Estate of Greenfield v. Commissioner of Internal Revenue, 102308 FED11, 08-11594

Docket Nº:08-11594
Opinion Judge:PER CURIAM.
Party Name:ESTATE OF MARVIN E. GREENFIELD, DECEASED, BARBARA GREENFIELD, Personal Representative, BARBARA GREENFIELD, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Judge Panel:Before CARNES, BARKETT and WILSON, Circuit Judges.
Case Date:October 23, 2008
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

ESTATE OF MARVIN E. GREENFIELD, DECEASED, BARBARA GREENFIELD, Personal Representative, BARBARA GREENFIELD, Petitioners-Appellants,

v.

COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.

No. 08-11594

United States Court of Appeals, Eleventh Circuit

October 23, 2008

DO NOT PUBLISH

Petition for Review of a Decision of the United States Tax Court, Agency No. 20423-04

Before CARNES, BARKETT and WILSON, Circuit Judges.

PER CURIAM.

The Estate of Marvin E. Greenfield and Barbara Greenfield (collectively "Estate") petition for review of a U.S. Tax Court decision sustaining the Commissioner of Internal Revenue ("Commissioner")'s determination as to the Estate's income tax deficiency. After carefully reviewing the parties' briefs, we deny the Estate's petition for review.

BACKGROUND

Marvin E. Greenfield, who died in February 2006, and Barbara Greenfield, the personal representative of Marvin's estate, were husband and wife at all times relevant to this case. The Greenfields timely filed their joint 1982 individual income tax return. Their return included flow-through loses from various partnerships known as the Mast Realty Associates Partnership.

The Internal Revenue Service (IRS) audited the Mast Realty Associates Partnership and solicited from the Greenfields a Form 872-A, Special Consent to Extend the Time to Assess Tax, as to their 1982 tax return. Both the IRS and the Greenfields signed the form. The form provided that the amount of income tax due on the Greenfield's 1982 tax return could be assessed on or before the 90th day after the IRS office considering the case: (1) received from the Greenfields a Notice of Termination of Special Consent to Extend the Time to Assess Tax (Form 872-T); (2) mailed Form 872-T to the Greenfields; or (3) mailed a notice of deficiency to the Greenfields for the 1982 tax year, in which case the tax could be assessed within 60 days after the period in which assessment was prohibited. The Greenfields never submitted a Form 872-T to the IRS as to the 1982 tax year.

In September 1992, Mr. Greenfield filed a Chapter 11 petition in bankruptcy court. The Commissioner filed a first proof of claim in the bankruptcy proceeding, asserting an unsecured priority claim of $27, 687.45 for 1983 and 1984 and an unsecured general claim of $9, 506.77 for those same years. Mr. Greenfield objected to the first proof of claim, claiming that he owed the IRS no money. The Commissioner consented to disallowing this first proof of claim. The Commissioner then filed an amended proof of claim, asserting an unsecured priority claim of $34, 150.32 for 1983 and 1984.

In April 1994, Mr. Greenfield's Chapter 11 reorganization case became a Chapter 7 liquidation case. In August 1994, the Commissioner filed a third proof of claim, asserting an unsecured priority claim of $216, 386.49 for 1983, 1984, and 1991 and an unsecured general claim of $19, 601.28 for the same years. In November 1997, the bankruptcy court issued a discharge in Mr. Greenfield's bankruptcy case. In July 2000, the bankruptcy trustee paid the Commissioner $29, 683.67 as to the Commissioner's unsecured priority claim of $216, 386.49.

The IRS later determined that the Greenfields' distributive share of income from Mast Realty Associates Partnership should be increased by $62, 186.00. In June 2004, the Commissioner sent the Greenfields a notice of deficiency for the 1982 tax year. The notice also indicated that the Greenfields were liable under I.R.C. § 6621(c) for an increased rate of interest because their investment in Mast Realty Associates Partnership was a tax-motivated transaction.1

The Greenfields petitioned the tax court for redetermination of the deficiency. They did not contest the deficiency amount. They submitted the case fully stipulated to the tax court for a decision without trial. The tax court found that the Commissioner timely submitted the notice. The court also sustained the IRS' determination as to the Estate's tax deficiency and liability for interest on that deficiency. The Estate now petitions for review of the tax court's decision.

STANDARDS OF REVIEW

"We review the Tax Court's findings of fact for clear error, even where those facts are based on stipulations entered into by the parties." Bone v. Comm'r, 324 F.3d 1289, 1293 (11th Cir. 2003). We review de novo the tax court's rulings on the interpretation and application of the Internal Revenue Code. Feldman v. Comm'r, 20 F.3d 1128, 1132 (11th Cir. 1994).

DISCUSSION

The Estate raises three issues in this petition. We discuss each in turn.

I.

The Estate argues that the tax court failed to analyze Form 872-A in light of Mr. Greenfield's bankruptcy proceeding. The Estate argues that the tax court erroneously found that Form 872-A was a unilateral waiver of the three-year statute of limitations in which to assess a tax after the taxpayer files a return. See I.R.C. § 6501(a). The Estate suggests that Form 872-A is instead an executory contract. If Form 872-A were an executory contract, it would be deemed rejected if "the [bankruptcy] trustee does not assume or reject [it]." 11 U.S.C. § 365(d)(1). If the executory contract were rejected, then the IRS would be prohibited from assessing the Estate's 1982 tax deficiency. I.R.C. § 6501(a).

"When a...

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