Bush v. United States, No. 12-5051 (Fed. Cir. 2013)Annotate this Case
In 2003, after more than a decade of litigation, the IRS assessed penalties under now-repealed I.R.C. 6621(c), which penalizes “substantial” underpayments of tax “attributable to tax motivated transactions” against the 19 partners of the Dillon Oil Technology Partnership in tax years 1983 and 1984. The partners paid the tax and penalties in 2004, and, in 2006, initiated a refund suit. The Court of Federal Claims dismissed for lack of subject matter jurisdiction under the Tax Equity and Fiscal Responsibility Act, 1 I.R.C.7422(h), which provides that individual partners may not bring tax challenges relating to subject matter “attributable to a partnership item.” Such claims must be brought in a partnership-level suit by the partnership representative or Tax Matters Partner. The Federal Circuit affirmed, calling the claim an impermissible collateral attack.