Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is:
2. Backdating and “Effective As of” Dating of Documents
Petitioners have admitted that one of the critical documents in the record was backdated. Although petitioners explain the backdating as a matter of convenience, the fact that any backdating occurred suggests a willingness to manipulate the relevant chronology in a way that does not enhance the credibility of petitioners’ evidence.
At least one document was revised after the effective date, but the fact of the revision is not disclosed on the face of the document. It also appears that several key documents were not prepared and dated contemporaneously. For example, the promissory notes dated as of October 27, 2000, that purported to formalize the loans the Melniks obtained from Clend were probably not executed on the dates indicated and conflict with records maintained by Bermuda Trust. Many of the critical documents reflect “effective as of” dating and do not reveal when they were executed.
The “effective as of” dating and backdating of relevant documents impede our review of the substance of the transactions * * * and lead us to conclude that the chronology reflected by those documents is not credible.
Melnik v. Commr., T.C. Memo 2006-25