692 F. App'x 432
9th Cir.2017Background
- J. Paul Reddam formed Clarence Ventures LLC and invested in the Foraker Strategic Investment Fund, an LLC partnership on which Presidio Growth, LLC served as tax matters partner.
- Foraker filed its 1999 partnership return on April 13, 2000; absent extension, IRS deadline to issue an FPAA was April 15, 2003.
- Reddam (personally and via power of attorney) signed multiple consents extending the statute of limitations, collectively extending it to June 30, 2008; the IRS issued an FPAA on December 21, 2004 (within the extension).
- Reddam later claimed he relied on advice from Carl Hasting when signing an extension and that Hasting aced an IRS investigation, creating a conflict of interest that invalidated Reddam s consent.
- The district court granted summary judgment for the government, finding the consents valid; Reddam appealed the validity of the extensions.
Issues
| Issue | Reddam's Argument | Government's Argument | Held |
|---|---|---|---|
| Whether advisor conflict of interest invalidates Reddam's consents to extend the limitations period | Hasting s conflict tainted Reddam s consent, making extensions invalid | Reddam personally signed consents, waived any disclosed conflict, and later signed additional consents after terminating Hasting | Court held consents valid; Hasting's potential conflict did not invalidate the extensions |
| Whether Transpac compels invalidation when taxpayer personally signs consent | Relies on Transpac to argue any advisor conflict voids consent | Transpac is distinguishable because it did not involve a taxpayer who personally signed consents | Court found Transpac inapplicable and distinguished it; taxpayer-signed consents stand |
| Whether summary judgment was appropriate on the consent validity issue | Facts show invalidation; summary judgment should be denied | Record shows waiver and multiple valid consents supporting summary judgment for government | Court affirmed summary judgment for government |
| Whether all consents were infected by Hasting's alleged conflict | All extensions signed by Reddam were tainted by Hasting's influence | Evidence shows Hasting advised only some signings, Reddam waived conflict, and later signings occurred after relationship ended | Court held no basis to infer every consent was infected; multiple valid consents existed |
Key Cases Cited
- Transpac Drilling Venture 1982-12 v. Comm'r, 147 F.3d 221 (2d Cir. 1998) (advisor conflict can affect validity of taxpayer consents in specific circumstances)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment: all justifiable inferences drawn for the nonmovant)