* After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument. This order and judgment is

not binding precedent, except under the doctrines of law of the case, res judicata,

and collateral estoppel. It may be cited, however, for its persuasive value

consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED

United States Court of Appeals

Tenth Circuit

June 9, 2009

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

W. BRIAN McDERMOTT,

Petitioner-Appellant,

v.

COMMISSIONER OF THE

INTERNAL REVENUE SERVICE,

Respondent-Appellee.

No. 08-9006

(Tax Court No. 19530-06)

ORDER AND JUDGMENT*

Before O’BRIEN, Circuit Judge, BRORBY, Senior Circuit Judge, and

McCONNELL, Circuit Judge.

In March 2000, the Commissioner of Internal Revenue (“Commissioner”)

mailed W. Brian McDermott and his now-deceased wife a notice of deficiency

pursuant to 26 U.S.C. § 6212 concerning their 1996 individual income tax return. 

The notice attributed income to them from various partnerships and explained that
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under 26 U.S.C. § 6213(a), they had ninety days to file a petition for

redetermination. It was not until September 2006, however, that Mr. McDermott

filed a petition in which he challenged the validity of the notice. He

acknowledged the petition was filed more than six years after the ninety-day

deadline, but argued his untimely filing was excused because the notice

improperly attributed partnership income to him before the conclusion of

partnership proceedings, and was thus invalid. The Tax Court never addressed

the validity of the notice, but instead dismissed his petition as time-barred. 

“We review tax court decisions in the same manner and to the same extent

as decisions of the district courts in civil actions tried without a jury. The Tax

Court’s legal conclusions are subject to de novo review, and its factual findings

can be set aside only if clearly erroneous.” Katz v. Comm’r, 335 F.3d 1121,

1125-26 (10th Cir. 2003) (citations and quotation marks omitted). 

Title 26 U.S.C. § 6221 provides that “the tax treatment of any partnership

item . . . shall be determined at the partnership level.” As such, “[a] partnershiplevel proceeding is the exclusive means for adjusting a partnership item.” Katz,

335 F.3d at 1124. In Dubin v. Comm’r, 99 T.C. 325 (1992), the taxpayers filed an

untimely petition for redetermination arguing that the “notice of deficiency is

invalid because all of the items giving rise to adjustments are partnership items

(or affected items) and [the Commissioner] has failed to comply with the unified

audit and litigation procedures applicable to partnership items.” Id. at 327. The
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tax court stated that “[a]lthough [the taxpayer] concedes that her petition was not

timely filed, we must take up first the validity of [the Commissioner’s] notice of

deficiency.” Id. The court then outlined the procedure when the taxpayer files an

untimely petition that challenges the validity of a notice:

If [the Commissioner] issued a valid notice of deficiency, then we

must grant [the Commissioner’s] motion and dismiss this case for

lack of jurisdiction on account of [the taxpayer’s] failure to file a

timely petition. In contrast, if respondent failed to issue a valid

notice of deficiency, we must dismiss this case for lack of

jurisdiction on that ground, rather than on the ground of an untimely

petition. Accordingly, we focus first on whether and the extent to

which [the Commissioner’s] notice of deficiency is valid.

Id. (citations omitted). Accord Rochelle v. Comm’r, 116 T.C. 356, 358 (2001)

(holding that “[i]f the notice of deficiency is found to be invalid, we must dismiss

in petitioner’s favor regardless of whether the taxpayer’s petition was timely

filed.”). 

The Tax Court in this case did not rule on the validity of the notice. It

reasoned instead that “[t]he factual issue as to whether income charged to [the

taxpayers] in [the Commissioner’s] notice of deficiency represents income [the

taxpayers] earned as [] partner[s] in a . . . partnership does not go to the

jurisdiction of this Court[,]” R., Doc. 11, at 4, and dismissed the petition as

untimely. To the contrary, that issue must be resolved in the first instance. The 
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failure to do so means that the case is REMANDED to the tax court for further

proceedings consistent with this Order and Judgment. 

Entered for the Court

Terrence L. O’Brien

Circuit Judge