Free Order - District Court of Federal Claims - federal

Case 1:05-cv-00748-CCM

Document 98

Filed 03/13/2008

Page 1 of 2

In the United States Court of Federal Claims
*************************** STOBIE CREEK INVESTMENTS, LLC, and JFW ENTERPRISES, INC., Plaintiffs, v. THE UNITED STATES, Defendant. *

* * * * Nos. 05-748T & 07-520T (Filed Mar. 13, 2008)

*************************** ERRATUM Please substitute the attached page 1 for the original in the order filed on March 10, 2008. The words "taxable year" are replaced with "tax periods" in the third line of the second paragraph.

s/ Christine O.C. Miller _____________________________________ Christine Odell Cook Miller Judge

Case 1:05-cv-00748-CCM

Document 98

Filed 03/13/2008

Page 2 of 2

In the United States Court of Federal Claims
*************************** STOBIE CREEK INVESTMENTS, LLC, and JFW ENTERPRISES, INC., Plaintiffs, v. THE UNITED STATES, Defendant. *

* * * * Nos. 05-748T & 07-520T (Filed Mar. 10, 2008)

*************************** ORDER ON MOTION TO CONFIRM JURISDICTION Plaintiffs on January 16, 2008, filed Plaintiffs' Motion for an Order Confirming Jurisdiction To Decide the Applicability of Penalties and Any Defenses Thereto. After an extension of time, defendant responded on February 11, 2008, and plaintiffs filed their reply on February 25, 2008. Argument was held on February 29, 2008. These actions challenge two Notices of Final Partnership Administrative Adjustment ("FPAAs") issued to Stobie Creek Investments, LLC ("the partnership") for the partnership's tax periods ending April 30, 2000, and December 31, 2000, pursuant to the Tax Equity and Fiscal Responsibility Act of 1982, 26 U.S.C. ("I.R.C.") §§ 6221-6234 (2000) ("TEFRA"). Compl. in Stobie Creek Investments, LLC v. United States, No. 05-748T, ¶ 1 (Fed. Cl. July 12, 2005); Compl. in Stobie Creek Investments, LLC v. United States, No. 07-520T, ¶ 1 (Fed. Cl. July 11, 2007). Plaintiffs Stobie Creek Investments LLC and JFW Enterprises, Inc., Tax Matters and Notice Partner ("Stobie Creek"); DKW Sr. Enterprises, Inc.; DKW Jr. Enterprises, Inc.; PCW Enterprises, Inc.; CSW Enterprises, Inc.; and VJ Enterprises, Inc., seek to confirm that the United States Court of Federal Claims has statutory jurisdiction to determine penalties and partner-level defenses at the forthcoming trial in these actions. The Internal Revenue Service (the "IRS") asserted four different accuracy-related penalties pursuant to I.R.C. §§ 6662(c), (d), (e), and (h) (2000): a 40% gross valuation misstatement penalty under sections 6662(e) and 6662(h); a 20% substantial valuation misstatement penalty under section 6662(e) (in the alternative); a 20% penalty for "negligence" or "disregard" of rules and regulations under section 6662(c); and a 20%