Filed On: September 15, 2011 UTAM, Ltd. and DDM Management, Inc., Tax Matters Partner v. Commissioner of Internal Revenue Service

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
____________
No. 10-1262 September Term 2011
USTC-24762-06
Filed On: September 15, 2011
UTAM, Ltd. and DDM Management, Inc., Tax
Matters Partner,
Appellees
v.
Commissioner of Internal Revenue Service,
Appellant
BEFORE: Sentelle, Chief Judge, Tatel, Circuit Judge, and Randolph, Senior
Circuit Judge
O R D E R
Upon consideration of appellees’ petition for panel rehearing, it is
ORDERED that the petition be denied. It is
FURTHER ORDERED, on the court’s own motion, that the opinion filed June 21,
2011, be amended as follows:
Insert on p. 2, line 11, after “(D.C. Cir. June 21, 2011)”: (as amended Aug. 18,
2011).
Insert on p. 6, line 3, after “(D.C. Cir. June 21, 2011)”: (as amended Aug. 18, 2011).
Delete on p. 9, footnote 7:
UTAM argues that even if § 6229(d) can be used to toll a partner’s
open § 6501 period, it did not do so here because the FPAA adjusted only
nonpartnership items and was therefore invalid. UTAM’s argument rests on
certain stipulations the parties made in the Tax Court for purposes of

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litigating the statute of limitations issue. But it was not until this appeal that
UTAM linked the issue of the FPAA’s validity with the statute of limitations
issue. The stipulations do not bind the IRS with respect to the underlying
issue of the FPAA’s validity. We therefore have no reason to decide whether
an invalid notice of final partnership administration adjustment may toll the
statutory assessment period.
Insert in lieu thereof this revised footnote 7:
UTAM argues that even if § 6229(d) can be used to toll a partner’s
open § 6501 period, it did not do so here because the FPAA adjusted only
nonpartnership items and was therefore invalid. UTAM’s argument rests on
certain factual stipulations the parties made in the Tax Court for purposes of
litigating the statute of limitations issue. But there was no stipulation that the
FPAA was “invalid,” as UTAM claims. The FPAA gave notice of the
Commissioner’s determination of adjustments to partnership items. See,
e.g., Clovis I v. Comm’r, 88 T.C. 980, 982 (1987). These included sham
transactions and their attendant incomes, gains, losses, and deductions. The
nature of the adjustments in the FPAA remained the same regardless of the
limited stipulations; as the stipulations made clear, whether the evidence
ultimately would support the adjustments was to be determined at trial. We
therefore have no reason to decide whether an “invalid” notice of final
partnership administration adjustment may toll the statutory assessment
period.
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY: /s/
Jennifer M. Clark
Deputy Clerk

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