Free Answer - District Court of Federal Claims - federal

Case 1:06-cv-00411-ECH

Document 11

Filed 09/15/2006

Page 1 of 5

IN THE UNITED STATES COURT OF FEDERAL CLAIMS (Judge Emily C. Hewitt) ________________________ No. 06-411 T CWC Partnership I, by and through Trust FBO Zachary Stern U/A Fifth G, Andrew Stern and Marilyn Sands, Trustees, a Notice Partner, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. _________________________ ANSWER __________________________ The defendant, the United States, by and for its first defense to the plaintiff's complaint in the above-captioned matter, respectfully denies each and every allegation contained therein that is not expressly admitted below. Defendant further: Admits that the first sentence in the unnumbered paragraph is plaintiff's statement of its claim. Denies that plaintiff is entitled to any relief. Admits that Exhibit A is the final notice of administrative adjustment of partnership items issued to CWC Partnership I (CWC) for the tax year 2001(CWC FPAA). I. THE PARTIES. 1. Admits only that CWC has an employer identification number of 16-1472626. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as -1-

Case 1:06-cv-00411-ECH

Document 11

Filed 09/15/2006

Page 2 of 5

to the truth of the remaining allegations of paragraph 1. 2. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 2. 3. Admits only that the tax matters partner of CWC designated on the 2001 partnership return was Richard Sands and the last four digits of his taxpayer identification number are 3858. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 3. 4. Denies that R,R,M&C Group LP (Group) is, or was at any time, a valid partnership for federal tax purposes. Admits that Group had an employer identification number of 43-1936516. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 4. 5. Denies that R,R,M & C Partners, LLC, is, or was at any time, a valid partnership for federal tax purposes. Admits that R,R,M & C, LLC, had an employer identification number of 43-1936519. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 5. 6. Denies that Alpha I, L.P. (Alpha) is, or was at any time, a valid partnership for federal tax purposes. Admits that Alpha had an employer identification number of 43-1936228. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 6. 7. Denies that Beta Partners, LLC (Beta) is, or was at any time, a valid partnership for federal tax purposes. Admits that Beta had an employer identification number of 43-1946833. States that defendant's answering attorneys lack knowledge or information sufficient to form a

-2-

Case 1:06-cv-00411-ECH

Document 11

Filed 09/15/2006

Page 3 of 5

belief as to the truth of the remaining allegations of paragraph 7. 8. Admits the allegations of paragraph 8. II. JURISDICTION and RULES OF THE UNITED STATES COURT OF FEDERAL CLAIMS App. R Rules 1 and 2. 9. States the jurisdiction exists, if at all, pursuant to 28 U.S.C. § 1508. 10-12. Admits the allegations of paragraphs 10 through 12. 13. Admits only that, on March 3, 2006, the amount of $1,567,414 was applied to the tax account of the Zachary Trust for its taxable period ending in December of 2001. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 13. 14-18. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraphs 15 through 18. III. DESCRIPTION OF THE TRANSACTIONS. 19-27. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraphs 19 through 27. IV THE SERVICE'S POSITION. 28. Admits the allegations of the first, second, and fourth sentences of paragraph 28, except to deny the implied allegation that the adjustment described is the only adjustment made in the CWC FPAA. States that defendant's answering attorneys lack knowledge or information sufficient to form a belief as to the truth of the allegations of the third sentence of paragraph 28. 29. Admits only that on December 22, 2005, the Service issued FPAAs to Group and to R,R,M & C Partners, LLC, in which the Service asserted a 40% accuracy-related penalty or, alternatively, a 20% accuracy-related penalty. Denies the characterizations of the FPAAs in that -3-

Case 1:06-cv-00411-ECH

Document 11

Filed 09/15/2006

Page 4 of 5

the documents speak for themselves. 30. Admits only that on December 22, 2005, the Service issued FPAAs to Alpha and to Beta in which the Service asserted a 40% accuracy-related penalty or, alternatively a 20% accuracy-related penalty. Denies the characterizations of the FPAAs in that the documents speak for themselves. 31. Admits that plaintiff's complaint challenges all of the adjustments made by the Service in the CWC FPAA. Denies that plaintiff is entitled to any relief. Admits that separate complaints have been filed to challenge the adjustments made by the Service in the Alpha FPAA, the Beta FPAA, the Group FPAA and the R,R,M & C Partners, LLC, FPAA. Denies that those plaintiffs are entitled to any relief. V. THE SERVICE'S POSITIONS IN THE CWC FPAA. 32-37. Denies the allegations of paragraphs 32 through 37. VI. CWC' ERRONEOUS TREATMENT OF TAX ITEMS. 38-58. Denies the allegations of paragraphs 38 through 58. VII. BURDEN OF PROOF. 59. Denies the allegations of paragraph 59.

-4-

Case 1:06-cv-00411-ECH

Document 11

Filed 09/15/2006

Page 5 of 5

VIII. PRAYER FOR RELIEF. WHEREFORE, the defendant prays that this Court enter judgment in favor of defendant and against plaintiff, determining that the adjustments made by the CWC FPAA to CWC's partnership items for the period ending December 31, 2001, are correct; dismissing plaintiff's complaint; and granting such other and further relief as is just and proper.

Respectfully submitted, /s David R. House DAVID R. HOUSE Attorney of Record U.S. Department of Justice Tax Division Court of Federal Claims Section Post Office Box 26 Ben Franklin Post Office Washington, D.C. 20044 (202) 616-3366 (202) 514-9440 (facsimile) EILEEN J. O'CONNOR Assistant Attorney General DAVID GUSTAFSON Chief, Court of Federal Claims Section s/David Gustafson

-5-