NOTE: This order is nonprecedential.

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JOHN E. KETTLE, ANNE R. KETTLE, RAYMOND

W. WEIDEMANN, JOAN C. WEIDEMANN, JAMES N.

IVY AND LEAH PAGE IVY,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

2012-5099

Appeal from the United States Court of Federal

Claims in consolidated case nos. 04-CV-683, 05-CV-1384,

and 09-CV-205, Judge Marian Blank Horn.

ON MOTION

Before RADER, Chief Judge, LOURIE and SCHALL, Circuit

Judges.

SCHALL, Circuit Judge.

ORDER

The United States moves to summarily affirm these

federal tax cases relating to taxation of partnership

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JOHN KETTLE v. US 2

transactions based on this court's prior decisions in

Keener v. United States, 551 F.3d 1358 (Fed. Cir. 2009)

and Prati v. United States, 603 F.3d 1301 (Fed. Cir. 2010).

The government's motion is opposed by the taxpayers.

The taxpayers in these suits invested in several limited partnerships sponsored by American Agri-Corp.

(AMCOR) in the 1980s that were targeted by the Internal

Revenue Service (IRS) as illegal tax shelters. In 1990 and

1991, the IRS issued notices of final partnership administrative adjustments (FPAA), disallowing the deductions

attributable to the AMCOR partnerships and demanding

that the partners pay the resulting deficiencies.

Representative partners filed suit in the United

States Tax Court. Among the issues litigated was

whether the adjustments were barred by the statute of

limitations. While the Tax Court proceedings progressed,

some partners chose to settle with the IRS, while other

partners agreed to be bound by the Tax Court's statute of

limitations determination in representative test cases.

In 2000, the Tax Court rejected the statute of limitations defense in the test cases, finding that one of the

partnerships had failed to file a valid partnership return

and that the other four had validly agreed through their

tax matters partners ("TMP") to extend the time period

pursuant to LR.C. § 6229(b). Subsequently, the Tax

Court entered stipulated decisions in all of the partnership cases. The IRS subsequently assessed additional

interest against the partners under LR.C. § 6621(c) for

substantial underpayment of income tax attributable to

tax-motivated transactions.

After paying the taxes, the taxpayers brought these

tax refund cases in the United States Court of Federal

Claims, asserting entitlement to a tax refund on the

grounds that the assessments were made after the statute

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3 JOHN KETTLE v. us

of limitations had expired, and the assessment of interest

under section 6621(c) was improper because the partnership transactions were not tax-motivated transactions.

The trial court held that it lacked jurisdiction over the

refund claims because the taxpayers were prohibited by

statute from bringing an action for a refund attributable

to partnership items, and both claims, including the

statute of limitations claim, were partnership items that

should have been challenged in the partnership-level

proceeding instead ofin partner-level proceedings.

This appeal followed.

Federal Claims' jurisdiction over partnership tax refund actions is limited by statute. Pursuant to the Tax

Equity and Fiscal Responsibility Act of 1982 ("TEFRA"),

Pub. L. No. 97-248, § 402(a), 96 Stat. 648, the tax treatment of "partnership items" is determined in a single

partnership-level proceeding, and section 7422(h) of the

Internal Revenue Code enforces that principle by prohibiting partners from bringing individual actions "for a

refund attributable to partnership items[.]"

In Prati and Keener, we held that statute of limitations claims and challenges as to whether section 6621(c)

interest should have been assessed as sham transactions

are "partnership items," and thus the taxpayers were

required to raise the claim in the partnership level proceeding. Prati, 603 F.3d at 1306. Since the claims here

are indistinguishable from those in Prati and Keener, the

trial court's ruling that section 7422(h) bars these taxpayers from asserting their section 6621(c) interest and

statute of limitations claims in these refund proceedings

is clearly correct as a matter of law.

The taxpayers contend that the Tax Court had no jurisdictional authority to allow them to participate in the

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JOHN KETTLE v. US 4

partnership-level Tax Court suits and raise their claims

earlier. But this argument was addressed and rejected by

this court in Prati. There, we explained that even before

the statutory amendment in 1997, tax partners could

have participated in partnership level proceedings. 603

F.3d at 1307 n.4 ("[T]he 1997 amendment merely codified

prior practice in the Tax Court; the appellants, as individual partners, were therefore free to participate in the

partnership-level proceedings to litigate the statute of

limitations issue.").

The cases on which the taxpayers rely that were decided after Prati are not to the contrary, because they do

not address the Tax Court's authority to allow individual

partners to participate in a timely filed partnership-level

proceedings. See A.I.M Controls, LLC v. Comm'r of

Internal Revenue, 672 F.3d 390, 393-95 (5th Cir. 2012)

(time period for filing petition within TEFRA's express

filing period is jurisdictional); see also Henderson ex rel.

Henderson v. Shinseki, _ U.S. _, 131 S. Ct. 1197, 1202-

03 (2011) (directing courts to decide whether statutory

filing periods are jurisdictional based on Congressional

intent). Because the tax partners could have raised these

claims during the Tax Court proceedings, we agree with

the government that their attempts to distinguish themselves from the taxpayers in Prati and Keener in that

regard are without merit.

Finally, the taxpayers contend that they are not

bound by the prior rulings, calling this court's attention to

an affidavit of Mr. Behrens, the TMP who apparently

negotiated the stipulated decisions in the Tax Court. Mr.

Behren's affidavit states in relevant part that: "The IRS

sought to have me concede the transactions were shams.

I refused." The affidavit further purports to explain that

his intent behind entering into the "Stipulation to be

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5 JOHN KETTLE v. us

Bound" in the Tax Court was not to bind other partnerships in relation to specific statute of limitations claims.

To the extent that the taxpayers are relying on Mr.

Behren's affidavit to dispute that the transactions were

tax motivated, this court has already rejected those lines

of argument as directed to the nature of the partnership

transaction and therefore barred by section 7422(h) from

being raised before the Court of Federal Claims. See

Prati, 603 F.3d at 1308-09. We therefore agree with the

government that the judgments of the Court of Federal

Claims should be summarily affirmed. See Joshua v.

United States, 17 F.3d 378, 380 (Fed. Cir. 1994) (Summary affirmance of a case "is appropriate, inter alia, when

the position of one party is so clearly correct as a matter

of law that no substantial question regarding the outcome

of the appeal exists.").

Accordingly,

IT Is ORDERED THAT:

(1) The motion is granted. The judgments of the

Court of Federal Claims are summarily affirmed.

(2) Each side shall bear its own costs.

FOR THE COURT

lsI Jan Horbaly

Jan Horbaly

Clerk

s19

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