all right mr christianson i think we're ready to start thank you may please the court jake oppressions and for the commissioner of internal revenue section four hundred eight of the internal revenue code provides in general that any money you paid or distributed out of an individual retirement account shall be included in the gross income of the payee or distributed the issue in this case is whether the withdrawal of fifty thousand dollars by the taxpayer mr magara from his ira in october eleven was a taxable distribution to him the tax court held that it was not and granted summary judgment in favor of the taxpayer based on its conclusion that taxpayer was acting as a mere agent for conduit of the custody and merrill lynch in withdrawing those funds from his ira and using them to purchase stock from a third party summary judgment was inappropriate because of the tax payer failed to establish that there was a lack of a genuine dispute with respect to that factual question whether he was acting as a mere conduit or agent for merrill courts and civil actions trial without a jury why doesn't this limit our review of factual findings made below for clear air this and one of the reasons i ask is to determine whether there's any deference owed to the tax court's interpretation of maryland email so what's the commissioner's position the review by the court is that in over review because this comes to the court in the context of the summary judgment that was granted to the taxpayer so it's subject get to that second stop the first point i'd like to make is that it is irrelevant whether mr magara was an actual receipt of the funds from his ira taxpayer concedes that the doctrine of construction receipt applies in this context and the tax court acknowledged that as well the second point that i would make is that unless mr magara was acting as an agent or a conduit for merrill lynch he plainly was in constructive receipt of the funds and the reason is that he had complete control he would have had complete control over the funds at the time of the withdrawal there's no doubt that there's no dispute that mr magara did not have the ability to instruct merrill lynch to distribute the fifty thousand dollars directly to himself if that had been his desire the fact that he instead directed merrill lynch to why are the funds to a third party is not relevant with respect to his unfettered command and control over those funds he could've had the funds is to him self directly therefore for that reason because he had complete control over the funds he was in constructive receipt of those funds unless he was acting as a mere agent or conduit for merrill lynch and so that brings us to the to the critical question on which so your theory is set because he had the ability to direct the investment of those funds that he was under control of those control over the funds at the time of the withdrawal he and the fact that he directed them to be sent to a third party is not relevant at that time he had constructive receipt so the fact that the ira of the  of no consequence i agree that is correct you open it and just just emphasize that point i think the supreme court's decision in corliss vs bowers would support that conclusion with respect to constructive or see the court stated that if a man disposes of a fund in such a way that another is allowed to enjoy the income which it is in the power of the first to appropriate then the income may be taxed to him this is his income and that's the essence of constructive  so if that's been the issue how do you distinguish this case from in syria and syria is distinguishable because in that case the court found that the taxpayer was acting on behalf of the custodian that the court taxpayer was acting as the agent of the custodian which is consistent with the custodians later acceptance of the stop as an asset of the ira in this case of discuss more that there's substantial evidence indicating the taxpayer was not acting as an agent or custodian of merrill lynch including the fact that merrill lynch ultimately refused to accept the stock as an asset of the ira but the point i'd like to because of the posture of this case and summary judgment case the burden was on the taxpayer here who was also not only the moving party but the party that bore the ultimate burden of proof with respect to this issue whether he was acting as an agent or conduit it was incumbent upon the taxpayer to cite evidence to support his claim and also to demonstrate that the record was so one sided as to rule out a prospect of a finding in favor of the commissioner on that issue the taxpayer here didn't provide any evidence in the district in the tax court that he was acting as an agent or as a conduit for merrill lynch there are no affidavits remeron lynch in taxpayer's own declaration doesn't even claim that he was acting on merrill lynch's behalf the cases that we've cited in our reply brief respect respecting where a taxpayer has been held to be a conduit for another party all involved in an agreement between the parties that effectively required are obligated the taxpayer to promptly transmit the funds received to another party again in this case there is no evidence that there was ever such an agreement between tax payer and merrill lynch that would have obligated the taxpayer here she promptly transmit the ira funds to the third party for for the stock purchase in this case took so long those lines i guess in terms of burden do you believe that it's mr mugabe's burden to show evidence that this was not an impermissible investment who has the burden to show whether or not this was a permissible in the us that would be mr mccosker and he would have to establish both that he was there was an agreement under which he was acting as an agent or a conduit for merrill lynch which would kind of go along those lines if if the investment is not a permissible investment that suggests that he was not acting as an agent or conduit for merrill lynch do you think there's an absence of evidence on that issue or do you believe that the evidence before the court is sufficient to demonstrate that the investment was in fact impermissible there is evidence from which a reasonable inference can be drawn that the investment was impermissible which is that in the first place merrill lynch although requested by the taxpayer to purchase the stock from the third party refused to do so and secondly marilyn's thereafter refused to accept the stock as an asset of taxpayers ira and in addition we have the two thousand and fourteen email in which merrill lynch specifically states that the purchase of the stock was not done via merrill lynch but instead that there was a distribution  not only is there a lack of evidence that mr magara was a mere conduit for merrill lynch but there is evidence in the record from which a strong inference can be drawn that that he was not acting as an agent speaking of th email isn't there reasonable or could there be a