Petaluma FX Partners, LLC v. Comm'r of IRS, No. 08-1356

In taxpayer-partnership's appeal from a tax court's decision that it had jurisdiction over several partnership-level determinations regarding the taxpayer and that valuation misstatement penalties applied, the order is affirmed in part where the tax court acted within its jurisdiction when it determined that the taxpayer was not a valid partnership and should be disregarded for tax purposes.  However, the order is vacated in part where the partnership's outside basis was an affected item, not a partnership item, and therefore the tax court had no right to determine, or assess penalties based on the conclusion, that the partners' outside bases were zero.

Read Petaluma FX Partners, LLC v. Comm'r of IRS, No. 08-1356

Appellate Information

Argued September 24, 2009

Decided January 12, 2010

Judges

Opinion by Judge Sentelle

Counsel

For Appellants:

Edward M. Robbins Jr., Hochman, Salkin, Rettig, Toscher & Perez, P.C., Beverly Hills, CA

For Appellee:

Joan I. Oppenheimer and Gilbert S. Rothenberg, U.S. Department of Justice, Washington, DC