we have two tax cases this morning mr reading here arguing both of the courts somewhat dispose to just give you a liberal amount of time on the front end and let you argue both at the same time would that work for you and that were per the government and then the government would have at least an equal time to respond and so on mr reading want you proceed in and is no similar place to look for a clear definition of the meaning of attributable to a partnership but for purposes of seventy four point two eight i don't think it gets a little confusing sometimes it was leafing that cases are talking about argument to get around kenar that it only addressed one of the two statute statutory provisions not exactly or rather tell me how you would  and address that first i would say that i agreed with chief judge of the court of claims recently did distinguish king or in one of the sort of boss cases pointing out the king  keener opinion relied on the lower courts determination of certain positions made by the petitioners in that case which are not present in this case and secondly result relied on became a necessary for the cold ultimately to look at the application of the formula to determine what we're sure is trivial to the court in kenya or treated the case as though there were only one ground for just a sham and that is certainly not the case here that the f boys are in the record there are multiple grounds in the fall and when you go to the definition of attributable to instill in the regulations to sixty six when you want to see keynote address ignore that what you're looking at in sr is its interpretation of attributable to relative to seventy four twenty two h it did not look at the  six twenty one see how you determine attributable to is mandated by the regulation which as the weight of law the there is no similar interpretation in the regulations or the code and i think it is not the same or should not be the same replication here and i think part of that in here comes about because of looking at that case as being narrowly defined as the taxpayer challenging the sham determination you still haven't told me why kenar didn't address both of these provisions refers to both the provisions relevant to this claim namely sixty two point zero nine and sixty five or two are found in the claim cannot be considered a partnership item by in the amount of tax motivated transactions determined in the following manner and then it sets out a formula by which you interpret that now the fifth circuit looked at that formula in waiter and said you take that formula and you apply it to the multiple rounds that are set out and in the nose of final partnership the ministry of justice and when you do because some of those grounds are not tax motivated transactions and some of the based on the example i referred to it as a definition your honor but it is it does say specifically how you make the determination of what is not but now doesn't the shown case decided recently by this court create a to purposes of seventy four twenty two h there is no specific statutory regulatory guidance you're talking about the penalty interest going here primarily right don't you have the regulations say that you have to look at every one of the prayers but why the form and that's where i have a problem with understanding how shell doesn't create a problem for you and that is the language from shell that i'm reading from on the last page  in addition that the f p a aides listed sham transaction as one of several grounds for disallowing partner the partnership does not as the taxpayer suggest render the f p s less conclusi now that seems to be saying that even though the p a s may have had multiple grounds that that doesn't mean that you can't find sham based on based on the board is also a valid for just well but it goes on to say shall that because the settlement agreement did not change the f p a findings that the activities of these doesn't matter and x x sept what you say that they don't relate to a sham but they do all relate to partnership issues you're right are they now suddenly something over which the court of federal claims has issue relevant i'm having trouble seeing which part of this is an individual partner item as opposed to a partners determination that it was a tax motivated transaction for purposes sixty six twenty one right it would say purpose of six hundred sixty six will see it it was the next decision the two thousand and one decision transaction is completely disregarded and if you look at that decision in depth what you find is they go on in say that a specific portion of the partnership debt black economic decision addresses that second element that says it it doesn't say it's a shared transaction as defined in section sold so it doesn't use the term share anywhere in the decision it says lack of economic substance but it's it is an element of share it's referring to that section discussed what economic substance lack of economic substances but it doesn't say that the trade is actually a black both elements it doesn't say  proceed insect included based on a decision of the court in which the court held that the transactions were disallowed under section one sixty two because of a lack of profit motive as that determination is made when a three well attachment of a transaction includes a transaction disallowed under forty three but as the court noted this transaction was disallowed intersexual in sixty for the government at this point saying it wasn't comprehensive was ritually fraud they've lied to the court that like the tax court they told reporters upfront that if they settled it would resolve their matters there'd be no further litigation or no further penalties they filed to reported in subsequent years and yet the court says no you can't take your loss let me see finder stand what you would envision would go on in the court of federal claims if you are right on the sixty six twenty one  the sixty six will see it plus not review them not to reconsider them giving all of them equal weight are all the grounds supportive of tax motivated transactions if not when your blood the formula just as they did in winner the result is that the royalty the partnership was not engaged in the trade or business of forming the ground that the deduction was disallowed specifically under section one sixty two you do get a chance to be heard ye and the other fifty three appeals for this court are the same the court denied rehearing on bond in keener and the supreme we had a chance and to that there are traditionally a stop for taking the position on appeal that contradicts their position in the court federal