Thompson, et al. v. CIR

Appellant formed RJT Investments X, LLC and began acting as RJT's tax matters partner. Thompson, later that year, entered into an illegal "Son-of-BOSS" tax shelter transaction using RJT in order to offset capital gains of approximately $21.5 million. On appeal, appellant and his wife challenged the Tax Court's order dismissing their petition challenging a notice of deficiency issued by the IRS. The court agreed with its sister circuits that outside basis was an affected item that must be determined at the partner level. Because the Tax Court did not determine appellant's outside basis in RJT, the IRS properly issued a notice of deficiency under I.R.S. Code 6230(a)(2)(A)(i). Accordingly, the Tax Court had jurisdiction over appellants' petition challenging the notice. View "Thompson, et al. v. CIR" on Justia Law