Opinion ID: 685018
Heading Depth: 1
Heading Rank: 2

Heading: issues

Text: 8 On appeal, NCBA contends that the district court erred in (1) finding that the NCBA was required to file informational partnership tax returns for 1979 through 1988 and could be penalized pursuant to 6698 for failing to do so, and (2) upholding the IRS's 6700 penalty for promoting an abusive tax shelter.
9 The NCBA asserts that the district court erroneously found it was subject to 6698 penalties for failing to file informational partnership tax returns for the years 1979 through 1988. 10 The NCBA concedes that it is required to file informational partnership tax returns. 3 However, the NCBA asserts that it is not liable for any penalty under I.R.C. 6698(b) because it had reasonable cause for not filing. The NCBA contends reasonable cause existed because (1) prior decisions of this ... court protected the privacy of NCBA's membership information, (2) the trial court has issued inconsistent rulings relating to NCBA's legal status, (3) [t]he NCBA had no prior notice that it should have considered itself to be a partnership for tax purposes, and (4) NCBA met its burden of proving a partnership of much smaller proportions than the court found. (Appellant's Appendix at 23-40). 11 Under I.R.C. 6698 if a partnership required to file a return under section 6031 for any taxable year fails to file it shall be liable for a penalty ... unless it is shown that such failure is due to reasonable cause. 26 U.S.C. 6698. However, the reasonable cause issue raised by NCBA on appeal was not adequately raised, preserved or presented by NCBA to the district court. This court will not address issues that were not presented to and ruled upon by the district court. 4 Farmers Ins. Co., Inc. v. Hubbard, 869 F.2d 565, 570 (10th Cir.1989). See also Burnette v. Dresser Industries, Inc., 849 F.2d 1277, 1282 (10th Cir.1988); Graham v. City of Oklahoma City, Okla., 859 F.2d 142, 146 n. 6 (10th Cir.1988) (We will not consider issues which were not raised before the district court.). 12 Although the NCBA raised arguments (1) and (4) in support of its reasonable cause claim in the district court as independent grounds for relief, it has not asserted these claims independently on appeal. Thus, by its own failures or inactions, NCBA rendered it inappropriate for us to consider the above theories of relief on appeal.
13 The NCBA contends that the district court erroneously determined that it promoted an abusive tax shelter and erred in upholding the $176,822.00 penalty under I.R.C. 6700. 14 The NCBA argues that it promotes political, educational and economic ideas, including ideas about taxation, none of which suggests that NCBA activities confer any 'tax benefit' by reason of association with or participation in any NCBA 'plan or arrangement.'  (Appellant's Appendix at 45). NCBA claims that it was formed to disseminate political ideas and that [f]or members of the NCBA, the exchange [NCE] is a mode of political expression protected by the First Amendment. Finally, the NCBA asserts that an individual must personally make or furnish the false or fraudulent statements in order to be liable and that a partnership would not impute liability to all partners simply because one partner had made or furnished false or fraudulent statements in violation of 6700. (Appellant's Appendix at 48). 15 Findings of fact ... shall not be set aside unless clearly erroneous. Fed.R.Civ.P. 52(a). A finding of fact is not clearly erroneous unless 'it is without factual support in the record, or if the appellate court, after reviewing all the evidence, is left with the definite and firm conviction that a mistake has been made.'  Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185 (10th Cir.1990) (quoting LeMaire ex rel. LeMaire v. United States, 826 F.2d 949, 953 (10th Cir.1987)). 16 The district court found that: the NCBA is a person under 6700; the evidence revealed that the NCBA/NCE did made [sic] representations about the tax advantages afforded by maintaining an account at the NCE; and the NCE was clearly established to thwart enforcement of the tax laws, and as such was an abusive tax shelter. (Appellant's Appendix at 135-36). 17 After careful examination of the record, we cannot say the district court's findings are clearly erroneous. 18 AFFIRMED.