plate so yes that that is the weaver and traditional stop and then as a result of that the court of federal claims entered judgments in a larger number of cases even than those are that are now before this court and subsequently the taxpayer said if the united states alternately prevails in keene than the seventy seven judgements can be re entered and they also said the practice facts in the legal analysis in the pratley opinion do not expand or alter the issues already before the federal circuit in keener so it's not a like they are many respects the promise though it seems to me at least that what happened after those representation it may have been every expectation on the part of the taxpayers that this court would decide keener in a way unresolved didn't down all the points that we believe are still viable arguments to be made in subsequent cases and if whether or not they're right about that that seems to me to be at least a reasonable position to take in the aftermath of keener even though you may have expected and indeed hope from their perspective they can or would have resulted in all the issues preferably as they see it in their favor why isn't that a perfectly reasonable position for them to have taken at the outset and in effect situation is somewhat altered by them but pretty significant fact of the decision well i think it actually is important that that position is not correct canner was no affirmed on point is that after the judgments were entered the taxpayers that had an opportunity and in fact did say that in seventeen of those judgments the cases presented noncredit related issues and related issues so not only did they say that the case would be controlled by keener they also represented that they were the scenes pret with respect to the dispositive jurisdiction which this detriment to the government because traditional stop will require detriment and all it i'm sorry done with that part of your argument i sensed you were concluding ok i want to go to the merits if we could let me see if i understand something basic about the way the statue of limitation operates as you view it in conjunction with seventy four twenty two age so we got the basics that your limitation sixty five a one i'm a taxpayer i'm also a partner in a partnership and let's suppose that on the very really matter when for present purposes the partnership files their return but let's assume that many years go by and in two thousand and nine the i r s wakes up and says you know what that  partnership had a real problem way back then let's issue a and if it now money three years have long since run nothing has happened in the  so they go through the process and sure enough they get a ruling that the partnership was engaged in a sham transaction it's at its center and there's an assessment against me presumably i can raise sixty five a want correct he can i raise sixty five or one and be in what for after i've had an assessment against me do i then have to pay the tax and can i sue for a refund predicated entirely and sixty five a one in the court of federal claims no no because there isn't a separate claim under section five you always have to look at this sixty two twenty nine criteria ok now we're  go to to a certain i sixty five a one writes well they have to be raised in the partnership proceeding so i would be i would have to well i guess i'm already technically a part well i think mr reddy would disagree on this but i may or may not be a party to the tax court proceeding but but your view is i would be a party to the tech support court proceeding as soon as the tax matters partner or or the challenge partner because that would be has initiated a proceeding in the taxpayer right so i want to magically as a partner i'm a party to that all partners are right and your position regardless of whether they're their limitations period has run or not just reading disagrees about that i think but but in any way your position is there were all parties to that proceeding ok now i have an obligation then the only place in your view that i can raise the sixty five a one claim would nine it stems from the interaction of those two statutes well she's twenty nine says is that the government gets a little extra time it does you know that's a that's a defense in a sense by the government against the the arguments that the government may make in the context of the sixty five i want to show but the question is where am i confined to the tax court is the only jurisdiction in which i can assert my individual sixty five a one right even though i may plainly have a solid sixty five a one claim and do i put up with that right if i haven't gone into the tax court as of party in the test for context yes and that's what this court kenya the reason is that because you have to look at both sixty five a one and sixty two twenty nine you cannot as you know evaluate whether or not the limitations period has expired is out of considering such things as when the partnership returns filed whether the partnership return is valid whether as in this case the tax the tax matters partner or extended period for assessment so that's why all of these  be at the partnership and if they are not raise the partnership level in that effort context they are waived and your authority for the proposition that at all times all the way back to when this matter was broached in the tax court that it was clear that the individual partners could get an education of their individual rights for example at b c b the statue of and that's certainly true when you look at all of the cases that have decided that this issue is a partnership i do not believe that for the circuits have reached the same conclusion as this court and you say that is on say they asserted special imitations to be assert their individual sixty five to one right well that i don't know but it doesn't matter because it you know the whole issue has to be reason the partnership  right that's right and if it is possible under sixty five to one for i mean every partner given that it triggers when they file could have a different period of time  but yet your position is that every one of those has to be individually brought as part of this partnership perceive and are not to be brought individual even though everything will partner has its own individual situation actually occurred it was a partnership level proceeding where more than three years have elapsed since the partnership filed its return but there is a partner's sixty five to one hundred that was still open and the t sixty five or one individual partner statute of limitation defend our partners for sure what the court held in keener