Recent TEFRA Partnership Tax Litigation

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Matthew L. Roberts

Matthew L. Roberts



Mr. Roberts is a Principal of the firm. He devotes a substantial portion of his legal practice to helping his clients successfully navigate and resolve their federal tax disputes, either administratively, or, if necessary, through litigation. As a trusted advisor he has provided legal advice and counsel to hundreds of clients, including individuals and entrepreneurs, non-profits, trusts and estates, partnerships, and corporations.

Having served nearly three years as an attorney-advisor to the Chief Judge of the United States Tax Court in Washington, D.C., Mr. Roberts leverages his unique insight into government processes to offer his clients creative, innovative, and cost-effective solutions to their tax problems. In private practice, he has successfully represented clients in all phases of a federal tax dispute, including IRS audits, appeals, litigation, and collection matters. He also has significant experience representing clients in employment tax audits, voluntary disclosures, FBAR penalties and litigation, trust fund penalties, penalty abatement and waiver requests, and criminal tax matters.

Often times, Mr. Roberts has been engaged to utilize his extensive knowledge of tax controversy matters to assist clients in their transactional matters. For example, he has provided tax advice to businesses on complex tax matters related to domestic and international transactions, formations, acquisitions, dispositions, mergers, spin-offs, liquidations, and partnership divisions.

In addition to federal tax disputes, Mr. Roberts has represented clients in matters relating to white-collar crimes, estate and probate disputes, fiduciary disputes, complex contractual and settlement disputes, business disparagement and defamation claims, and other complex civil litigation matters.

Recent TEFRA Partnership Tax Litigation

Stevens v. Comm’r, T.C. Memo. 2020-118 | August 6, 2020 | Halpern, J. | Dkt. Nos. 29815-13, 9539-15

Short SummaryThe IRS determined deficiencies for the taxpayers’ 2006, 2008, 2009, and 2010 tax years.  In addition, the IRS asserted additions to tax under Section 6651(a)(1) and accuracy-related penalties under Section 6662(a) for 2006, 2008, and 2010.  Moreover, because the taxpayers had not filed returns for 2005, 2007, 2011, and 2012, the IRS issued separate notices of deficiency to each taxpayer and also determined additions to tax under Section 6651(a)(1) and (2) and estimated additions to tax under Section 6654 for 2011 and 2012.

After the notices of deficiency were issued, the taxpayers submitted to the IRS signed and unsigned returns reflecting losses from TEFRA partnerships which effectively offset the deficiencies.  Prior to trial, the IRS moved to dismiss for lack of jurisdiction so much of each case as it related to partnership items, which was granted by the Tax Court.  Thereafter, the IRS provided recomputed deficiencies reflecting the dismissal of partnership items.  The taxpayers provided no evidence at trial challenging the adjustments underlying the deficiencies.

Key Issue:  To what extent can the Tax Court uphold the IRS’ recomputed deficiencies in light of the taxpayers’ claimed partnership loss deductions?

Primary Holdings

Key Points of Law:

Insight:  The Stevens case again illustrates the complexity in the old TEFRA regime.  However, fewer of these cases will be heard by the Tax Court as the IRS initiates more partnership examinations under the new BBA audit procedures.