F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

A L L E N D A V I S ; C A R

O L D A V I S , P laintiffs-Appellees

,

v.

U N I T E D S T A T E S O F A M E R I C A , Defendant-Appellant

. No. 13-16458

D.C. No. 3:11-cv-04316- EDL

OPI N I ON

A ppeal from the United States District Court for the Northern District of California Eliz abeth D. L aporte, Mag istrate J udg e, Presiding

Arg ued and Submitted November 17, 2015—San F rancisco, California

F iled J anuary

25, 2016

B e fore: Sidney

R. Thomas, Chief J u dg e and Sandra S. I kuta and Andrew D. Hurwitz , Circuit J udg es.

Opinion by

J udg e HurwitzD A V I S V

. U N I T E D S T A T E S 2

SUMMARY *

Tax

Reversing a judg ment o f the district co urt in an income
tax refund a c tion broug ht b y Al Davis, former principal

owner of the Oakland ( and L os A ng eles) Raiders, a nd his wife Carol Davis, th e p a n el held that a breach of a Closing Ag reement between t h e I nternal Revenue Service (I RS) a nd the p artn e r s h ip that formally o wned the Raiders did not invalidate the tax assessments, which w ere properly assessed within the statute of limitations.

Davis and his w ife were pa r tners in a partnership that entered i n t o a settlement with the I RS in which the partners had a desig nated amount of time to review and comment on the I RS’s proposed tax liability calculatio n s before any assessments were made. The I RS admittedly br e ached the C l o s ing Ag reement b y making certain assessments withou t g iving Davis a second opportunity to review its calculations.

The panel held that the I RS’s breach of contract e n t i t led Davis to a contractual remedy but did not invalidate the
assessments. The p anel noted that the breach did not prevent Davis f rom challeng ing the as s e ssed amounts and seeking consequential damag es in an a dministra t i v e refund c laim o r a refund action, which he did not do.

The p a nel also h eld that the assessments were timely

. Apply ing the plain lang uag e o f I .R

. C

. § 6231(b)(1)(C), the

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.D A V I S V

. U N I T E D S T A T E S 3

panel held that the I RS does not “enter into a settlement
ag reement wi t h t he partner” when it enters into a settlement
ag reement with the tax matters partner, and the individ u al partner is b ound merel y b y o peration of the tax court’s decision to which the p a

r tner is a party

. B ecause the Closing Ag reement and stipulations were not a “ settlement ag reement with” Davis within t h e s co pe o f I .R.C. § 6231(b), the panel held that the tax assessments were timely

, as they occurred within one y ear after the Tax Court decision became final.

COUNSEL

Kathry n Keneally

, A ssistant Attorney General, Richard F arber, Andrew M. W e iner (arg ued), Attorn e y s , Tax Division, Department of J ustice, W a s hing ton, D.C., for Defendant-Appellant.

Steven L

. May er (arg

ued), Kenneth G

. Hausman, Stu ar t S. L ipton, J ulian Y. W aldo, Arnold & Porter L L P, San F rancisco, California, for Plaintiffs-Appellees.D A V I S V

. U N I T E D S T A T E S 4

OP INION

HURW I TZ , Circuit J udg e:

The late Al Davis is a g ridiron icon, deservedly inducted into the Pro F ootball Hal l o f F ame in 1992. He served a s coach, then g eneral manag er, a nd finally a s the “pr i ncipal owner” of the Oakland (and L o s Ang eles) Raiders over some fi f t y y ears. During the Davis y ears, the Raiders appeared in five Super B owls, winning three.

