McCann v. United States
105 Fed. Cl. 120
Fed. Cl.2012Background
- AMCOR-sponsored tax shelter partnerships in the 1980s led to FPAAs disallowing deductions and deficient taxes.
- Taxpayers McCann and Epps paid the deficiencies and pursued refund actions in this court.
- TEFRA governs partnership-item treatment and directs partnership-level determinations for items—limiting partner-level refunds.
- Keener and Prati held that certain refund claims tied to partnership items are barred in partner-level proceedings.
- This court lifted stays and consolidated the cases; prior rulings dismissed for lack of jurisdiction.
- The government moved to dismiss the amended complaint as a partner-level action, invoking TEFRA and the partnership-item concept.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TEFRA jurisdiction over partner-level claims | McCann/Epps argue claims are not partnership-item based. | Government says claims are partnership-item related and barred. | Dismissed; claims barred as partnership items. |
| Statute-of-limitations as partnership item | Claims outside period should yield refunds. | Limitations issue is a partnership item; barred. | Dismissed; limitations issue treated as partnership item. |
| Penalty-interest under former § 6621(c) as partnership item | No partnership-level sham finding; penalty interest improper. | Keener/Prati control; dispute over partnership transactions barred. | Dismissed; penalty-interest claims attributable to partnership items. |
Key Cases Cited
- Keener v. United States, 551 F.3d 1358 (Fed.Cir.2009) (claims involving partnership items barred in partner-level suits)
- Prati v. United States, 603 F.3d 1301 (Fed.Cir.2010) (statute-of-limitations and penalty-interest claims barred as partnership items)
- Schell v. United States, 589 F.3d 1378 (Fed.Cir.2009) (FPAAs conclusive; supports partnership-item determinations)
- Duffie v. United States, 600 F.3d 362 (5th Cir.2010) (penalty interest as affected item with partnership/nonpartnership components)
- Dahlberg v. United States, 104 Fed.Cl. 214 (2012) (court decisions aligned with Keener/Prati on similar AMCOR claims)
- Kettle v. United States, 104 Fed.Cl. 699 (2012) (AMCOR-type claims dismissed for lack of jurisdiction)