NOTE: This orderis nonprecedential. 

# muiteb**~tates** 

# <!Courtof**~eaIs** 

# fortbejf

# eberaI<!Circuit

JOHNY. GLASS, JOSEPHINE J. GLASS, THOMAS R. LUMPKIN, JEAN P. LUMPKIN, JAMES R. REHAK, AND 

### JOANNM. REHAK, Plaintiffs-Appellants,



### v. UNITED STATES, Defendant-Appellee.

2012-5101

Appeal from the United States Court of Federal Claims in consolidated case nos. 01-CV-575, 06-CV-094, and 09-CV-259, Judge Lawrence M. Baskir.



### ONMOTION

Before RADER, 

### ChiefJudge, LOURIEandSCHALL, 

### Circuit Judges. SCHALL, 

### CircuitJudge. 

### ORDER The United States moves to summarily affirm these federal tax cases relating to taxation of partnership Case: 12-5101 Document: 15 Page: 1 Filed: 11/27/2012JOHN GLASS 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. UnitedStates, 603 F.3d 1301 (Fed. Cir. 2010). The government's motionis opposedbythe taxpayers. The taxpayers in these suits invested in several limited partnerships sponsored by American Agri-Corp. (AMCOR) in the 1980s that were targetedby the Internal Revenue Service (IRS) as illegaltax shelters. In 1990 and 1991, the IRS issued notices offinal partnership administrative adjustments (FPAA), disallowing the deductions attributable to the AMCOR partnerships and demanding thatthe partners paythe 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 Courtproceedings progressed,
some partners chose to settle with the IRS, while other partners agreed to be boundby the Tax Court's statute of limitations determinationinrepresentative testcases. In 2000, the Tax Court rejected the statute oflimitations 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 ofthe partnership cases. The IRS subsequently assessed additional interest against the partners under LR.C. § 6621(c) for substantial underpayment ofincome tax attributable to tax-motivatedtransactions. Mter 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 afterthe statute Case: 12-5101 Document: 15 Page: 2 Filed: 11/27/20123 JOHNGLASS v. US

oflimitations had expired, and the assessment ofinterest under section 6621(c) was improper because the partnership transactions were nottax-motivatedtransactions. The trial courtheldthatitlackedjurisdictionoverthe refund claims because the taxpayers were prohibited by statute from bringing an action for a refund attributable to partnership items, and that both claims, including the statute oflimitations claim, were partnership items that should have been challenged in the partnership-level proceedinginsteadofinpartner-levelproceedings. This appeals 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) ofthe 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 oflimitations 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 oflimitations claims in these refund proceedings is clearlycorrect as a matteroflaw. The taxpayers contend that the Tax Court had no jurisdictional authority to allow them to participate in the Case: 12-5101 Document: 15 Page: 3 Filed: 11/27/2012JOHN GLASS v. US 4

partnership-level Tax Court suits and raise their claims earlier. Butthis argumentwas addressed andrejectedby this court in 

### Prati. There, we explained that even before the statutory amendment in 1997, tax partners could have participatedinpartnership levelproceedings. 

### Prati, 603 F.3d at 1307 n.4 ("[T]he 1997 amendment merely codifiedpriorpractice inthe 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 proceeding. 

### SeeA.I.M. Controls, LLC v. Comm'rofInternal Revenue, 672 F.3d 390 (5th Cir. 2012) (holding that 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 withoutmerit. Finally, the taxpayers contend that they are not boundby the priorrulings, callingthis court's attentionto 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 Case: 12-5101 Document: 15 Page: 4 Filed: 11/27/20125 JOHNGLASS v.

### us

Bound" in the Tax Court was not to bind other partnerships inrelationto specific statute oflimitations 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 ofargument as directed to the nature ofthe 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 ofthe Court of Federal Claims should be summarily affirmed. 

### See Joshua v. United States, 17 F.3d 378, 380 (Fed. Cir. 1994) (Summary affirmance ofa case "is appropriate, 

### interalia, when the position ofone party is so clearly correct as a matter oflaw that no substantial questionregarding the outcome ofthe appeal exists."). Accordingly, 

### ITIs ORDERED

### THAT: (1) The motion is granted. The judgments of the CourtofFederal Claims are summarily affirmed. (2) Each side shallbearits owncosts.

FOR THE COURT

/s/Jan Horbaly Jan Horbaly Clerk s19 Case: 12-5101 Document: 15 Page: 5 Filed: 11/27/2012