by John Darer CLU ChFC MSSC CeFT RSP CLTC
The IRS is investigating whether Brook-Hollow Capital LLC and Brook Hollow Financial LLC may be liable for civil penalties pursuant to 26 U.S.C. § 6700 “for organizing or promoting abusive tax shelters”
The Internal Revenue Service is investigating whether Brook-Hollow Capital LLC
and Brook-Hollow Financial LLC (collectively “Brook-Hollow”) may be liable for civil
penalties pursuant to 26 U.S.C. § 6700 for organizing or promoting abusive tax shelters.
(Second Declaration of Revenue Agent Elizabeth Walker (Doc. 24,. Ex. 1, “Second
Walker Decl.”) ¶ 2). Based on the investigation to date, the IRS understands that
Brook-Hollow offers deferred legal fee programs that purport to defer the receipt of a
law firm’s fees, payable out of a settlement amount negotiated by the law firm on behalf
of its client.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
UNITED STATES OF AMERICA,
Petitioner, Case No. 1:24-mc-13
v.
TATE JOHNSON,
Defendant
The IRS issued summonses that seek documents and records concerning Brook Hollow’s deferred fee structures, the law firms that have participated in those structures and the related financial arrangements
On their face, these categories are reasonably calculated to shed light on how Brook-Hollow’s programs operate, how they are marketed, and how income is treated for tax purposes. The relevance standard in the summons context is broad: information is relevant if it “might throw light upon the correctness” of the return or liability under investigation. Powell, 379 U.S. at 57.
Source: Case: 1:24-mc-00013-SJD-SKB Doc #: 26 Filed: 12/11/2025 Page: 5 (footnote) and 6 of 12
” The Requested information easily meets the standard”
Respondent argues that Petitioner has not established that the Court has jurisdiction to hear this matter as the pleadings, as a whole, do not make clear that enforcement is sought against Brook Hollow Capital and Brook Hollow Financial—the parties to whom the summonses were addressed. See Parker v.
Graves, 479 F.2d 335, 336 (5th Cir. 1973). However, Respondent contends that Petitioner’s pleadings
largely indicate that enforcement is sought against Tate Johnson personally. Petitioner notes that the
“caption of a complaint is not part of the statement of claims against any alleged defendants, but is chiefly for a court’s administrative convenience for identifying the case.” Church v. City of Cleveland, 2010 WL 4883433, at *3 (N.D. Ohio Oct. 26, 2010), report and recommendation adopted, 2010 WL 4901739 (N.D.Ohio Nov. 23, 2010). The “determination of whether a defendant is properly in the case depends upon the allegations in the body of the complaint.” Eberhard v. Old Republic Nat’l Title Ins., 2013 WL 12293449, at *5 (N.D. Ohio Sept. 13, 2013) (collecting cases).
The Petition and the accompanying declaration (and the second declaration of Revenue Agent Walker) establish that the IRS properly issued these summonses to (Tate) Johnson as President and partnership representative of Brook-Hollow, to obtain Brook Hollow’s records”
- Here, the summonses themselves identify to whom the summonses are issued and what documents are sought.
- The Petition, and the accompanying declaration (and the second declaration of Revenue Agent Walker) establish that the IRS properly issued these summonses to Johnson, as president and partnership representative of Brook-Hollow, to to obtain Brook Hollow’s records.
- As such, Respondent’s contention in this regard is not well-taken.
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