Free Motion to Supplement the Administrative Record - District Court of Federal Claims - federal

Case 1:94-cv-00522-MCW

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS FIRST ANNAPOLIS BANCORP, INC., ) ) Plaintiff, ) v. ) ) THE UNITED STATES, ) ) Defendant. ) )

No. 94-522C (Judge Williams)

PLAINTIFF'S MOTION TO SUPPLEMENT THE RECORD Plaintiff, First Annapolis Bancorp, Inc. ("Bancorp"), by and through counsel, moves to the supplement the record herein to include a Request for Payment of Corporation Income Tax dated September 10, 2007 that it received from the Internal Revenue Service, and as grounds therefore states as follows. 1. At the trial on damages in March of this year, the Government argued that Bancorp is not entitled to a tax gross-up in this case because any award of damages would be a non-taxable recovery. 2. In its Reply Brief that it filed on July 23, 2007, the Government argued that "[e]ven if Bancorp files an inaccurate tax return unnecessarily reporting an award from this case as taxable income, when such an award is a non-taxable capital recovery, this error would not likely result in a tax liability for Bancorp." Defendant's Response to Plaintiff's Post-Trial Brief at 64. The Government explained that if Bancorp filed a tax return reporting the recovery as taxable income, the return would be subject to an audit, and, if there was an audit, the IRS would "undoubtedly discover a capital recovery was incorrectly reported as taxable income, and any resulting tax payment would be refunded to Bancorp." Id. The Government concluded by stating that "[c]onsequently, even if an inaccurate tax return is filed by Bancorp, no tax liability will likely result." Id.

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3. On September 12, 2007, the Internal Revenue Service ("IRS") sent a Request for Payment of Corporation Income Tax to Bancorp, a copy of which is attached hereto as Exhibit A. 4. In that request, the IRS stated that, based on the amount of taxable income reported on the 1989 tax return, Bancorp owed $52,076.25 in corporation income tax for the tax period ending December 31, 1989. See Exhibit A. 5. Thereafter, on October 15, 2007, the IRS sent a collection notice to Bancorp, marked "Urgent!!," stating that "We intend to levy on certain assets. Please respond NOW." A copy of this notice is attached as Exhibit B. The Notice explains that the IRS seeks to collect the amount of $52,076.25 for the tax period ending December 31, 1989, set forth in the Request for Payment of Corporation Income Tax, Exhibit A hereto. 6. The record should be supplemented to include these documents because they contradict the argument made by the Government in its Reply Brief. They are evidence that the Government would treat an award in this case as taxable income and would seek to collect the tax on that income. As it did for the 1989 return, in the event there was a recovery in this case, the IRS would merely treat the taxable income reported on Bancorp's tax return as taxable income and seek to collect any outstanding tax that has not been paid. WHEREFORE, Plaintiff First Annapolis Bancorp, Inc., respectfully requests that its Motion to Supplement the Record be granted.

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Dated: November 16, 2007

Respectfully submitted, COOTER, MANGOLD, TOMPERT & KARAS, L.L.P.

s/Dale A. Cooter Dale A. Cooter, Esq, James E. Tompert, Esq. 5301 Wisconsin Avenue, NW, Suite 500 Washington, D.C. 20015 Tel: (202) 537-0700 Facsimile: (202)364-3664 Attorneys for Plaintiff First Annapolis Bancorp, Inc.

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 16th day of November 2007, a copy of the foregoing Motion and exhibits was filed electronically pursuant to the Electronic Case Filing procedures of the United States Court of Federal Claims, with service by Notice of Electronic Filing to the designated attorneys and parties of record.

s/Dale A. Cooter Dale A. Cooter

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS FIRST ANNAPOLIS BANCORP, INC., ) ) Plaintiff, ) v. ) ) THE UNITED STATES, ) ) Defendant. ) )

No. 94-522C (Judge Williams)

ORDER Upon consideration of Plaintiff's Motion to Supplement the Record, and the opposition thereto, it is this _______ day of ________________2007 hereby ORDERED, that said Motion is granted, and it is further ORDERED, that Request for Payment of Corporation Income Tax from the Internal Revenue Service dated September 10, 2007 attached to the Motion as Exhibit A and the collection notice from the Internal Revenue Service dated October 15, 2007, attached to the Motion as Exhibit B, are hereby deemed and adjudged to be part of the record herein.

____________________________________ United States Court of Federal Claims

CC: Counsel of Record