decision in petaluma and i think both need clarification with respect to the judgment centers decision her grace due to carter he basically avoided the substantive question that's before this court and that was before him not contesting that principle of law but we are seriously contesting is the other statement made by the judge which was that notwithstanding the third circuit's potter reversal of this court's judgment there could be no doubt that the third circuit's presidential decision constituted a final judgment on the merits but these consolidated the peals judge sanchez and the i r s are disregarding the fact that the prior residency case which i argued involve the consolidation of the us from a number of judgments polow all of which were inextricably intertwined with the residency decision  the reversal in part by this court therefore we quiet that these prior judgments be modified amended or in a couple of cases maybe even affirmed that something had to be done by the district  understood that let me be very specific as to what needed to be done the court and there's nothing left but the are outstanding major questions for example the virgin islands had filed its own actions against the powers judge sanchez dismissed all of that because he found that all five of the members of the vento family were not residents of the virgin islands well five that's what he was correct and this court reversed as to to finding that richard and nana and one of the the the parents were residents of the very general so the decision the judgement that that dismissed had to be modified because right now if that this is it was final the virgil gets no money yes and it's all consolidated in the appeal with respect to residency because there were all preconditions of it as specifically very specifically in the notice of appeal these prior decisions part judgments were part of the notice of appeal and specifically consolidated if you look at the number on the top of the decision with respect to residency it lists all these these numbers because they had to be there let's say or do they pay it to the i r s judge sanchez said it all goes to the i r s nothing goes to the virgin islands this court split it and so something had to be done with the judgments the prior judgments which gave it all to the i r s and nothing to the virgin islands otherwise the virgin islands will never be able to collect this is a judgment throwing out their case and the i r s has a judgment which entitles them to collect on not only from the three district court judge knew that things had to be done he ed issued order saying let me know what i have to do the i r s says you have to if you know judgments and modify some of the judgments and then we make a motion at that time to dismiss on jurisdictional grounds so it's timely and it's not a collateral attack it's part of the direct appeal good on that aspect of the decision say just because you know that you had jurisdiction does it mean that you cannot challenge the substantive subject matter jurisdiction there's a unique aspect here and let me try to give you an that that's the most decides the thread is correct and therefore what you have to do is correct the other judgements that have been entered predicated upon that and that had to be done by the district court this record had to come up with an order now which says correct it has to be you can either do one of two things one is you can remain for him to address the substantive issue or we suggest in our papers that since it's all been brief then it's a legal issue you could address it  of law you can address it on your own and that's completely up to the discretion of the court my preference would be since you have everything decided but that is what work where you don't have to do the work i understand the reality of the situation but what i was trying to say the specifically addressed for one moment is that there are two steps in this process is the partnership step and then you get to the partner step you have to have a partnership step resolved you asked the question as to whether or not there was jurisdiction i was going to give you an analogy let's assume you get a ticket from a  philadelphia police officer returnable in the philadelphia courts but it's issued while you're outside of philadelphia the way this structure is you have jurisdiction to go to the philadelphia city court saying you have to dismiss this because the officer had no jurisdiction to issue the ticket outside of of philadelphia that's essentially the way the structure is it strange but that's the structure in terms of the code it says you have to file within ninety days a challenge to the f b i office then if you go through the whole structure of it you can then challenge the subject matter jurisdiction in the in that court for ultimate determination that you didn't have jurisdiction the i r s didn't have jurisdiction and that the district analogous to the situation that i that i described let me just quickly jump over to judge the decision in petaluma because the judge is highly regarded but there is a part of that decision that just simply makes no sense and what he did and i'll summarize it very quickly he did two things one the issue had never been raised by any of the parties you know he's decided that this is the answer and none of the parties addressed that it never was raised before and he basically said that when you have a statute on the set it says it becomes effective october for two thousand and one and then it says see the prior temporary regulations he said oh that's incorporation by reference well the word c is normally not in cooperation by reference particularly in the statute says that the whole section becomes effective october for two thousand and one and then you read the preamble which we cite and the preamble makes it crystal clear that this is not a new corporation by reference the i r s believed that the temporary regulations were valid so they would never suggest you don't cooperate by reference they're saying they're valid and so you're in a situation where you incorporate by reference when no one thought that was incorporated by reference and then he he does something which is also a little bit unusual and he says well they also said that they eliminate the pl prior temporary regulations what is unusual about that is if these regulations sever regulations were still in effect you know eliminate them you incorporate them and you make them part of the new regulations no they've been eliminated so i strongly suggest if you look at the first part of his here they sometimes stop a judge from going off on a frolic and detour and that's what happened here he went off tried to find a reason and it's been criticized by a number of legal scholars because it just doesn't have any basis in the it please the court good morning for the record my name history some o'clock when and i represent the united states the government's position is that the district court was correct in refusing to reopen this matter when the case came back including the law i should back up an appeal of the government's position was that nothing needed that even if  there was a reversal nothing