My readers doubtless recall the flurry of articles and blogposts a dozen years ago as the Bipartisan Budget Act of 2015 (BBA) was wending its way into law, AFAIK the last enactment to bear the title “Bipartisan.” But I recall none thereof discussing the problem of the misdesignated partnership representative (whom I call the PaRep, but whom Judge Christian N. (“Speedy”) Weiler calls the “PR.”  I’ll use Judge Speedy Weiler’s abbreviation hereafter). 

Judge Speedy Weiler has to confront the issue today in Infinity Cycle, LLC, John L. Green, Partnership Representative, Docket No. 9369-24, filed 3/12/26. B, managing member and 99% interest holder in Infinity Cycle, didn’t designate a PR in its 1065, but subsequently filed Form 8979, Partnership Representative Revocation, Designation, and Resignation, designating his attorney K as its PR for year at issue; names omitted.

When the FPA hit, B tried reaching K, but discovered K was ill and no longer practicing law, so B had Green, attorney for the partnership, file the petition timely. IRS answered, and five (count ’em, five) months later amends, alleging the petition didn’t name the PR or provide the contact info the regs require, so is ineffective and should be tossed. Infinity Cycle files a new 8979, but gets it wrong by not putting in the relevant year(s) for which PR acts and put the new PR, Green, in the wrong place among entities. IRS moves to toss the petition.

Judge Weiler loads up the “somber reasoning and copious citation of precedent” cannons.

“Compliance with Treasury Regulation § 301.6223 and the subsequent revocation and designation of a PR under section 6223 are not the only issues before us. Rather, the precise question here is whether we have jurisdiction under the Code to consider a Petition after amendment and when a succeeding PR ratifies the original filing.” Order, at p. 4.

Rule 60(a) provides for ratification if the right person didn’t sign on to the petition. There’s bushelbasketsful of old TEFRA precedent that BBA didn’t wipe out. And Mr. B submits an affidavit telling the whole tale.

“Here, the original Petition was timely filed by the attorney representing Infinity Cycle. Mr. Green was retained by Mr. B—the managing member of Infinity Cycle. Mr. B authorized Mr. Green to respond to the FPA, and under the circumstances, file a Petition with the Court on behalf of Infinity Cycle. If we were to grant respondent’s Motion to Dismiss, then Infinity Cycle and its partners would have no judicial remedy with respect to the partnership adjustments determined in the FPA. We find the evidence surrounding the filing of this Petition–namely with authorization from the managing member of Infinity Cycle–to be compelling.” Order, at p. 5. (Name omitted.)

“Respondent contends that Form 8979, submitted by Infinity Cycle, was incomplete and not a valid revocation under Treasury Regulation § 301.6223-1(e) since the form did not indicate for which taxable year the Partnership was changing its PR, and incorrectly revoked an entity partnership representative (and designated individual), when in fact K was previously designated as an individual PR for Infinity Cycle. Petitioner argues that while there may have been inconsistencies in revocation and designation of Mr. Green as successor PR, the submission to IRS nevertheless substantially complied with Treasury Regulation §301.6223-1(e). Petitioner contends that the minor discrepancies were not material to Form 8979 as the IRS received actual notice of Infinity Cycle’s intent to designate a new PR. We agree, and conclude the PR revocation made by Infinity Cycle, followed by subsequent designation of Mr. Green, substantially complies with Treasury Regulation § 301.6223-1(e)(5).” Order, at pp. 6-7.

While substantial compliance isn’t always applied, since where compliance is essential to fulfillment of the statute there is no room for “good enough,” where the rule is merely procedural or directory good enough is good enough.

“Under the BBA, the introduction of the concept of the partnership representative was ‘intended to address the shortcomings of the TMP as the representative of the partnership under TEFRA.’ Centralized Partnership Audit Regime, 82 Fed. Reg. 27334, 27338 (June 14, 2017) (proposed regulations). These resolutions to shortcomings included broader selection of those who can be a PR—including a nonpartner—and it provided that the PR had the sole authority to bind the partnership and any final decisions in a proceeding brought under subchapter C of chapter 63. Id. at 27338–39. The purpose of Treasury Regulation § 301.6223-1(e) is to ‘provide[] flexibility to the partnership in [certain] circumstances [where the partnership would like to change the designation], allowing the partnership, through its partners, to revoke a prior designation.” Id. at 27348. Consistent with its purpose we conclude that Treasury Regulation §301.6223-1(e) is merely procedural. A PR was established to be a centralized authority for the partnership. Overall, Treasury Regulation § 301.6223-1(e) requires a taxpayer to inform the IRS by written notice for revocation of a PR and appointment of a successor PR. Therefore, substantial compliance with the requirement will suffice.” Order, at p. 7.

And, ultimately, “respondent does not contend these two discrepancies prejudice the IRS or failed to provide actual notice of the successor PR as required under the regulations.” Order, at p. 8. 

Anyway, Rule 256.6(a) gives Tax Court the power to “take such action as may be necessary to establish the identity of the partnership representative.” Order, at p. 8. Judge Speedy Weiler says he runs his own docket. 

No hurt, no foul.

So welcome aboard, Green, salute the quarterdeck and stand to your kit. And here’s a Taishoff “Good Job, First Class” to pin on your dress blues.

I have characterized Judge David Gustafson as The Obliging Jurist since 2012 (see my blogpost “We’ll Come to You,” 9/18/12). Only once before now have I found him to be unobliging, for which see my blogpost “‘Modest Experience,” 8/15/23.

Now Vitaly Nikolaevich Baturin, Docket No. 14796-14, filed 3/11/26, becomes the second disobliged (unobliged?) petitioner. I came late to Vitnik’s trudge through the US-Russia tax treaty, only starting in 2019. All I can say is this fight is over whether Jefferson labs paid Vitaly for services rendered or just pure research. Judge David Gustafson said services rendered hence US taxable income last month; see my blogpost “Another Bad Day for the Russians,” 2/5/26.

Vitnik wants clarification. Twice.

“‘Petitioner respectfully moves the Court to clarify what laws were/will be used for ‘judgement as a matter of law’ pursuant to provisions of Rule 121(a)(2).” Order, at p. 1. (Emphasis in original).

Judge Gustafson is remarkably abrupt. “The applicable law is set out in our Memorandum Opinion. We will not elaborate beyond that opinion.” Order, at p. 1.

“…petitioner seems to be asking us to answer two questions (“Question 1” and “Question 2”) to clarify the meaning of the Commissioner’s proposed language in a proffered stipulated decision. The parties should come to a common understanding of the document they will eventually submit as a stipulated decision. Where one of them has a question about the meaning of that language, they should reach consensus on a joint intention before filing. Petitioner’s Question 1 asks the significance of a previous refund on the amount of the deficiency to be entered, and Question 2 asks ‘[w]hether interest will be charged for’ the five year period between the… trial and the… entry of decision by the Tax Court. In a deficiency case, the Tax Court has no jurisdiction to determine interest on the deficiency. However, the parties’ stipulation for entry of decision may include (below the place for the judge’s signature) their extra-jurisdictional agreements (such as the Commissioner’s stipulation that interest should be abated, or his acknowledgement that the decision in the deficiency case does not resolve or preclude a claim for interest abatement). We encourage the parties to include such matters in the stipulation, if it would be expedient to do so. But the Court will not address matters not within its jurisdiction.” Order, at pp. 1-2. (Citations omitted).

Man, Is That a Question!

I doubt it ever occurred to Judge Travis A. (“Tag”) Greaves, when he assured the United States Senate Committee on Finance, back on 7/24/19, that “I will make every effort to balance the need to help these taxpayers understand the Court’s rules and procedures, while remaining independent and impartial,” he would find himself echoing the Rolling Stones and “perfecting ways of making sealing wax.”

I do hope that that wonderful source of blogfodder Amgen Inc. & Subsidiaries, Docket No. 16017-21, filed 3/10/26, doesn’t result in anyone’s 19th nervous breakdown, and that no one “owes a million dollars tax.” Howbeit, on with the story.

Back in July last year Judge Tag Greaves unsealed a co-promotion agreement between Amgen and nonparty Pfizer. Pfizer now wants Rule 161 reconsideration, but Judge Tag Greaves converts that into a motion to seal.

Unhappily, what Pfizer wants to seal bears heavily upon the leading issue in the case: who bears the cost of the healthcare reform fees (HCR)? HCRs are legacies of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), legislation that inspired half-a-hundred repeal votes and a celebrated Senate vote. Trade secrets, which are what Pfizer claims the stuff they want sealed to be, get sealed when disclosure would seriously impair the secretor economically. The bar is lower when the secrets don’t go to the heart of the case, but when justice must be done it must be seen to be done, and the sealing wax comes off.

But Pfizer slides under the tag.

The parties are willing to mask the exact numbers. That’s good enough for Judge Tag Greaves.

“To the extent Mr. M’s testimony addresses the mechanics of expense sharing, the nature of the fee obligations, the approval process, or the operative reimbursement structure, it lies at the core of the issues before us. The public’s right to access such testimony outweighs Pfizer’s interest in confidentiality. We therefore decline to seal those portions, except to the limited extent respondent concedes that discrete numerical figures may be sealed.

“By contrast, other portions of Mr. M’s testimony concern granular operational and budgeting details that do not bear directly on the reimbursement issue. The same is true for Mr. M’s testimony concerning a dispute between Amgen and Pfizer. Those passages were not meaningfully relied upon in the parties’ briefing, nor do they presently appear necessary to our ultimate disposition. With respect to such material, Pfizer’s demonstrated interest in protecting confidential commercial information outweighs the diminished public’s interest in disclosure. We will therefore seal those portions of Mr. M’s testimony.” Order, at p. 5. (Name and footnote omitted, but the footnote says that Pfizer’s proposal to put a summary of the sealed into the record has no basis in statute or reg, and only risks disclosing sealed stuff).

But before Pfizer breaks out the ’07 Salon Le Mesnil, Judge Tag Greaves has a parting shot.” Should it become necessary to reference any sealed testimony in our opinion, we will do so.” Order, at p. 5.

And there follow five (count ’em, five) pages with a line-by-line statement of what Judge Tag Greaves leaves out and lets in.