The case before u s arises from a complaint filed in 2011 by Davis and his wife

, C a r ol, ag ainst the United States, seeking a r efund of income tax es. 1 Davis 2 arg ues that the

1 B y 2 0 1 1, Dav is an d th e R aid ers w ere h ard ly stran g ers to th e co u rts. In 1 9 7 8
, th e L o s A n g eles Co l iseu m , w ith t h e R aid e r s as cro ss- claim an ts,

su ccessf u lly su ed th e Natio n al Fo o tb all L eag u e (NFL ) f or v io latio n of th e

an titru s t law s f

o r th e NFL ’ s ref

u sal to allo w th e Ra i d ers to m o v e to L o s A n g eles. L.A. Mem’l C o liseu m Co mm’n v. Na t’l Fo o t b a l l L ea g u e , 7 9 1 F.2 d 1 3 56 (9 th Cir. 1 9 8 6 ); L.A. Mem’l C o liseu m C

o mm’n v

. Na t’l Fo o tb a ll Lea gu e , 7 2 6 F.2 d 1 3 8 1 ( 9 t h Cir. 1 9 8 4 ). In 1 9 8 0
, af t er th e Raid ers an n o u

n ced th e i r in t en tio n to m ov e to L o s A n g eles, th e C i ty of Oak lan d b ro u g h t an actio n to acq u ire th e Raid e r s ’ p r o p erty b y em in en t d o m ain ; th e Raid ers p rev ailed af ter f i v e ap p eals an d e i g h t y ears of litig atio n

. City o

f Oa kla n d v. Oa kla n d Ra i d ers , 64 6 P .2 d 8 3 5 (Cal. 19 8 2) ( i n b an k ); City o

f Oa kla n d v. Oa kla n d Ra i d ers , 2 4 9 C al. Rp tr. 6 06 (C t

. A p p. 19 8 8 ); City o

f Oa kla n d v. Oa kla n d Ra id ers , 2 2 0 Cal. Rp tr. 15 3 (Ct. A p p. 1 98 5 ); City o

f Oa kla nd v. S

u p erio r Co urt , 1 9 7 Cal. Rp tr. 7 2 9 (Ct. A p p. 19 8 3 ); City o

f Oa kla n d v. S

u p erio r Co u rt , 1 8 6 Cal. Rp tr. 3 2 6 (Ct. A p p. 1 9 8 2). In 1 9 8 4
, t

h e Oak lan d C o liseu

m su ccessf

u lly su ed t h e Raid ers

an d D av i s f

o r u n p aid ren t. O a kla nd

-Ala med a Cty. Co l i s eu m, In c. v. Oa kla n d Ra i d

ers, Ltd

. , 2 4 3 Cal. Rp tr. 3 0 0 (Ct. A p p

. 1 9 88 ). In 1 9 9 7
, th e Raid ers u n su ccessf

u lly su ed th e Oak lan d Co liseu m f o r n eg lig e n tly

m i s r e presen tin g th e su ccess o f ad v an ce seaso n t ick et sales to in du ce t h e team to m ov e b ack to Oak lan d

. O a kla n d Ra id ers v. Oa kla n d

-Ala med a Cty. Co liseu m, In c. , 5 1 Cal. Rp tr. 3 d 1 4 4 ( C t

. Ap p

. 2 0 0 6 ). In 19 9 9, th eD A V I S V

. U N I T E D S T A T E S 5

I nternal Revenue Service (I RS) assessed the tax e s outside the
statute of limitations and in brea c h o f a Closing Ag reement between the I RS and the partnership that formally owned the Raiders. The district court held tha t t h e b reach of contract invalidated the assessments and entered judg ment f or Davis. W e reverse, finding

the assessments valid.

I. Background

Davis h ad th e larg est interest in the Oakland Raiders, a California limited partnership (the “ Partnership”), which owned and operated the professi o nal football team. D avis

was a lso the president of A.D. F ootball, I nc., the sole g eneral
p a r t ner and tax matters p artner ( “TMP”) of the Partnershi p

. See 26 U.S.C. (“I .R.C.”) § 6231(a)(7).

The Par t n e r ship and the I RS were involved in long

running Tax Court litig a tion. See Milenbach v. Comm’r
, 318 F .3d 924 (9th Cir. 2003). I n 2 005, th e Partnership a nd the I RS reached a settlement over tax y ear s 1988 throug h 1994. The Closing Ag reement, which co n c l uded the litig ation, was sig ned by Davis, a s Presi d ent of the TMP.

