this morning is daniels versus the united states ms brown yes thank you the court good morning i think this case really comes down to two points first is that i think that mr and mrs daniels who are here today are the kind of taxpayers that congress wanted to give a form to they are law abiding taxpayers but they have a form in the tax court know why not because they don't because they didn't have any upfront for him because fungible the remedies at the collection really as i understood you joe lieberman wrong your clients would have an opportunity to present the argument as to why they shouldn't be subject to the tax that the government wants and well in other words that's another route to get to this to a circuit court or to an arbiter already three revere yes your honor but my position would be that really the range of issues that are material and probative in a collection proceeding different area that they would make if they're going to fishing or you know the client would make the same on camera but the stent to which the court would rule that was material and probative is different when the issues before the court is whether or not the person a taxpayer entitle to a refund is different from what the issues at the collection hearing stage i will also say your honor i will certainly not ari how are those issues different i don't see the issue with whether  either stays whether or not they should have to pay those taxes whether they should have to pay them at all or whether they did pay them and should have to should get that money back either way it's still a focus on the merits of the underlying tax issue either and that i would submit to you would certainly d i would say it's somewhat different in the administrative process because there's already been a preceding there's been a tax refund piled there's been a an administrative process reviewing the merits of the tax refund that and the tax refund was denied that is the letter that triggered this process and the letter that the i r s gives i would say to your honor's that the i arrest does not think that the collection remedy is the same as going to the court of claims or the route that brings us here today you may remember in the record there is the letter that the i r s sends to the daniel same your tax refund claim is denied your options are to go to the district court or to the claims court so they're really not the same i don't think your honor that all procedure because this procedure about issues at the collection stage we're really kind of past the liability stage while there might be some  understand where your honor saying with respect to the way that that is worded in practical or practical realities that is not where tax refund arguments and cases are litigated so this isn't a tax refund case because they didn't pay the entire tax that's what the jurisdictional statutes and interpretations they're of have required well it's would still be a tax refund case your honor respectfully because they're claiming that they overpaid tax they paid for point they paid almost for me not in the court of claims court of federal claims or in the district court where we're bound by the supreme court's decision well i think actually i disagree with your honor on that one i don't think the supreme court we certainly are bound by the precedent of the supreme court but the precedent the supreme court does not apply to the situation that is before you jurisdiction your honor i don't think we have any disagreement with that i do think what's key to what your honor has said though is that you do you you do not have supreme court precedent with respect to this fact pattern you have you have sit in bank and to reverse our existing impression and that and that is what we are here to do i mean this is the way the process goes but let me say i managed to get one a question yes my understanding is your first line of relief was to file in the jurisdiction if when you file or there's a pending case elsewhere and i believe that argument was raised below your honor i do understand what your honor is saying but the case went what trying to say is that may well be that you've got t i would guess in for a dime in for a dollar if i may say your honor with respect to the hills if i may say though with respect to what i think makes this case unique is the fact that you have here you have a substantial  effort to pay a really an outsized tax i mean it's a five point five million dollar tax bill and almost four million has been paid i think that's i'm not so great in math certainly on my feet here but it's about seventy percent that's one thing secondly there was no notice of deficiency issue because the i r s agrees that that is what the tax should have been there is here i also think it makes a difference that the nature of the arding taxpayers who under the voluntary tax system they have an accountant and they calculated tax according to certain formulas what no one knew at the time and of course what was known later our position on the merits was that there was this fraud on the market but if i must just if i may say about this point to you about the compensation a vent that triggers this bill is not an income it's not that income flowed into them it's pieces of paper that one day are valued one way and another day found the way the jurisdictional way to be permitted to greet the merits of your case yes your honor then how am i going to draw a line between your case and acacia ordinary americans pay this kind of tax level at this level because this is a compensation this is a ten forty tax return but the other thing i think that makes it different your honor if i may is that there was an offer in compromise made here and your honor probably certainly knows tax law better than i do but one of the elements of an offer in compromise is that you cannot pay the tax liability and you have to demonstrate that somehow to the i r s so there's been an offer compromise made here where and you know with a demonstrated inability to pay the tax and the  commons was refused and i think that these are the circumstances that distinguish and help you separate out the cases that i submit to you congress wanted a form a tax purse to have a for for and those people who i would call tax abusers where there may not is an issue so much of whether they can afford the taxes they don't want to pay the tax you know so i think you are that is that that is an important criteria and also i mean it helps the governing the government brings us here you know i mean because there was an offer of compromise process that was gone through here unsuccessfully went and i think in that situation you know in that situation the really is no other forum but a tax refund you know bringing us tax refund playing square and not in you know not on the guise of the collection hearing or something like that and you're always sort of it's which is go to the district court and go to the court of claims and may i say make one other point if i may about the design the rebuttal time you realize i do that i realize i have a little cocky just one quick point about floor and what i think florida does with respect to precedent the claims and the district court or jury trial being a big asymmetry i mean as a lawyer i don't know why you would go you know if you lived up in jersey why wouldn't you go to the district court in the us for jury trial if you could pay the tax so there are asymmetries and i would submit to you that under the scheme that congress provided and given this kind of taxpayer where there's been a hardship and i one other small point as i was looking over some things yesterday in preparation of this there was article cited in flo at footnote two which is that the journal of taxation one nine hundred fifty eight article an effective tax for sieges and even there when they were talking about this issue even there they were not arguing that there should be an absolute rule and they there really dispute i mean if they exercised options and then the company went bankrupt and they reported on their taxes the amount they should have received from the company had the check ever been c you know but never got it because the company went bankrupt i mean clearly they're not still well the hook for all that money they never got right under the tax law just doesn't seem to me on the merits that there's really a dispute here well  understand your question but the valuation that occurs occurs on the day that they exercise the options and they had everybody on that day to sell a certain amount of sun and get that money because so all the stock and protected themselves you know the entire amount of money and moved all of that into a mutual fund to protect themselves and diversified but they chose to hang on to the entire amount of stock and that was a risk that they took and the cases that we've cited at the end of our brief regarding the recent dot dot com ca exception in cases where there is a hardship and why is that a curiosity i soon this issue was raised alone would and you will determine there wasn't a hardship in this case that they still required to pay the balance of the tax in order to denial of an offer of compromise you've got a court that will show us whether or not there was a hardship correct greg but it certainly has not made that claim in any court to the stage  let's see if you would agree i assume that even in a florida had never been decided this well i suppose i shouldn't say that because the case law in our circuit relies on laura not there is mr brown yes i have just very briefly if i may the minutes left i did reserve a little time your honor fine just want to draw your judge mort your attention to the record page twenty eight and twenty nine which is something that had the government had