again good morning your honor sam please the court my name is andy wiener represent the united states in this matter this case concerns a harmless breach of a closing agreement between the internal revenue service and the oakland raiders a partnership in which the just well i i respectfully i don't think so i think that they said that they might have but but i believe as we showed in our in our in our reply brief that well first of all for many years they did not dispute because you've reached at you now concede the breach that you fought below and you're saying there's nothing that can be done about that they can claims court which i've not sure whether there's even a procedure that would allow them and in this context so as an unforeseeable is that just illusory no your honor the that's not our position our position is that what we did was we we gave them a we made them a promise that we would provide them let's assume that you are within your rights to make the assessment but you plainly breached the contract the contract said you wouldn't make the assessments until you get them sufficient time to check the computations didn't give them sufficient time to come up with some damages they can go to claims court that doesn't seem like a very effective remedy that they would have i don't even know if procedurally they'd be able to do that but you're saying within this the contract there's no remedy there's nothing  you saying it's harmless because they've done nothing with respect to him perhaps that's waiver but let's let me give you a hypothetical let's assume that they think these assessments are wrong comp they would have done different computations and come up with a different number and let's move backwards in time to the time you make this incessant they made bad computations you made back computations that davis want to contest them what do they complaint if they wish to and raise a way to claim that these were improperly computed well your honor again it runs into the problem of variance but they would have to go back and they would have to file an administrative claims for refund that would assert that the liability was not properly the library was not properly computed and would you assert that those were untimely i would have to go back and walk to what the what the limitations would be on that it's it's nothing that they've asserted in this case and so but there's some force to their argument that you didn't raise harmlessness below and any meaningful way i grant you it's maybe raised in passing but it wasn't the central focus of your argument and you lead with the argument today as you did with your brief that this is harmless right so their response is hey this is a new argument we should have a chance to show the prejudice for in fact it was harmful what's wrong with that well again your honor i don't for verse why i think that as as you suggested we did raise it below and if you know certainly  sentence in passing that's not a label and that's but but i think the important part is that we also said in the same section of our brief that what the breach of power after hugh provided was not to invalidate the assess what i'm i'm saying let's assume for purposes of discussion that we agree with you on that i'm still trying to figure out how why it is that they're left without any remedy at all for your breach of a contract and i'm not sure i can say it's harmless because this record doesn't tell me it's harmless it may well be i want to ask them whether they've got a claim to the computation to or made incorrectly and if they don't then i guess it is harmless but let's assume that they do want to contest the computation of how do resonator same transaction rule fifteen a would seem to cover this it's simply a matter it went to why why wouldn't we then say look if you want to go back and file an amended complaint and complain about the computations have at it what's wrong with that result well first of all i think again the the initial problem is that taxpayer is not even on a pos for that and then second of all i think sure to be made a strategic decision by virtue of the fact that they were go in passing and talking about a potential remedy you know you made a whole host of arguments if judge laporte had thought you were addressing harmlessness she would have addressed it in harare like the opinion so that wasn't really part of your defense either both sides question as to the amount of the assessments which is why she called it a windfall but beyond that i think the important part here is that the contract again the i r s breached the terms of the contract the question is what is the ramifications of that and we clear we argued and it was a not in passing that it was not a condition of making valid assessments that the iris comply with this term this term is a promise that the i rest made and it did not comply with it what the what it did not afford taxpayers was any special rights with respect to the system and procedures or it did not relieve them of the necessity to challenge and assessment that they disagreed with no again there's also no dispute at least taxpayers to not contest that taxpayers in this case had multiple avenues in which to challenge the amount of the assessment they could have they just written a letter after the assessment and said listen you guys assessed an improper amount we want you to abate they never did that but that was not the contract or the agreement called for men to suffer at the procedure and you know and didn't require them to do that and if taxpayers want to go to for instance if they want to assert eight breach of contract claim against the government for for the you know the additional expense of them having to do that then that that's that's a breach of  the six to three one b one c which the partnership items of a partner becomes and partnership items when the i r s entries interest element agreement that that only that takes place not at the partnership level but at the individual  taxpayer of the individual partner level and i didn't see anything in the statute that made that distinction that the government's relying on the tenth circuit case and when i read in support they're holding either so why is it not the case that at the time the tax court entered the decision documents that started this edge of limitations running  your honor well a couple of reasons one is that respectfully disagree i think that in the language of the statute it says that partnership items sell converts to non partnership items when the i r s enters into a think i disagree your honor because what they are already said but they're not parties to it there are parties to the partnership level proceeding by which the the parties entered into a stipulated decision that then binds them but they did a there's no question that they didn't answer and so the settlement agreement and there's also no question that it was not with them as individual partners the whole point of the statutory scheme is to allow the i settle with individual partners outside of the scope of our nation well that's what you're saying but the statute doesn't only math us as that well actually only refers to the settlement with the partner which i assume that's what happened here is that this element agreement is binding on each of the partners again it is it is it is the is the safety of the decisions that make them binding but they are not parties to any settlement a stipulated the station that would bind all the parts are going to be the ends the partnership level proceeding and that for that to start the statute of limitations running when there is another provision that specifically says the statute of limitations start right starts running again ok when the decision that it but the thing is even if you did give skidmore deference it would support the government's view that just the the directive instructs area council to make clear what the statute provides which is that they stipulate decision does not start the running of the limitations period before that stipulated decision becomes final do you find it somewhat ironic that we began this some years ago with the i r s arguing for the raiders and entered however i would say this and then hours are of the last twenty seconds for one hundred for a bottle which is that the i r s breached paragraph q there's no question but the remedy for that is and the paragraph to itself does not provide for and the iris never would have entered into the site the year that it was providing these tax payers special rights with respect to its authorit proceed if it's a condition precedent there doesn't need to be damage well i meant perhaps but that's not the question i asked ok well the question that i've been dying to ask and i'm going to ask it early on when you get up was who are now what thirteen years into this fourteen years into this how long after the assessments were made the assessments are made in two thousand and seven ok so we're eight years after the assessments were made are they right or wrong we think they're they're wrong and we said so at the time well no you didn't i but i've read your i read your your letters are the way they calculated incorrectly well if you look for example at the september for assessments they were issued at the same time as the computational adjustments and the two didn't later adjusted the interest but with respect to not with respect to stuff that they haven't fixed are the wrong we don't know why can't you know you're eighty years later because well for the reason or you were going to get ninety days to check the computations you round of computational adjustments and we said in that letter that we needed multiple documents to ascertain whether the computational adjustments were correct and indeed the iris conceded in a joint stipulation that they filed in the district court in which sunny page seventy eight the excerpt of record that the information requested was quote necessary to review the computational adjustments close quote we never got that information as judge laporte found so i know your honor is expressing incredulity that we don't know whether they're correct but that is in fact the case because with the damage you would have suffered i mean i don't me tell you i find your condition precedent argument difficult so just i'm not asking you to it but assuming that you're assuming that you can't invalidate the assessments in toto it seems to me it is fair to give you the opportunity that you were deprived of which was to dispute them and i'd like you know i really want to know whether you intend to dispute them we will yes if but but i i do think there is a way to dispose of this case there are two ways there's many ways to dispose of it but i'm just i'm telling you i have difficulty with your condition precedent i want to address that your hon but first i want to say this the district court found in pat pages thirty fifteen and it page eighteen of the transcript of the excerpt of record rather the paragraph q was a condition precedent let me just read what judge laporte s it page fifteen paragraph q places a condition proceeding a recording the assessment reaching a condition precedent have any effect on the irises ability to make an assessment i mean so they a provision in the contract but they don't have they're not deprived of any statutory authority they already have your clients money so so what's what's the remedy for a breach of a condition precedent as any different from the breach of a covenant under contract box we're just talking about a contract here because the definition of a condition precedent is that the breach excuses the other parties performance that you didn't have the other party didn't have anything to perform because the i r s already had their money well you know you well we did have the obligation to pay the tax why did you say that this discharged you from the obligation to pay tax for those years it could you sort of refund of everything that the i r s had or is underlying statute here that was reinforced by the contract that's correct but the issue in that case was whether there was a valid waiver of the statutory notice provision and the dissent held in that case not the language of the waiver was not a condition precedent and because all it said was that the taxpayer would waive the statutory right to notice when the