Raid ers u n su ccessf

u lly su e d t h e N FL
, seek in g (1 ) co m p en s atio n f

or th e

“ op p o rtu n ity ” th e Raid ers g av e th e NFL b y m o v in g b ack to O ak lan d an d th ereb y o p en in g u

p a sp o t f o r a team in L o s A

n g eles, an d (2 ) d am ag es f or th e NFL ’ s f

ailu re to o f

f er th e Raid ers m o re su

p p o rt to d ev elo p a s tad iu m in So u th ern Calif

o rn i a. Oa kla n d Ra id

ers v. Na t’l Fo o t b a l l L ea g u e , 1 6 1 P .3 d 1 5 1 (Cal. 2 0 0 7 ).

2 A l Dav is d i ed o n O cto b er 8
, 2 0 1 1
, a f ew m o n th s af

ter th i s case w as f iled

. Caro l Dav is is th e ex ecu trix o f h is estate an d th e so l e tru stee o f th e A llen an d C aro l Dav is Rev o cab le T ru st, w h ich su cceed ed to A l’ s in terest in th is litig atio n

. Fo r co n v en ien ce, w e ref er t o t h e p lain t if

f s co llectiv ely as “ Dav i s.”D A V I S V

. U N I T E D S T A T E S 6

Under the Ag reement, the I RS was required to make “computational adjustments” to d e termine the effect of t he settlement on e ach partner’s tax liability

. I .R.C. § 6231(a)(6). Parag raph Q o f the Closing Ag reement g ave the partners the following procedural rig

hts related to those computations:

[ E] ach partner of the [Raiders] wil l be
pe rm i tted at least 9 0 day s to review a nd
comment on computational a djustments proposed by the I R S w ith respect to the implementation of this settlement (and at least 60 day s to review any revised c omputational adjustments) prior to the I RS assessi ng such
amounts.

The Closing Ag reement was implemented throug h three stipulations filed in the Tax Court, one each fo r t ax y ears 1990, 1 991, and 1992. Each stipulati o n included a F orm 4605-A, showing the ag reed-upon adjus t m ents to the Partnershi p ’ s informational tax r eturn; a F orm 886-Z
, showing each partner’s share of the corrected income for that
tax y ear; a

nd a corresponding dec i s i o n to be entered by the Tax Court. The stipulations recited that they were in
ag reement with and subject to the Closing Ag reement. They

were sig ned by St u art L ipton, identified as counsel for “Pet i tioner”—the Partnership and its TMP, A.D. F ootball. On J une 6, 2006, the T a x Co u r t a p p roved and entered the stipulated decisions.

The I RS did n o t d i stribute its calculations of e ach partner’s computational adjustments until J une 2007. D avis

r e s p o nded a few w eeks later, but b y the time the I R S s e n t revised calculations o n A ug ust 2 7, 2007, it had no time to wait 6 0 day s for Davis to review these calculations (asD A V I S V

. U N I T E D S T A T E S 7

p r o v ided for by Parag raph Q of the Closing Ag reemen t ) because the statute of limitations to make assessments w a s about to ex pire. On September 4, 2007, the I RS issued
assessments ag ainst Davis in the amounts of $501,6 61 for 1990, $1,820,400 for 1992, and $159,287 for 1995. 3 The I RS applied a p ortion of refunds otherwise d ue to Davis for earlier
y ears to satisfy

those assessments.

I n November 2007, Davis filed an administrative refund claim fo r tax y ears 1990 a n d 1992, arg uing that the Se p t e mber 2007 assessments were invalid because the I RS had bre a c h e d Parag raph Q o f the Closing Ag reement. The I RS never responded to this claim. I n F ebruary 2009, Davis filed an administ r at i ve refund claim for tax y ear 1995, claiming that the I RS had b r e a c hed Parag raph Q, made the Se p tember 2 007 assessments outside the statute o f limitations, and miscalculated interest. The I RS disallo w e d the claim in larg e part, adjusting only t h e calculation o f interest.

