A recent case regarding partnership taxation in the US Court of Appeals for the Ninth Circuit held that the tax court has jurisdiction in rejecting a partner’s assertion of the statue of limitations and affirmed. A summary of the case is as follows,
In an action brought by a partner seeking judicial review of the IRS’s adjustment of a partnership’s tax return, the panel held that the tax court had jurisdiction to reject the partner’s assertion of the statute of limitations, and affirmed.
Marcus Katz, a partner in MK Hillside Partners, filed a petition for review in tax court contesting the IRS’s finding that MK Hillside was a sham, lacked economic substance, and was formed and used principally to avoid taxes; and asserting the statute of limitations. The tax court rejected the partner’s assertion of the statute of limitations. The panel held that because the tax court had jurisdiction to consider Katz’s argument regarding the statute of limitations, it necessarily had jurisdiction to reject it, at least for the purposes of the partnership proceeding. The panel affirmed the tax court’s determination that the limitations period remained open as to Katz.
Follow this link for the full case and related documents: MK Hillside Partners v. Commissioner, No. 14-71504 (9th Cir. 2016) :: Justia
Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal