In Uncategorized on 04/07/2016 at 15:39

We all know how obliging Judge David Gustafson can be. Offer of proof is set forth in my blogpost “I’ll Help You Try Your Case,” 12/15/15.

Now we also know Ch J Michael B. (“Iron Mike”) Thornton is a short-timer, as we used to say when our wardrobe featured green. And short-timers sometimes get a wee bit testy. That even seemed to affect Ch J Iron Mike, as I pointed out recently.

But Ch J Iron Mike shows an obliging side to counsel in Larry S. Freedman & Sheri L. Freedman, Docket No. 23411-143, filed 4/7/16.

This is a TEFRA outside basis jumpball, of which we have seen many, although US v. Wood, 571 US 310 (2014) seems to have taken the sting out of the Petaluma-Tiger-Eye scramble of yesteryear.

IRS moves to toss Larry for lack of jurisdiction, because Larry’s squawk about his deficiency arises out of his outside basis, which IRS claims is a partnership-level item, not a partner-level (affected) item. And apparently the FPAA for the partnership is still in process.

Larry says IRS admitted that his outside basis is an affected item (partner-level) in the individual SNOD they gave him and from which he’s petitioning.

Ch J Iron Mike wants IRS to clarify its position. So IRS’ counsel should “…set forth and discuss fully respondent’s position as to whether the Court here in the instant case has jurisdiction to review the outside basis adjustments made in the deficiency notice…issued to petitioners.” Order, at p. 2.

And just in case IRS’ counsel needs some pointers, Ch J Iron Mike obliges.

“Outside basis may be an affected item required to be properly determined in a partner level deficiency proceeding. Thompson v. Commissioner, 729 F.3d 869, 873 (8th Cir. 2013); Jade Trading, LLC ex rel. Ervin v. United States, 598 F.3d 1372, 1380 (Fed. Cir. 2010); Petaluma FX Partners, LLC v. Commissioner, 591 F.3d 649, 655 (D.C. Cir. 2010); Greenwald v. Commissioner, 142 T.C. 308, 314-317 (2014); see I.R.C. secs. 6213(a), 6230(a)(2) (A)(i). Cf. United States v. Wood, 571 U.S. , 134 S.Ct. 557 (2013).” Order, at p. 2.

Just drag and drop to your reply papers, guys. If you need more help, I’ve blogged Thompson, Greenwald, and some iterations of Petaluma.

And aren’t you glad TEFRA sunsets at year’s end?

Sheri wants innocent spousery, so  her beef isn’t in play. Sheri stays in no matter what.


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