I n 2011, D avis broug ht this action in the United Sta t e s District Court for the Northern District of California, seeking

r e funds f o r tax y ears 1990, 1992, and 1995, based o n t h e I RS’s breach o f Parag r a p h Q. B efore the district court, the I RS arg ued that it did not breach the Closing Ag reement, a nd that even if it did, the breach did not in v a lidate the
assessments. T he d i strict court g r anted Davis’s motion for

su m m a ry judg ment, holding that the I RS’s breach of the C l o sing Ag reement invalidated the assessments. The
g overnment timely

appealed.

3 T h e IRS issu ed an assessm en t f o r tax y ear 19 9 5 b ecau se, alth o u g h th e Clo sin g A g reem en t d id n o t ex p ressly g o v ern t h at tax y ear, it ch an g ed th e Net Op eratin g L o ss Carry o v er ap plicab le to th at y ear.D A V I S V

. U N I T E D S T A T E S 8

II. Discussion

A . Breach of

the Closing Agreem ent

The I RS now a dmits that it breached Parag r aph Q of the C l osing Ag r eement by making the September 20 0 7

ass e ssments w ithout g iving Davis a second opportunity to review its calculations. The issue is whether, as the district
court con cluded, that breach o f c ontract invalidates the subsequent assessments.

Closing ag reements are contracts, Stat es S.S. Co. v

. Comm’r
, 683 F .2d 1282
, 1 2 8 4 (9th Cir. 1982), g o verned b y federal common la w, United S tates v. Nat’l S

teel Corp.
, 75 F .3d 1146, 1150 ( 7th Cir. 1996)

. “[ F ] or most purposes closing ag reem e n t s are just like other contracts.” Id. And, “damag es a

re alway s the d efault remedy fo r b r each o f contract.” United States v. W instar Corp.
, 518 U.S. 8 39, 885 (1996) ( plurality opinion) (citing Rest atement (Second) o f Contracts § 346, cmt. a (Am. L aw. I nst. 1981)).

B u t Davis does not seek damag e s; instead, he arg ues that
any ass e s sments made in breach o f the Closing Ag reement

are invalid. 4 Da v is relies primarily on I .R.C. § 7 1 21(b)(2), wh i ch provides that closing ag r eements are “final a nd conclusive.” He notes that the T a x C o urt incorporated the Closing Ag reement into its decision, making it enforceable a s

a court o rder. B ut, the “final and conclusive” nature o f closing ag reements simply means that they “settle an ex isting dispute with finality ,” Nat’l Steel

, 7 5 F .3d at 1150, and may not be modified or d i sreg a rded “ex cept upon a showing o f fraud or malfeasance, or misrepresentation of a material fact,”

4 Dav is d o es n o t seek

rescissio n

o f th e Clo sin g A g reem en t.D A V I S V

. U N I T E D S T A T E S 9

I .R.C. § 7121(b); see a lso I n re H opk i n s , 1 46 F .3d 729, 732 (9th Cir. 1998) (“I n apply ing § 7121, courts u n animously have held that closing ag reements are meant to d e termine finally and conclusively a tax pay er’s liability for a particular
tax y e ar or y ears.”). That a contract is “final” does not dictate the remedy for its bre ac h

. C f

. Jeff D. v. Andrus

, 899 F .2d 753, 759 (9th Cir

. 1989) (noting that even a fter court approv a l

, “[ a] n ag reement to settle a leg al dispute is a contract and its enforceability is g overned by f a m i liar principles of contract law”). And, Davis offers no support for the unlikely proposition th a t , because a settlement with the I RS is “ final” and c o urt-approved, the r emedy f or any breach, however small, is t o free the tax pay er from his pre-ex isting oblig ation to pay tax e s. I f t h i s were the case, the I RS justifiably would b e reluctant to enter into closing
ag reements, for fear that a mi n o r error could have major
consequences.

