In Uncategorized on 11/12/2020 at 12:17

Judge Buch comes on in relief of Judge Ruwe, to strike out Dewayne Bridges, 26519-16, filed 11/12/20. Dewayne wants a Rule 161 of his TEFRA loss, more particularly bounded and described in my blogpost “Bamboozle Your Way To Victory,” 4/27/20.

This was the irreconcilably inconsistent 1065 Dewayne and partner Steve unloaded on IRS, who gave it the Section 6231(g) “reasonable belief”, and small-partnershiped Dewayne and Steve out of TEFRA.

Judge Buch: “Recognizing the mischief that might result if the IRS follows the wrong procedures, Congress enacted section 6231(g), captioned ‘Partnership Return To Be Determinative Of Whether Subchapter Applies.’ That provision, in effect, provides that, if the Commissioner reasonably determines from the face of the return that TEFRA applies, then TEFRA applies even if – with perfect knowledge of the facts – it should not. Sec. 6231(g)(1). Likewise, if the Commissioner reasonably determines from the face of the return that TEFRA does not apply, then TEFRA does not apply even if – with perfect knowledge of the facts – it should. Sec.6231(g)(2). In short, Congress authorized the Commissioner to determine whether TEFRA applies based on the face of the partnership return.” Order, at p. 2. (Citation omitted).

Of course, captions don’t limit statutory language, but they help if there’s any ambiguity, Order, at p.3, footnote 2.

All Dewayne is doing in this reconsideration motion is rehashing. “Petitioner spills considerable ink highlighting all of the information gathered during the examination that conflicts with a determination that Mr. Bridges was a direct partner in … LLC. But in our memorandum opinion, we directly addressed the irrelevance of this information, stating that ‘conflicting information provided during the give-and-take of the examination * * * did not prevent * * * [the Commissioner] from relying on the returns to make a TEFRA determination.’ T.C. Memo. 2020-51, at *21.” Order, at p. 3.

How quaint: “spills considerable ink.” Judge, welcome to the Twenty-first Century. How about “discomposes considerable electrons” or “dumps a lot of toner”?

But as I said in my blogpost hereinabove-cited (as my high-priced colleagues would say), it’s Dewayne’s and Steve’s return. Did neither sign it? If neither, then who did? In any case, someone provided the information shown in the return, and it’s to that person Dewayne should turn if he’s unhappy. Remember, a partner who serves as tax matters partner (whether or not it’s a TEFRA partnership) is a partner first and a tax matterer second.

Now what will happen under the new Section 6223 “partnership representative” regime, where the PR only needs a name, TIN, onshore address, and phone number, and need not be a partner, is a fertile field for blogfodder. Watch this space.


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: