Yes, it’s another busted Dixieland Boondockery, and perpetuity is on the table, but it’s not about defeasance of the easement. A group of Putative Participants, indirect holders of a hair less than 6% interest in Chimney Rock Holdings, LLC, Ornstein-Schuler, LLC, Tax Matters Partner, T. C. Memo. 2025-39, filed 5/1/25, claim that now-extinct Section 6226(c)(2) lets them participate even as everyone else is ready to accept IRS’ final settlement offer.

Y’all will recall the Notice 2017-10 kerfuffle and IRS’ settlement letters to petitioning Boondockers. Turns out the TMP’s principals are allegedly under investigation, but they get an offer anyway on the road to trial. The Putatives claim that taints the settlement, but Judge Goeke doesn’t think so.

Judge Goeke sustains Rule 245, which did allow the Putatives to come in, but imposes a 90-day time limit and even allows a motion to come in “out of time” if good cause shown (poor man’s equitable tolling?). These dudes waited two years after petition filed, and can’t show good cause.

FRCP 24 (intervention) gets a good airing. And USCFC has set a 45-day limit in TEFRA cases.  There’s also a time limit for Rule 248 settlements for nonparticipants, who have to make a showing they can continue the litigation on their lonesomes if they choose to opt out.

“Putative Participants have stated that they are ‘ready, willing, and able to litigate this case’ if necessary. Beyond this general statement, there has been little showing that Putative Participants are actually prepared to do so, and they appear to be more interested in negotiating with respondent (who has clearly stated that the proposed settlement terms will not change and/or that the settlement offer will be revoked if not accepted). Furthermore, Putative Participants have made no showing that they alone could or would shoulder the potential costs of trying the case. Thus, the partners owning 94% of Chimney Rock would face the possibility of being dragged into a trial they apparently do not want, while also potentially paying additional legal fees as a result. Under the circumstances, we must consider the possible financial implications to the partners owning 94% of Chimney Rock.” T. C. Memo.  2025-39, at p. 13. (Footnote omitted).

And while all participants have to give up all tax breaks except for actual out-of-pockets, they only get a 10% chop, rather than the 40%. Given what’s happened in other cases (Judge Goeke lists them at p. 13, and I’ve blogged them all), the Putatives could do worse.

In short, no perpetual right to participate or intervene.