Davi s a r gues that Philadelphia & Reading Corp. v

. United States
, 944 F .2d 1063 (3d Cir. 1991), establishes that
t h e r emedy f

or the breach of a c losing ag reement i s invalidation of subsequent assessments. I n that case, a settlement waived the statutory requirement that the I RS mail

a notice of d eficiency prio r t o m a king assessments. Id. at 1066–67. T he settlement ag reement ex pressly conditioned that waiver on the I RS delay ing the assessments until after it had approved a schedule o f overpay ments, so tha t the
tax pay e r, w hich had overpaid tax es i n certain y ears a nd underpaid in o thers, could pay o nly the net balance owed. Id.
at 1067. The I RS, h owever, assessed tax e s befo r e the

ove rpay ments had been approved and, more importantly

, without sending the statutorily mandated notice of deficiency

. Id. at 1068. The Third Circuit held that the assessments were invalid. Id. at 1072.D A V I S V

. U N I T E D S T A T E S 10

However, Philadelphia & R e ading is of no aid to Davis. B ecause the I RS had failed to approve the schedule o f
overpay ments, the Thir d C i rcuit f ound that the tax pay er’s contractual waiver of its statutory rig ht to receive a notice o f deficiency never came into effect. Id. The assessments were therefore not a

uthoriz ed by statute. Id. a t 1072–73. H ere, b y contrast, the I RS violated no law in making the a ssessments.

At bottom, the problem with Davis’s arg ument is that his oblig ation to pay tax es validly and accurately assessed comes from the I nternal Revenue Code, not the Closing Ag r eement, which only specified the treatm e n t o f certain Partnership income as inputs t o t h e c alculation of his tax es. The I RS’s failure to p erform its contract with the Partnership cannot relieve D avis of his statutory oblig a tion to pay tax es; nothing in the Closing Ag reement provided that any tax es assessed on the partners pursuant to statute would be rendered invalid if the g overnment failed to perform.

The I RS breached its contract. That entit l e d Davis to a remedy

, but only one in contract. 5 Moreover, althoug h the breach denied Davis an o pportunity to commen t o n the
amounts of the assessments b efore they were made, it did not p revent h im from challeng ing the assessed amounts; Dav i s could have soug ht to challe n ge t h ose amounts in an administrative refund c l ai m or a refund action. See I

. R.C. § 6230(c)(1)(A). He did not. And, h ad he don e s o, D avis

5 Co n t rary to Dav is’ s arg u m en t, th e g o v ern m en t p reserv ed t h is arg u m en t in its m o tio n f

or su m m ary j u d g m en t, w

h ich arg u ed th at “ A ‘ B reach ’ Do es No t En title P lain tif

f s to a T ax Ref

u n d .” B ecau se th e g o v ern m en t d o es n o t

co n test Dav is’ s ab ility to raise a co n tractu al claim

, w e assu m e f o r p resen t p u rp o s es th at alt h o u g h n ot p erso n ally a party to th e Clo sin g A g reem en t, Dav is w as a th ird

- p arty

b en ef iciary o f th at co n tract.D A V I S V

. U N I T E D S T A T E S 11

mig ht have soug h t c onsequential damag e s resulting from his having to ch a lleng e the assessments in a more ex pensive

manner than that provided for by Parag raph Q. Ag ain, he did
not. I nstead, he threw a Hail Mary a n d soug ht a full refund. That pass falls incomplete. W e hold that the I RS’s b reach o f Parag raph Q did not invalidate the assessments. 6

B. Statute of

Lim itations

B e cause we f

i n d that the district court erred in holding that the breach o f the Closing Ag reement invalidated the assessments, we must address an issue t h a t t he court pretermitted—whether the assessments were untimely

.

