Neither Is Hearing, When It Comes to TEFRA

So Judge Laro instructs us in Green Gas Delaware Statutory Trust, Methane Bio, LLC, Tax Matters Partner, 2015 T. C. Memo. 168, filed 8/24/15.

The Green Gassers claimed a ton of Non-Conventional Source Fuel Credits, IRS issued an NBAP and ten days later issued a FPAA, which kicked out most of the credits.

The Green Gassers yell “foul!”, claiming IRS didn’t wait the 120 days Section 6223(d) requires before issuing the FPAA, and never let the Green Gassers put in any information before slugging them with the FPAA, from which they now petition, claiming no jurisdiction.

Well, says Judge Laro, the 120 days isn’t a jurisdictional predicate.

“Section 6223(d) provides that the Commissioner shall mail the FPAA at least 120 days after the NBAP is issued. Both parties in this case agree that the NBAP was not issued 120 days before the FPAA. Petitioner argues that because the NBAP was untimely, the resultant FPAA was fatally defective. The NBAP was indeed untimely, but the issuance of an FPAA shortly after an untimely NBAP does not invalidate the FPAA. Wind Energy Tech. Assocs. III v. Commissioner, 94 T.C. 787, 791-794 (1990); see also Bedrosian v. Commissioner, 143 T.C. 83, 95 (2014) (stating that the Commissioner’s failure to adhere to the 120-day timeframe means that the NBAP is untimely but does not invalidate either notice); sec. 301.6223(e)-2(a), Proced. & Admin. Regs. (failure to issue either notice within the 120-day timeframe does not invalidate either notice).” 2015 T. C. Memo. 168, at pp. 8-9.

So neither wind nor gas will prevail against a premature FPAA.

Next is the Green Gassers’ claim they were shut out of participation or interaction with IRS before the FPAA boom was dropped on them.

Your remedy, says Judge Laro, is the Section 6223(e) opt-out, whereby the nonparticipants can elect to treat partnership items as nonpartnership (that is, individual) items, and duke it out with IRS their own selves.

And if the Green Gassers don’t like that, let them take their woes to Congress. Tax Court isn’t rewriting the Code.

“If Congress wanted the Commissioner to conduct a meeting between or among the parties, it would have included such a requirement in the legislation. Instead, petitioner requests this Court to create a new prerequisite that the Commissioner must adhere to before issuing an FPAA. It is Congress’ prerogative to establish such requirements. Congress has not done so.” 2015 t. c. Memo. 168, at p. 10.

IRS issued a proper FPAA here. They looked at the Green Gassers’ return and amended return, and allowed the Green Gassers some of the credit they claimed. It’s not a completely made-up deficiency.

And the Green Gassers’ SOL argument is also out. It’s an affirmative defense, not a jurisdictional bar.

So time is not of the essence.