reasonable reading of the email from their own lynch that i have the ira's policy would have allowed for the stock to have been held i agree at this point your honor i wouldn't dispute that my response would be that that is not the only plausible or reasonable interpretation of the email and the explaining are of flying and i actually think it goes the other way merrill lynch was repeatedly stated that there had been a distribution in october of two thousand and eleven and that the stock purchase was not done via merrill lynch they were marilyn just comments with respect to the need to redeposit the stock within sixty days is a clear reference to the rollover provisions of code under which where there has been a distribution the tax payer is not required to include that money in income if the money is is placed back into a qualified retirement plan within sixty days so maryland has comments in that respect let me back up so the old religions only become relevant when there has in fact been a distribution which is consistent with just stated position in the email that there had been a distribution and merrill lynch was merely explaining in the email that if taxpayer wished to avoid having to include that income in gross income that he would have had to have complied with the rollover provisions and turn the stock within six days the taxpayer failed to do that so it would be it so those comments would would be for the e mail that we're we've been referring to refers to a telephone call where taxpayer requests the distribution telephonically for that time there was a play you know a ta that's my understanding based on based on the record and merrill lynch in fact issued attend ninety nine reporting the distribution unless there are further questions i'll reserve my time all right thank you  for distributing taxpayer never had cash check stock wire transfer ever in his hands commissioner acknowledges that there was no literal receipt that just seeing it significant distinguishing factor in this case from the other cases is that nothing in this case ever passed through the taxpayer can't this is simply the most significant factor in the end syria case the taxpayer had requested a distribution simply been and vestment in the ira and there be no question as to whether there was a taxable distribution to the petitioner that's a situation that we have in this case there is no dispute as to any material facts in this case because of the ruling that matters in this receipt i wanted to ask you about the policy because in your brief you felt the commissioner for not making the policy part of the record but isn't the burden on the taxpayer to demonstrate that the notice of deficiency was incorrect taxpayer was a conduit they commissioner cease to go to constructive or see again we've acknowledged that there's he's acknowledged that there's no literacy in may so let me ask you this without the policy of the record how can we determine whether mr magara had the right to direct the investment of funds in the ira so mr my guy was the owner and beneficiary of the ira and so the nature of irish themselves there's some discussion that perhaps about self directed or not self directed but under section four zero eight if you are the owner and beneficiary of an ira in call up that angle online today to my to my ira and i can request a distribution filling out the proper paperwork or i can request an investment made that pretty standard with respect to all ira's so commissioners making the argument that because of that sort of basic ability of any owner or beneficiary to make it you know to make an investment or take a distribution that that's where there's unfettered discretion control and it's our position that what you have to look at is there's this moment when you make the phone call and say ok i want to take a distribution in which case there's no proper paperwork and steps required may be some issues with what merrill lynch did but not with what the taxpayer did so the place you really have to look at is if you call up and you request an action with respect to your ira they want to distribution or what is their control at any point after you've made that request and that's just not the case here so that taxpayer never had any control still doesn't have control the taxpayer cannot do anything with a stock certificate commissioner makes a big deal out of the fact that the stock lynch as the custodian at this i raise the owner and will not do anything with the stock certificate absent a hold harmless from merrill lynch as well as an affidavit of gloucester stock certificate so there never was any controlled and there's currently no no control over th commissioner actually makes the argument for me as brief on page seventeen knowing that custodian is responsible for the policies so there's thousands and thousands of policies about iras and trying to say that the taxpayer is responsible for dealing with merrill lynch's policies is imposing a huge burden on every taxpayer who has an ira to try and figure out what they can and cannot comply with there is of record a wire transfer instruction that clearly shows 's responsibility not to have that so when commissioner argues there's no agency there's no authority well clearly there at ranch acted on behalf of taxpayers direction so there is also it's pretty clear that there is the e mail that you were discussing and that does say that we did not accept this because it wasn't here within sixty days that would imply that it would it except it had arrived within sixty days where it was never within the control in the hands of the taxpayer it really didn't favor the commissioner in this case or had the effect of punishing taxpayers for the improper application of law and policies by the custodian thank you your hours just two quick points under the regulations it is the responsibility of the ira custodian to establish policies and to direct the investment and disposition of property within the i historial agreement can confer certain rights on the account owner but as the court noted that that agreement is not in evidence in this case in the record so we don't know what the provisions may have been in that respect the inference from merrill lynch's refusal to purchase the stock in the first place is that merrill lynch clearly retained authority to restrict the investments that could be the second point that i would make is that the mere fact that the stock was held in a separate retirement account owned by the taxpayer does not establish that the transaction in this case was a permissible transaction and again the inference from merrill lynch is refute isil to purchase the stock and its subsequent refusal to accept the stock as an asset is that the investment was not a permissible investment that's a reasonable interpretation and you know i don't think the record definitively answers again whether the investment was permissible under merrill lynch's policies but again this is the burden on s