W e beg in with g eneral principles of partnership tax law. A partnership is not liable as an e ntity f o r i n c o m e tax es. I .R.C. § 7 01. Rather, income is allocated among the p artners. Id. § 702. Until tax y ear 1 982, partnership tax disputes were conducted at the individual p artner level. See C r n kovich v

. United States
, 202 F .3d 1325, 1328 (F ed. C i r. 2000) (per curiam). The I RS w as therefore required to conduct separate investig ations for each partner, and e nter into “ separate settlement ag reements with each.” I d. Cong ress responded
to this situation i n the Tax Equity and F iscal Responsibility Act (TEF RA), I .R.C. §§ 6221–6233, which provided for the

6 W e ex p ress n o op in i o n as to w h at co n tractu al rem ed ies rem ain

av ailab le to Dav i s , i f an y , or th e ap p ro p riate f o ru m in w

h ich to p u rsu e th em

.D A V I S V

. U N I T E D S T A T E S 12

resolution of partnership tax disputes at the partnership level. 7 Id. § 6221; Crnkovich

, 202 F .3d at 1328.

TEF RA requir e s e ach partnership to desig n a te a TMP

w ith primary responsibility over tax d isputes. See, e

. g

. , I .R.C. §§ 6223(g ) (TMP must keep partners i nformed o f proceeding s), 6224(c)(3) (TMP may b ind certain other partners), 6226(a)–(b) (TMP has first opportun i ty to challeng e administrative partnership tax ruling s in court, a nd
may intervene in a c halleng e b r o u g h t by another partner), 6231(a)(7) (defining TMP); see also Comput. Programs Lambda, Ltd. v. Comm’r
, 89 T.C. 1 98, 205 (1987). Other partners retain the rig ht to p articipate in tax disputes, and any partner whose tax es may be affected b y a partnership tax case in d istrict or tax court is statutorily a party to that case, bound by the judg ment. I .R.C. §§ 6 2 2 4 ( a ), 6226(c); Crnkovich

, 202 F .3d at 1328.

Althoug h TEF RA g enera lly provides that the tax treatment of partnership items will be det e r m i ned at the partnership level, the I RS still can enter into settlement
ag reements with individual partners. I .R

. C

. § 6224. The
set t l ing partner’s partnership items then convert to “nonpartnership items,” id. § 6231(b)(1), and the partner can be dismissed from the partnership-level proceeding

, id. § 6226(d)(1)(A); Mathia v. Comm’r
, 669 F .3d 1080, 1085–86 (10th Cir. 2012) (Section 6231(b) recog n iz es that “individual partners may opt out of a p artnership-level proceeding b y entering into a settlement ag reement with the I RS with respect to the determination of their individual par t n e rship

7 T h e B ip artisan B u dg et A ct o f 2 0 1 5 , P u b. L

. No

. 1 1 4

- 7 4
, § 1 1 0 1, 1 2 9 Stat 5 8 4
, 6 2 5 –6 3 8
, rep ealed T EFRA
, ef f ectiv e f o r p artn ersh ip t ax y ears b eg in n in g af

ter Decem

ber 3 1 , 2 0 1 7

.D A V I S V

. U N I T E D S T A T E S 13

items.”); Olson v. United States
, 37 F e d. Cl. 727, 733 (1997) aff’d

, 172 F .3d 1311 (F e d

. Cir. 1999) (“[ T] he settling partner

e s s e n tially has become a free ag ent to whom the collect i v e approach of TEF RA no long er applies.”).

I f the I RS “enters into a settle m e n t ag reement with the partner” under I .R.C. § 6231(b)(1)( c )

, the partner’s partnership items c onver t t o nonpartnership items, id. § 6231(b)(1), which trig g ers a one-y ear statute of limitations under I .R.C. § 6229(f)(1). I f the I RS does not enter “i nto a settlement ag reement with the p a r t ner,” then the o n e-y e ar stat u t e o f limitations under I .R.C. § 6 229(d) beg ins to run when the tax court d e c ision beco m e s final, which occurred here 90 d ay s after the tax court entered the decision documents. See 26 U.S.C. § 7481(a)(1); Tax Ct. R. 190(a).

