Tax Court In Brief | Green Valley Investors v. Comm'r (consolidated) | Notice 2017-10 Deemed Improperly Issued; Syndicated Conservation Easements

• Published date: 15 November 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Tax Authorities
• Law Firm: Freeman Law
• Author: Freeman Law

Tax Litigation: The Week of November 7th, 2022, through November 11th, 2022

• Fields v. Comm'r, T.C. Summary Opinion 2022-22 | November 10, 2022 | Panuthos, Special Trial J. | Dkt. No 2925-20S (IRS Automated Underreporter, gifts from employer, unreported gross income, and accuracy-related penalty)
• Amos v. Comm'r, T.C. Memo. 2022-109 | November 10, 2022 | Urda, J. | Dkt. No. 4331-18

Green Valley Investors, LLC v. Comm'r, 159 T.C. No. 5 | November 9, 2022 | Weiler, J. | Dkt. Nos. 17379-19, 17380-19, 17381-19, 17382-19 (consolidated)

Opinion

Short Summary: On December 23, 2016, the IRS issued Notice 2017-10, which identified all syndicated conservation easement transactions beginning January 1, 2010, including all substantially similar transactions, as "listed transactions" for purposes of Treas. Reg. ' 1.6011-4(b)(2). In 2019, the IRS examined several limited liability companies (collectively, the "taxpayers"). After the taxpayer challenged the IRS's determinations in its final partnership administrative adjustments ("FPAAs") through the filing of a Tax Court petition, the IRS answered and asserted an additional penalty against the taxpayers under I.R.C. ' 6662A. The parties filed cross-motions for summary judgment on the I.R.C. ' 6662A penalty issue with the taxpayers contending, among other things, that the IRS's issuance of Notice 2017-10 failed to comply with the notice-and-comment provisions of the Administrative Procedure Act (the "APA").

Key Issues:

Whether Notice 2017-10 is a legislative or interpretative rule under the APA?

Whether Notice 2017-10 must be set aside as in violation of the notice-and-comment procedures of the APA?

Primary Holdings: Notice 2017-10 is a legislative rule that was improperly issued by the IRS without notice and comment as required under the APA. Notice 2017-10 must be set aside under the APA, rendering the I.R.C. 6662A penalties unlawful.

Key Points of Law:

A party may move for summary judgment regarding all or any part of the legal issues in controversy. Rule 121(a); Wachter v. Comm'r, 142 T.C. 140, 145 (2014). The Tax Court may grant summary judgment if the pleadings, stipulations and exhibits, and any other acceptable materials show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(a) and (b); Elec. Arts, Inc. & Subs. v. Comm'r, 118 T.C. 226, 238 (2002). When a motion for summary judgment has been filed, the Tax Court construes the facts and...