i r s made a schedule of overpayment making an assessment unless there was a waiver by your client and in that it didn't seem to me that that it was on all fours with philadelphia it is it is different in the sense that the case involves statutory isn't  would you say and i just why the case is difficult you say the remedy is we get a free walk we get to walk away from all of our tax obligations even if they're even if they were properly imposed they say no you're stuck with them i'm trying and it seems to me you're reasonable complaint if you should have a chance to contest the computation but maybe maybe we ought to restore the party to the status quo that they would you like to would you like to be out of the settlement agreement and have the ira stored all over again i think i'm no good i can answer that question on the spur of the moment your honor but let me address you know you're asking for contract remedies and and the remedy you seek strikes me as very extreme so i'm trying to figure out what remedy puts what remedy the compensate your clients for the irises breach of the contract the problem with the remedy that you suggest your honor with law respect is that it doesn't give us anything yes of course but you know what it doesn't give you anything means that you don't have a problem with the computations if you have a problem i'd like to give you a remedy that allows you to contest the computation but why do you that's a vice but we have that remedy anyway you didn't you don't need paragraph q two in to contest an invalid or incorrect assessment so if that's all we've got paragraph two doesn't add anything and  breach is without a remedy you know there are multiple cases the federal case out of the second circuit is one where the i r s has statutory authority to do something and gives that statutory authority up in a settlement in in farrel as i recall the issue was whether the i r s could impose interest penalties that were clearly authorized by statute and when they wanted to amend their answer in front of the tax court to do that and the court the second circuit said no you can't do that you made a deal in a deal's a deal and the fact that you're waving a statutory right doesn't matter and that's it with all respect that's exactly what happened here and what i'd like to see i want to what i do want to and go back to the condition precedent point never raised the issue in their opening brief they did not take issue with judge laporte conclusion of law that the paragraph to impose a condition proceeding on their right to make an assessment they put all their eggs in the harmless error basket that when it came time for us to write our brief we assumed without belaboring the point the judge of the port was correct then in their reply brief for the first time they make the point well it's not really a condition precedent and mary speckly suggest that if the court let me ask you this though court was making a conclusion of law obviously she wasn't making a finding because it was on summary judgment do you think it's purely and if you want or not well i think you know i think there are some thousand and seven for example mr lipton wrote the mr sorenson iris attorney and said basically you have to give us review and comment before we before you can impose tax and mr sorenson never said that interpretation of the contract was incorrect when the i r s issued its initial computational adjustments on june in june this is on page one fifty six of the record it said you have ninety days to review these  computational just means and if we don't hear from you within ninety days then we'll assess so the record is clear that both sides understood that the completion of the review and comment period was correct was it for the irises ability to assess moreover that the case law reached the same conclusion again in the philadelphia case so what do you want us to read a waiver of their statutory authority into that it's i don't think it's a waiver it's an additional hurdle that they had t my problem i'm not sure by contract they give away their statutory authority unless they waive it what we want to let you do you can give away their statutory authority by condition precedent well but they don't do you know they were concerned about that in fact one of the reasons we provides otherwise and also prohibits an agreement contrary to its terms so there's an escape hatch that the i r s put into paragraph q to address the we don't have authority issue but the problem is that although they made that contention in the district court they don't contend now that paragraph q was without their authority so it's really and indeed if all paragraph q gave us was the right to contest assessments that were settlement agreement with the parties there there was a settlement agreement with the parties and let me quote from page one thirty six of the record this is the i'm quoting from the stipulated decision document that the tr entered and the very first sentence is pursuant to the agreement of the parties in this case period so who are the point of this case well you know the parties in this case were included pursuant to  tax court rules to forty seven to fifty one all the limited partners so we do have an agreement between the i r s and the partner and the partners in this case that brings you within the four corners of the statute and it's also conceded that that agreement to the individual partners by percentage so when he when do you believe the statute began to run no later than june sixth two thousand and six when the stipulated decision documents were entered were entered speak us because in your view the signing of the agreement itself didn't start dispatcher ratz that's correct art and the reason for that it was wasn't signed by well your clients well actually there's another reason even if it had been it wouldn't have started the statute running because it while it's settled the partnership we're not our position is very modest we're not contending that the closing agreement started the statute running were contending that the stipulated decision documents did which incorporated the closing agreement and the reason that this case is