Background

• A.I.M. Controls, L.L.C., RESAM Holdings Trust, and Clifford William (together, Petitioners) challenged IRS adjustments after FPAA notices; the FPAA was issued August 27, 2008.
• A.I.M. Controls was formed in 1998 as an LLP; its partners were RESAM and A.I.M. Group Trust; Royce and Susan Mitchell were managers, not partners.
• The IRS determined A.I.M. Controls was a sham partnership and disregarded it for tax purposes, imposing tax and penalties on the partners.
• Royce Mitchell sought readjustment of his personal tax liability in district court but the action was dismissed for lack of jurisdiction due to failure to deposit the liability.
• Petitioners filed a readjustment petition in the Tax Court on October 19, 2009, arguing TEFRA tolling prevented dismissal; the Tax Court dismissed for lack of jurisdiction.
• The Fifth Circuit affirmed, holding § 6226’s 150-day filing period is jurisdictional and not subject to tolling; the petition was filed 418 days after the FPAA.

Issues

Key Cases Cited

• Henderson ex rel. Henderson v. Shinseki, 131 S. Ct. 1197 (2011) (filing deadlines are claim-processing rules, not always jurisdictional)
• Arbaugh v. Y&H Corp., 546 U.S. 500 (2006) (jurisdictional label must be clearly prescribed by Congress)
• Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010) (copyright registration not jurisdictional)
• Bowles v. Russell, 551 U.S. 205 (2007) (dramatic limits on the reach of jurisdictional deadlines for appeals)
• Mader v. United States, 654 F.3d 794 (8th Cir. 2011) (circuit applying Henderson to determine jurisdictional deadlines)
• Rich v. C.I.R., 250 F.2d 170 (5th Cir. 1957) (hard jurisdictional deadlines in tax-related petitions)
• Columbia/St. David's Healthcare Sys. LP v. C.I.R., 264 F.3d 1140 (5th Cir. 2001) (non-tolling limitations in partnership-readjustment petitions)