Meruelo v. Comm'r of Internal Revenue, No. 11-70015 (9th Cir. 2012)
Annotate this CaseThe IRS issued a Notice of Deficiency (NOD) to Alex and Liset Meruelo a few days before the three-year statute of limitations expired. Alex was a partner in a partnership. The Meruelos petitioned the tax court challenging the deficiency contained in the NOD and subsequently moved to dismiss for lack of jurisdiction on the ground that the IRS issued the NOD prematurely, making it invalid. The tax court held that the NOD was valid and not premature and that the items were affected items. The parties later reached an agreement as to all issues, except the validity of the NOD. The tax court then entered a final decision holding that the Meruelos were liable for $1,387,006 in additional income tax and $277,401 in penalties. The Ninth Circuit Court of Appeals affirmed, holding that (1) a NOD issued when no partnership-level proceeding or final partnership administrative adjustment have been issued is valid; (2) a NOD issued when the normal three-year statute of limitations has not expired is valid; and (3) therefore, the tax court had jurisdiction.
The court issued a subsequent related opinion or order on November 14, 2012.
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