is that the interaction of sixty five will one in six to twenty nine is a partnership and that's a that taxpayers raised in that case was a partnership and it's the identical claim that the taxpayers are raising in this case the complains or say i would just accept for changing the names it's the same claim that this court already cited statute limitations and the other is simply a statute that provides a gloss in effect on the statute of limitations by saying that it's not as short as it looks under certain circumstances right so since you twenty nine extends is that an adjunct to sixty five and one they've also missed the sara lee said that sixty five and one is a partnership wish that's right the court said that this claim is a partnership issue i think that some of that money and let me ask another question which is so i believe i'm getting all the numbers mixed up but one of suppose that the government doesn't do it within a year but does it after three years and so the taxpayers argument is a straight forward to the five zero one you didn't file within a year after the tax court decision at the partnership level you can't be before this is all somewhat hypothetical because when you look at what the tax payers limitations claim actually you do it within the one year period partnership issue if the tax evasion doesn't do it within a one year it's not a partnership issue well the question  because they defined the limitations claiming credit as whether the i r s obtained a valid in time sixty two twenty nine b extension so as to make the effort cause time for the purpose of suspending the sixty five a one sixt core already decided since you started down the line of talking about academic issues let me ask you another one that's going to sound certain academic but i think it ends up making a difference perhaps in the way we dispose of this let's assume we agree with you on all the substantive points that you made in your briefing today you used it correct to say that the right disposition of this case is to affirm a dismissal for lack of jurisdiction or is it more correct to say that the claims which after all has jurisdiction over refund actions simply is barred from getting at the substance of the particular claims that the taxpayers are made but those matters have either been already decided by another court the tax court or have for the tax court and the tax were only to decide and therefore cannot be the source of a judgment in favor of the tax payers in the quarter to claims you understand what i'm saying i just see what you're saying and  that the court a federal claims ought to say you have failed to demonstrate a right to relief or does she the court a federal crime simply say we have no jurisdiction here even though you're bringing us a refund action which normally is what we have jurisdiction reject the same argument although well essentially i mean it can or will that it had no jurisdiction to consider that argument at all because there is no jurisdiction over a claim for a refund or tax would find it interest there's no jurisdiction to consider that argument this court has held it is first it is no jurisdiction to consider that and even if it did it would not be persuaded because i mean frankly it doesn't make sense if a transaction is if if a part of the tr were there argument i i think they would characterize the f p a allegations differently i think they would say that those allegations particularly the extent that they are inconsistent would simply be alternative possible grounds for invalidity and that wouldn't be necessary saying that they are all true at the same time and that's the argument that on which the separate bill of the finding as i in effect becomes a decision that becomes binding if not successfully challenged with respect to all of the assertions in the say the interest was improperly imposed without saying without disproving the fact that the transactions were shady so that's why that's partnership i suppose that instead of doing what the i think i know what your answers but i want to make sure to prove it instead of doing what was done in the decision the two thousand and one to tampa decision where there was a specific reference to the sham or fraudulent transaction provision of the previous version sixty six twenty one see her suppose instead that for whatever reason the tax court had used a a murky term such as this was a dubious transaction or this was a questionable transaction and we had come then to the point of refund action in the court of federal claims when the court of federal claims have jurisdiction at least to decide what it was that the tax court decision actually held with respect to the issue sham well on its flock years of course it certainly look outside see it so i think if the court wished to consider the tax court decision and see what the tax court decision said well but what i am going one step beyond that apply to looking at it the court says that's really difficult to understand what the what the tax court did when would that be something that the court of federal claims would be entitled to do that is to say to determine whether the tax court had actually made a finding a sham itself look to see if the tax court decide which and you know it would probably look at documents outside of the decision itself to see if there was another finding share but it could not make an independent germination as whether the transactions were she said you are saying then that the taxpayer would not be relegated slowly to the remedy of going back to the tax court and asking for clarification that that's something federal claims is running this will speak pretty narrow but not quite as narrow perhaps as i thought you might answer yes i think well it's i think that the court could look to see if the tax court had  have a row we're dealing with cases under the old wall the tax court good luck have heard an independent sixty five or one of the limitations defense in these cases the i think if you go back and look eighty global follows roe polling now it was on a net issue and you so many issues in this case and may be crossing my wires but i thought the government argued that well for us to say well be quite a federal claims was correct to say that all of these issues are barred from its addressing but it was incorrect to call dismissal one project stiction and would give you anything that would give me any decide that because of the statute of limitations jurisdiction which should be considered there are eight of the cases that are on appeal that are state the do not have a stage of limitations claim in there that address only sixty six