John C. Bedrosian; Judith D. Bedrosian, Petitioners-Appellants,
Commissioner of Internal Revenue, Respondent-Appellee.
and Submitted August 15, 2019 Pasadena, California
from a Decision of the United States Tax Court Tax Ct. No.
R. Mather (argued), Mather Turanchik Law Corp., Los Angeles,
California; Richard E. Hodge, Malibu, California; for
Deborah K. Snyder (argued), Gilbert S. Rothenberg, and Andrew
M. Weiner, Attorneys; Travis A. Greaves, Deputy Assistant
Attorney General; Richard E. Zuckerman, Principal Deputy
Assistant Attorney General; Tax Division, United States
Department of Justice, Washington, D.C.; for
Before: Mary M. Schroeder and Susan P. Graber, Circuit
Judges, and Joan H. Lefkow, [*] District Judge.
panel affirmed the Tax Court's dismissal, for lack of
jurisdiction, of taxpayers' petition challenging
adjustments to a Final Partnership Administrative Adjustment
involving taxpayers' partnership.
Internal Revenue Service initiated a partnership proceeding
that resulted in administrative adjustments to a partnership
tax return and disallowances of certain deductions. The IRS
simultaneously pursued a deficiency proceeding against the
partners (taxpayers) individually, to enforce the
partnership-level adjustments. In a prior appeal challenging
the results of the partnership proceedings, this court
affirmed. In taxpayers' challenge to the partnership
adjustments asserted in the deficiency proceeding, the Tax
Court dismissed the petition as untimely because taxpayers
should have brought their challenges in the partnership-level
every other circuit court to consider this issue, the panel
held that a challenge to the timeliness of a Final
Partnership Administrative Adjustment must be raised in the
partnership-level proceeding itself, and that failure to do
so results in a forfeiture of the argument. The panel
therefore affirmed the Tax Court's dismissal of
taxpayers' petition for lack of jurisdiction.
SCHROEDER, CIRCUIT JUDGE
John and Judith Bedrosian seek to challenge the Internal
Revenue Service's (IRS's) disallowance of deductions
that they claimed on their 1999 and 2000 returns. Because the
deductions were generated by a partnership entity, the IRS
initiated a partnership proceeding that resulted in
administrative adjustments to the partnership's return
and corresponding disallowances. The IRS simultaneously
pursued a deficiency proceeding against the Bedrosians
individually to enforce the partnership-level adjustments.
earlier appeal, we upheld the validity of the partnership
proceeding and the adjustments made therein. Bedrosian v.
Comm'r, 358 Fed.Appx. 868, 869 (9th Cir. 2009)
(unpublished). In what is essentially a collateral attack on
the partnership proceeding, taxpayers now challenge as
untimely the partnership-level adjustments the IRS asserted
in the deficiency proceeding. The Tax Court dismissed the
action for lack of jurisdiction because challenges to the
adjustments should have been brought in the partnership
appeal, the Bedrosians argue that there was no valid
partnership proceeding in which they could have challenged
the disallowances, because the partnership proceeding was
initiated after the relevant statute of limitations had
expired and was therefore a legal nullity. We have not had
occasion to address this issue, but other circuit courts
uniformly have held that a challenge to the timeliness of a
partnership proceeding must be raised in the partnership
proceeding itself and that ...