Free Response to Motion - District Court of Federal Claims - federal

Case 1:01-cv-00358-LB

Document 82

Filed 07/17/2006

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No. 01-358 T (Judge Block) ______________________ IN THE UNITED STATES COURT OF FEDERAL CLAIMS ______________________

JEFFREY T. SCUTERI, PLAINTIFF VS. UNITED STATES OF AMERICA, DEFENDANT ____________________ PLAINTIFF'S RESPONSE IN OPPOSITION TO THE MOTION OF THE UNITED STATES FOR PARTIAL DISMISSAL OF PLAINTIFF'S COMPLAINT ____________________

Plaintiff Jeffrey T. Scuteri ("Plaintiff") respond to the Motion of the United States for Partial Dismissal of Plaintiffs' Complaint ("the government's motion") and request that the government's motion be denied. This Court has jurisdiction to address Plaintiff's §6621(c) claim. As will be addressed in detail in this brief, Defendant's motion is fundamentally flawed to the extent it rests on the following erroneous precepts: (i) The government erroneously asserts that the settlements were partial settlements. They were in fact comprehensive settlements converting all partnership items to nonpartnership items and removing the Plaintiff from the Tax Court proceedings. The subsequent Tax Court proceedings are irrelevant. (ii) The government erroneously asserts this Court lacks jurisdiction based on the erroneous

Case 1:01-cv-00358-LB

Document 82

Filed 07/17/2006

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representation that Plaintiffs' claim requires a redetermination of partnership items. That is a patent misrepresentation of Plaintiff's claim. Plaintiff's claim requires only a consideration of the content of the FPAAs issued by the IRS, the content of the settlements they entered into, and the applicable law. Based on those settlements, the penalty interest provisions of §6621(c) are not applicable. Plaintiff's claims do not require a re-opening or review of partnership items. Their claims are not attributable to partnership items. They are attributable to the erroneous applications of §6621(c) to the liabilities resulting from the agreed settlement. Plaintiff entered into §6224(c) settlements with the IRS for 1984. Those settlements addressed only partnership items. Although this Court is barred from addressing refunds "attributable to partnership items" pursuant to 26 U.S.C. §7422(h), section 7422(h) does not deprive this Court of jurisdiction over Plaintiff's claims because (i) §6621(c) is not a partnership item, it is an "affected item," over which the Tax Court has no jurisdiction in a TEFRA partnership-level case and this Court does have jurisdiction, (ii) the partnership item settlements were comprehensive, and by statute, for 1984, could not be "partial," (iii) the parties intended that the settlements be comprehensive as to partnership items and the IRS repeatedly represented to the Tax Court that settled partners were no longer parties to the partnership-level cases for any reason, (iv) for the tax years in issue, a partner cannot be bound to determinations made in a TEFRA partnership-level case after they settle their partnership items, (v) even if a partner could be bound to determinations made in a TEFRA partnership-level case after they settle their partnership items, the bases for the adjustments in the decisions cannot be imputed to the Plaintiff's settlement adjustments because the amount of the adjustments were substantially different for the same partnership items, and (vi) even if the bases for the adjustments in the decisions could be imputed to the Plaintiff's settlement adjustments they are not binding because they were not independent findings of the Tax Court, but rather resulted from a 2
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Case 1:01-cv-00358-LB

Document 82

Filed 07/17/2006

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purported agreement between the IRS and TMP. WHEREFORE, Plaintiff Jeffrey T. Scuteri respectfully requests that the government's motion be denied in full. Respectfully submitted,

July 17, 2006

/Thomas E. Redding / Thomas E. Redding Sallie W. Gladney Teresa J. Womack REDDING & ASSOCIATES, P.C. 2914 W.T.C. Jester Houston, Texas 77018 (713) 965-9244 / (713) 621-5227 Fax ATTORNEYS FOR PLAINTIFF

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