deadline. They need not wait to file stipulations until all possible stipulations have been agreed to but should instead feel free to file multiple stipulations as their work progresses. (Such filings should be referred to as a "Second Stipulation of Facts", "Third Stipulation of Facts", etc.) Additional exhibits should be numbered sequentially after the previously filed Exhibit 11-J, and paragraphs in the stipulation should be numbered sequentially after existing paragraph 12.