needed to be done to the final judgment accepting the f pause merits adjustments and conceding the penalties because stand the other side's thought it shouldn't but on the last page of its opinion in the residency case this court said we don't need to look into the residen of the federal park his because that will follow with the residence of the individual partners so were the essential thrust of them was to declare that the partnerships were sham and once you get rid of sorry a sham partnership then it's the l l c these are the individuals behind them d that the that the transactions were did not create the loss this was an abusive tax shelter that's called son  boss and they where the end to the last season taxpayers conceded that these transactions these offsetting transactions in market link deposits did not create a loss that no judgment no final noble judgment has been that well when the case got back to the district court the district court said and there are several cases not just the federal up our cases what if anything do i need to do we need to be done to dispose of these cases in light of the mandate which is a reasonable question and he asked the parties to to tell him and the government's position was  i think well i'm i mixed up just at the moment about whether this was the government's position or their position both the government's position which is that j a two eighty seven was that all confirmed resolution of all issues raised in proceedings in a pub so there wasn't really disagree too much disagreement that these cases were basically over  before the district court and they made the district court may want to do something like saying this cases can be used cases are closed and it's true it hasn't done so but that doesn't detract from the the fact of the judgments that already went up on appeal and were and of and the courts they could have in those direct appeals they could the other side could have challenge the subject matter jurisdiction of the court but they didn't they conceded it and the court found i think at  oh they would they invoked they didn't just submit to the jurisdiction of this is they brought these cases and they allege that there was your subject matter jurisdiction so but even so the supreme court if you waive that then you're still precluded and that has to be right because otherwise every judgment could be reopened as void judgment when this when it's clear under rules under the cases under rule sixty before that there has to be that it's a much more limited question that it's there was an express admission that there was subject matter jurisdiction in the district court but the cases also say that  even if you don't admit it and you merely way that by the time you get to the end you can't collateral it is race judicata and it you waive it by not objecting to yes you can and the supreme court said so in the chico county drainage just her case and this court has said so i believe in the marshall and hides cases is that is your position that's what happened in yes and i believe on page seven of the residency opinion the court said we have jurisdiction over these  that what the controlling regulation it controlling regulation under section sixty two thirty three is a final regulation rather than the temporary regulation and we think it's perfectly straightforward that and we now agree with the d c circuits formulation that the regulation  time it incorporates by reference the the text of the temporary regulation that was then extent and replaces it and the final regulation was adopted with notice and comment although we think that these are interpretive regulations where that her vision of the a dozen of doesn't apply and it's true that the the final regulation is adopted with retroactive a fact for taxable years beginning before its adoption but that is was expressly permitted by section seven eight zero five of the internal revenue code which is appreciate create decision so that doesn't there doesn't have to be a thirty day waiting period before  before regulation goes into effect so there was no violation of the unless the court has any other questions and any question yes you can hear me the residence of the individual partners so it was a decision that they didn't need to decide residency but it's important that the issues in the federal f park cases you know could have been brought up in that direct appeal and they were not and as has been pointed out the taxpayers conceded that the market linked deposits transactions didn't generate a loss so in  t the decisions which the main thrust of which was that this there's no real partnership in the partnership is just a device therefore will disregard it and taxation will follow at the end of the individual partner level and that remains that in a fact that is the effect of the first decision on appeal the footnote that we're talking about let me just read it says a district court made of fine is with respect to the vento partnerships because these partnerships a pass through entities citation they do not have residency separate from their errors that is a correct statement what and that's consistent with what happened below so what you had then is judge sanchez when he made the residency decision he doesn't say is the partnership resident of the virgin islands he looks at the individual partners just nothing but what he then did and had to do is return respect to the death pause we submitted to the court a supplemental documents the judgments a judgment is entered on feb eighteenth right after he renders his residency decision with respect to him taking one of them with respect to the virgin and therefore he ends up dismissing the virgin highlands action it necessarily follows from his decision what this court was saying is this order we don't have to say whether the partnership was a resident of virgin islands or the partnership was a resident of the united states we have to look at the partners so this order has to be changed to reflect the decision and to eliminate the conclusion with respect the argument and it's a very simple argument is that under the statute originally as time passed the i r s and the court has jurisdiction over partnerships let's first decide partnerships and we'll get to partners very simple but what happens if you decide that it's not a partnership it's a sham do we have jurisdiction to deal with that so what the congress did was we passed an amendment a new statute as if it's a sham subject to regulations established by the i r s you can then deal with it and the army is a very simple one if congress says you must pass regulations to make it effective and they don't they're out they have to do what congress says they have to do congress gave them the power gave them a mandate to do so the fourteen years they refused to follow what congress said that's their problem they're the ones who violated the law for fourteen years by having temporary regulations congress passed new laws afterward saying you can't do that you have to pass regulations when we tell you to pass regulations and we tell you the statute becomes effective when you pass regulations you have to do what we tell you to do better you've made