different than matthias is exactly what the statute says the statute says that the statute starts running when partnership items transformed into non partnership items by by the tax code and by a settlement between the i r s and a partner and that never happened in matthias the matthias settlement she dealt with the partnership items but it didn't allocate them between the partners and for that reason the matthias case is distinguish pages ten eighty six and ten eighty seven of the opinion where the court said this would come out the other way if the settlement had transformed the partnership items into non partnership items and in that event the assessments would have been untimely because they would have run they would have been were deprived of the right to review the computational assessments and determine whether or not they were correct that was an important bargain for i have to tell me why it's important is there a argue for whatever you rather would have argued force eight years ago once you figure out what it is and in fact here's what the government said about this is in response to the refund claim this is on page two ninety seven of the record where the government is characterizing our claims  and i quote i just want to know whether that would put you in the same position you should have been in eight years ago if we sent it back to the to the district court and said these guys may have a refund claim based on computations the government hasn't given them t documents yet so when you get the documents and make that claim i would not put you exactly in the position you should have been in eight years ago well i we would say that the position we should have been in eight years ago was that the r s couldn't i understand i understand i'm asking i said let's assume that they had complied with the contract and i'm sorry let's assume that they had complied with you we were told we had they complied what you would have got was a chance to challenge the computations right i'm asking why doesn't that suffice now could you start by addressing judge her with this question i mean is that something that that would be feasible within the framework of the irises and it's a regulation that they could go back to court and have the opportunity to challenge the computations and get a refund or as they have for close by procedural rules your honor think carefully about your answer because we want to give these guys a re refund and there is a treasury regulation and there is binding nice circuit precedent that says if you don't tell the i r s the basis for the reason why you should be entitled to a refund at the administrative level then you can't tell the district court and  and so but at the same time while i say that your honor i respectfully submit that they have had eight years these exhaustion away verbal defense i think it here and we send the case back to the trial court and say what they want to amend and sort of claim they may not amend and sort of claim because they may think the calculations are perfectly ok they do i assume based on what you've said you would have a certain exhaustion  or those always used for the district court i mean yeah i mean i guess those would be issues for the district court as a as a theoretical matter is exhaustion way of a bowl i would think the answer would be i feel i need to impress upon this they have had eight years to identify any problem with those computational adjustments the fact that they if they decided they like hey we got tell million dollars wait for us what do we need to worry about that i think i take your point but the i appreciate your position on appeal but before that just record this is an entirely different case where you said the tax court didn't have authority they didn't have authority you fought tooth and nail about whether the settlement agreement was viable or not and i appreciate the fact on appeal you're saying yes we did was we entered into it and we breached it and her position is at this point there's no remedy but my point being below it's an entirely different case so it's hard for me to fault him for not doing the computations and years when that really wasn't at issue well i mean again your honor to put that in some perspective what they are complaining about is not having sixty days in which to review they remanded computational adjustments now they're saying this case wasn't even brought until four years after so so we're not talking about sixty days anymore we're talking about sixty days time s position they would have they would have identified that fallback position the answer is that they're not interested in breach of contract claims because in this particular these partners have no damages even taxpayers counsel said the reason why we wanted this provision is to protect against improper collection actions but there have been no improper question actions nor could there have been improper question actions with your honor the answer would be a at the risk of asking for it the answer is that they would have a breach of contract claim like anybody else who has a contract dispute with the united states they either go to district court if it's under ten thousand dollars or they go to the court of federal claims if it's over right but but this we're talking about the statute barred claim now are we no no i mean we first act like there i'm sorry i cut in the part of federal law yet with respect to occurred more into years ago you agree yeah that's that's that's true the breach occurred more than six years ago yes but the thing is is that you know we breached the contract it was taxpayers taxpayers made strategic or otherwise they made decisions as to how they were going to seek remedy for that what they did was they tried to they tried to in they tried to bring themselves a massive windfall there like listen we agreed to four million dollars worth of tax liability and we actually it was it was a little bit less performance out of the tax liability and we can we can keep it all plus the interest that's been running which is six million dollars as of when we filed our briefs so we're now talking about like you know the pot odds if you play poker you know