The Tax Court approve d t he stipulated decision documents in this case on J une 6, 2006. D a v i s arg ues that these documents were each a “settlement ag reement with the partner,” I .R.C. § 6231(b)(1)(C), so that the statute o f limitations e x pired o n J une 6, 2007, one y ear after their entry

. Davis relies o n the prefatory lang uag e of the st i p u l a t ed decisions, which provide t h a t the adjustment to the Partnership’s returns is made “[ p] ursuant to the ag reement o f the parties in this case

. ” D avis arg ues that, u nder I

. R.C. § 6226, all partners were parties to the Tax Court proceeding

, so each stipulation was “a settlement ag reement with the partner” under I .R.C. § 6231(b)(1)(c). B ecause the o n e-y e ar statute of limitations under I .R.C. § 6229(f) ended on J une 6, 2007, D avis claims that the g o vernment’s September 4
, 2007 assessments were too late.

The g overnment arg ues that the indivi d ual p artners did
not enter into a settlement ag r eement with the g overnment onD A V I S V

. U N I T E D S T A T E S 14

J une 6, 2006. Rather, they were bound by force of law when the tax c ourt entered the stipulated decisio n d o cuments, because the individual partners were parties t o t he tax court proceeding under I .R.C. § 6226(c), and a decision by the tax
court in a partnership action is binding on all parties, T a x Ct. R. 251. B ecause the individual p artners did not “enter into a settlem e n t ag reement w ith” the I RS for purposes o f § 6231(b)(1)(C), the applicable statute of limitations, see I .R.C. § 6229(d), ex pired on September 4, 2007, one y ear a nd 90 day s after th e s t ipulated decisions were entered. According ly

, the g overnment ar gu e s , its September 4, 2007 assessments were timely

.

Under the pl a in lang uag e o f I .R.C. § 6231(b)(1)(C), we conclude that the I RS d o e s n o t “enter into a settlement
agr e e m e nt with the partner” when it enters into a settlement
ag reement with the TMP and the individual partner is bound merely by operation of the tax court’s decision to which the partner is a p arty

. Here, the stipulations were not ag reements

w ith Davis individually

. He d id not sig n them, n o r d i d
any one purporting to represent him in h is individual capacity

. I nstead, each stipulation was si gned only by an attorney for the I RS and Stuart L ipton, in his c a p a c i ty as “Counsel for Petitioner.” 8 Th e “ P e titioner” in the Tax Court proceeding

was the Partnership a

nd its TMP, A

. D

. Fo o tball. Thus, the stipulations, like the Closing Ag reement, wer e ag reements only between the I RS and the Partnership. To be sure, these documents had consequences for D a v is, but they were not ag reements “ with” him under I .R.C. § 6231(b). N othing in TEF RA indicates that Cong r e ss meant the word “partner” in § 6231(b) to mean “tax matters partner;” to the co n trary ,

8 Dav is d o es n o t arg u e th at L ip to n sig n ed in h is cap acity as Dav is’ s p erso n al law

y er.D A V I S V

. U N I T E D S T A T E S 15

C o n g ress appears to have chosen its wording careful l y throug hout the statute, differenti a ting between partners in
g eneral and the tax matters par t n e r r epeatedly

. S ee, e.g. , I .R.C. §§ 6 223, 6224(c), 6226(a)-(b), 6226(g ), 6227, 6228(a), 6229(b).

B e cause the Closing A g reement and stipulations were not

a “settlement ag reement with” Davis w ithin the scope o f I .R.C. § 6231(b), the a ssessments made on September 4, 2007

were timel y , as they occurred within o ne y ear a fter the Tax Court decision became final. I .R.C. § 6229(d).

III. Conclusion

W e reverse the judg ment of the district court and remand for further proceeding s consistent with this opinion.