Attorney-at-Law

INELIGIBLE RECEIVER – PART DEUX

In Uncategorized on 10/02/2017 at 21:17

Today it’s Judge Wherry who touches his head and whistles the play dead in Cambridge Partners, L.P., Kenneth I. Nowak, State of New Jersey Appointed Receiver, et al., 2017 T. C. Memo. 194, filed 10./2/17.

Ken is the ineligible receiver. He got appointed to wind up a couple NJ limited partnerships whose erstwhile general partner and tax matterer took a big fall for a couple felony fraud counts (hi, Judge Holmes). Seems that ex-gen’l partner gave some limiteds big distributions, reported as taxable, but he was running a Ponzi scheme and there were no profits, only losses. So the NJ authorities tossed the ex-gen’l partner, and sent to the bullpen for Ken, who files for refunds for the partners, using Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).

But Section 6228 and Rules 240 and 241 say only the tax matterer may do so, and Ken isn’t. IRS tried to find a swindled limited to step up as tax matterer, but all demurred.

Ken never was a partner. NJ can’t give Ken powers that Congress didn’t give him, even though the NJ Superior Court order that appointed Ken was modified to give him those powers.

And Tax Court has no inherent non-statutory power to appoint a non-partner tax matterer unless it has jurisdiction. Which it doesn’t.

Judge Wherry notes that the individual limiteds can file their own AARs.

I note with gratification that the amended Section 6223 (a) (the result of the Bipartisan Budget Act of 2015) creates a “partnership representative” who need not be a partner. This would obviate the problem encountered here.

 

 

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