101 Fed. Cl. 791
Fed. Cl.2011Background
- Cookes seek a refund of §6621(e) interest for 1983 and 1984; government moves to dismiss for lack of subject-matter jurisdiction and for summary judgment to be moot.
- TEFRA governs partnership items; TEFRA §7422(h) precludes refund actions attributable to partnership items and §6230 governs partner-level adjustments timing.
- Dillon Oil Technology Partners (Elektra partnerships) underwent TEFRA proceedings culminating in Krause v. Commissioner, which found enhanced interest under §6621(c) proper for certain transactions.
- Vulcan Oil decisions and show-cause orders adopted Krause-based recalculations; later dismissals/Orders of Dismissal bound non-settling partners to Krause’s framework.
- Cookes filed their refund action in 2010; issue presented is whether §7422(h) bars an individual refund action challenging partnership-item-based penalties; court grants dismissal for lack of jurisdiction.
- Court cites controlling authority that reviewing partnership-level items in an individual refund action is barred under §7422(h).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §7422(h) bars the refund action. | Cookes argue distinction from Keener/Prati; no TMT determination made. | Government says refund is attributable to partnership items; barred. | Barred; §7422(h) deprives jurisdiction. |
| Whether Vulcan Oil’s dismissal orders constituted a TMT determination. | Cookes contend no TMT finding existed to support §6621(c) penalties. | Vulcan Oil’s actions bound by Krause; TMT determination effectively made. | Barred; court cannot examine partnership-level items in this refund action. |
Key Cases Cited
- Krause v. Commissioner, 99 T.C. 132 (1992) (test case for Krause holdings applying §183 and TMT penalties)
- Hildebrand v. Commissioner, 28 F.3d 1024 (10th Cir. 1994) (affirmation of Krause in circuit court context)
- Keener v. United States, 551 F.3d 1358 (Fed.Cir. 2009) (holds §7422(h) bars partnership-item reviews in refund actions)
- Prati v. United States, 603 F.3d 1301 (Fed.Cir. 2010) (confirms §7422(h) barring partnership-item examination in refunds)
- Schell v. United States, 84 Fed.Cl. 159 (2008) (recognizes §7422(h) bar on partnership-item challenges in refunds)